The $166 million publishers have agreed to pay to settle e-book price fixing charges with the states and consumer class could soon begin flowing to consumers, and PW has learned that more than 23 million consumer accounts are eligible to receive refunds.
Representatives from Rust Consulting, the firm retained to administer the settlement fund, confirmed to PW that 23,073,840 customers of Amazon, Apple, Barnes & Noble, Kobo, Google, and Sony have been directly notified via e-mail or by postcard that they are eligible to participate in the settlement. That figure represents consumer accounts, a Rust representative explained to PW, not the number of individual consumers, as some consumers have accounts with multiple retailers, or multiple accounts at a single retailer.
An additional 28,600 claim forms were also filed by consumers. This figure likely represents mostly Google and Sony customers who were required to file claim forms, as automatic refunding was not an option at the time of the initial settlements. But it may also include consumers inadvertently excluded from direct noticing. Another 229,037 notices were undeliverable—a remarkably low 1% failure rate.
In a previous court declaration, Rust Consulting executives said that the cooperation of e-book retailers, who have detailed records of consumers and their eligible purchases, along with automatic crediting, will translate into an “unprecedented” rate of compensation reaching consumers.
Unfortunately, the breakdown by retailer is not publicly available. Knowing which retailers the claims were being noticed and paid through would offer a solid assessment of e-book market shares among the retailers, estimates of which have varied.
The refunds will be issued automatically to consumer accounts. No action was required by consumers unless they wished to opt out of the settlement or to receive a check. Administrators told PW that just 100 consumers have opted out of the settlement, and only 48,124 consumers opted to receive checks instead of credits. The deadline to opt out or to request a check passed last December.
An eligible consumer is defined as anyone “who purchased e-books from an ‘Agency Five’ publisher from April 1, 2010 to May 21, 2012.” Anyone who received notice by e-mail or postcard purchased at least one qualifying e-book from one or more retailers. The figures do not include Minnesota, which has a separate settlement.
State attorneys have put the publishers' total damages estimate at just over $218 million, with the $166 million settled upon with the five publishers representing a recovery of 76% of that figure.
According to the settlement Web site the final amount of the consumer refunds is yet to be determined, but consumers are tentatively set to receive $1.32 for each book on the New York Times bestseller list purchased during the claims period, and .30 cents for non-bestsellers. Once the settlement plan is finalized for disbursement, court documents state, payment amounts will be “recalculated as necessary” to ensure that all the settlement funds are distributed to consumers.
The publishers are also separately paying the cost of administering the settlement, meaning that all of the $166 million in the fund will go to consumers. The credits issued to consumer accounts can be used toward the purchase of e-books or print books.
Additional funds, meanwhile will likely be added at a later date, following Apple’s pending liability determination in the state and consumer class action. This week, Judge Denise Cote put Apple’s damages trial on the calendar for May, 2014. Any payments to consumers coming from Apple could also be stayed pending the outcome of Apple’s appeal.
Attorneys for the states and the consumer class are not planning to wait on Apple, however. Although no date has been set, attorneys told the court last week they are moving ahead with plans to distribute the publishers’ funds.