Settlement approved in e-book pricing case

Sept. 6, 2012 at 5:19 PM

NEW YORK, Sept. 6 (UPI) -- A U.S. judge has approved a settlement with three major publishers over collusion in e-book pricing, setting the stage for a digital book price war.

District Court Judge Denise L. Cote, the federal judge in Manhattan overseeing the case, rejected arguments against the settlement in a civil antitrust case brought by the U.S. Department of Justice, The New York Times reported.

The government filed a lawsuit against five publishers and Apple, accusing them of engaging in price-fixing of e-books.

Three of the publishers, Hachette Book Group, Simon & Schuster and HarperCollins, had agreed to settle while Penguin Group USA, Macmillan and Apple declined and face a trial.

As part of the settlement the three publishers must terminate contracts with e-book retailers that constrain the retailer's ability to set their price of an e-book or contain any so-called "most favored nation" clause, which states no other retailer is allowed to sell e-books for a lower price.

The contract restrictions will remain in effect for two years for the e-book pricing and five years for the most favored nation clause, the Times said.

"The government reasonably describes these time-limited provisions as providing a 'cooling- off period' for the e-books industry that will allow it to return to a competitive state free from the impact of defendants' collusive behavior," the court said in a filing on Thursday.

"The time limits on these provisions suggest that they will not unduly dictate the ultimate contours of competition within the e-books industry as it develops over time."

The three publishers have also agreed to pay more than $69 million in fines.

E-book retailer Amazon, reacting to the settlement, said it will drop prices on its e-books, probably to the $9.99 point for most bestsellers and newly released e-books, which will likely put pressure on other retailer to respond in kind, the Times said.

Follow us on Facebook, Twitter, and Instagram for more news from
Related UPI Stories
share with facebook
share with twitter
Trending Stories