Why Are Amazon and Other Ebook Stores Giving Away Money?
Did you just receive an email from Amazon telling you that you’re entitled to some money? Believe it or not, it’s not a scam designed to bilk you out of your life savings. It’s the settlement of a major lawsuit between ebook readers and publishers, who have been accused of artificially inflating the prices on digital books.
(Photo: Nomadic Lass on Flickr.)
Confused? Read on for the 411.
Why am I getting this email?
In April 2012, the U.S. Department of Justice and attorneys general from 33 states sued five major U.S. publishers and Apple, accusing them of conspiring to fix prices on ebook sales. With some popular titles, digital copies cost more than the printed ones, despite being radically cheaper to produce.
According to the suit, the publishers allegedly met in secret with Apple in 2009 to discuss how to counter steep discounts being provided by Amazon, which was then selling ebooks for $9.99 each. The group of publishers then imposed higher prices on all digital book sellers.
The last of the publishers settled in December, and the money is just being distributed now by Amazon, Google, Barnes & Noble, and other ebook sellers, including Apple’s iTunes Store. Apple, however, has yet to reach its own settlement agreement with the government.
How much can I get?
That depends on how many ebooks you bought and how popular they were at the time. If you bought any New York Times bestsellers, you’ll get back $3.17 per book. Every other ebook pays out at 73 cents apiece. The more voracious your reading habits, the more money you’ll get back. See, Mom was right—it does pay to read.
Residents of Minnesota will receive a higher payout due to a separate settlement. We’re not sure exactly why, but we think it has something to do with Garrison Keillor.
The total pool of funds available is $166 million, and an estimated 23 million consumers were affected by the price fixing, which means an average payout of slightly more than $7. However, the United States and individual states are also seeking an additional $840 million from Apple for its role in the price-fixing scheme. So more may be coming your way.
You’re right to be suspicious, but this one’s legit. (Screenshot by Yahoo Tech)
Can’t I just take this money as cash and run off to the Caymans?
Not likely. Some ebook retailers (like Google and Sony) issued the refunds as postcard checks, but most just offered credits on future purchases. So that money still essentially belongs to whomever you bought your books from; you’ll just get a small discount on ebooks in the future—provided that you buy them before April 1, 2015. That’s when the payout expires.
I didn’t get any money. Where’s ma money?
To qualify for a payout, you have to have purchased an ebook from a company owned by any of five publishers (Macmillan, Hachette, HarperCollins, Penguin, or Simon & Schuster) between April 1, 2010, and May 21, 2012. You also have to live in the United States or one of its territories. And if you received an ebook as a gift, you don’t qualify, though your gifter might.
If you meet those requirements and still didn’t see any moola, you can contact the settlement administrators at 1-866-621-4153 or info@EBooksAGSettlements.com.
These publishers are private companies. Why can’t they charge whatever they want?
By allegedly colluding on prices, these publishers (and Apple) have been accused of violating the Sherman Antitrust Act. By settling the suit, they don’t actually have to admit they did anything wrong.
Don’t like the law? Don’t blame us; blame President Benjamin Harrison. He signed the original act back in July 1890, though it’s been amended a few times since.
Questions, complaints, kudos? Email Dan Tynan at ModFamily1@yahoo.com.
