Purchase an eBook since April 2010? Your Refund Check Could Soon be in the Mail

A court settlement reached Wednesday could soon put $69 million back into the pockets of eBooks purchasers, including more than $2 million to residents of Georgia.

Georgia Attorney General Sam Olens sent out a press release Thursday announcing that he, along with attorneys general from 54 other states and U.S. territories, have reached an antitrust settlement with three of the largest book publishers in the United States.

Hachette Book Group Inc., HarperCollins Publishers L.L.C. and Simon & Schuster Inc. have agreed to pay a total of more than $69 million to consumers to resolve antitrust claims of an alleged unlawful conspiracy to fix the prices of electronic books (E-books).  They have also agreed to change the way they price E-books going forward.

Consumers in Georgia are expected to receive up to $2,014,433.00 in total compensation. Consumers eligible for restitution will be notified by the retailers from which they purchased their E-Books.

The case was brought to court in June, alleging that Hachette Book Group, Inc., HarperCollins Publishers L.L.C., and Simon & Schuster Inc. were involved in the conspiracy. Another case against non-settling publishers, Penguin and MacMillan and Apple, Inc., remains pending in the Southern District of New York.

"Our legal action sends a strong message that attorneys general will not tolerate price-fixing, which results in higher prices for consumers" Olen said in the press release. "Today's settlement with three publishers paves the way for restitution for those consumers harmed by the scheme." Olens added, "In addition to the compensating consumers who overpaid for E-Books, this settlement will restore competition in the E-Book market by promoting E-Book competition among retailers."

The rest of the statement reads:

The lawsuit and the settlement stem from a two-year antitrust investigation conducted jointly by the Connecticut and Texas Attorneys General and U.S. Department of Justice’s Antitrust Division. That investigation developed evidence that the Agency Five conspired to end E-Book retailers' freedom to compete on price by taking control of pricing from E-Book retailers and substantially increasing the prices that consumers paid for E-Books. As a result of this conduct, the States allege that consumers paid millions of dollars more for their E-books.

Under the proposed settlement agreement, which the court must approve, Hachette, HarperCollins and Simon & Schuster will compensate consumers who purchased E-books from any of the Agency Five during the period of April 1, 2010 through May 21, 2012.  Payments will begin 30 days after the court approval of the settlement becomes final. The settling defendants will also pay approximately $7.5 million to the states for fees and costs.

In addition to paying the $69 million consumer compensation, Hachette, HarperCollins and Simon & Schuster have agreed to terminate their existing agency agreements with certain retailers, requiring the publishers to grant those retailers–such as Amazon and Barnes & Noble–the freedom to reduce the prices of their E-book titles. For two years they will be prohibited from making any new agreements that constrain retailers' ability to offer consumer discounts or other promotions which encourage the sale of E-Books. 

The proposed settlement agreement also precludes these three publishers from further conspiring or sharing competitively sensitive information with their competitors for five years. Also for five years, Hachette, HarperCollins and Simon & Schuster will be forbidden from agreeing to any kind of Most Favored Nation clause that could undermine the effectiveness of the settlement agreement.