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Penguin Reaches Ebook Price-Fixing Settlement

(c) Sky News 2012

Penguin has reached a settlement with the US Justice Department after it accused America's largest book publishers of colluding with Apple (NasdaqGS: AAPL - news) to raise the price of ebooks.

The US government claims Apple conspired with several publishers in the autumn of 2009 to force electronic book prices several dollars above the $9.99 (£6.13) charged by Amazon on its popular Kindle device.

The Justice Department, which sued the firms in April (Paris: FR0004037125 - news) , settled with Hachette Book Group, HarperCollins and Simon & Schuster earlier this year.

The Penguin deal leaves Apple and book publisher Holtzbrinck, which does business as Macmillan, as the only remaining defendants.

"The proposed settlement with Penguin will be an important step toward undoing the harm caused by the publishers' anti-competitive conduct," said Justice Department lawyer Jamillia Ferris.

She said it would help restore retail price competition so consumers can pay lower prices for Penguin's ebooks.

The settlement had been expected by some industry observers as a means to simplify Penguin's impending merger with Random House, which is not a defendant in the case.

That deal would create the world's largest publisher of consumer books.

Under the settlement, Penguin must submit to a "strong anti-trust compliance programme" that includes telling federal officials about any joint ebook ventures or any communications with other publishers.

The Justice Department's lawsuit stems from agreements reached between major publishers and Apple in 2010 that allowed publishers to set their own prices for ebooks, an effort to counter Amazon's deep discounts of bestsellers.

It said Apple and the publishers had cost consumers more than $100m (£61.3m) in the past two years by adding $2 or $3 - and sometimes as much as $5 - to the price of each ebook.

Apple said the accusations were untrue. The trial is scheduled to begin in June.

Last week, the European Union's competition watchdog accepted proposals by four publishers and Apple to end agreements that set retail prices for ebooks.

Ebooks are believed to comprise around 25%-30% of total book sales.

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