Monthly Archives: September 2012

Court Approves Justice Department’s E-Book Proposal, Restoring pre-2010 Status Quo Without an Economic Study

Judge Denise Cote approved the Justice Department’s controversial settlement with three major publishers — Hachette, HarperCollins, and Simon & Schuster — in a 45-page decision filed yesterday afternoon. The settlement requires the publishers to allow e-book retailers to sell their books at any price, even below cost, so long as the retailer does not lose money over a publisher’s entire e-book list over a 12-month period. The Justice Department had sued five publishers (the others are Penguin and Macmillan) and Apple this spring alleging that they had colluded to introduce “agency pricing” for e-books in 2010 with the launch of the iPad.

The Authors Guild opposed approval of the settlement, believing that the DOJ could address the alleged collusion without requiring three publishers to allow Amazon to resume predatory pricing. Amazon’s predatory pricing — selling bestselling frontlist e-book titles at a loss — had helped the online retailer gain a 90% share of the e-book market by January 2010.

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