Simon & Schuster Has Settled in Antitrust Case – Federal Complaint Dropped

Posted by at 3:07 pm on May 18, 2012

Simon & Schuster, one of the defendants in multiple antitrust lawsuits has settled the overall complaint filed by many states’ attorneys general. As a result, Judge Denise Cote granted a motion to dismiss Simon & Schuster from the federal complaint. The terms of the settlement have not been provided.

Simon & Schuster joins HarperCollins and Hachette with state-level settlements. Defendants that refuse to settle and deny any wrongdoing in the case are Apple, Macmillan Publishers, and the Penguin Group.

The suit was originally filed by the attorneys general from Texas and 15 other states. More joined the suit, to the total of 29 states at this time. The plaintiffs in the complaints allege that Apple and the publishing houses worked together to manipulate e-book prices illegally and limit Amazon’s control over the market at the same time.

A migration to an agency model, meaning multiple companies (the book publishers) acting through one company (Apple), is the core of the case. This standard model lets the publishers set book prices as a vehicle to avoid price wars. The defendants say their actions were in defense against Amazon’s near monopoly of the market. Prior to 2010, Amazon possessed 90 percent of the e-book market. Amazon’s e-book market share is currently estimated at 60 percent.

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