Penguin settles with DoJ

Penguin settles with DoJ

Penguin has joined Hachette, Simon & Schuster and HarperCollins in settling with the US Department of Justice over ending agency pricing, ahead of its merger with Random House.

Earlier this year Hachette, S&S and HC settled with the DoJ over the shift to agency, agreeing not to enter into any contracts that prevented retailers from setting their own e-book prices for a two-year period. At the time Macmillan and Penguin refused to accept the terms of the settlement.

The DoJ will continue with its lawsuit against Apple and Macmillan for "conspiring to raise e-book prices to consumers", with a trial to begin in June 2013.

Jamillia Ferris, chief of staff and counsel at the DoJ’s Antitrust Division said:  “If approved by the court, the proposed settlement with Penguin will be an important step toward undoing the harm caused by the publishers’ anticompetitive conduct and restoring retail price competition so consumers can pay lower prices for Penguin’s e-books.”

Today a statement from Penguin spokesperson Erica Glass said: "Penguin confirms that it has reached an agreement with the U.S. Department of Justice to settle claims relating to the establishment of agency pricing agreements in 2010. . .

“Penguin has always maintained, and continues to maintain, that it has done nothing wrong and has no case to answer. Penguin continues to believe that the agency pricing model has encouraged competition among distributors of both ebooks and ebook readers and, in the company’s view, continues to operate in the interest of consumers and authors. But it is also in everyone’s interests that the proposed Penguin Random House company should begin life with a clean sheet of paper.”

If the settlement is approved, then the terms will apply to Random House too. The DoJ said: “Should the proposed joint venture proceed to consummation, the terms of Penguin’s settlement will apply to it.”

Earlier this month it was reported that Apple, Hachette Livre, HarperCollins, Simon & Schuster and Macmillan had settled with the EC over agency pricing, while Penguin parent Pearson was said to be in "constructive discussions" with the EC.

At the time, Penguin UK communications director Rebecca Sinclair said: "Our position has been—and remains—that we have done nothing wrong. As a practical matter, we are settling in the interests of clearing the decks before the new company is established."