Last week a New York federal judge granted a preliminary approval on 2 class action settlements worth $115 million. The granting of these class action settlements will resolve the e-book price-fixing claims against Penguin Group USA Inc. and Macmillan Publishers Ltd.
In the initial class action lawsuit, 33 state attorneys general and private consumers accused Penguin and Macmillan of conspiring with other publishing companies and Apple Inc. to manipulate e-book prices, forcing consumers to pay an artificially inflated price in violation of antitrust laws. This alleged conspiracy was uncovered by the U.S. Department of Justice. The other publishing companies include Hachette Book Group, HarperCollins Publishers and Simon & Schuster.
Most of the money from the class action settlement will be awarded to the class of consumers from 33 states that purchased e-books from the companies between April 1, 2010 and May 21, 2010. Under these agreements, Penguin has agreed to pay the consumer class $75 million and Macmillan has agreed to pay $20 million. The rest of the class action settlement money will be used to pay attorneys’ fees and costs for the class members and state government.
Apple is the only of the listed defendants in the class action lawsuit who opted to go to trial. Last month, Judge Cote ruled that Apple conspired with other publishing companies to raise the prices of e-books from $9.99 to as much as $14.99. These inflated prices cost customers hundreds of millions of dollars. Apple intends to appeal Judge Cote’s decision.