Judge Denise L. Cote of Federal District Court in Manhattan has approved a settlement proposed by Apple to end a case concerning the violation of antitrust laws with regards to setting e-book prices. Apple was accused of conspiring with publishers to artificially inflate the price of e-books in a move directed at rival Amazon. The case was originally filed by the Justice Department in 2012, but has dragged on, largely due to repeated delays initiated by Apple.
According to the lawsuit, Apple and five major publishers hatched a plan to increase the average price of e-books from the $9.99 price made standard by Amazon as the price for new e-book releases. In her verdict, Judge Cote concluded that Apple’s co-founder and then chief, Steve Jobs, was fully aware of the publishers’ frustration with Amazon’s pricing of $9.99 for new releases and offered publishers a new business model that let publishers set their own prices for e-books when they agreed to sell their books through Apple’s iBookstore. The Justice Department presented Mr. Jobs’ words and emails as crucial evidence of a conspiracy throughout the trial.
The settlement affects nearly 23 million consumers. $400 million of the settlement will be disbursed to consumers in cash and e-book credits. The lawyers trying the case will receive $50 million for their services. The attorneys general in 33 states and class-action lawyers that brought the lawsuit against Apple were expected to seek damages of nearly $840 million in the damages portion of the trial. The five publishers – Simon & Schuster, HarperCollins, Penguin, Macmillan and the Hachette Book Group – have already reached settlements in the case totaling about $166 million in damages for consumers of e-books.
There is still a chance that an appeals court will overturn a 2013 verdict in which Apple was found guilty of conspiring with the publishers in the e-book price fixing case. In the event the court overturns the verdict, Apple would pay a reduced amount of $50 million to consumers and $20 million to the lawyers.
