Judge approves e-book price-fixing settlement

The settlement will restore pricing competition to the e-book market, the judge writes

A judge has approved an e-book price-fixing settlement between the U.S. Department of Justice and three book publishers.

Judge Denise Cote of the U.S. District Court for the Southern District of New York, in an order dated Wednesday, approved the proposed settlement between the DOJ and Hachette Book Group, HarperCollins and Simon & Schuster. The three publishers agreed to settle the antitrust case in April, when the DOJ announced the price-fixing charges against Apple and five publishers.

Apple and publishers Macmillan and Penguin Group have not settled with the DOJ.

The settlement requires the publishers to allow retailers to set their own prices for e-books, and it prohibits the publishers from discussing pricing with competitors for five years and from constraining retailer efforts to offer discounts for two years. The settlement also requires the publishers to end their e-book sales agreements with Apple.

The settlement is an appropriate way to protect the public interest, Cote wrote. "The proposed judgment secures a remedy that is closely related to the violations alleged in the complaint," she wrote.

The settlement "unravels" pricing agreements made among the publishers and with Apple, she added. "The proposed final judgment appears reasonably calculated to restore retail price competition to the market for trade e-books, to return prices to their competitive level, and to benefit e-books consumers and the public generally," she wrote.

The DOJ accused Apple and the five publishers of conspiring to raise prices on e-books in retaliation for Amazon.com pricing most e-books at US$9.99 beginning in late 2007.

Apple opposed the settlement, saying in July the deal was a "threat to ebook competition." In August, Apple asked the judge to delay the settlement until after it can defend itself in a trial.

Also in August, Hachette Book Group, HarperCollins and Simon & Schuster agreed to pay more than $69 million to a group of U.S. states to settle similar e-book price-fixing charges.

Grant Gross covers technology and telecom policy in the U.S. government for The IDG News Service. Follow Grant on Twitter at GrantGross. Grant's e-mail address is grant_gross@idg.com.

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