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Penguin agrees to settle e-book price-fixing suit for £50m

Book publisher Penguin has announced a $75 million (£50 million) deal that settles a class-action lawsuit over e-book price-fixing.

The deal must still be approved by the court, but if it goes through, consumers who overpaid for e-books thanks to the price-fixing scheme could get a cut of that figure.

This case dates back to April 2012, when the Department of Justice filed cases against Apple and five other publishers for an alleged "illegal conspiracy" involving e-book price fixing. At the time, Apple, Macmillan, and Penguin planned to fight the government, while Hachette, HarperCollins, and Simon & Schuster agreed to a proposed settlement. Macmillan and Penguin later settled, but Apple is fighting the case.

The investigation, however, prompted a number of consumer lawsuits, which were eventually consolidated into one class-action suit. Today, in cooperation with 33 state attorneys general, Penguin announced a settlement to that suit.

"This proposed settlement is a powerful demonstration of what is possible when federal, state and private class antitrust enforcement lawyers work together," Steve Berman, managing partner of Hagens Berman, said in a statement. "In this case, the level of cooperation was unprecedented, and the results that we were able to deliver to the states and consumers demonstrate that."

One of the states involved in the case was Connecticut. "Consumers are entitled to a fair, open and competitive marketplace," Attorney General George Jepsen stated. "This agreement is yet another step toward providing restitution to those consumers who were harmed by alleged price-fixing within the eBook market and will further ensure that, going forward, consumers benefit from fair competition in the sale of e-books."

Penguin reached its settlement with the DOJ in December. The deal forced the publisher to cut off its existing e-book deals with Apple and other e-book sellers; it also imposed a ruling that Penguin must notify the DOJ of any e-book ventures it joins, and keep the agency updated about communications it has with other publishing houses.

Meanwhile, the deal included a two-year ban on entering into agreements that prohibit retailers from offering discounts or promotions on e-books, and stops Penguin from "agreeing to any kind of most favored nation (MFN) agreement that could undermine the effectiveness of the settlement" for the next five years, according to the DOJ's December statement.

Last week, the DOJ released a number of filings that paint Apple as the ringleader in the price-fixing case. The Cupertino company is scheduled to face off against the DOJ in court on 3 June.