Court Approves e-book Antitrust Settlement

September 7, 2012 | Intellectual Property News

The Southern District of New York has approved a settlement among electronic book publishers and distributors to resolve an antitrust dispute that may result in lower e-book prices.

The Justice Department filed the case earlier this year, complaining that several book publishers had colluded with Apple to inflate the price of electronic books. Before the introduction of the Apple iPad, Amazon typically priced its electronic books at $9.99 each. The Justice Department alleged that publishers approached Apple and Amazon in an effort to find a way to raise prices, ultimately reaching deals with Apple calling for “agency pricing” in which the publishing agencies, rather than Apple, set the retail pricing. Amazon later allowed publishers to set pricing as well, resulting in prices that were generally $2 or $3 higher than the prior $9.99 prices.

In the settlement, the accused book publishers must allow e-book sellers such as Amazon and others to set their own prices and may not enter into contracts restricting retailers from setting prices on their own. For the next five years, the publishers may not enter into contracts that prevent publishers from selling to retailers who sell at lower prices. The agreement is expected to result in more competition and lower prices for e-books.

As an aside, and a bit of levity in the proceedings, licensing attorney Bob Kohn filed an amicus brief in the form of a comic strip after being told that his amicus brief must be limited to five pages.  Read the full brief at the link here. Comic Brief