updated 06:10 pm EDT, Thu August 30, 2012
Checks or e-book store credit available from most vendors
Book buyers in 49 states and five territories are poised to receive $69 million as a result of civil suit settlement accusing Hachette, HarperCollins, and Simon & Schuster of collusion with Apple, Macmillan, and Penguin. If the settlement is approved by Judge Denise Cote, the three publishers will partially reimburse consumers who bought agency-priced e-books between April 1, 2010 and May 21, 2012.
Upon finalization of the settlement, consumers may choose to be reimbursed by check or with a credit applied to the user's account towards the purchase of e-books in the future. Amazon, Barnes & Noble, Apple, and Kobo have all agreed to contact eligible consumers by email. Sony is automatically issuing checks to affected users, and Google customers will need to submit a claim. Payments commence 30 days after the settlement's approval.
Leader of the investigation into the ebook pricing issue Connecticut Attorney General George Jespen said that "Through our ongoing litigation, we hope to provide additional restitution to consumers." Maryland Attorney General Douglas Gansler agreed, and blamed collusion by the publishers that has "cost consumers millions of dollars more for the most popular e-book titles."
The suit was originally filed by the attorneys general from Texas and 15 other states. More states joined as the suit progressed with all but Minnesota involved now. The plaintiffs in the complaints allege that Apple and the publishing houses worked together to manipulate e-book prices illegally and limit Amazon's control over the market at the same time.
A migration to an agency model, meaning multiple companies (the book publishers) acting through one company (Apple), is the core of the case. This standard model lets the publishers set book prices as a vehicle to avoid price wars. The defendants say their actions were in defense against Amazon's near monopoly of the market. Prior to 2010, Amazon possessed 90 percent of the e-book market. Amazon's e-book market share is currently estimated at 60 percent.
A class-action lawsuit on behalf of consumers is duplicating the federal case. Apple and the publishers tried to get the complaint tossed out, but Judge Cote believes that Apple circumvented the openness of the e-book market by assisting the publishers to price fix, rather than competing independently. Recently, the judge has granted amici curiae, or friends of the court, status to writer's advocacy organization The Authors Guild and licensing expert Bob Kohn. Both have been given permission to file an amicus brief with the court, decrying the proposed settlement, and pointing out what they see as flaws in the Department of Justice's arguments.
Judge Cote has set the e-book antitrust bench trial, which pits the Department of Justice against Apple and two of the five major book publishers, to June 3, 2013. The date is much later than Apple wanted, but much earlier than the Department of Justice wanted. Apple was hoping to get the trial underway as soon as possible, citing a cloud over the industry and damage to its reputation. The remaining parties in the lawsuit claim no wrongdoing in the case.