May 22, 2013

Attorney General George Jepsen today announced that Penguin Group (USA) Inc. has entered into a settlement agreement to resolve claims asserted by Connecticut and 32 other states and territories in a lawsuit alleging price-fixing and collusion in the market for electronic books, or eBooks.

This marks the fifth settlement with an alleged conspiring publisher in a case that is currently scheduled to go to trial in the Southern District of New York on June 3, 2013. The investigations conducted by Connecticut and Texas, and the resulting litigation, have paved the way for recovery of approximately $164 million for consumers nationwide, to date.

“Consumers are entitled to a fair, open and competitive marketplace,” said Attorney General Jepsen. “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 eBooks.”

Attorney General Jepsen said, “However, our efforts are not yet complete. Connecticut, along with Texas, is leading the upcoming trial effort against the remaining defendant, Apple, on behalf of our partner states, and we will aggressively seek to obtain additional compensation for consumers in our respective states who have been injured by the illegal conspiracy we allege in our complaint.”

The agreement with Penguin will, if approved by the court, provide significant consumer restitution as well as injunctive relief. This agreement grants eBook retailers greater freedom to reduce the prices of eBook titles and provides $75 million to compensate affected consumers nationwide.

If approved by the court, Connecticut consumers will receive approximately $3 million in aggregate compensation from the five settling publishers.

In February, the Attorney General announced that Holtzbrinck, LLC, d/b/a Macmillan, had agreed to settle the same claims against it for the payment of $12 million to consumers in the participating states.

Also in February, Judge Denise L. Cote of the U.S. District Court for the Southern District of New York granted approval of previous settlements with eBook publishers Hachette Book Group, Inc., Harper Collins Publishers LLC and Simon & Schuster, Inc. related to the same conduct. These previous settlements were joined by the attorneys general of 49 states, U.S. territories and the District of Columbia.

The litigation and settlements stem from a two-year investigation conducted by the Offices of the Connecticut and Texas Attorney General and the U.S. Department of Justice.

For consumer information on the previously approved settlements with Hachette, HarperCollins and Simon & Schuster, please visit www.ebookagsettlements.com or call the eBooks settlement hotline at 1-866-621-4153.

Assistant Attorneys General Joseph Nielsen, Gary Becker and Richard Porter; Paralegal Holly MacDonald; and Assistant Attorney General Michael Cole, chief of the Antitrust and Government Program Fraud Department, are assisting the Attorney General in this matter.

Attorney General Jepsen serves as co-chair of the Antitrust Committee for the National Association of Attorneys General.

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