E-Book Publishers, States’ $69 Million Accord Approved

A U.S. judge granted preliminary approval to a $69 million settlement between 49 states and three U.S. publishers over alleged price fixing of electronic books.

U.S. District Judge Denise Cote in New York gave initial approval to the accord with Hachette Book Group, HarperCollins Publishers LLC and Simon & Schuster Inc. and all the states but Minnesota.

The District of Columbia, U.S. Virgin Islands, Northern Mariana Islands and Puerto Rico also joined in the settlement.

Hachette agreed to pay $31.7 million; HarperCollins, $19.6 million; and Simon & Schuster, $17.8 million, Cote said in an order signed yesterday and made public today. The judge scheduled a fairness hearing for Feb. 8.

The states sued alleging the publishers unlawfully agreed to fix the prices of electronic books, violating U.S. antitrust law. The companies agreed to switch from the “traditional wholesale/retail model of distribution to an agency model with the major retailers of e-books in order to raise and fix the prices of electronic books to consumers,” the states said.

Apple Lawsuit

In a separate case, the U.S. sued Apple Inc. (AAPL) and five publishers in April, charging that they conspired to limit e- book price competition. The government said the defendants sought to raise e-book prices “significantly higher” than the $9.99 level at which they were selling.

Cote approved a settlement with Hachette, HarperCollins and Simon & Schuster in that case earlier this month, saying it was in the public interest.

The U.S. suit against Apple and the publishers Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH, and Pearson Plc (PSON)’s Penguin Group remains in effect, according to a statement by Texas.

The case is Texas v. Hachette Book Group Inc., 1:12-cv- 06625, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.

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