During the first week of September this year, U.S. District Judge Denise Cote of Manhattan approved a settlement between the Justice Department and three publishers who allegedly conspired with other publisher and tech giant Apple Inc to drive up the costs and prices of e-books.
Cote, while mentioning the settlement caused negative comments, she said there was absolutely no justification for price fixing. The Justice Department, in their lawsuit, accused Apple and a total of five publishers of price fixing in order to break the hold Amazon.com has on the e-book market.
News Corp’s HarperCollins Publishers Inc, CBS Corp’s Simon and Schuster Inc, and Lagardere SCA’s Hachette Book Group are the three publishers who agreed to settle; Pearson Plc’s Penguin Group and MacMillan, a division of Verlagsgruppe Georg von Holtzbrinck GmbH, are planning to fight the lawsuit along with Apple Inc.
The settlement so far has had many critics including booksellers Barnes & Noble Inc who claim the move with strengthen the dominance that Amazon enjoys and will eventually push smaller publishing houses out of business. Amazon has been informally accused of selling e-books below price to drive out competition, to only raise prices later.
“Even if Amazon was engaged in predatory pricing, this is no excuse for price-fixing,” said the judge in her 45-page opinion.
While e-books are gaining in popularity with sales of over $2 billion in 2011, most people still prefer to buy print books and spent over $11.1 billion on them in the same time period.