Penguin officials, along with Attorneys General for 33 states and the consumer class, announced this morning that they have finally settled their outstanding e-book price-fixing charges—for a hefty $75 million. As with the Department of Justice settlement it agreed to in December, 2012, Penguin will admit no wrongdoing.
The Penguin settlement, which still must be approved by the court (and hearings are expected this summer), means that it will be Apple alone at the defense table as the long-awaited price-fixing trial gets underway on June 3. And the settlement announcement comes just one day before the parties in the suit were set to have a final pre-trial conference with Judge Denise Cote.
Penguin, the largest publisher named in the suit, will pay the largest amount. The $75 million sum—which does not include legal fees or other costs—is roughly triple the $26 million to be paid by Macmillan, and more than the initial $70-plus million agreed to by the other three publishers accused in the case (Simon & Schuster, Hachette and HarperCollins).
The full agreement had not been made public Wednesday morning, but in a brief statement, Penguin said it has "committed to the State Attorneys General to abide by the same injunctive relief as previously agreed in a separate settlement with the Department of Justice." Penguin also noted that parent company Pearson has already taken a $40 million charge for the settlement in its 2012 accounts. An incremental charge will be expensed in Pearson's 2013 statutory accounts as part of the accounting for the Penguin Random House joint-venture, Penguin said.
With the Penguin deal, the settlement fund that will reimburse consumers has now more than doubled since the initial state settlement was announced in 2012, with the five accused publishers set to pony up roughly $165 milion to e-book consumers. The final amounts to be paid to the consumer fund from the state and consumer class settlements, not counting fees and costs: Penguin will pay $75; Macmillan $20 million; Hachette has agreed to pay $32 million; HarperCollins, $20 million; and Simon & Schuster, $18 million.