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Feds, Penguin Group reach settlement on e-books

WASHINGTON – The Justice Department announced Tuesday it has reached a settlement with Penguin Group (USA) Inc. in its lawsuit accusing the nation’s largest book publishers of colluding with Apple Inc. to raise e-book prices on customers.

The settlement, if approved by a federal judge, leaves Apple and Holtzbrinck Publishers LLC, which does business as Macmillan, as the only defendants standing against the federal government’s charges that Apple, the multimedia and computer giant, conspired with several publishers in the fall of 2009 to force e-book prices several dollars above the $9.99 charged by on its popular Kindle device.

The Justice Department, which sued in April, settled with Hachette Book Group, Inc., HarperCollins Publishers LLC and Simon & Schuster Inc. earlier this year. The trial is scheduled to begin in June.

“The proposed settlement with Penguin will be an important step toward undoing the harm caused by the publishers’ anticompetitive conduct and restoring retail price competition so consumers can pay lower prices for Penguin’s e-books,” said Jamillia Ferris, chief of staff and counsel at the Justice Department’s antitrust division.

Apple Inc. has said the government’s accusation that it conspired with major book publishers to raise the price of e-books is untrue.

Under the settlement, Penguin “will be prohibited for two years from entering into new agreements that constrain retailers’ ability to offer discounts or other promotions to consumers to encourage the sale of the Penguin’s e-books,” and must submit to “a strong antitrust compliance program” that includes telling federal officials about any joint e-book ventures or any communications with other publishers, Justice Department officials said.

The Justice Department and 15 states said Apple and the publishers cost consumers more than $100 million in the past two years by adding $2 or $3, sometimes as much as $5, to the price of each e-book.