DOJ Agrees On E-Book Price-Fixing Settlement With Three Publishers

Only hours after filing suit against Apple and six book publishers over allegations of e-book price-fixing, the Justice Dept. said has agreed on settlement terms with three of those publishing companies — HarperCollins, Simon & Schuster, and Hachette.

Said U.S. Attorney General Eric Holder in his statement regarding the settlement:

If approved by the court, this settlement would resolve the Department’s antitrust concerns with these companies, and would require them to grant retailers – such as Amazon and Barnes & Noble – the freedom to reduce the prices of their e-book titles. The settlement also requires the companies to terminate their anticompetitive most-favored-nation agreements with Apple and other e-books retailers.

In addition, the companies will be prohibited for two years from placing constraints on retailers’ ability to offer discounts to consumers. They will also be prohibited from conspiring or sharing competitively sensitive information with their competitors for five years. And each is required to implement a strong antitrust compliance program. These steps are appropriate – and essential in ensuring a competitive marketplace.

The DOJ lawsuit alleges that the “agency pricing” model adopted by these publishers after Apple entered the e-book market has allowed the plaintiffs to determine market prices for titles, rather than allowing e-book sellers to set prices.

“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” said Holder.

The DOJ accused publishers and Apple of “a conspiracy to raise, fix, and stabilize retail prices.”

What this settlement means is that sellers like Amazon and Barnes and Noble will now be able to set their own prices for e-book titles, and determine how much of a profit or loss they want to make off each sale.