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Ebook Customers Receive Price-Fixing Settlement Letters

Users of Apple’s iBooks app who have purchased books from Apple’s online iBookstore and purchasers of Kindle books from Amazon have begun to receive email notifications from the administrator of the State Attorneys General and Class Counsel E-book Settlements. This notice states that Holtzbrinck Publishers, LLC, (known as Macmillan) and Penguin Group (USA) Inc. have now joined the settlement in the price-fixing suit against five publishers and Apple. The publishers have all settled, whereas Apple continues to contest the suit (see Adam Engst’s discussion of the case in “Explaining the Apple Ebook Price Fixing Suit,” 10 July 2013).

According to the letter, the fund for payments to customers who purchased qualifying ebooks is now $162.25 million with the addition of these two settlements. Anyone who purchased ebooks from Apple or Amazon between 1 April 2010 and 21 May 2012 is eligible to receive a payment from this fund upon court approval of the settlement. That is, almost anyone: because of the complexity of the case and complex mix of the various parties involved in it, only individuals who are residents of the United States (including five territories and the District of Columbia) are eligible for payments; libraries, government agencies, and corporations, among others, are excluded, as well as those who only obtained free books or gifts from these vendors.

Payments will not begin immediately following final approval of the settlement in December 2013, assuming it is approved. That’s because the case is still subject to appeal, and the payments will not begin until all appeals are resolved, a process that could take months or even years.

By default, those due to receive payments from Apple will receive a credit in their iTunes accounts, although individuals may request payment by check instead. Amazon customers will receive automatic credits to their Amazon E-reader accounts unless they request payment by check. Those who wish to receive a check must submit the request by 21 October 2013; information about how to request a check is included in the email message.

The amount that one might receive as a result of the settlement has not yet been established, though estimates are that each purchased New York Times bestseller may result in a payment of $3.06; payments for non-bestsellers are roughly estimated to be about $0.73 per book. Question 11 of the Frequently Asked Questions at the settlement Web site provides the details.

Both email messages note that residents of Minnesota, while included among those who are eligible, are subject to different terms in the settlement. This is because the state of Minnesota did not participate in the earlier settlements between the State Attorneys General and three of the publishers: Hachette, HarperCollins, and Simon & Schuster. Instead, a class counsel represented Minnesota ebook purchasers and negotiated a separate settlement with these publishers. Minnesota residents have a special Web site they can consult that outlines the settlement specifics that apply to them.

Although none of us at TidBITS has yet received email from Barnes & Noble regarding purchases of Nook ebooks, we won’t be surprised if such a message containing similar settlement terms is sent out in the near future.


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