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2 publishers close to settling states' Apple e-books antitrust suit

April 18, 2012|Bloomberg News

The judge overseeing an antitrust lawsuit against Apple Inc. over e-book prices was told by a lawyer that two publishers that earlier settled with the Justice Department are now close to a deal with 15 states.

Three publishers named in the U.S. government's antitrust lawsuit — CBS Corp.'s Simon & Schuster, Lagardere's Hachette Book Group and News Corp.'s HarperCollins — settled their cases after the complaint was filed April 11. A group of 15 states and Puerto Rico filed a similar suit this month.

Shepard Goldfein, a lawyer for Harper Collins, told U.S. District Judge Denise Cote in Manhattan that the publisher and Hachette have signed a memorandum of understanding with 15 states. The publishers hope to extend the agreement to all 50 states and complete a deal within 60 days, Goldfein said Wednesday.

Further settlement talks involving defendants in the federal case that haven't settled, including Apple, Macmillan and Penguin, probably won't be productive, said Joseph Wayland, a Justice Department lawyer. Cote is scheduled July 27 to consider public comments on the proposed resolution of the federal case and whether it is in the public interest.

U.S. antitrust officials have stepped up enforcement against anticompetitive price-fixing agreements in industries including healthcare and auto parts. Regulators have also increased scrutiny of Apple's digital publishing, mobile computing and music retail businesses to make sure that the iPad maker hasn't thwarted competition on its way to becoming the world's most valuable company.

Before the pricing agreements, Amazon.com Inc. had dominated the digital books market by offering titles at $9.99 each. Through the agreements, the publishers set prices for bestselling books at $12.99 and $14.99, giving Apple a 30% cut.

The state group, led by Texas and Connecticut, filed its lawsuit this month in federal court in Austin, Texas. The defendants include Apple, Pearson's Penguin, Simon & Schuster and Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck.

Simon & Schuster is also negotiating with the states and hopes to reach agreement, said Helene Jaffe, a lawyer for the publisher.

Apple's digital book-pricing practice may have cost consumers more than $100 million, Connecticut Atty. Gen. George Jepsen said after that suit was filed.

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