Macmillan Settles Ebook-Pricing Antitrust Charges
The publishing giant Macmillan has agreed to join four other publishers in settling antitrust charges related to ebook pricing, according to court papers filed today.
Macmillan is resolving the case on similar terms as four other publishers sued in April by the Department of Justice. Apple, also sued by the government, continues to fight the charges.
The federal authorities say in court papers filed today that the deal "likely will lead to lower e-book prices for many Macmillan titles," adding that prices of other publishers' ebooks fell after they settled the case.
Macmillan -- which already canceled its "agency" contract with Apple -- has agreed that it won't enter into a similar type of agreement until at least December of 2014.
Macmillan and the other publishers who were sued -- Hachette, HarperCollins, Simon & Schuster, and Penguin -- were accused of conspiring to end Amazon's $9.99-a-book price for bestsellers. The publishers allegedly forged a deal to force retailers to shift from a wholesale pricing model -- which allowed retailers like Amazon to sell books at whatever prices they saw fit -- to an agency model. The agency model calls for publishers to set the retail price and then pay commissions to the retailers.
The industrywide shift to an agency model benefited Apple, which didn't want to price bestsellers for the iPad at the same low rate that Amazon offered -- $9.99 per download.
Not everyone thought the Justice Department's lawsuit was a good idea. Critics said that Amazon's $9.99 pricing was predatory and, if unchecked, would have resulted in the company's monopoly over ebooks -- a bad situation for consumers as well as other booksellers. But the judge who is presiding over the case, Denise Cote in Manhattan, ruled last year that even if Amazon's pricing was predatory, the publishers still didn't have the right to conspire to fix prices.