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Penguin settles with US over claims of e-book price setting

Penguin has agreed to settle with the United States government over allegations of price-setting with Apple in the e-book market.

The British books group, whose authors range from Jamie Oliver to Pippa Middleton, is the latest publisher to settle with the Department of Justice, after Hachette, HarperCollins and Simon & Schuster agreed similar deals in April.

Apple and five publishers faced accusations that they illegally colluded over prices, as part of an effort to fight price-cutting by online giant Amazon, the dominant player in e-books. US authorities alleged the publishers were using the "agency model" to allow them to set the cost of e-books at a potentially higher price, while letting Apple benefit by taking its usual 30 per cent cut.

Pearson, the owner of Penguin, strongly denied any suggestion of price-fixing. But, under the terms of the settlement, Penguin will drop any agreements with Apple and other e-book sellers that prevent price-discounting and it will not be allowed to reinstate the deals for two years.

It has also agreed to set up "a strong anti-trust compliance programme" to tackle competition issues.

Apple and Macmillan still have not reached an agreement with the Department of Justice.