Book publisher Penguin has agreed to a $75 million settlement with consumers and states in the ebook pricing lawsuit, several months after it settled with the Department of Justice. The other publishers in the case — HarperCollins, Simon & Schuster, Hachette and Macmillan — had already settled with both the states and the DOJ. Penguin’s settlement is by far the largest that any of the publishers have reached.
The news comes just a couple of weeks before Apple is set to face the DOJ in court. In the trial, beginning June 3, the DOJ will argue that Apple conspired with book publishers to fix ebook prices. Apple counters that the system of agency pricing it arranged with the publishers is the same as what it uses with all other retailers in iTunes, and that the launch of iBookstore created competition in the marketplace.
Under the proposed settlement, announced Wednesday morning, Penguin would pay $75 million to consumers represented by 33 states’ attorneys general and by Hagens Berman, the Seattle-based law firm that filed the class action suit against Apple and publishers in 2011. The settlement still has to be approved by the courts, in a hearing set to take place later this summer.
Penguin’s settlement with the consumers and states is the largest that any publisher has agreed to. HarperCollins, Hachette and Simon & Schuster settled together for a combined $69 million, while Macmillan agreed to a $20 million payout. The settlements, in most cases, result in customers receiving a credit for online book retailers — meaning the publishers will recoup at least some of what they pay out.
The settlement also clears the way for the Penguin-Random House merger to move forward in the second half of this year. Penguin’s parent company Pearson said in a statement, “In anticipation of reaching this agreement, Pearson had made a $40m provision for settlement in its 2012 accounts. An incremental charge will be expensed in Pearson’s 2013 statutory accounts as part of the accounting for the Penguin Random House joint-venture.