Connecticut Consumers To Get $1.26 Million From Ebook Antitrust Settlement

Connecticut consumers are expected to receive $1,264,658 under a proposed $69-million nationwide antitrust settlement between state attorneys general across the country and three major book publishers.

The federal court settlement would resolve allegations of an illegal conspiracy to fix the prices of electronic books, or ebooks, Connecticut Attorney General George Jepsen announced this week.

The three publishers – Hachette Book Group, Inc., HarperCollins Publishers L.L.C.. and Simon & Schuster Inc. – have agreed to pay the $69 million to consumers nationwide and to change the way they price ebooks in the future, Jepsen’s office said in a press release.

Consumers who bought ebooks from the publishers from April 1, 2010 through this past May 21 can expect to get back anywhere from 25 cents to $1.32 per book purchased, with the high end being purchases of selections from New York Times best-sellers list, Assistant Attorney General Gary M. Becker said Thursday.

The settlement was entered Wednesday at the same time as an antitrust suit was filed in federal court in New York, Jepsen’s office said. The simultaneous filings — of the suit, and the settlement that would end it — were the result of months of negotiations, Becker said.

The settlement won’t become effective until a judge approves its terms; that approval would conclude the legal action. After that, Becker said, ebook buyers would be informed about how to get their money back — either in the form of checks, or in credits from major online vendors such as Amazon, which was not accused in the alleged conspiracy.

The suit claims that the three publishers, along with two other publishers who have not settled – Macmillan and Penguin – “conspired and agreed to increase retail ebook prices for all consumers” and “agreed to eliminate ebook retail price competition between ebook outlets, such that retail prices to consumers would be the same regardless of the outlet patronized by the consumer.”

Two additional publishers, Macmillan and Penguin, as well as Apple Inc., also are alleged to have participated in the same ebooks price-fixing conspiracy, but have not agreed to the settlement that Jepsen announced. A U.S. Department of Justice lawsuit is pending against them, Jepsen’s office said.

“While publishers are entitled to their profits, consumers are equally entitled to a fair and open marketplace,” said Jepsen said in the press release. “This settlement will provide restitution to those customers who were harmed by this price-fixing scheme, but it also will restore competition in the ebook market for consumers’ long-term benefit.”

The settlement agreement came after a two-year joint antitrust investigation by the Justice Department’s Antitrust Division and the Connecticut and Texas attorneys generals’ offices, Jepsen’s office said.