Pearson Reaches $75 Million Settlement in E-Book Complaint

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A division of Pearson, the worldwide publisher of education products and other materials, has agreed to pay $75 million as part of a settlement of a lawsuit in which a group of companies was accused of fixing the price of e-books.

The lawsuit had alleged that Penguin, whose parent company is Pearson, and other publishers had conspired with Apple Inc. to limit competition and fix the retail price of e-books, as a way to combat Amazon’s influence over the market through the Kindle, including its ability to offer discounted prices.

The class-action lawsuit emerged from a legal action brought by 33 individual state attorneys general. In court documents, the plaintiffs had described the publishers’ actions as an “ongoing conspiracy” that “caused e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid.”

Pearson officials described the settlement in a statement as part of a “comprehensive agreement” with the attorney generals and plaintiffs in a private, class-action lawsuit. Pearson officials said they committed to the same terms as part of a previous settlement with the U.S. Department of Justice, also focused on price-fixing allegations. The company said it had put $40 million aside in 2012 to account for a settlement, and that additional money will be paid as part of the accounting for the anticipated merger of Penguin’s and Random House’s publishing operations.

Steve Berman, a lawyer representing the plaintiffs, called the settlement a “powerful demonstration of what is possible when federal, state, and private class anti-trust enforcement lawyers work together.”
Several publishers named in the original lawsuit have settled, though the civil case against Apple continues, Berman told Education Week in an e-mail.

The e-book case did not pertain to education-focused e-books, specifically, Berman told Education Week. As we’ve reported previously, the lawsuit instead centered on the market for “trade books,” or general interest fiction and non-fiction books, and not academic textbooks or other reference materials, which are typically sold through other channels.

The resolution of the case, however, could affect educators and students if it influences the overall pricing for e-books, products that are becoming increasingly popular among young people. A recent nationwide survey revealed that 46 percent of children in the United States reported having read an e-book, up from 25 percent in 2010. They used a variety of tech tools, from laptops to iPads, to do so.

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