Proposed E-Book Publisher Settlement Could See Customers Receiving Up to $3 Per Book Purchased

Friday August 30, 2013 9:44 am PDT by Eric Slivka
iBooks.pngWhile Apple has been found guilty of conspiring to fix e-book prices as it sought to launch its iBookstore alongside the iPad in early 2010, five publishers involved in the case have already agreed to settle the cases brought against them by state attorneys general and other class-action plaintiffs.

Among the publishers, Hachette, HarperCollins, and Simon & Schuster had previously received court approval for their settlement agreements, and Macmillan and Penguin settlements are now proceeding through the approval phase. Customers who purchased Macmillan or Penguin e-books are now receiving emails informing them about the proposed settlement and their rights and responsibilities with respect to the agreement.

Under the proposal, the Macmillan and Penguin settlement funds would be combined with previous amounts committed by the other publishers, yielding a total fund of $162.25 million to be paid out to consumers who purchased e-books between the iBookstore's April 1, 2010 launch and May 21, 2012.

While the exact amount of reimbursement customers will receive depends on how many end up being included in the program, current estimates suggest that customers could be reimbursed $3.06 for each purchase of an e-book that appeared on the New York Times bestseller list at any point, and $0.73 per non-bestseller book.
The amount of your credit or check will be affected by how many qualifying E-books you purchased. There will be two levels of payments, based on categories of E-books. While the exact amount to be paid per E-book in each category is not yet finalized, the best estimates of payments for each E-book you purchased, based on the Plaintiffs proposed plan for a combined fund, are as follows:

- New York Times bestsellers: $3.06 per E-book. These include titles that were New York Times bestsellers at any time, irrespective of when you purchased the E-book.

- Non-New York Times bestsellers: $.73 per E-book. These E-books include any titles that were not New York Times bestsellers.
Residents of Minnesota will receive a different, higher amount per book because they were not included in the first round of settlements.

Reimbursement methods will also vary based on where e-books were purchased, with Amazon customers receiving automatic account credit while Apple, Barnes & Noble, and Kobo users will have to activate their account credits, or they may request reimbursement by check. Consumers have until October 21 to object to or exclude themselves from the proposed settlement, and a hearing will be held on December 6 to consider approval.

While penalties in the case against Apple have yet to be assessed and Apple has vowed to appeal the verdict, estimates have suggested that Apple could owe as much as $500 million for its role in pushing book publishers to move to an agency model that resulted in higher prices for consumers.

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theheadguy
83 months ago
Hilarious! It seems like the majority of the people on here were hating the DOJ for proposing ANY kind of punishment or settlement. Now that people might see their own pockets lined with some refunds, haters magically turn into lovers!

It's more interesting from a psychological perspective to see people who still feel bad for Apple and would only be content if there was an Apple legal defense fund they could willingly donate to ;)
Rating: 11 Votes
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BC2009
83 months ago
5 Publishers who received 70% of revenue from e-Books across multiple marketplaces (Kindle, Nook, iBookstore) in total owe $162M.

1 Ecosystem Provider (Apple) that received 30% of the e-Books revenue on a single distant-second marketplace may owe $500M.

Hmm..... something about this math does not work.
Rating: 10 Votes
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bsolar
83 months ago

I think this whole situation amounts to a perverse interpretation of "anti-trust" laws. In punishing Apple and the publishers for "colluding," the DOJ is rewarding Amazon for its efforts to create a monopoly. :mad:

If Apple wants to compete with Amazon there are legal options, but Apple did not want to make the investment to enter the ebooks market competing on price. Another competitor doing great is no excuse to break the law.

And what does "colluding" in this sense really mean? The publishers offered ebooks at a price well below the price of the printed version. Cost of production and distribution aside, authors and publishers are entitled to make money for their work. There is no "e-book" in "free," or some such pun. ;)


Authors and publishers were making more money with the wholesale model. The publishers actually decided to go with Apple's agency model knowing perfectly well that they would have less revenue, even with higher consumer prices.

With respect to the refunds, nobody forced consumers to buy them at the set price -- and who is the DOJ to determine what is the fair price? We know that the price Amazon set was intended as a loss-leader to sell more Kindles. So that price is fiction and should not be the basis for anything.


