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Publishers reach settlement with state AGs in e-book antitrust claim

Three publishing companies on Friday settled [press release] an antitrust lawsuit [complaint, PDF] filed by attorneys general of 49 states, the District of Columbia and five US territories and commonwealths, who had accused the nation's top publishers of a price-fixing conspiracy. The attorneys general brought suit against five publishing companies. Of those companies, Hachette, Harpers Collins and Simon & Schuster agreed to settle, while Penguin and Macmillan [corporate websites] did not and will continue litigation. The settling publishers denied any wrongdoing and stated that they agreed to settle to avoid the cost, uncertainty and risk of litigation. The settlement fund totals $69.04 million and covers people who purchased an e-book published by any of the five publishing companies from April 1, 2010, through May 21, 2012, and lived in one of the areas bringing the lawsuit. People who qualify will be eligible for a credit or check refunding a portion of the purchase price for each qualifying e-book they purchased. A final approval hearing for the settlement will be held in February in the US District Court for the Southern District of New York [official website].

Last month a judge for the US District Court for the Southern District of New York approved [JURIST report] a similar settlement agreement [opinion, PDF] between the US Department of Justice (DOJ) [official website] and certain e-book publishers in a price-fixing suit under the Sherman Act [text]. The DOJ alleged that Apple, Hachette, HarperCollins, MacMillan, Penguin and Simon & Schuster conspired to fix the prices of e-books in response to Amazon's discount pricing strategy. Hachette, HarperCollins and Simon & Schuster agreed to the settlement, but the other defendants elected to continue litigating. The DOJ brought the suit in April, and the court denied a motion to dismiss [JURIST reports] in May. Commentators had been very mixed in response to the proposed settlement agreement. Some commentators have suggested that the DOJ's lawsuit is merely "superficial" [JURIST op-ed] and that the effect of the agency agreements may actually have been a net-positive to consumers if Amazon was selling e-books as loss leaders in order to drive the sale of Kindles. Other commentators, however, state that commentators against the settlement agreement and the defendants' arguments are based on a premise that competition is wrong [JURIST op-ed].

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