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Settlement with publishers over e-book price-fixing reached

Maryland and several other states agreed to a $69 million settlement with three major U.S. publishers. Simon & Schuster, HarperCollins and Hachette Book Group were accused of price-fixing for electronic books in violation of U.S. antitrust laws. An attorney general with one of the states included in the settlement called the behavior "anti-competitive and inconsistent with the free market approach that it critical to our economy. Today's settlements provide refunds to customers who paid artificially inflated prices for e-books." A total of 55 attorneys general from U.S. states, territories and districts were included in the settlement.

The U.S. also sued tech giant Apple and five publishers for allegedly conspiring to raise e-book prices in order to limit competition. The defendants were reportedly threatened by Amazon.com, which began offering discounts on its e-books. The suit claims the publishers saw Amazon as a "substantial challenge to their traditional business model" and agreed to a system in which retailers would not have the ability to change publisher-set prices. The prices, previously set at $9.99, were increased to a "significantly higher" level.

Additionally, Apple would collect a 30 percent commission through any of the publishers' e-books it sold through its online store under the new pricing model. Apple was still deciding whether to sell digital books for its soon-to-be released iPad at the time.

According to on attorney general, approximately 97 percent of consumers affected by the price-fixing will receive notice of the settlement by e-mail. However, it is unclear how the consumers will receive their refunds and how much compensation each may collect. Additionally, the settlement must first be approved by a federal judge before any payments are made.

Although three of the accused publishers settled, publishers Penguin Group and Macmillan are still targeted by the lawsuit, as is Apple.

Source: Bloomberg, "Ohio, Texas, Maryland Reach $69 Million E-Books Deal," Don Jeffrey, Aug. 29, 2012

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