Government E-Book Lawsuit Targets Only Apple, After Macmillan Settles

The U.S. Justice Department’s landmark 2012 antitrust lawsuit against major publishing companies over alleged e-books price collusion has been narrowed to target only Apple, after the last publishing company that was still contesting the charges, Macmillan, agreed to settle on Friday.

The Justice Dept. in April 2012 originally accused Apple and five publishing companies —  Hachette, HarperCollins, Macmillan, Penguin, and Simon & Schuster– of banding together to set the price of e-books sold through Apple’s iBookstore and other online stores (namely Amazon) higher than Amazon’s preferred previously established e-book price of $9.99, in violation of federal antitrust law.Three of the five publisher defendants –Hachette (owned by Lagarde SCA), HarperCollins (owned by News Corp.) and Simon & Schuster (owned by CBS) — moved to settle right away, leaving just Apple, Macmillan and Penguin to battle the Justice Dept.’s charges.

In December 2012, Penguin agreed to a settlement offer with the DOJ as well, leaving Apple and Macmillan to contest the case.

On Friday, Macmillan also settled, agreeing to “immediately allow retailers to lower the prices consumers pay for Macmillan’s e-books,” according to a statement published online by Jamillia Ferris, Chief of Staff and Counsel at the Department of Justice’s Antitrust Division.

As part of the settlement, Macmillan is also “prohibited until December 2014 from entering into new agreements,” to prevent e-book retail outlets like Amazon and other online stores from offering discounted Macmillan e-books. Macmillan must inform the DOJ going forward of any future e-book deals it plans to strike with other companies and any conversations it has with other competing publishing companies more generally, as well as undertake its own internal antitrust compliance program.

While Macmillan calculated that all of those compliance agreements were more favorable than an expensive and potentially lengthy trial, Apple still faces legal proceedings in June.

Read more about the likely outcomes and the so-called “agency model” that Apple and its partners were pursuing here.

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