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Department of Justice e-book pricing settlement approved by judge

September 07, 2012|By Carolyn Kellogg
  • A judge, in agreeing to a settlement for three publishers in the e-book price-fixing case brought by the Department of Justice, found that the government provided "a sufficient factual foundation" that price-fixing existed.
A judge, in agreeing to a settlement for three publishers in the e-book price-fixing… (Scott Eells )

A judge has ruled on a final settlement for three publishers in the e-book price-fixing case brought by the Department of Justice. Hachette, HarperCollins and Simon & Schuster have agreed to settle in the case.

In the decision, dated Wednesday, Judge Denise Cote considered and dismissed comments submitted by Apple, agent Simon Lipskar and hundreds more. She found that the government provided "a sufficient factual foundation as to the existence of a conspiracy to raise, fix, and stabilize the retail price for newly-released and bestselling trade e-books, to end retail price competition among trade e-books retailers, and to limit retail price competition among the Publisher Defendants."

In making her decision,  Cote quoted the Emily Dickinson poem, "There Is no Frigate Like a Book."

Public comments had protested that actions taken by the defendants had helped to make the e-book marketplace more, not less, competitive. The three remaining defendants -- Apple, Macmillan and Penguin -- can be expected to make a similar argument when the case goes to court.

The settlement agreement calls for Hachette, HarperCollins and Simon & Schuster to terminate their agreements with Apple within a week. They must also terminate contracts with any other e-book retailers that set restrictions on e-book pricing.

Additionally, "For at least two years, they may not agree to any new contract with an e-book retailer that restricts the retailer’s discretion over e-book pricing." And for five years the companies are prohibited from using most-favored-nation status with e-book retailers.

This means that Amazon will soon be able to set its e-book prices however it likes; many expect a return to the $9.99 e-book, which was at the center of the Department of Justice's case.

We'll soon have more about what this means for readers, publishers and publishing. In the meantime, the decision can be found in its entirety at Publishers Weekly.

ALSO:

Publisher Macmillan says "We did not collude" over e-books

Government sues Apple, publishers over e-books

Steve Jobs says publishers are "not happy" with Amazon

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