Dear Valued Visitor,

We have noticed that you are using an ad blocker software.

Although advertisements on the web pages may degrade your experience, our business certainly depends on them and we can only keep providing you high-quality research based articles as long as we can display ads on our pages.

To view this article, you can disable your ad blocker and refresh this page or simply login.

We only allow registered users to use ad blockers. You can sign up for free by clicking here or you can login if you are already a member.

Amazon.com Inc. (AMZN) to Offer E-book Refunds

Amazon.com Inc.Amazon.com Inc. (NASDAQ:AMZN) has been involved, albeit indirectly, in an e-book price-fixing case that ensnared Apple Inc. (NASDAQ:AAPL) and five publishing houses by the U.S. Department of Justice. While at least some of the parties involved are still heading back to court, some of the parties are accepting the terms of the settlement offer and are announcing that they will soon be sending out refunds to the millions of e-book purchases over a two-year period.

The DOJ charged Apple Inc. (NASDAQ:AAPL) and the five publishers with fixing e-book prices higher to force Amazon.com Inc. (NASDAQ:AMZN) to raise its e-book prices to make the marketplace more competitive. The way this happened, the DOJ claims, is that Apple Inc. (NASDAQ:AAPL) wanted to build up its Markeplace of e-books by convincing the publishers to take on an “agency” pricing model, in which the publishers controlled the price of their e-books, rather than letting the retailers dictate their prices – also known as the “wholesale” model. This went on, allegedly, from April 2010 through May of this year.

While Amazon.com Inc. (NASDAQ:AMZN) was not directly involved in the lawsuit, the (alleged) price-fixing forced the online retailer to hike its e-book prices above where it would have sold them had it had more control.  Therefore, Amazon.com Inc. (NASDAQ:AMZN) has started to e-mail e-book customers to let them know that each e-book customer will receive from 30 cents to $1.32 per each e-book title purchased during the two-year period mentioned in the settlement.  Three of the publishers – Simon & Schuster, HarperCollins and Hatchette Book Group – have agreed to the terms of the settlement and will be offering similar refunds. The three publishers will produce a $69 million fund out of which to issue the refunds, while Amazon.com Inc. (NASDAQ:AMZN) will pay the refunds out of its own cash. This may come across as a quality customer-service effort by Amazon.com Inc. (AMZN) which may help investor sentiment in the company – especially stock holders like billionaire fund manager Ken Fisher of Fisher Asset Management.

By the way, the settlement is not official until court approval in February, but Apple Inc. (NASDAQ:AAPL) and the other two publishers in the lawsuit – Macmillan and Penguin – are fighting their involvement in the case and are scheduled to go to court to fight the settlement in June of next year.

Loading Comments...