Penguin Settles for $75 Million in eBook Pricing Suit

By Jason Boog Comment

Penguin will pay $75 million in damages and “costs and fees to resolve all antitrust claims relating to eBook pricing”–settling with 33 state attorneys general and consumers in a suit led by Hagens Berman Sobol Shapiro.

The suit revolved around allegations of price fixing with the agency model for eBook pricing. The publisher issued a brief statement:

Penguin has also committed to the State Attorneys General to abide by the same injunctive relief as previously agreed in a separate settlement with the Department of Justice. In anticipation of reaching this agreement, Pearson had made a $40m provision for settlement in its 2012 accounts. An incremental charge will be expensed in Pearson’s 2013 statutory accounts as part of the accounting for the Penguin Random House joint-venture.

In December, Penguin reached a settlement with the Department of Justice in a similar suit about eBook pricing. The court still needs to approve the settlement.  You can track the hearing schedule at this site.

In addition, Hagens Berman Sobol Shapiro described the ramifications of the settlement in a release:

The lawsuit asserts that Penguin actively participated in a price-fixing scheme orchestrated by Apple (NASDAQ: AAPL) that artificially raised e-book prices and created a virtual cartel, eliminating any retailer competition on price. The $75 million settlement, if approved by the court, would resolve claims filed by 33 states against Penguin as well as class-action lawsuits filed by consumers alleging that the company’s behavior violated unfair competition laws, causing consumers to overpay for e-books.