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

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.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.