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April 11, 2012By Michael Cader

Hachette Admits No Liability, and Asks Government to Ensure “We don’t return to the days of monopoly”; Harper “Made A Business Decision”

April 11, 2012By Michael Cader

Hachette Book Group says in a statement that “after much deliberation” they have “reluctantly agreed to join the settlement of this matter with the U.S. Department of Justice, and to begin the process of settling with the State Attorneys General.” But “Hachette was not involved in a conspiracy to illegally fix the price of eBooks, and we have made no admission of liability.” In a separate statement, HarperCollins also says the company “did not violate any anti-
trust laws and will comply with its obligations under the agreement. HarperCollins’ business  terms and policies have been, and continue to be, designed to give readers the greatest choice of formats, features, value, platforms and partners – for both print and digital…. HarperCollins made a business decision to settle the DOJ investigation in order to end a potentially protracted legal battle.”

In Hachette’s statement, they say that “although we remain confident that we did not violate the antitrust laws, we faced the prospect of lengthy and costly litigation with government plaintiffs with virtually unlimited resources. Hachette has decided that the costs, uncertainties, and distractions of this litigation would be too disruptive to our business.” At the same time, “We are disappointed that we were unable to persuade the Department of Justice of the merits of our actions, but believe much has been accomplished to increase diversity and competition in the market for eBooks since the advent of the agency model.”

“Two years ago, Amazon effectively had a monopoly on the sale of eBooks and eReaders, and was selling products below cost in an effort to exclude competitors. Today, consumers have multiple sources to choose from, and the price of dedicated e-readers has fallen dramatically. And the fact that 82% of Hachette’s eBooks are currently priced at $9.99 or less — including many books by our bestselling authors — belies any notion that we increased prices on all
eBooks.”

Per our interpretation, the settlement does not eliminate agency entirely: “Although the terms of the DOJ settlement will place some constraints on agency distribution over the next two years, we are pleased that we will continue to be able to choose our own distribution channels and retail partners.” They add that, “The terms of our understanding with the State AGs will put Hachette on a path to conclude our dispute with the State AGs and to concluding the existing consumer class actions, without placing any additional constraints on our distribution operations and choices. We see this as critical to putting these disputes behind us and focusing our attention on the business of inspiring, developing, and distributing great books.”

Finally, HBG suggests that “DOJ and the State AGs have a responsibility to consumers to ensure that the market for eBooks remains diverse and competitive, and that we don’t return to the days of monopoly, with one company controlling what and how people read eBooks.”

Filed Under: DOJ, Free, Legal

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