Macmillan Settles Suit with FTC, Only Apple Left - The UpStream

Macmillan Settles Suit with FTC, Only Apple Left

posted Saturday Feb 9, 2013 by Scott Ertz

Macmillan Settles Suit with FTC, Only Apple Left

Over the past year several suits have been filed against publishers and distributors of eBooks about price fixing. Amazon ended up refunding money, while several publishers have settled with the Department of Justice to end the suit.

The Department of Justice case involved Amazon, though not directly. The DoJ filed suit against Apple and five publishers because, due to Amazon's policy of selling new releases at $9.99, the companies all thought they were losing money. This caused the companies to gang up and raise the wholesale cost of the books to Amazon, causing the price to go up, level with that of Apple's book store. As soon as the suit was filed, three companies settled, with another settling in December. That left only two, until this week.

Macmillan has officially settled their dispute with the DoJ "because the potential penalties became too high to risk even the possibility of an unfavorable outcome." That is certainly a reasonable reaction, though it seems to be a little late to have come to the realization. Other than Apple, the only remaining defendant in the DoJ case, everyone settled their disputes almost immediately. What caused Macmillan to wait so long, yet finally settle?

It would appear that the two years of forced wholesale discounts finally got to be a lower number than the inevitable judgement cost, plus the mounting legal fees. Apple has not commented on the matter, but does say they will not settle because they have done nothing wrong.

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