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Amazon promises partial refunds for some e-book purchases

updated 11:46 pm EDT, Sat October 13, 2012

Payments a result of suit settlement with three publishers

As a result of a possible settlement between the Department of Justice and three publishers involved in a lawsuit regarding e-book price fixing, owners of Kindle e-readers will receive refunds on past e-book purchases. Amazon told Kindle owners on Saturday that they could receive a refund of between $0.30 and $1.32 per book for books purchased between April 2010 and May 2012.

The books must have been published by HarperCollins, Simon & Schuster, or Hachette to qualify for a refund. If the settlement is approved by the supervising judge, the agreement will limit the publishers' ability to set e-book prices, which in theory will lead to lower costs for e-books. "We think these settlements are a big win for customers and look forward to lowering prices on more Kindle books in the future," Amazon told customers in the emails.

The three publishers, plus Apple had been accused of colluding in an attempt to sustain high prices for e-books, through contractual agreements that prohibited booksellers from offering discounts. The contracts were viewed as a way to compete against rival Amazon, which routinely sells select e-books at a loss as part of a broader strategy to promote the Kindle platform.

Many credit the iBookstore and Barnes & Noble's Nook store with dropping Amazon's market share of e-books from 90 percent to 60 percent, and it's suspected that Apple may be more likely to win than not if the DOJ goes to a full trial. Evidence provided by the DOJ itself pointed to publishers talking to each other at meetings regarding e-book pricing, but none where publishers were clearly talking to Apple at the same time.

The Department of Justice is only settling with three publishers, however it plans to proceed with its case against Apple and two other publishers, Macmillan and Penguin. The publishers that have agreed to the settlement proposal will be barred for two years from establishing contracts that place restrictions on price discounts or other promotions.



By Electronista Staff
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Comments

  1. Swift

    Fresh-Faced Recruit

    Joined: 08-23-03

    I can't understand this DoJ ruling. The store sets the price of the book? Not in the book business.

    Apple wanted to keep the price of songs at .99. The music companies wanted variable prices. Jobs held out for the fixed price with DRM removed. As a result, Amazon accepted variable pricing and got the DRM-free almost a year before Apple, who were forced to accept the pricing deal.

    Tell me again how Apple's acceptance of "agency pricing," which is the practice in the book business before e-books, loses to a fixed price by a STORE that didn't give any advances to authors and spends NOTHING for promotion?

    How much damage did the tewwible people do? Well, look at the refunds you're getting, huh? 30 cents?

  1. apostle

    Junior Member

    Joined: 04-16-08

    I'm still confused by this. Are Publishers allowed to set whatever price they like as long as it can be changed at any time? In other words, no contractually fixed price. Or is the DOJ saying you have to sell your wares below cost. What would be the point? You might as well just give it away for nothing.

    Can anyone offer any links that would clarify this in laymans terms?

    =0/

  1. prl99

    Dedicated MacNNer

    Joined: 03-24-09

    None of this has anything to do with what is right for publishers, it all has to do with the way the DOJ thinks things happened. It's all about collusion, which is illegal (except for oil companies and other businesses that get away with it). The DOJ believes Apple and some publishers met to talk about price setting (or fixing), which technically is illegal (but we all know this happens all the time all over the place). It has nothing to do with Amazon selling below the cost they paid for the books or any monopolistic activity Amazon is absolutely participating in.

    @apostle, Publishers can set any price they want to but Amazon will sell at the price they feel they can sell the book for especially while taking a loss because it doesn't matter if they take a loss as long as they get the business and push other book store out of business. This has already happened and follows exactly what the basis of the movie "You've Got Mail" suggested way back in 1998. Borders is gone and Barnes & Noble is trying to compete with Amazon by offering its own eBook reader. Amazon, however, is still king and will be until the DOJ challenges it's predatory pricing scheme.

    As for a contractually fixed price, this doesn't mean much today. Amazon will pay for books but sell them cheaper, which is something they can do. I wonder whether the fair-trade practice is still valid anymore. Generally Apple has figured out a way to not let their products get sold for a reduced price. This is why Costco doesn't have any iPods anymore. They wanted to sell them at a greatly reduced price and Apple said no so they were removed from all the stores.

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