DOJ Shuns Critics in e-Book Antitrust Suit

July 23, 2012
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July 23 – July 29, 2012 Edition DOJ Shuns Critics in e-Book Antitrust Suit WASHINGTON, D.C./AUTHORLINK NEWS/July 23, 2012–The U.S. Department of Justice today declared that its proposed “final judgment” in an e-book price-fixing case against three large publishers provides an “effective remedy” for alleged antitrust violations, “and therefore is in the public interest.” The findings came after a legally-required 60-day period for public discussion. The DOJ received 868 public comments against the proposed settlement with Simon & Schuster, Hachette and HarperCollins. Less than 70 comments were favorable, but the DOJ dismissed criticism as largely being submitted “by those who have an interest in seeing consumers pay more for e-books, and hobbling retailers that might want to sell e-books at lower prices.”

In submitted its proposed settlement to the US District Court, Southern District, New York, the DOJ admonished the court that its inquiry must be limited to ruling whether the DOJ’s case is “within the reaches of broad public interest,” and whether “the Final Judgment provides an effective and appropriate remedies” for the alleged antitrust violations.

The DoJ response to comments showed little interest in statements from Barnes & Noble, Books-A-Million, the ABA and the Authors Guild that the “collusive limits” were a necessary response to Amazon’s anticompetitive behavior.

Lawyers for Apple (a main target for the DOJ price-fixing case and one of three publishers that refused to settle) wrote in comments to the DOJ that the settlement represents a threat to e-book competition. “In a misguided attempt to reshape the market according to its own preferences, the government seeks to impose a business model that will result in dramatic and long-lasting harm,” the company said. Apple’s case is scheduled for trial in June 2013.

The DOJ last April brought a price fixing law suit against Apple and five other large publishers accusing the companies of working together to raise accusing the companies of working together to raise prices of e-books.

Defendants in the lawsuit were Apple, Hachette Book Group, HarperCollins Publishers, Macmillan, Penguin Group and Simon & Schuster. The DOJ said in court documents that the six companies conspired to raise prices on e-books in retaliation for Amazon.com pricing most e-books at $9.99 beginning in late 2007. Three of the publishers, Simon & Schuster, Hachette and HarperCollins, have said they will settle.

The settlement, if approved in court, would require the publishers to allow retailers to set their own prices for e-books. The settlements would also prohibit the publishers from discussing pricing with competitors for five years and prohibit them from constraining retailer efforts to offer discounts for two years.

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