3 big publishers settle e-book antitrust lawsuit

By Megan Workman
CHARLESTON, W.Va. -- Three of the nation's largest publishers will pay West Virginians who purchased electronic books from them up to $300,000 to resolve antitrust claims of a conspiracy to fix the prices of e-books.Hachette, HarperCollins and Simon & Schuster have agreed to pay more than $69 million to consumers across the country as part of a settlement reached by West Virginia Attorney General Darrell McGraw and other attorneys general across the United States.The publishers will compensate customers who purchased e-books from April 1, 2010, through May 21, 2012.In April, the federal government and several states, including West Virginia, sued five major publishers and Apple, claiming the companies conspired to artificially raise the price of bestselling e-books.The lawsuit, originally filed in U.S. District Court for the Western District of Texas, alleged that e-book prices were boosted from $9.99 to $12.99 and $14.99.The book publishers were worried because Amazon --- the biggest bookseller on the Internet -- was selling bestselling books for $9.99, and they were concerned it would negatively affect their hardcover book sales, West Virginia Assistant Attorney General Douglas Davis had said in May.On Thursday, Davis was pleased about the outcome. "This is good news," he said. "We're excited that we were able to get it done."Davis said the court still has to approve the restitution process. The $300,000 in compensation that West Virginians are expected to receive from the settlement is not set in stone, he said.The court, for example, might not agree how people should go about getting money back, Davis said.
The proposal suggests giving a credit to customers who purchased e-books, since most of them used a website, Davis said. They could use the credit toward future purchases on that website, he said.Writing checks for each customer who files a claim is another way to get money back to people. Davis said if the checks are small -- $5 or less -- then it might cost more to send the check out than what it is worth."Our suspicion is that people would probably like the credit way," he said. "It would be the most efficient way to get money back."McGraw, U.S. Attorney General Eric Holder and officials in other states are still in litigation with two other publishers -- Penguin and Macmillan -- as well as Apple, which has denied the claims in the lawsuit.That lawsuit was filed Thursday in U.S. District Court for the Southern District of New York and also had included Hachette, HarperCollins and Simon & Schuster. The court must still approve the settlement agreement with those three publishers.
Davis said that lawsuit is moving forward.Penguin, Macmillan and Apple "look like they want to take this all the way" to the federal court in New York, Davis said.Thursday's settlement will not prevent this type of price inflation from happening again, but Davis said it helps deter price fixing of books."The e-marketplace has become a larger part of the economy and we think it's only going to continue to grow," he said. "It's going to be a huge drag on the economy if we're paying more for goods than we need to."Consumers can contact the Attorney General's Office at 1-800-368-8808 to have their names put on a list for the claims process. The claims program will begin after the court grants final approval to the settlement. For more information, visit www.wvago.gov.Reach Megan Workman at megan.workman@wvgazette.com or 304-348-5113.
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