7 Comments

Summary:

Consumers who bought eligible ebooks between 2010 and 2012 are likely to receive up to $3.06 per book, according to updated information released by the states’ Attorneys General Friday. Here’s what you can expect.

All five publishers who were accused of conspiring with Apple to set ebook prices at the launch of the iBookstore have settled with the federal government and with the states, and until now it has been unclear how much money customers would get from those settlements. On Friday, though, the states released new documentation laying out how much people who made qualifying purchases are likely to receive.

Short answer: If the states’ settlement with the publishers is finalized, customers who bought an ebook from any one of the five settling publishers between April 1, 2010 and May 1, 2012 will be eligible for a refund of up to $3.06 per book. If you’re one of those people, you’ll get that money as a credit to the digital bookstore where you purchased the book.

It’s taken awhile to even get to this “final” — but still preliminary — dollar amount. That’s because HarperCollins, Hachette and Simon & Schuster settled with the Department of Justice right away, back in April 2012, but the remaining two publishers in the lawsuit — Penguin and Macmillan — didn’t agree to settle until December 2012 and February 2013, respectively. Penguin and Macmillan’s settlements have been approved, but not finalized.

So last year, without Penguin and Macmillan included in the settlement, it appeared that eligible consumers would get a refund between $0.25 and $1.32 per ebook. Once Macmillan and Penguin decided to settle, though, the total settlement amounts increased — to $162.25 million — and so the payments will be bigger.

Assuming the Macmillan and Penguin settlements go through — they’re set to be finalized on December 6, 2013 — anybody who bought an ebook from Hachette, HarperCollins, Simon & Schuster, Penguin or Macmillan between April 1, 2010 and May 1, 2012 will get a refund of $3.06 if that ebook was a New York Times bestseller at any point in its publishing history, and $0.73 per ebook that was never a NYT bestseller.

How will you know if you qualified for the settlement? You should receive an email from the ebook retailer. You might actually have received this email last year, if you made qualifying purchases from HarperCollins, Hachette or Simon & Schuster. But if you bought a qualifying ebook from Penguin or Macmillan, you probably did not receive the email notice until today.

Regardless of which publisher you purchased an ebook from, though, your settlement amount will be the same. And you’ll receive it as a credit to the digital bookstore that you bought the ebook from — Kindle, Google or whomever.

This settlement guide that my colleague Jeff Roberts published last year is still a good guide; just swap out the dollar amounts mentioned there for the higher figures provided in this post. You can also check out the states’ ebook settlement website; I’ve embedded the key document below. And Amazon has made its own ebook settlement page, too.

  1. This DOJ conspiracy theory was even crazier than most. Why would Apple want to make iBookstore prices higher than those for the Kindle app running on an iPad? That’s no way to sell more iPads. And how much power did Apple have to force prices up when it had 0% of the market and Amazon had 90%.

    Imagine in your town there are two bookstores equally easy to visit. The long-established store that gets almost all the business in the community has a bestseller you want for $9.95. The other, which just opened, has it for $14.95. Is that higher price really a threat to the community? Hardly. If that store wants to stay in business it will have to cut its prices. That’s precisely what Steve Jobs was telling the Big Six publishers. There was no need for the feds to do what the market would quickly do. And there’s probably been no product in human history for which a free market works better.

    What book readers are also likely to get out of this settlement are fewer talented new writers to read. These publishers can recover the several hundred million dollar cost of these settlements by taking fewer risks with new authors, five of six of which typically aren’t profitable. In this ill-conceived settlement, avid readers are the real losers.

    –Michael W. Perry, author of My Nights with Leukemia: Caring for Children with Cancer

    Share
    1. You’re mistaken I’m afraid sir. One of the core problems with Apple’s terms was that they stipulated that the book publishers could not sell their books cheaper anywhere else. That is price fixing plain and simple.

      Share
      1. Amazon also has the same most favorite nation agreements with the publishers. That is pretty standard practice and is not price fixing. Amazon selling for below cost to drive B&N out of business though is a pretty good example of the antitrust definition of predatory pricing. http://en.wikipedia.org/wiki/Predatory_pricing

        Share
  2. Nate the great Saturday, August 31, 2013

    Funny, I was under the impression that Apple hadn’t settled yet.

    Share
    1. Apple hasn’t, but the publishers have.

      Share
  3. Nate the great Saturday, August 31, 2013

    “Once Macmillan and Penguin decided to settle, though, the total settlement amounts increased — to $162.25 million — and so the payments will be bigger.”

    This doesn’t make any sense. The possible number of eligible credits also increased when the 2 publishers settled, so that would tend to cancel out the increase in the size of the payment.

    It is more likely that the attorneys general now have a better idea about the number of ebook sales that are covered by this settlement. The number of ebooks sold was smaller than they expected so the payment was increased.

    Share
    1. No, this isn’t true. Macmillan and Penguin were last to settle and because of that they paid more. The three first publishers to settle — HarperCollins, Hachette & S&S — combined paid $69.04 million (which, according to the settlement docs, is “approximately 51% of the damages Plaintiffs estimated to be caused by those three settling publishers (Hachette,
      HarperCollins, and Simon & Schuster”).

      Macmillan and Penguin paid $95 million, “approximately 118% of the damages estimated by Plaintiffs’ expert for these two publishers. Macmillan and Penguin believe that damages, if any, were substantially smaller than the amount calculated by Plaintiffs.” They were penalized for settling later by having to shell out more, and that’s why consumers are going to see higher payments.

      Share

Comments have been disabled for this post