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Agency model

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Overview Edit

E-books Edit

The agency model is a pricing model whereby book publishers set the price of the e-books, and distributors, like Amazon or Apple, get a fee from the publishers on every book sold. Distributors allegedly do not own the e-books and therefore do not have the right to set prices.

On April 11, 2012, the U.S. Department of Justice (DOJ) filed a lawsuit[1] against Apple and five[2] of the Big Six publishing houses in the United States. The suit alleges that Apple and the named publishers colluded to artificially increase the price of e-books by letting publishers set the prices. In early September 2012, a federal judge has approved the U.S. Justice Department's settlement with three of electronic book publishers (Hachette, HarperCollins and Simon & Schuster). Under the settlement they agreed to abandon the agency model.

A number of State Attorney Generals filed similar suits. Those were settled under similar terms. The three publishers agreed to pay $69 million as part of the settlement.

Numerous class action suits have also been filed by consumers.

Similar lawsuits were filed in Europe under EU competition laws.

References Edit

  1. A copy of the complaint is available here.
  2. Random House was not named as a defendant.

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