Friday, February 8, 2013

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Texas Attorney General Reaches Agreement with Macmillan to Resolve E-Book Price-Fixing Allegations

AUSTIN – Texas Attorney General Greg Abbott today announced the resolution of a multistate antitrust investigation against a major U.S. book publisher for price-fixing and collusion in the electronic book (E-book) market. Texas has reached an agreement in principle on behalf of 32 other states and territories with Holtzbrinck Publishers LLC d/b/a Macmillan to settle the states’ allegations that Macmillan colluded with other major publishers and Apple Inc. to manipulate prices in the E-book market. Attorney General Abbott issued the following statement about the agreement:

“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. Today’s agreement with Macmillan provides refunds to customers who paid artificially inflated prices for E-books and prohibits Macmillan from colluding with other publishers and undermining retail price competition in the E-book market.”

The agreement with Macmillan must be approved by the U.S. District Court for the Southern District of New York. When finalized, the agreement with Macmillan will grant E-book outlets greater freedom to reduce the prices of their E-book titles. Consumers nationwide – including those represented by the attorneys general of the 33 states and those represented by private counsel in a related class action – will receive $20 million in compensation. Texas customers comprise nearly eight percent of E-book purchasers nationwide.

Judge Denise L. Cote of the U.S. District Court for the Southern District of New York also granted final approval today of agreements the states reached with book publishers Hachette Book Group Inc., HarperCollins Publishers L.L.C. and Simon & Schuster Inc. relating to the same conduct. Those agreements were filed with the court in August 2012 and were joined by the attorneys general of 54 other jurisdictions, including states, U.S. territories and the District of Columbia. Final approval paves the way for the affected customers to receive $69 million in restitution.

Texas’s antitrust action based on the same allegations against publisher Penguin Group (USA) Inc. and Apple Inc. remains pending with trial scheduled in June 2013.