MSP Reports for St. Mary's County

Penguin Group Inc., conspired with other major publishers to jack up prices

BALTIMORE (May 23, 2013)—Attorney General Douglas F. Gansler, joined by attorneys general from 32 other states and territories, announced today the resolution of a multistate antitrust investigation of a major U.S. book publisher for price-fixing and collusion in the electronic book (E-book) market. The agreement with Penguin Group (USA) Inc., settles allegations that Penguin colluded with other major publishers and Apple Inc., to manipulate prices in the E-book market.

“By eliminating competition and ignoring consumers’ rights, these publishers ignored the basic principles of free-market commerce and forced customers to pay higher prices for E-books,” said Attorney General Gansler. “This settlement means Marylanders will be reimbursed for having paid higher prices on E-books and competition will be restored to the marketplace.”

The agreement with Penguin must be approved by the U.S. District Court for the Southern District of New York. When finalized, the agreement 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 participating states and territories and those represented by private counsel in a related class action, will receive $75 million in compensation.

Maryland has previously settled with four other publishers for allegations relating to the same conduct. They are: Hachette Book Group Inc., HarperCollins Publishers LLC, Simon & Schuster Inc., and Holtzbrinck Publishers LLC d/b/a Macmillan. Consumers nationwide will receive $164 million in compensation as a result of the settlements with all five publishers. Maryland consumers are expected to receive approximately $3.9 million from all five settlements.

Maryland’s antitrust action based on the same allegations against Apple Inc., is pending with trial scheduled for next month.

In announcing the settlement, Attorney General Gansler thanked Antitrust Division Chief Ellen Cooper, Deputy Chief John Tennis and Assistant Attorney General Schonette Walker for their work on this case.

Source: Office of Attorney General Douglas F. Gansler

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