Another publisher settles

Alan Wallace
| Saturday, Dec. 29, 2012, 8:19 p.m.

And then there were two — just two companies, e-books retailer and iPad maker Apple and publisher Macmillan — still fighting the U.S. Department of Justice lawsuit over alleged e-book price-fixing.

Justice took exception to the “agency model” for e-book pricing — publishers setting retail prices and retailers taking a percentage — that Apple championed in response to Amazon's deep, market-share-grabbing discounting of retail e-book prices.

Publishers Hachette Book Group, Simon & Schuster and HarperCollins chose to settle. But until mid-December, Penguin Group (USA) was still siding with Apple and Macmillan, which intend to make their cases for the agency model at trial in June.

But now, Penguin's settling with Justice — a move widely expected since Penguin's planned joint-venture merger with Random House (which never was part of the Justice lawsuit) was announced in late October. Like the other publishers who've settled with Justice, Penguin maintains it did nothing wrong but said it's “in everyone's interests that ... Penguin Random House ... begin life with a clean sheet of paper,” according to Publishers Weekly.

The Justice Department, of course, must give antitrust approval for the merger to become final, which Penguin and Random House expect to occur in the new year. The department's statement on the Penguin settlement said that if its ongoing review results in approval of the merger, “the terms of Penguin's settlement will apply to” Penguin Random House.

The settlement awaits court approval after a 60-day period for comment. Terms require Penguin to end its agreements with e-book retailers including Apple; refrain for two years from new agreements that limit retailers' ability to offer discounts or other promotions; enter an antitrust compliance program that mandates informing Justice in advance of any joint e-book ventures with other publishers and reporting regularly to Justice about any communications with other publishers; and refrain for five years from any agreement that might undermine the settlement's effectiveness.

It's tempting to view the Penguin settlement as a victory for Amazon. But any such judgment is premature until Apple's and Macmillan's cases are resolved — whether they ultimately go to trial or not. Bet that the parties that have settled with Justice continue to watch what happens with Apple and Macmillan very closely indeed and to ponder in the meantime how they'll react should those two prevail.

Until all the dust settles, it's also difficult to judge what this Justice lawsuit ultimately will mean for readers in terms of e-book prices and selection via various retailers. Penguin's status is a little clearer now that it's chosen to battle the government no longer. But the outcome of this legal war over e-book pricing remains unclear.

Threats that spread

Two upcoming titles of interest:

“Spring Fever: The Illusion of Islamic Democracy” by Andrew McCarthy (Encounter Books, available Tuesday) — Now a National Review columnist, the author successfully prosecuted the 1993 World Trade Center bombing case. He says “Arab Spring” is a misnomer because radical Middle Eastern Islam is committed to America's destruction, and its concept of freedom — utter submission to Allah and Shariah law — is utterly at odds with our own. Thus, the region is not rife with would-be democratic reformers — and aligning the U.S. with “Arab Spring” movements opens a Pandora's box.

“Contagion: How Commerce Has Spread Disease” by Mark Harrison (Yale University Press, available Jan. 8) — The author directs the University of Oxford's Wellcome Unit for the History of Medicine, and has written prizewinning books on British military medicine in World Wars I and II. Here, he charts the interrelated growth of trade, development of public-health measures and spread of disease since the 14th century. He shows how quarantines and embargoes have been used for political, economic and military gain and warns that today's health-related rules disrupt the global economy and fail to protect the public.

Alan Wallace is a Trib Total Media editorial page writer (412-320-7983 or

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