First Round Of Ebook Price Fixing Settlements Are Announced

from the when-crime-does-eventual-pay dept

When the Department of Justice decided to sue Apple and five of the major book publishers for price fixing ebooks, we were glad to see some justice coming to purchasers of overpriced ebooks. Shortly after filing the suit, three of those publishers, HarperCollins, Hachette and Simon & Schuster, decided to settle rather than fight. Now, the first round of settlements have been reached between these three companies and 49 states (sorry Minnesota) and 5 US territories. The settlement totals to around $69 million to be split among the states and territories.

In a press release on this settlement, Connecticut AG George Jepson states that while it is fine for companies to seek profit, they shouldn't harm the public in the process.
While publishers are entitled to their profits, consumers are equally entitled to a fair and open marketplace. This settlement will provide restitution to those customers who were harmed by this price-fixing scheme, but it also will restore competition in the eBook market for consumers’ long-term benefit.
By restoring competition in the market, these publishers agree to allow retailers pricing control of ebooks in the future. This could bring us back to $10 and below new releases that we have sorely missed.

While this settlement is getting underway, the settlement between these companies and the DOJ is still being reviewed. That may take a while as District Court Judge Denise Cote has 868 public comment letters to sift through. Hopefully, she can ignore the ignorant pleas of those opposed to the current settlement proposal and agree to a positive result. All that would be left is that actual lawsuit against Apple, Macmillan and Penguin which are all holding their ground that they did nothing wrong. 
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Filed Under: ebooks, price fixing, settlement
Companies: hachette, harpercollins, simon & schuster


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  1. identicon
    Andrew D. Todd, 31 Aug 2012 @ 1:49am

    The Next Round

    Jean Zimmerman, in her excellent book on the 1991 Tailhook sexual assault scandal, _Tailspin: Women at War in the Wake of Tailhook_ (1995), observed (p. 67) that "Any investigation mounted by the United States government will have certain common characteristics, but alacrity and perspicacity are not chief among them. An Internal Revenue Service audit, say, or a General Accounting Office investigation is lethal not because it floats like a butterfly and stings like a bee. It kills by grinding its subjects down, like a steamroller stuck in low gear."

    Very well, the grinding has commenced. The Feds will be back, over and over again, asking the same questions, or variations of them. The publishers will get used to being ordered to issue and automatically distribute rebates at intervals. The next price-fixing investigation will probably have to do with college textbooks, especially e-textbooks automatically vended as part of the college registration process. That is where the publishers can really get burned.

    Colleges will begin to set up rules about using textbooks where the professor has a financial interest. Rule one will of course be that if the professor makes the book freely downloadable over the internet, by anyone, anywhere in the world, he's good to go. If not, then he has to fill out a form resembling his income tax return, to determine how much he has to refund to the students. He'll have to report what textbook salesmen visited him, and when, and if they gave him any gifts. Under the circumstances, the vast majority of professors will try to make their books freely downloadable. To that end, they will devote their energy to working out copyright clearances.

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