DOJ Said Near E-Book Pricing Settlement With Publishers
The U.S. Department of Justice is close to a settlement with three of the world’s biggest publishers on e-book price contracts with Apple Inc. (AAPL), said three people with knowledge of the situation.
CBS Corp. (CBS)’s Simon & Schuster, News Corp.’s HarperCollins and Lagardère SCA (LH)’s Hachette Book Group may finalize a Justice Department accord next week, said one of the people, who requested anonymity because the talks are private.
The situation may change, the people said. Justice officials may delay a settlement until an agreement is reached with publishers that also include Pearson Plc (PSON)’s Penguin Group and Macmillan, owned by Verlagsgruppe Georg von Holtzbrinck GmbH, they said.
A settlement would allow Amazon.com Inc. (AMZN) and other retailers to offer lower prices for digital versions of books, according to the Wall Street Journal, which reported the status of the talks yesterday. To compete, Apple may stop selling books or match lower prices, in some cases resulting in a loss on each book, according to the newspaper.
Publishers are attempting to avoid a court battle with the Justice Department after the agency opened a probe into how Cupertino, California-based Apple changed the way publishers charged for e-books on the iPad, a person familiar with the matter said last month. European antitrust regulators also have said they’re investigating whether Apple’s pricing deals with publishers restrict competition.
Setting The Price
When Apple came out with the iPad in 2010, it allowed publishers to set their own prices for e-books as long as it got a 30 percent cut and the publishers agreed to offer their lowest prices through Apple. This so-called agency model overtook Amazon.com Inc.’s tactic of buying books at a discount from publishers and then setting its own price on the Amazon the e- reader device.
Gina Talamona, a Justice Department spokeswoman, declined to comment. Apple spokesman Tom Neumayr, Holtzbrinck spokeswoman Beatrice Richter-Beck and a spokeswoman for HarperCollins also declined to comment. Spokesmen for Pearson, Lagardere and Simon & Schuster did not immediately return calls requesting comment.
CBS, controlled by Sumner Redstone, fell 0.1 percent to $32.97 at 9:55 a.m. New York time while News Corp. (NWSA), controlled by Rupert Murdoch, lost 0.6 percent to $19.31. Lagardere declined 0.4 percent to 21.53 euros in Paris as of 3:55 p.m. and Pearson rose 0.1 percent to 1,137 pence in London.
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