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Judge approves settlement in e-book case

The $69-million settlement between 49 states and three publishers follows accusations that Hachette, HarperCollins and Simon & Schuster conspired with Apple on e-book price-fixing.

September 14, 2012|Bloomberg News

A U.S. judge granted preliminary approval to a $69-million settlement between 49 states and three U.S. publishers accused of conspiring with Apple to fix the prices of electronic books.

U.S. District Judge Denise Cote in New York gave initial approval to the accord with Hachette Book Group, HarperCollins Publishers and Simon & Schuster Inc. and all the states but Minnesota.

Hachette agreed to pay $31.7 million; HarperCollins, $19.6 million; and Simon & Schuster, $17.8 million, Cote said in an order made public Friday. The judge scheduled a fairness hearing for Feb. 8.

The states had alleged the publishers unlawfully agreed to fix the prices of electronic books, violating U.S. antitrust law. The companies agreed to switch from the "traditional wholesale/retail model of distribution to an agency model with the major retailers of e-books in order to raise and fix the prices of electronic books to consumers," the states said.

In a separate case, the U.S. sued Apple Inc. and five publishers in April, charging that they conspired to limit e-book price competition. The government said the defendants sought to raise e-book prices "significantly higher" than the $9.99 level at which they were selling.

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.

Cote approved a settlement with Hachette, HarperCollins and Simon & Schuster in that case earlier this month, saying it was in the public interest.

The U.S. suit against Apple and the publishers Macmillan and Penguin Group is continuing.

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