PublishersLunch
A little later than planned, attorneys general from 49 states (all but Minnesota), five territories and the District of Columbia have filed with Judge Denise Cote's court a proposed settlment of their ebook price-fixing action with Hachette Book Group, HarperCollins and Simon & Schuster. The publishers have agreed to pay approximately $69 million in consumer restitution, and "about $7.5 million to the states for legal fees and other costs." (When the agreement to settle was announced in April, the AGs said they expected the publishers would pay about $52 million, but that was before Simon & Schuster had agreed to settle with the states. In all, the state complaint alleged that the original five agency publishers' actions had "resulted in e-book customers paying more than $100 million in overcharges."
The agreement now awaits Judge Cote's review and approval--just like the pending Federal settlement. The settlement was due by August 20, and the attorneys general were granted a brief extension earlier in the month. The AGs from Ohio, Connecticut and Texas--writing as the settlement committee--told the judge that working out the mechanics of how restitution would be provided to consumers "has proven to be a far slower process than we originally contemplated." Their objective was to "develop a notice and distribution plan that harnesses the very technology used in selling ebooks." In other words, the big retailers will play a key role in notifying buyers and distributing the money or credit. Florida's AG indicated that "about 97 percent of consumers will get notice of the settlement by e-mail."
Consumers who purchased Agency Five ebooks between April 1, 2010 and May 21, 2012 are eligible for some form of compensation. The pool has already been allocated on a state-by-state basis, with each attorney general in the land telling their constituents how much money their state will divvy up. (In the very roughest of terms, we figure consumers may be looking at one dollar or less per ebook purchased.) Payments will begin 30 days after the court's final approval of the settlement.
With a nationwide settlement, expect the settling publishers to push for dismissal of the pending class action suit (with the possible exception of Minnesota), since those publishers will argue that they have fully compensated all consumers and the additional suit is unnecessary.
Judge Cote Accepts Authors Guilds' Brief; Will Accept A Kohn Filing of 5 Pages Only
Separately, in a brief ruling on Tuesday on the pending Federal settlement, Judge Denise Cote accepted the amicus curiae brief submitted by the Authors Guild, and agreed to do the same for businessman and attorney Bob Kohn, as long as he resubmits his brief by next Tuesday, September 4 and turns his dozens of pages into 5 pages or less, just as everyone else was ordered to do. "Kohn had a full opportunity to express his opinion on the proposed FInal Judgment during the public comment period and took full advantage of this opportunity. Any additional remarks need only address new arguments presented in the Government's July 23 and August 3 submissions.
As you may have inferred, the likelihood that new ebook contractual relationships with Amazon, Barnes & Noble and others will be forced into place by the court during the important holiday selling season is diminishing with each passing day. Judge Cote reiterates in this week's ruling that the court "must [our italics] determine in advance whether the entry of an antitrust consent decree is 'in the public interest.'" The court has accumulated a lot of public comments and subsequent briefs to consider and reply to in its decision. It is still not known whether Judge Cote will agree to hold a hearing on the matter, but even a quick approval--if that should be the case--still looks to be a minimum of weeks away.
Multiple parties, including Apple, have all but vowed to appeal any approval of the settlement. If that comes to pass, Judge Cote would be asked to stay execution of the final judgment pending appeal--which she has to consider and rule on--and if she does not agree, then the decision not to stay would go to the Court of Appeals as well with a plea for expedited consideration. Given the seven days plus approximately 60 days or more the settlement itself provides for new contracts with everyone but Apple to be put in place, you can see how any new business paradigm looks to be sliding into 2013.
Barnes & Noble announced that retailer Argos, academic bookseller Blackwell'sand independent bookstore Foyleswill also sell the Nook in the UK as of October, after announcing its deal with John Lewis earlier in the week. The Argos deal is particularly significant as it means the Simple Touch and GlowLight devices will be sold in a chain of 700 stores, while Blackwell's and Foyles enables BN to have some bookstore presence to compete with WHSmith (which stocks Kobo) and Waterstones (which sells Kindle.) In a statement BN director of digital products Jamie Iannone touted that "Argos built its brand on choice and convenience, and with 90 percent of the population living within 10 miles of an Argos store, this literally brings the NOOK experience close to home for millions of UK consumers." Managing director of Blackwell's Bookshops and online David Prescott commented in the release that it was "critically important...that we found a device partner who understood the specific needs of our customer groups. Barnes & Noble’s bookselling expertise, academic heritage and market leading NOOK reading devices made them the outstanding choice for Blackwell's customers." Foyles ceo Sam Husain added: "Barnes & Noble's NOOK was born in and developed by a bookshop, so it is the ideal digital reading device to be sold by one. Foyles is always looking for new ways to recommend books to our customers and with NOOK, our booksellers now have superb hardware at hand to do so. NOOK is a market leader in eBook technology we are delighted to now be able to offer to our customers."
