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Texas paves way for settlement regarding e-book price fixing

When businesses are able to set competitive prices, it helps to encourage a healthy, open marketplace that gives consumers the chance to get items at a fair price. This also gives competing companies the chance to develop loyal customers and strong business partnerships. If the ability to change prices for fair competition is taken away, it not only isn’t fair for businesses who don’t have the choice, but also for consumers and the industry in general. Also, it opens the path for business litigation from consumers against companies that practice unfair competition.

Texas and Connecticut have conducted investigations against several companies suspected of price-fixing and collusion with electronic books, which was apparently started by Apple. Penguin has recently settled for their role in the price-fixing scheme, agreeing to pay $75 million to consumers in 33 states.

Overall, five settlements so far are predicted to recover about $164 million for e-book buyers across the country, which also included class-action lawsuits filed by consumers themselves. They allege that the companies violated unfair competition laws and forced them to overpay for e-books.

The class-action lawsuit accused publishers of setting e-book prices, forbidding retailers by contract from reducing or competing on their prices, and raising their prices far above what many consumers say was fair. The settlement with Penguin may allow e-book stores to set competitive prices for their wares, and avoid the overcharging that they formerly had no say in.

The outcome of these settlements can provide a valuable lesson for online and local retailers. American consumers appreciate value, and companies should have the right to compete for their customers.

Source: Consumer Affairs, “Penguin settles e-book price-fixing suit for $75 million,” James R. Hood, May 22, 2013

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