After getting slapped with an antitrust lawsuit, publishing houses Simon & Schuster, Harper Collins and Hachette have agreed to compensate people who bought ebooks from Apple’s iBookstore at elevated prices.
Apple and ebook publishers have been accused of price-fixing. The U.S. Department of Justice alleges that Apple
, as it prepared to launch its own ebook store, persuaded publishers to price ebooks at $13 and $15, or about $3 more than the same books being sold through Amazon and other outlets.
Formerly, it was retailers like Amazon, and not publishers, that set consumer prices. As part of the deal, Apple allegedly got a 30 percent commission on each ebook sold. Amazon and others felt compelled to adopt the new model, and now most Amazon Kindle
books start at $13.
After a two-year investigation, the Justice Department filed an antitrust suit against Apple, Penguin, Macmillan, Hachette, HarperCollins and Simon & Schuster.
The bottom line, based on documents filed by the Justice Department and released by tech
news site The Verge: Amazon’s $10 ebook price scared the hell out of publishers. The plan to end Amazon’s iron reign took place in secret CEO meetings in private New York dining rooms beginning in the fall of 2008.
Sixteen states and the commonwealth of Puerto Rico have filed a suit 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.
Simon & Schuster, Harper Collins and Hachette are avoiding the states’ suit by agreeing to “provide restitution” to people in those states that had purchased their books from Apple
. The publishers said that they will “use a formula based on the number of states participating and the number of eBooks sold in each state” to determine amounts due, but did not specify how consumers will be reimbursed — by check, a discount on future purchases, or some other mechanism. Details are to be finalized in the coming weeks.