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December 19, 2012

US DOJ reaches settlement with Penguin in e-books case

Publishers had been accused with Apple of inflating the price of e-books

By CBR Staff Writer

The US Department of Justice (DOJ) has reached a settlement with book publisher Penguin Group (USA) over claims it conspired to inflate the price of e-books.

In April this year, the US DOJ filed a suit against five publishers and Apple, claiming that they conspired to increase e-book prices for consumers.

The department said it will continue to litigate against Apple and Holtzbrinck Publishers, which does business as Macmillan, to prevent continued restrictions on price competition. A trial against Macmillan and Apple is scheduled to start in June 2013.

Previously, the US DOJ’s antitrust division settled its claims against three book publishers, Hachette Book, HarperCollins Publishers and Simon & Schuster.

US DOJ’s antitrust division Chief of Staff and Counsel Jamillia Ferris said: "Since the department’s settlement with Hachette, HarperCollins and Simon & Schuster, consumers are already paying lower prices for the e-book versions of many of those publishers’ new releases and bestsellers."

"If approved by the court, the proposed settlement with Penguin will be an important step toward undoing the harm caused by the publishers’ anticompetitive conduct and restoring retail price competition so consumers can pay lower prices for Penguin’s e-books," Ferris said.

As part of the settlement, Penguin will terminate its agreements with Apple and other e-book retailers and will be barred for two years from entering into new agreements that constrain retailers’ ability to offer discounts.

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Penguin must submit to a strong antitrust compliance program that includes providing advance notification to the department of any e-book ventures it plans to undertake jointly with other publishers, the DOJ said.

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