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Justice Department Reaches Settlement With Macmillan in E-Book Antitrust Suit

Justice Department has already reached agreements with three other publishers, but will take Apple to trial in June

The Department of Justice said Friday it settled with one of four publishers it sued for allegedly conspiring with Apple to raise e-book prices.

The settlement, filed in a U.S. district court in New York, forces Holtzbrinck, which does business under the name Macmillan, to allow retailers to lower prices on its e-books. The publisher — along with Hachette Book Group, HarperCollins, Penguin Group and Simon & Schuster — allegedly conspired with Apple to jack up the prices of e-books.

The department said it will continue its lawsuit against Apple, which it plans to take to trial in June.

The department sued the five publishers and Apple last April, but settled with Hachette, HarperCollins and Simon & Schuster in September.

A public comment period on the department's settlement with Penguin will close on March 5.

“As a result of today’s settlement, Macmillan has agreed to immediately allow retailers to lower the prices consumers pay for Macmillan’s e-books,” Jamillia Ferris, chief of staff and counsel at the justice department's antitrust division.  “Just as consumers are already paying lower prices for the e-book versions of many of Hachette’s, HarperCollins’ and Simon & Schuster’s new releases and best sellers, we expect the prices of many of Macmillan’s e-books will also decline.”

Macmillan did not immediately respond to requests from TheWrap for comment.

The five publishers and Apple had been unhappy that competition — especially from Amazon —  among e-book sellers had lowered the price they could charge for downloadable literature, so they worked together to raise prices and eliminate competition, the justice department said.

Before that, retailers regularly sold e-books for a roughly $9.99 price point. After conspiring, average prices on e-books ran up to $12.99, $14.99 or more.

Under the proposed settlement, Macmillan will lift restrictions on discounting and other promotions by e-book sellers and will be prohibited from entering into any similar agreements until December 2014.

The proposal also imposes antitrust compliance restrictions on Macmillan, requiring that it notify the government before making deals with any other publishers. It must also regularly report its communications with any other publishers to the department.

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