16 Comments

Summary:

Customers who bought agency-priced ebooks between 2010 and 2012 are receiving credits for those books as a result of the publishers’ settlements with the states. Kindle customers appear to be the first to get those credits.

apple-legal

Book publishers, as part of a price-fixing settlement with state governments, agreed to pay small credits to consumers who bought eligible ebooks between 2010 and 2013. Those credits started showing up in Kindle customers’ accounts Tuesday. Barnes & Noble also says credits will start showing up for Nook customers today.

kindle ebook pricing settlement

Anybody who bought an ebook from Hachette, HarperCollins, Simon & Schuster, Penguin or Macmillan between April 1, 2010 and May 21, 2012 gets a credit of $3.17 if that book was a New York Times bestseller at any point in its publishing history and a credit of $0.73 if the book was never a NYT bestseller. (The only exception is if you live in Minnesota, which reached a separate settlement; Minnesota customers get a credit of $3.93 or $0.94 per ebook.)

The publishers were accused of conspiring with Apple to fix ebook prices at the launch of the iBookstore. None of the publishers admitted guilt, but said they settled to avoid disrupting their business.

The settlement applies to all ebook retailers, but Amazon appears to be the first to start providing the credits. If you were eligible for a credit, you should have received an email last year from the retailer you bought the book from, and you should get another email when the credit is in your account. Amazon customers got emails Tuesday and can also go to the Kindle Books section of Amazon’s website to see if they have a credit.

The credits can only be applied to book purchases. As Amazon explains, “We will automatically apply your available credit the next time you purchase a Kindle book or a print book sold by Amazon.com, regardless of publisher.” In that sense, the settlement money that the publishers paid out is largely going right back into the book business.

Consumers could also receive a further credit from Apple once the dust settles in an ongoing price-fixing trial. Unlike the book publishers, Apple has chosen to fight an antitrust case brought by the Justice Department, state governments and class action lawyers — but has so far lost at each step of the way.

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  1. worshiphisholiness Tuesday, March 25, 2014

    I received $4.38.

  2. You should point out the credit can only be used for buying books on Amazon. Doesn’t it defeat the purpose? If I was overcharged in the first place, shouldn’t I be able to spend this refund any way I see fit?

    1. BlackHippieChick MK Wednesday, March 26, 2014

      You get the refund from the places you spent the money in the first place.

  3. Sweet. $.73!

  4. Kevin C. Tofel Tuesday, March 25, 2014

    $18.50 due to my e-reading habits. :)

  5. 1.38 still happy though

  6. 1.46 hey it’s something. :)

  7. All that trouble, legal hassle, and expense on behalf of consumers who were unfairly charged too much and they get… $0.73. Each!

    Of course, the attorneys for the book publishers took in huge fees for their work. I love how our justice system “helps” consumers by paying the blood-sucking tics of the legal system millions of dollars. I’ve received probably a half dozen or so checks or rebates for class-action lawsuits and government settlements over the years. My net intake on them has been less than $20. Far less than the people fighting on my behalf.

    Our legal system is a joke. And a not very funny one at that.

    1. This particular case was brought by the DOJ and 49 state attorneys general. They were paid their usual salaries which are funded by your tax dollars and 100% of the settlement was returned to the consumers that were determined to be harmed.

      The Minnesota AG chose not to join so there were outside attorneys that filed on behalf of the consumers in MN. Those attorneys negotiated a slightly higher settlements for those consumers and 100% of those settlements also went to the consumers determined to be harmed. A separate settlement was reached later to cover the attorney fees for this action.

  8. Hmm… I don’t see a credit on my account, though I bought many books over this time period, and from one of the publishers listed. Does the settlement vary by state?

  9. David Emil Henderson Tuesday, March 25, 2014

    I’m curious what authors think of these settlements. Don’t they have a right to “fix” a price that provides decent compensation for the years of work that goes into many books? Writers’ royalties amount to a pittance when eBooks are selling for less than $10 a copy. People spend that for a couple of coffees at Starbucks.

    1. I’m in several groups with authors & they all were excited to buy books, too.

    2. Amazon was quick to use ebooks as a loss leader to boost kindle sales, this cause a preconceived notion with the consumer market that all ebooks should be 9.99 or less. In reality Amazon was implementing predatory pricing to snuff out competition, but the reality was the effect was also hurting the publishers. Amazon would purchase the ebooks at wholesale price and sell at a loss to draw in customers, this had no effect on royalties because writers made their cut from the wholesale price. Now with a switch in pricing models from wholesale to an agency model (basically what the price fixing case was about), the writer receives a royalty based upon the selling price, so now that 9.99 ebook makes you less. The reason why prices went up was to fix the price erosion Amazon established. The problem comes into play when that ebook for 9.99 cuts into sales of physical books, which in return causes less royalties as well for authors. Basically publishers had to figure out a way to counterattack the false prices Amazon established, and the only solution was to inflate the ebook prices back to a normal reality.

  10. If you actually read over the court documents, you will see the reason why everyone thinks they were “charged to much” from the publishers was all due to Amazon implementing predatory pricing on ebooks. Amazon was actually selling ebooks at a loss as to boost their kindle sales. Apple enters the market with the iPad, but also establishes a new pricing model with publishers (no more wholesale purchasing, they opted for an agency model – which they receive a percentage of each sale, no risk of stale inventory) All this started because Amazon was purposely causing price erosion as to knock out the competition. The prices inflated because of the agency model, I guess you could say they became more realistic. The only reason why this is considered price fixing is because 90% of the bestseller market is from 5-6 publishers. The reality was publishers switched pricing models (wholesale – agency model) as a means to prevent loss due to predatory pricing.

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