Amazon plans to lower e-book prices after an antitrust settlement

October 16, 2012 10:16 AM Inc. is beginning to e-mail some early and unusual holiday cheer to customers, notifying them that e-book prices may be coming down and that they may receive refunds of up to $1.32 for certain e-books they’ve already bought. The refunds are the result of an antitrust case against several publishers.“You can apply this credit toward any Kindle or print book,” Amazon says on its web site.

Kindle, of course, is the e-book reader Amazon, No. 1 in the Internet Retailer Top 500, sells to consumers to read the e-books it sells. And under a June 2012 settlement of an antitrust case brought by the attorneys general of 49 states, the District Columbia and five U.S. territories and commonwealths against three publishers—Hachette Book
Group Inc., HarperCollins Publishers Inc. and Simon & Schuster Inc.—Amazon and other retailers will be refunding customers in amounts ranging from 30 cents to $1.32 if the settlement is approved in court in February.

The three publishers will pay a total of $69 million to cover the refunds. The case, which involves the so-called agency pricing model, alleges e-book price-fixing by publishers. Major book publishers moved to the agency model—in which the publisher sets the price and the retailer takes 30% of the sale—to stop Amazon from pricing top-selling e-books at $9.99, a price typically about a third of what publishers charge for new hardback books. If the court approves the antitrust settlement, Amazon and other retailers will be free to set their own prices.

The settlement calls for consumers to receive refunds of $1.32 for each e-book that was on the New York Times Best Sellers list and purchased between April 1, 2010, and May 21, 2012. Consumers who purchased e-books during that period that were not on the best-sellers list will receive 30 cents per book.

"We think these settlements are a big win for customers and look forward to lowering prices on more Kindle books in the future," Amazon says in an e-mail sent to e-book customers in recent days. The retailer adds that the settlement imposes limitations on the publishers’ ability to set e-book prices.

A separate case by the coalition of attorneys general is still pending against two additional publishers, Penguin Group (USA) Inc. and Holtzbrinck Publishers LLC (also known as Macmillan), and Apple Inc. That case is scheduled to go on trial next year in the U.S. District Court for the Southern District of New York.




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