HarperCollins, Simon & Schuster, Settle With DOJ Over E-Book Pricing - Multichannel

HarperCollins, Simon & Schuster, Settle With DOJ Over E-Book Pricing

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News Corp. subsidiary HarperCollins and CBS-owned Simon & Schuster have settled with the Justice Department over allegations they and two other publishers conspired with Apple Inc. to raise the price of e-books.

According to a copy of the complaint, filed Wednesday in a New York U.S. District Court, Justice alleges that the defendants conspired with Apple to limit e-book price competition as a way to curtail Amazon's ability to discount those books and to prevent Amazon's $9.99 from becoming the de facto price.

"Beginning no later than 2009, and continuing to date, Defendants and their co-conspirators have engaged in a conspiracy and agreement in unreasonable restraint of interstate trade and commerce, constituting a violation of Section 1 of the Sherman Act," said Justice in the complaint.

Hachette also agreed to settle, while Justice said it would pursue litigation against Apple, Penguin and Macmillan.

Simon & Schuster, HarperCollins and Hachette agreed to allow Amazon, Barnes & Noble and others to reduce the prices of e-book titles and to "terminate their anticompetitive most-favored-nation agreements with Apple and other e-books retailers."

In addition, "the companies will be prohibited for two years from placing constraints on retailers' ability to offer discounts to consumers.  They will also be prohibited from conspiring or sharing competitively sensitive information with their competitors for five years.  And each is required to implement a strong antitrust compliance program," said Attorney General Eric Holder in announcing the settlement and litigation. "If approved by the court, this settlement would resolve the Department's antitrust concerns with these companies," he said.