Gemstar-TV Guide to Pay $5.6 Million Fine
WASHINGTON (AP) _ Gemstar-TV Guide International Inc. and the Justice Department reached a settlement Thursday that includes a record $5.6 million fine for allegations concerning pre-merger actions.
The civil penalty is the largest ever for a case of ``gun-jumping,″ in which Gemstar and TV Guide allegedly fixed prices, divvied up customers and violated waiting periods before they merged in July 2000. The settlement must still be approved by a federal judge.
``Merging parties must remain separate and independent until the end of the statutory waiting period,″ said R. Hewitt Pate, acting assistant attorney general for the antitrust division.
TV Guide, which sells about 9 million copies a week, and Gemstar merged in part to focus on an interactive program guide for cable and satellite TV and other media innovations. But the Pasadena, Calif.-based company has lost key patent cases, restated recent earnings and is the subject of a Securities and Exchange Commission investigation into accounting practices.
The settlement with the Justice Department prevents Gemstar-TV Guide from engaging in similar conduct in the future and gives customers who signed contracts before the merger a chance to rescind them.
Gemstar-TV Guide shares rose 10 cents, or 3.4 percent, to close Thursday at $3.04 each on the Nasdaq Stock Market.
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