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Publishers pony up $69m in ebook price-fixing settlement

Pennies from heaven the DoJ for you and me

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Three of the publishers accused along with Apple of price fixing in the ebook market have agreed to settle the case for a total of $69m, in a move that could mean a (very small) windfall for consumers in 49 US states and the District of Columbia.

Under the terms of the settlement, Hachette, HarperCollins, and Simon & Schuster will abandon the so-called agency agreements that the US Department of Justice says illegally barred booksellers from selling books at a discount. They'll also pay restitution to each state based on the number of ebooks its residents purchased.

"We will not tolerate publishers colluding to overcharge consumers millions of dollars for some of the most popular e-books," Colorado Attorney General John Suthers said in a statement.

The state attorneys general involved in the case were quick to carve up the $69m pie on Thursday, pointing out exactly how much of that payout would go to their respective jurisdictions.

Florida Attorney General Pam Bondi crowed that the Sunshine State would be getting around $4.4m, for example, while Maryland stands to receive up to $1.64m.

Hawaii is likely to see only a $300,000 payout, but that's still more than Minnesota will see – it was the only state not to participate in the suit.

Most of that cash will go to consumers, whom the lawsuit alleges paid too much for ebooks during the period between April 1, 2000 and May 21, 2012.

Don't jump for joy quite yet, though. The Christian Science Monitor reports that the actual reimbursements will amount to between 25 cents and $1.32 per book, which hardly covers the difference between the cost of books under agency pricing and the $9.99 Amazon was charging before the agency model went into effect.

Meanwhile, Apple and the two other publishers named in the price-fixing suit – Macmillan and Penguin – maintain that they have done nothing wrong, and that the agency model is the one that offers the best prospects for an open and competitive ebook market.

Their case is heading for trial in 2013, and from the sound of it, the attorneys general are already rubbing their hands.

"Today's settlement paves the way for consumers to receive restitution and promotes retail competition in the e-book market," Suthers said. "Through our ongoing litigation against the remaining defendants, we hope to provide additional restitution to victimized consumers." ®

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