Macmillan settled for an e-book pricing agreement with the Department of Justice leaving Apple as the only company left in the battle suit.
In April 2012, the DOJ sued Apple and five other publishing houses for scheming to raise the prices of e-books. According to the lawsuit, the six companies accused Amazon of bringing down the price of e-books as Amazon set the price of all e-books at $9.99 each. Hence, Apple and the other five publishing houses thought of setting up a new business model, called the agency model, which raised the price of many e-books by about $2 to $3. In this model, the publishers and not bookstores would determine the price of all e-books.
The publishing houses also agreed to give Apple 30 percent of all earnings from the e-books sold through its iBookstore and also agreed that they would not allow any other retailers to sell e-books lesser than the price Apple sells them at.
HarperCollins, Hachette and Simon & Schuster were the first three among the five publishing houses to agree to an immediate settlement with the DOJ while Penguin succumbed to the DOJ's terms in December.
Macmillan and Apple were the only two companies remaining in the battle suit. However, now Macmillan has announced that they have reached a pricing settlement with the Department of Justice.
According to the settlement with the DOJ, all the publishers had to abandon their agency-pricing agreements with Apple and other retailers. Moreover, for the next two years, these publishing houses are forbidden from setting up any similar agreement.
"As a result of today's settlement, Macmillan has agreed to immediately allow retailers to lower the prices consumers pay for Macmillan's e-books," Jamillia Ferris, chief of staff of the Antitrust Division, said in a statement.
The statement also confirmed that the e-book versions of all HarperCollins', Simon & Schuster's and Hachette's newly released and best seller publications are now available at lower prices and hopes that Macmillan will also follow suit.
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