You have it backwards: Amazon does not make money selling Kindles, it actually makes money selling the content, kinda like a gaming console makes money selling games and not selling the console itself.
Rating: 8 Votes
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mac 2005
83 months ago
I think this whole situation amounts to a perverse interpretation of "anti-trust" laws. In punishing Apple and the publishers for "colluding," the DOJ is rewarding Amazon for its efforts to create a monopoly. :mad:

And what does "colluding" in this sense really mean? The publishers offered ebooks at a price well below the price of the printed version. Cost of production and distribution aside, authors and publishers are entitled to make money for their work. There is no "e-book" in "free," or some such pun. ;)

With respect to the refunds, nobody forced consumers to buy them at the set price -- and who is the DOJ to determine what is the fair price? We know that the price Amazon set was intended as a loss-leader to sell more Kindles. So that price is fiction and should not be the basis for anything.
Rating: 8 Votes
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bbeagle
83 months ago

Hilarious! It seems like the majority of the people on here were hating the DOJ for proposing ANY kind of punishment or settlement. Now that people might see their own pockets lined with some refunds, haters magically turn into lovers!


I'm actually against any class-action lawsuits like this (against any company). $3 is ridiculous. If something like a car breaks, and requires $700 part, it's fine to have a class-action lawsuit to get that money back, but $3? This was just made so lawyers could get their cut.

I'm also against this settlement. How does it make any sense at all?
Rating: 8 Votes
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schmidm77
83 months ago
I think worrying about how much I was "overcharged" for an ebook is missing the point, because I paid what I was willing to pay, for the price advertised; and I would again.

A lot of people don't realize that antitrust law is not about giving consumers a better price, but is about protecting competitors from anticompetitive behavior. It just happens to be the case that competition tends to, but not always, result in lower prices. I don't know that what Apple and the publishers did actually hurt competition.
Rating: 6 Votes
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Sincci
83 months ago
Would the same people here currently defending Apple really feel the same way about this case if it was Samsung/Google/Microsoft colluding with the publishers in exactly the same way?
Rating: 5 Votes
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bsolar
83 months ago

Apple had the advice of legal council when they negotiated with the publishers and undoubtedly believed they were in the clear legally. But the laws were ambiguous enough that despite good legal council they still ran afoul of the law. That suggests to me that there is a problem with the clarity and applicability of the law in the modern world.

That they actually got good legal advice is a speculation, and even if it were true they could have decided to ignore it thinking their strategy was worth the risk. Anyway the publishers settled almost immediately, most likely because their legal advice did not find the laws so ambiguous and the risk of an adverse judgement too high. Apple most likely simply had much more to lose.

Apple was a new entrant in a market dominated by a single retailer with an overwhelming market share, and the power to set the retail price of everything on the e-book market without regard to business interests of the content producers. Apple's deal allowed the five largest content producers to each set the retail price for their own product, seemingly breaking Amazon's monopoly. But in this case the law was used to protect the monopoly, and that makes me think there is a problem with the law.

The monopoly was not illegally obtained nor illegaly abused, at least until a judge says otherwise. Being a new entrant doesn't mean you can break the law to get a share of the pie, it's obvious you have to make investments which might be costly. Microsoft entered the gaming consoles market with 0% market share and managed to get a good share of the market after years of due investments. Apple wanted to do the same but without the due investment part.

Once the producers were able to set e-book prices they would have the incentive they needed to make more books available as e-books. And while in the short term prices went up, the increased availability of e-books as a less expensive alternative to physical books, there would have been a net savings to consumers.

The publishers wanted higher ebooks prices because they wanted to protect their declinig physical books market. They have zero interests in incentiving ebooks sales because in a world dominated by ebooks they become irrelevant: in the digital world you simply don't need them anymore and can publish directly through Amazon/Apple/whatever.
Rating: 4 Votes
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Thunderhawks
83 months ago
If anybody has to fill out a claim form and dig for receipts, it's for sure worth the time to get $ 3.06.
Rating: 4 Votes
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Renzatic
83 months ago

"Trust the Government. It worked well for Native Americans."


You seemed to trust them pretty well when Samsung was found guilty of patent infringement just a little while back.

"They were found guilty in a court of law. THEY SHOULD PAAAYYYY".
Rating: 3 Votes

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