“This is a big win for Kindle owners, and we look forward to being allowed to lower prices on more Kindle books.” –Amazon’s statement on Hachette, Simon & Schuster and HarperCollins’ settlement with the Department of Justice
The Department of Justice filed a lawsuit against Apple and five big publishers this morning, accusing them of colluding to fix e-book prices.
Three of the publishers named – Simon & Schuster, Hachette and HarperCollins — are settling, while Macmillan and Penguin will fight the suit in court.
The full text of the settlement is embedded in full below. (I got it from Publishers Weekly.) For a good overview of what is contained in this settlement, see this post at Publishers Lunch: “Settling publishers are allowed modified agency for two years that could limit predatory pricing.“
Hachette, HarperCollins: “Reluctance” to settle, no wrongdoing
In statements, HarperCollins and Hachette acknowledged that they had settled but defended agency pricing and did not admit to wrongdoing
“HarperCollins did not violate any antitrust laws and will comply with its obligations under the agreement,” HarperCollins said in a statement, noting that “After HarperCollins adopted the agency model in 2010, the e-book market exploded, giving consumers more choices of devices, formats and prices that would never have existed but for the agency model.”
The company “faced legal challenges on five separate fronts, including the DOJ investigation,” the company said, adding, “ The e-book market has grown over the last two years from a small e-ink market, dominated by one platform, to a $1B market with several competing platforms. HarperCollins made a business decision to settle the DOJ investigation in order to end a potentially protracted legal battle.”
Hachette said it “reluctantly agreed” to join the settlement. “Hachette was not involved in a conspiracy to illegally fix the price of e-books, and we have made no admission of liability,” the company said. It noted that “we remain confident that we did not violate the antitrust laws,” but “the prospect of lengthy and costly litigation with government plaintiffs with virtually unlimited resources” would “be too disruptive to our business.”
Hachette says 82 percent of its e-books are priced below $9.99. “In the wake of this settlement, we believe the DOJ and the State AGs have a responsibility to consumers to ensure that the market for e-books remains diverse and competitive, and that we don’t return to the days of monopoly, with one company controlling what and how people read e-books,” the company said.