If you bought an e-book in the past few years, you probably overpaid. But you
may soon be able to get some compensation.
Attorneys general around the nation announced Friday that they have
reached settlements with three of the nation's top publishers and others
accused of conspiring to fix and raise retail prices of electronic books.
Wisconsin Attorney General J.B. Van Hollen said in a news release Friday
that the proposed settlements -- if approved by the United States District
Court for the Southern District of New York -- will provide checks or credits
to people who purchased e-books published by Hachette, HarperCollins, Simon &
Schuster, Penguin and Macmillan between April 1, 2010, and May 21, 2012.
There will be two levels of payments based on categories of books, the
release said, but the exact amount of each payment has yet to be determined.
"Although the settlements are subject to final court approval, claims
under the proposed settlements will begin to be processed before approval
occurs," the release said.
Officials said most people who bought qualifying e-books will receive
written notice that they are eligible for a credit. Those who follow the
instructions provided with the notice will receive a credit into their e-book
retailer account or a check.
According to the antitrust lawsuit:
Amazon.com started offering New York Times best sellers for $9.99 in 2007
and by 2009 accounted for at least 80% of e-book sales. The "big six"
publishers -- the settling ones plus Random House -- were afraid that Amazon
would seek lower wholesale e-book prices from them and become a direct
competitor by contracting directly with authors to publish e-books. They were
also concerned that Amazon would cannibalize the sales of printed books by
selling lower-priced e-books.
So chief executives of the big publishers started meeting regularly over
exclusive dinners in private rooms at elite New York restaurants in 2008 and
2009. Subsequently, the companies tried to find a way to force Amazon and
other retailers to increase their bestseller prices. Simon & Schuster
increased its wholesale prices in early 2009 in an attempt to get online
retailers to raise their prices, but online retailers didn't budge.
"The conspiring publishers reached an agreement that something had to be
done to end Amazon's $9.99 pricing of NYT-Bestsellers and they were
collectively searching for the means to effectuate a price increase," the
lawsuit states.
By mid-December 2009, Simon & Schuster, Hachette, HarperCollins and
Macmillan had agreed to delay publication of their e-books until several
months after the first print editions came out. That was done to enhance their
ability to negotiate higher retail prices from Amazon and other distributors.
The publishers shared information with each other about which titles would be
delayed and for how long, the complaint says.
By January 2010, Apple Inc. had facilitated the implementation of the
scheme to increase prices, according to the complaint. Instead of selling
their books through retailers and letting them set prices, the publishers
would start selling their own books directly to consumers through Apple's
iBooks store at a higher retail price. That eliminated e-book price
competition between Apple, Amazon and other outlets and ensured that Apple
earned a 30% gross margin on e-books.
As a result of the conspiracy, consumers nationwide paid "substantially
more than" $100 million in overcharges, the complaint says.
If the court approves the settlements and the attorneys general's
distribution plan, the publishers will contribute $69 million into a
settlement fund that will be distributed to eligible consumers.
The New York court has scheduled a hearing on the settlement for Feb. 8,
2013.
Van Hollen noted that the settling publishers deny that they did anything
wrong. A separate lawsuit with similar claims continues against two other
publishers and Apple Inc.
Collectively, the settling publishers and Random House are responsible
for 60% of all revenue generated from print titles sold in the United States,
including 85% of the revenue generated from New York Times best sellers.
E-books have increased significantly in popularity over the past five
years, making up 2% of all titles in the United States in 2007 but 25% in
2011.
HOW TO FILE A CLAIM
To see a full list of the publishers and imprints included in the
settlement, and to see the conditions in case you bought e-books but weren't
notified, visit www.EBookAGSettlements.com.
To learn more, to explore your legal rights and options, and to decide
whether to file a claim form, call (866) 621-4153. Claim forms must be filed
online or postmarked by Dec. 12.
