June 7, 2012 / 6:06 PM / 8 years ago

Barnes & Noble says U.S. e-books deal hurts public

June 7 (Reuters) - Barnes & Noble Inc has objected to the U.S. government’s proposed settlement of its price-fixing lawsuit against top publishers and Apple Inc, saying it would harm book sellers and “millions and millions” of book buyers.

The top U.S. bookstore chain, which has been battling with Amazon.com Inc in the growing e-books market, said in a letter sent to the U.S. Department of Justice on Thursday that the settlement would lead to “higher overall average e-book and hardback prices and less choice, both in how to obtain books and in what books are available.”

In an antitrust lawsuit in April, the Justice Department sued Apple Inc and two publishers, saying they, and three other publishers with which it simultaneously settled, conspired to fix the prices of electronic books to break Amazon’s dominance in the market.

Apple had successfully convinced publishers to use the “agency model” that allows publishers to set the price of e-books and in turn, Apple would take a 30 percent cut, the government said at the time.

The settlement the government reached in April with three of the publishers would allow Amazon to resume discounting books, and terminate their “most-favored nation” contracts with Apple. Amazon said at the time that it planned to lower prices on books associated with its Kindle e-reader.

Barnes & Noble said in its letter that the adoption of agency pricing had lowered Amazon’s share of the e-book market to 60 percent from 90 percent. Barnes & Noble claims to have 27 percent.

The retailer, which operates nearly 700 bookstores, said that before the adoption of agency pricing, it was “losing substantial money in an effort to compete with Amazon’s pricing and was unable to gain significant market share.”

A growing digital business has been a balm for stagnant book sales.

Barnes & Noble also said the proposed settlement “will injure innocent third parties, including Barnes & Noble, independent bookstores, authors and non-defendant publishers.”

The three publishers who agreed to settle are News Corp’s HarperCollins Publishers Inc, CBS Corp’s Simon & Schuster Inc and Lagardere SCA’s Hachette Book Group.

Macmillan, a unit of Verlagsgruppe Georg von Holtzbrinck GmbH, and Pearson Plc’s Penguin Group, have said they plan to fight the Justice Department charges, along with Apple.

The Justice Department, HarperCollins, Hachette and Simon & Schuster could not immediately be reached for a comment.

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