ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, April 24, 1996 TAG: 9604240048
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: SAN DIEGO
SOURCE: Associated Press
Reader's Digest has agreed to pay $40 million to settle a lawsuit that claimed a subsidiary bilked schools out of millions of dollars by monopolizing the magazine subscription fund-raising business.
Under the deal announced Tuesday, more than 20,000 schools that used QSP Inc. in their fund-raising from 1990 to 1995 will receive between $80 and $4,000, depending on their volume of sales.
``This case is about monopoly, the effect of which deprives schools and the children in those schools money that was rightfully theirs,'' said Frederic Gordon, an attorney who represents the schools.
Pleasantville, N.Y.-based Reader's Digest denied any wrongdoing and said it settled to avoid the expense and distraction of going to court.
Schools looking to buy items such as band uniforms, athletic supplies and computers often have students peddle magazine subscriptions. QSP acts as a middleman between the magazine publishers and the schools.
The class-action suit filed in 1992 by San Diego's Catholic schools and the Chino Unified School District claimed Reader's Digest monopolized the business with exclusive contracts that prohibited publishers from using other subscription companies.
Such deals involved Good Housekeeping, Sesame Street and Family Circle magazines, according to the schools' lawyers.
LENGTH: Short : 34 linesby CNB