Penguin will pay $75M back to e-book buyers over alleged price fixing

Penguin will pay $75 million to settle claims that it engaged in a conspiracy with other publishers and Apple to raise e-book prices.

"Penguin has reached a comprehensive agreement with the US state attorneys general and private class plaintiffs to pay $75 million in consumer damages plus costs and fees to resolve all antitrust claims relating to eBook pricing," the Pearson-owned company announced yesterday.

The money will be distributed to consumers, Massachusetts Attorney General Martha Coakley announced. “Price collusion among competitors is unacceptable,” Coakley said. “This settlement will reimburse consumers harmed in this e-book scheme and bring an end to the unlawful practices that caused these overcharges.”

Coakley said the $75 million will be disbursed to consumers nationwide and that Penguin will pay another $7 million to the states for legal fees and costs. Penguin is the fifth company to settle. Overall, Coakley said US consumers will receive $164 million in reimbursements to compensate for e-book price fixing.

Penguin previously settled with the Department of Justice (DOJ) last December. Justice officials have also extracted settlements from HarperCollins, Hachette, Simon & Schuster, and Macmillan, leaving Apple as the last holdout among the defendants named by the DOJ in an antitrust lawsuit.

The trial against Apple is scheduled to begin June 3 in US District Court for the Southern District of New York. In a recent filing, the DOJ accused Apple of being the "ringmaster" in a conspiracy with the publishers to raise e-book prices above those charged by Amazon. While Amazon was generally charging $9.99, US officials say each publisher signed deals with Apple to raise standard prices to $12.99 and $14.99 "on the explicit condition that other publishers agree to do the same." Apple has denied being part of any conspiracy or even being aware of one.