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How Amazon Benefits from Price-Fixing Settlement

Amazon.com customers who purchased certain Kindle ebooks between April 1, 2010, and May 21, 2012, received a credit for future purchases on Tuesday. That’s thanks to a settlement reached between plaintiffs and five publishers in a class action lawsuit. The credits will total as much as $62 million out of a $166 million partial settlement – providing an incentive for customers who receive a credit to purchase more books through Amazon.

Amazon will automatically apply the credits to customers’ future purchases of Kindle books or print books sold by Amazon.com, regardless of the publisher.

State attorneys general and plaintiffs alleged Apple and the five publishers engaged in a price-fixing scheme in late 2011 because they feared Amazon’s discounted pricing structure for Kindle ebooks would permanently set consumer expectations for lower prices of ebooks, even for other e-reader devices. The publishers deny they did anything wrong, but have agreed to settle to avoid the cost and risk of a trial.

Apple refused to take part in the settlement, and a separate lawsuit with similar claims continues against Apple.

While Amazon is not a party to the lawsuits, under the settlements the publishers have provided funds for credits that will be applied directly to Amazon.com accounts of eligible customers. Amazon sent the following letter to those customers affected by the settlement:

Dear (name),
Good news! You are entitled to a credit of $(amount) for some of your past Kindle book purchases. The credit results from legal settlements reached with publishers Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin in antitrust lawsuits filed by State Attorneys General and Class Plaintiffs about the price of eBooks.

You don’t have to do anything to claim your credit, we have already added your credit to your Amazon account. We will automatically apply your available credit to your next purchase of a Kindle book or print book sold by Amazon.com, regardless of publisher. The credit applied to your purchase will appear in your order summary. If your account does not reflect this credit, please contact Amazon’s customer service.

For more information about the settlements, please visit www.amazon.com/ebooksettlements Your credit is valid for one year and will expire after 03/31/2015. If you have not used your credit, we will send you another email 90 days before it expires to remind you that it is still available.
Thanks for being a Kindle customer.
The Amazon Kindle Team
Settlement ID: (number)

The law firm of Hagens Berman represented purchasers of ebooks in 19 states and four U.S. territories, with the balance of the states represented by their respective attorneys general. Hagens Berman said it was pursuing the remainder of class members’ damages against Apple.

More information about the lawsuit settlement is available on eBookAGSettlements.com.


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Ina Steiner
Ina Steiner
Ina Steiner is co-founder and Editor of EcommerceBytes and has been reporting on ecommerce since 1999. She's a widely cited authority on marketplace selling and is author of "Turn eBay Data Into Dollars" (McGraw-Hill 2006). Her blog was featured in the book, "Blogging Heroes" (Wiley 2008). She is a member of the Online News Association (Sep 2005 - present) and Investigative Reporters and Editors (Mar 2006 - present). Follow her on Twitter at @ecommercebytes and send news tips to ina@ecommercebytes.com. See disclosure at EcommerceBytes.com/disclosure/.