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Three U.S. publishers — HarperCollins, Simon & Schuster, and Hachette — have quickly agreed to pay $69 million to settle the U.S. Department of Justice’s price collusion suit.The deal follows a two-year antitrust investigation by the Connecticut and Texas Attorneys General and the U.S. Department of Justice’s Antitrust Division, Bloomberg Businessweek reported.
In April, the U.S. opened a case against Apple and five publishers in New York district court for allegedly working together to fix the prices of e-books, according to The Wall Street Journal.
“Unlawful collusion and price-fixing not only violates antitrust laws, it is anti-competitive and inconsistent with the free market approach that is critical to our economy,” Texas Attorney General Greg Abbott said in a statement. “Today’s settlements provide refunds to customers who paid artificially inflated prices for e-books.”
The Alleged Conspiracy
The DOJ argued that Apple and the five publishers sought to increase e-book prices “significantly higher” than the typical $9.99. According to the complaint, the publishers saw Amazon.com’s lower prices as a “substantial challenge to their traditional business model,” Bloomberg reported.
Bloomberg reported that HarperCollins, Simon & Schuster, and Hachette were quick to agree to a deal with the U.S. shortly after the allegations, while Apple denied any wrongdoing.
According to the complaint from the DOJ, the publishers and Apple agreed to set a new method of pricing, which would not allow for retailers to change prices set by publishers. Under the illicit deal, Apple would have benefited from a 30 per cent commission on all digital book sales.
There’s still pending litigation against Apple and the publishers Macmillan and Penguin Group, according to Bloomberg.