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Vermont Attorney General Charges Publishers And Apple With Antitrust Law Violations, Price-Fixing For E-Books

CONTACT: Ryan G. Kriger, Assistant Attorney General, (802) 828-5479

April 11, 2012

Vermont Attorney General William H. Sorrell today joined other 15 state attorneys general in charging three of the nation’s largest book publishers and Apple Inc. with colluding to fix the sales prices of electronic books. The States’ antitrust case, which was filed in federal court in Austin, TX, cites the defendants for violating the States’ antitrust laws and the federal Sherman Antitrust Act. The publishers named in the action are Macmillan, Simon & Schuster, and Penguin.

“When companies collude to fix prices, consumers end up paying more. The evidence in this case demonstrates that these major publishing companies and Apple conspired to raise the prices of electronic books. I am working with my fellow State Attorney Generals to stop this anticompetitive practice and obtain recoveries for the affected consumers”, said Attorney General Sorrell.

For years, retailers sold e-books through a traditional wholesale distribution model, under which retailers – not publishers – set e-books’ sales prices. However, an investigation led by the States of Texas and Connecticut, in coordination with the U.S. Department of Justice, revealed that Penguin, Simon & Schuster and Macmillan conspired with other publishers and Apple to artificially raise prices by imposing a distribution model in which the publishers set the prices for bestsellers at $12.99 and $14.99. According to the States’ enforcement action, the coordinated agreement to fix prices resulted in e-book customers paying more than $100 million in overcharges.

The States’ antitrust action seeks injunctive relief to reverse the effects of the defendants’ anti-competitive conduct as well as damages for customers who paid artificially inflated prices for e-books.

The States have reached an agreement in principle with HarperCollins and Hachette to provide significant consumer restitution as well as injunctive relief.

The other states bringing the action include Texas, Connecticut, Alaska, Arizona, Colorado, Illinois, Iowa, Maryland, Missouri, Ohio, Pennsylvania, Puerto Rico, South Dakota, Tennessee, and West Virginia.

  Website consulting provided by The National Association of Attorneys General.