Ken Paxton

Wednesday, May 22, 2013

Texas Attorney General Reaches Agreement with Penguin Group Inc. to Resolve E-Book Price-Fixing Allegations

AUSTIN Texas Attorney General Greg Abbott today announced the resolution of a multistate antitrust investigation against a major U.S. book publisher for price-fixing and collusion in the electronic book (E-book) market. Texas has reached an agreement on behalf of 32 other states and territories with Penguin Group (USA) Inc. to settle the states’ allegations that Penguin colluded with other major publishers and Apple Inc. to manipulate prices in the E-book market. Attorney General Abbott issued the following statement about the agreement:

Unlawful collusion and price-fixing not only violates antitrust laws, it is anti-competitive and inconsistent with the free market approach that is critical to our economy. Today’s agreement with Penguin provides refunds to customers who paid artificially inflated prices for E-books and prohibits Penguin from colluding with other publishers and undermining retail price competition in the E-book market.

The agreement with Penguin must be approved by the U.S. District Court for the Southern District of New York. When finalized, the agreement with Penguin will grant E-book outlets greater freedom to reduce the prices of their E-book titles. Consumers nationwide including those represented by the attorneys general of the 33 states and territories and those represented by private counsel in a related class action will receive $75 million in compensation. Texas customers comprise nearly eight percent of E-book purchasers nationwide.

Texas has previously settled with four other publishers: Hachette Book Group Inc., HarperCollins Publishers L.L.C., Simon & Schuster Inc., and Holtzbrinck Publishers LLC d/b/a Macmillan for allegations relating to the same conduct. Consumers nationwide will receive $164 million in compensation as a result of the settlements with the five publishers.

Texas’s antitrust action based on the same allegations against Apple Inc. remains pending with trial scheduled in June 2013.