Report: EU authorities ready to accept Apple, publishers settlement in ebook price fixing investigation

According to a new report from Reuters, EU authorities are about to accept a deal with Apple and four book publishers in order to end an antitrust investigation into whether Apple conspired with publishers to prevent Amazon from undercutting Apple’s ebook pricing. The companies originally proposed the settlement in late August, and it would see Amazon go back to its original ebook pricing for two years. By making the deal, Apple and the publishers will be able to put an end to the antirust investigation and avoid related fines:

Apple, Simon & Schuster, News Corp unit HarperCollins, Lagardere SCA’s Hachette Livre, and Verlagsgruppe Georg von Holtzbrinck, the owner of German company Macmillan, made the proposal to the European Commission in September…Pearson Plc’s Penguin group, which is also under investigation, did not take part in the offer.

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Apple and Amazon notify customers of $69M State settlement with publishers, how to get credit

Earlier this week, Amazon began letting customers know if they were eligible for a share of the $69 million state attorney settlements with Hachette, HarperCollins, and Simon and Schuster. Today, Apple started notifying iBooks customers, who bought an iBook from April 1, 2010 to May 21, 2012, of the same payout.

The payout will be dispersed as Kindle/iBooks credit or customers can call a number to request a check for delivery in February.

Notably, if you purchased the Steve Jobs eBook bio from Simon and Schuster on iBooks or Amazon, you should receive this notice.

To be clear, this is separate from the Federal price-fixing case surrounding Apple and some publishers. Barnes and Noble and other eBook distributors are likely doing the same thing. The Amazon version is below:

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Apple calls DOJ settlement with publishers unlawful, says trial is necessary

The U.S. Department of Justice announced a settlement in April with three of the publishers involved in the eBook price-fixing antitrust suit against Apple. Hachette, HarperCollins, and Simon & Schuster were part of the settlement, which would allow Amazon to return to its previous wholesale model and the publishers to set and reduce prices for eBook titles freely. PaidContent provided an update today on the case by reporting Apple has filed a document with the Southern District of New York. It called the proposed settlements with the three publishers “fundamentally unfair, unlawful, and unprecedented.” Apple argued that since it is not settling, the settlement would unlawfully end contracts those publishers have with Apple.

The proposed settlement would require the three settling publishers — HarperCollins, Hachette and Simon & Schuster — to terminate their existing agency pricing contracts with Apple. Apple says that isn’t fair: “The Government is seeking to impose a remedy on Apple before there has been any finding of an antitrust violation.” This case, the company states, revolves around “an alleged conspiracy to force Amazon to adopt agency.” So a settlement “enjoining collusion or precluding publishers from forcing agency on Amazon would be appropriate,” but Apple is entitled to defend its contracts in court.

Apple is hoping the courts decide to reject the settlements or delay a ruling until after the June 2013 trial. Apple also discussed Amazon’ role in the case. It claimed the government has “unwittingly placed a thumb on the scales in favor of Amazon”:
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Cue on agency model: ‘I don’t think you understand. We can’t treat newspapers or magazines any differently than we treat FarmVille.”

By now you probably know that the U.S. Department of Justice launched an antitrust lawsuit against Apple and two publishers this month following an investigation into Apple’s eBook pricing agency model. Three publishers, including Hachette, HarperCollins, and Simon & Schuster, decided to reach a settlement with the Department of Justice to return to Amazon’s set-your-own price wholesale model. Meanwhile, Apple, Macmillan, and Penguin will take the fight to court.

Interestingly, a report from The Wall Street Journal, which is owned by the HarperCollins’ parent company News Corp, suggested Apple was only ever trying to continue its App Store business model. The Wall Street Journal’s L. Gordon Crovitz described visiting Senior Apple Executive Eddy Cue to discuss changing Apple’s policies for publications. He quoted Cue as comparing book pricing to apps and not wanting to treat publications differently than app developers:
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Apple eBook price-fixing lawsuits hit Canada following DOJ suit

Following an investigation into alleged eBook price-fixing, the U.S. Department of Justice filed an antitrust lawsuit against Apple and publishers Macmillan and Penguin earlier this month, who refused to settle. Other publishers, including Hachette, HarperCollins, and Simon & Schuster, settled and reached an agreement to return Amazon to its previous wholesale model and dismantle Apple’s agency model. The settlement also included agreements with select states that would see $51 million in restitution paid to those who purchased eBooks through Apple’s platform. Now, several Canadian publications are reporting class-action lawsuits were filed against Apple and the five publishers throughout Canada.

Lawyer Normand Painchaud spoke with The Montreal Gazette about his class-action suit filed in Quebec Superior Court and talked about two others filed in Ontario and British Columbia:

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DOJ explains settlement with three publishers, Macmillan CEO explains why they won’t settle

The U.S. Department of Justice and Attorney Gen. Eric Holder just announced (via CNN) a settlement with three publishers—Hachette, HarperCollins, and Simon & Schuster— following this morning’s report that it would launch an antitrust suit against Apple, Macmillan, and Penguin, which refused to settle. The settlement is said to give publishers the “freedom to reduce the prices of their e-book titles,” allowing Amazon to return to its previous wholesale model.

The states are seeking $51 million in restitution that will be provided through a credit toward a future book purchase or a check, although the Department of Justice’s charges remain civil. The exact details of the settlements with the three publishers were not discussed, but Apple, Penguin, and Macmillan will continue to fight charges in the lawsuit filed earlier today in New York.

As for exactly why Apple and the two other publishers have decided to take the case to court, at least one publisher is speaking. Macmillan’s Chief Executive Officer John Sargent published an open letter today explaining the company’s stance (via PaidContent). In the letter, Sargent claimed the Department of Justice’s settlement demands “could have allowed Amazon to recover the monopoly position it had built before our switch to the agency model.” He also said it is “hard to settle a lawsuit when you know you have done no wrong” and called the agency model the future of an “open and competitive market.”

Interestingly, AllThingsD pointed us to a line from the Department of Justice’s official complaint that indicates Apple proposed teaming up with Amazon at one point:

In addition to considering competitive entry at that time, though, Apple also contemplated illegally dividing the digital content world with Amazon, allowing each to “own the category” of its choice—audio/video to Apple and e-books to Amazon.

Go past the break for Sargent’s full letter, which is a great rundown of the case from the perspective of the publishers that have decided not to settle:
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