Publishers to Pay $69M to Settle eBook Claims

MANHATTAN (CN) - Three leading publishers agreed to pay $69 million to settle an antitrust lawsuit accusing them of conspiring to fix ebook prices.

Hachette Book Group, Simon & Schuster and HarperCollins Publishers agreed to reimburse customers who paid artificially high prices for ebooks between April 1, 2010 and May 12, 2010. Reimbursements range from 25 cents to $1.32 per book, and payments are scheduled to begin 30 days after final court approval of the settlement.

The attorneys general of 54 states, U.S. territories and the District of Columbia filed suit Wednesday in Federal Court, claiming the publishers "entered into an agreement to raise the retail price of electronic books."

The states' lawsuit comes on the heels of the government's antitrust complaint in April against the same three publishers, as well as Apple, Verlagsgruppe Georg von Holtzbrinck and Holtzbrinck's subsidiary Macmillian.

Hachette, Simon & Schuster and HarperCollins also settled those claims, which included allegations that they teamed up with Apple to raise prices in their battle against Amazon's lower $9.99 price point for ebooks.

According to the states' lawsuit, the price-fixing scheme involved a shift in distribution models. Publishers began setting ebook prices and selling ebooks directly to customers, rather than through retailers such as Barnes & Noble, according to the federal complaint.

The states claim the publishers "conspired and agreed to increase retail ebook prices for all consumers," and "agreed to eliminate ebook retail price competition between ebook outlets, such that retail prices to consumers would be the same regardless of the outlet patronized by the consumer."

Under the proposed settlement, also filed Wednesday, the three publishers will modify their product distribution models, pay $7.5 million in fees and costs in addition to the $69 million, and end existing agreements with certain ebook outlets, giving them more freedom to reduce ebook prices.

"Unlawful collusion and price-fixing not only violates antitrust laws, it is anticompetitive and inconsistent with the free market approach that is critical to our economy," Texas Attorney General Greg Abbott said in a statement.

The settlement still needs to be approved by a federal judge.

Claims against Apple, Macmillan and Penguin are pending in Manhattan Federal Court.

Last August, consumers in San Francisco filed a federal antitrust class action against Apple and five publishers, including the three that settled in New York.

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