Penguin to settle price-fixing allegations with DOJ
19 Dec 2012
Penguin has agreed to settle allegations of e-book price-fixing with the Department of Justice, which is expected to add to pressure on Apple to follow suit.
Hachette, HarperCollins and Simon & Schuster have already settled, which leaves only Apple and Macmillan yet to settle. Their trial would start next June.
The publishers stood accused of having scrapped retail price competition, that led to consumers ending up paying millions of dollars more for their e-books than they should have.
According to Jamilia Ferris, chief of staff and counsel at the Department of Justice's Antitrust Division, since the department's settlement with Hachette, HarperCollins and Simon & Schuster, consumers were already paying lower prices for the e-book versions of many of those publishers' new releases and bestsellers.
She added, if approved by the court, the proposed settlement with Penguin would be an important step toward undoing the harm caused by the publishers' anticompetitive conduct and restoring retail price competition so consumers could pay lower prices for Penguin's e-books.
According to the complaint, the companies entered into contracts that eliminated price competition among bookstores selling e-books. Earlier many sold them at the magic $9.99 price point and according to the department prices rose to $12.99, $14.99 or more.