Apple ebook buyers to get compensation from publishers

Macworld Australia Staff
13 April, 2012
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Following the price-fix controversy involving Apple’s iBookstore and a handful of ebook publishers,  companies Simon & Schuster, Hachette and Harper Collins have agreed to compensate consumers in the US who purchased their publications at elevated prices.

The investigation into allegations of price-fixing by the US Department of Justice include claims that Apple coerced publishers to cost their books from US$12 – US$15 to exceed Amazon’s standard US$9.99 ebook price for the same publications sold on its website.

In the past, it was retailers that set book prices, not the publishers. Apple’s price hike netted the company a 30 percent commission for every ebook sold, forcing the hand of Amazon and other online retailers to adopt a similar model – the result being that the majority of Amazon Kindle books now retail from US$13.

Following a two-year investigation, the US Justice Department filed an antitrust case against Apple and a number of ebook publishers, including Harper Collins, Hachette, Simon & Schuster, Penguin and Macmillan.

The case alleges that Amazon’s dominance in the ebook retail market concerned Apple, who strategised with the publishers’ CEOs in a series of secret meetings in New York, beginning in 2008.

Hachette, Harper Collins and Simon & Schuster agreed to settle with the DOJ while not admitting any violation of federal law.

Under the terms of the settlement, the publishers agreed to terminate any existing deal with Apple or any other seller of ebooks that “restricts, limits or impedes the ebook retailer’s ability to set, alter or reduce the retail price of any ebook.”

Meanwhile,16 US states and the commonwealth of Puerto Rico have filed suits of their own. in “Texas, Alaska, Arizona, Colorado, Connecticut, Illinois, Iowa, Maryland, Missouri, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Texas, Vermont, West Virginia and Puerto Rico have demanded compensation for their citizens,” Mashable reported. reports Mashable.

In another attempt to avoid ongoing legal implications, publishers’ Simon & Schuster, Harper Collins and Hachette have agreed to “provide restitution” to consumers in these states who had bought their publications from Apple.

The compensation scheme will be formulated “based on the number of states participating and the number of eBooks sold in each state” to calculate amounts owed, though it has bot been confirmed how consumers will be compensated. It’s expected that further details will be announced in the coming months.

Further investigations into the price-fixing continue on both sides of the Atlantic, with EU competition chief EU competition chief Joaquin Almunia recently saying that a settlement offer from Apple and four publishers had been discussed.

What do you think? Are these publishers doing enough to rectify the situation? And what role has Apple played in all of this? Leave your thoughts in the comments field below.

@grace_robinson_

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