Amazon customers received a present in their accounts this morning courtesy of the ebook settlements between the “Agency Five” publishers and various state governments: store credit to buy more books (print or ebooks). As previously outlined, customers who bought at least one ebook published by Hachette, HarperCollins, Simon & Schuster, Penguin or Macmillan between April 1, 2010 and May 21, 2012 will get a credit of $3.17 per ebook for New York Times bestsellers, and 73 cents for non-NYT bestsellers. For Minnesotans, who reached a separate settlement, the breakdown is $3.93 for NYT bestsellers and 94 cents for non-bestsellers.
Twitter is rife with customers reporting their store credits, or what we’ve long compared to a Book Publishing Stimulus package, from as low as 73 cents (for 1 ebook) to as high as $312.69. A spokesperson for Barnes & Noble said the retailer would also notify Nook customers of their credits today. The credit can only be spent on books or ebooks, from any publisher, as Amazon explained. Google, Kobo, and other retailers are expected to credit customers in similar fashion as well. And the credits must be used within a year, or they go away. The credits total approximately $166 million in all.
The ebook settlement credits arrive as two smaller retailers have sued the same publishers (and Apple) on antitrust grounds. Last Friday, Abbey House Media Inc., which previously did business as BooksOnBoard, claimed in their Manhattan federal court complaint — one that is “identical in virtually all respects to the one proven by the DOJ” — that Apple conspired with the publishers “to fix prices and reduce competition” in the burgeoning ebook market in order, and that Apple and the publishers violated both the Sherman Act as well as the NY State-based Donnelly act. The complaint was reported on by Courthouse News, but does not appear to be available in the federal docket yet.
While BooksOnBoard claimed to do well prior to the implementation of agency pricing, its business cratered thereafter: “Once Apple and the publisher defendants entered into their price-fixing agreement, however, BooksOnBoard was no longer able to offer its favorable pricing…After years of steady growth, in April 2010 – right after the imposition of agency – BooksOnBoard quickly went under for all intents and purposes.” BooksOnBoard added that Apple’s 30 percent cut on any agency-priced ebook further harmed them, calling the move “uneconomic and non-competitive because the agency agreements allowed for only 30 percent margins on sales of ebooks.”
On March 14, Diesel ebooks also filed suit in Manhattan federal court against Apple and the Agency Five publishers, in a remarkably similar complaint to BooksOnBoard (and one that rehashes all of the greatest hits of the DOJ lawsuit.) Diesel, now doing business as Lavoho, also blamed the implementation of agency pricing in 2010 for why they “quickly went under for all intents and purposes” and brought the suit to “vitiate defendants’ unlawful and anticompetitive conduct.”
Diesel’s suit will be presided over by Judge Cote, who currently has her hands full trying to sort out the damages phase of Apple’s guilty verdict in the DOJ case, which is still scheduled for trial in May.