This article was published on May 22, 2013

Penguin pays $75 million to settle US eBook price-fixing case ahead of Apple’s June trial


Penguin pays $75 million to settle US eBook price-fixing case ahead of Apple’s June trial

Apple may be calling the overarching lawsuit flawed, but Penguin has confirmed it has reached a “comprehensive agreement” with the US State Attorneys General, and other private class plaintiffs, in the long-standing antitrust eBook pricing suit.

While the agreement was originally made back in December, Pearson, Penguin’s parent publisher, has now confirmed it will pay $75 million in consumer damages – as well as additional costs – to bring an end to all antitrust claims relating to eBook pricing in the US. This follows the recent news that it had also settled with EU authorities, after promising to terminate all eBook agency agreements with Apple.

Just to recap, we reported last year that the United States Department of Justice (DoJ) was proceeding with lawsuits against Apple and five major publishers – Hachette, HarperCollins, Macmillan, Simon & Schuster and Penguin – over alleged e-book price fixing. Essentially, the DoJ was investigating whether Apple’s deals with the publishers amounted to price-rigging, in the wake of the iPad’s launch back in 2010.

Simon & Schuster, Hachette Book Group and HarperCollins had previously agreed to settle for around the $70m mark, and MacMillan became the final publisher to agree a settlement earlier this year, paying $12m in the process. But with Penguin paying $75, this represents the single-biggest payout from the five publishers implicated in the case.

Publishers pay out, but Apple fights on

The Attorney General for Connecticut, one of the 33 participating states and territories in the suit, also confirmed the settlement earlier today, noting that the investigations and resulting litigation has recovered in the region of $164 million so far. “Consumers are entitled to a fair, open and competitive marketplace,” says Attorney General Jepsen. “This agreement is yet another step toward providing restitution to those consumers who were harmed by alleged price-fixing within the eBook market and will further ensure that, going forward, consumers benefit from fair competition in the sale of eBooks.”

Apple is continuing to fight, however, saying that its pricing spurred competition and e-reader advances. The court case kicks off on June 3.

As a result of today’s announcement, Pearson says it has made a $40m “provision for settlement” in its 2012 accounts, and says that an incremental charge will be added to Pearson’s 2013 accounts, put against the Penguin Random House joint-venture which is edging closer to being finalized.

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