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Monday, February 26, 2024 | Back issues
Courthouse News Service Courthouse News Service

Apple Last in E-Book Case After Macmillan Settles

MANHATTAN (CN) - Macmillan agreed Friday to let retailers reduce the costs of its e-books, the Justice Department said, leaving Apple to face price-fixing charges at trial.

The government had sued six of the world's leading publishers and two subsidiaries on April 11, 2012. It claimed the publishers conspired to raise e-book prices after determining that Amazon, with its $9.99 e-books, was unlikely to budge on pricing.

"To effectuate their conspiracy, the publisher defendants teamed up with Apple, which shared the same goal of restraining retail price competition in the sale of e-books," the lawsuit states.

Instead of $9.99, the defendants allegedly priced the e-book editions of new and bestselling books at $12.99, $14.99 or $16.99. Retail e-book prices increased in relation to the hardcover price, according to the complaint.

The government said the conspiracy caused consumers to pay "tens of millions of dollars more for e-books than they otherwise would have paid."

Three publishers - Hachette, HarperCollins, and Simon & Schuster - settled immediately, and a federal judge approved their deal in September.

Penguin joined the settling bandwagon in December, and the government announced Friday that it reached a deal with Macmillan, which is incorporated in New York as Holtzbrinck Publishers.

The news leaves Apple alone to face a trial in June 2013.

Macmillan's settlement requires it immediately lift the restrictions it had used to stop e-book retailers from offering discounts and other promotions on its merchandise.

It will be prohibited until December 2014 from entering into new agreements with similar restrictions, according to the settlement.

Prosecutors said Macmillan also faces a strong antitrust compliance program that requires it to give the Justice Department advance notification of any e-book ventures it plans to undertake jointly with other publishers.

The program further requires Macmillan to regularly report on any communications it has with other publishers. For five years, the publisher cannot agree to any kind of most favored nation (MFN) provision that could undermine the effectiveness of the settlement.

Verlagsgruppe Georg von Holtzbrinck, based in Stuttgart, Germany, owns Holtzbrinck Publishers.

Once the government publishes the proposed settlement, along with a competitive impact statement, in the Federal Register, the public will have 60 days to comment.

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