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. icon
    PaulT (profile), 30 Aug 2012 @ 10:59pm

    Re: Re: $10 Text Files?

    "Fair enough, but you realize the market has spoken pretty vocally that $10 is an acceptable price for a new book by a big-name author. "

    I agree with Iron up there. Maybe the market has "spoken", but that still isn't going to make me buy it. I can't justify such a high price for so little in return. I'm *never* going to pay that price, just as I never buy the hardback or paperback at the manufacturer's recommended price.

    But, guess what? Real competition with physical books mean that I'm rarely asked to do so. Many hardbacks retail at less than half the cover price, supermarkets regularly sell paperbacks as loss leaders and Amazon can sell older/used copies at a penny if they wish. I can't remember the last time I paid the retail cover price on a book, but it's a rare occurrence.

    The other problem with your claim is that if price fixing is going on, the market hasn't actually "spoken". If there's no competition allowed, the market doesn't "say" anything - people either buy the new Grisham or they don't. Amazon regularly sell Kindle books at prices higher than the physical product - which they're clearly not worth as the physical item has values that the Kindle version doesn't (ability to lend & resell, etc.). even arguing the convenience factor, it's clear that this shouldn't happen. If that's the market in action then so be it, but if price fixing is occurring there's no reason why the prices should be anywhere near that high.

    It's their own decision, of course. But don't let me hear people whining about piracy when they lose money because people recognise overpriced crap for being just that, and opt to buy something else instead.

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