The U.S. Justice Department said on Tuesday it has reached a settlement
with Pearson Plc's Penguin Group in the government's investigation of
alleged price-setting in the e-book market.
The Justice Department had
accused Apple and five publishers in April of illegally colluding on
prices as part of an effort to fight Internet retailer Amazon.com Inc's
dominance of e-books.
Apple is accused of convincing the five
publishers to use the "agency model," that allows publishers to set the
price of e-books, and in turn Apple would take a 30 percent cut.
HarperCollins and Simon & Schuster opted to settle with the Justice
Department in April but Apple, Penguin and MacMillan said they would
fight the allegations.
News Corp. owns HarperCollins Publishers
Inc, CBS Corp owns Simon & Schuster Inc and Lagardere SCA owns
Hachette Book Group. Macmillan is a unit of Verlagsgruppe Georg von
Many people in the book publishing and selling
industry accuse Amazon of deeply discounting books to sell them below
cost in order to drive other e-book sellers out of business, and then
Under the terms of the settlement announced on
Tuesday, Penguin will drop any agreements with Apple and other e-book
sellers that prevents price discounting. It will not be allowed to
reinstate the deals for two years.
The settlement terms were similar to ones that the Justice Department reached with the other three publishers in April.
impetus for the settlement could well be a joint venture of Penguin and
Random House announced in October by Penguin owner Pearson's and Random
House owner Bertelsmann.
That deal is also aimed at gaining the upper hand in the publishers' relationship with Amazon and Apple.
publisher settlements with the Justice Department have been unpopular
with bookseller Barnes & Noble Inc and the American Booksellers
Association, which represents independent stores. Both have argued the
settlements would strengthen Amazon's dominance.
© Thomson Reuters 2012