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Publishers Respond To DOJ Lawsuit

HarperCollins and Hachette have settled with the Department of Justice rather than face a lawsuit over the agency model for eBook pricing. Simon & Schuster is expected to settle, as well. Macmillian, on the other hand, has decided to fight the DOJ in court.

Hachette said today that the company has “reluctantly agreed to join the settlement of this matter.” Here is an excerpt from the HGB letter on the subject: “Hachette was not involved in a conspiracy to illegally fix the price of eBooks, and we have made no admission of liability.  Hachette’s unilateral adoption of agency was designed to facilitate entry by a new retail competitor and to increase the diversity and health of retail booksellers, and we took these actions knowing that Hachette itself would make less money than before the adoption of agency.  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.”

Harper Collins released a statement explaining its reason for settling. Here is an excerpt: “HarperCollins faced legal challenges on five separate fronts, including the DOJ investigation which was resolved today. The e-book market has grown over the last two years from a small e-ink market, dominated by one platform, to a $1B market with several competing platforms. HarperCollins made a business decision to settle the DOJ investigation in order to end a potentially protracted legal battle.”

Macmillan CEO John Sargent wrote a letter addressed to “authors, illustrators and agents” explaining his reason to fight. He wrote: “But the terms the DOJ demanded were too onerous. After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model. We also felt the settlement the DOJ wanted to impose would have a very negative and long term impact on those who sell books for a living, from the largest chain stores to the smallest independents.”

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