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Apple agrees to $400 million settlement in ebook price-fixing case

Apple has agreed to an approximately $400 million settlement as part of the high-profile ebook pricing fixing federal court case that would cover consumer damages and civil penalties for the 33 states involved.  Attorney General Eric T. Schneiderman made an announcement today detailing the settlement that was also discovered in documents filed with the courts.

Schneiderman noted the settlement will ultimately depend on the outcome of  Apple’s still pending appeal of “the court’s July 2013 finding that Apple violated antitrust laws by orchestrating a conspiracy with five publishers to artificially raise E-book prices.”:

Consumers nationwide (including those represented by private counsel in a related class action) will receive $400 million if the Court’s ruling that Apple violated antitrust laws is ultimately affirmed. If the Court’s ruling is not affirmed, the settlement provides for a smaller recovery of $50 million if liability must be retried, or no recovery if Apple is determined not to have violated antitrust laws. New York consumers are expected to receive approximately 7 percent, or as much as $28 million, from any amount that Apple is ultimately required to pay. In the event that the Court’s decision is upheld on appeal, Apple will also make payments to the 33 states of $20 million to resolve the states’ claims for costs, fees, and civil penalties.

The payout would be in addition to the $166 million in settlements paid by five publishers— Penguin, Macmillan, Hachette, HarperCollins, and Simon & Schuster— that were originally involved in the case. Earlier this year, despite Apple’s still pending appeal of the decision it violated anti-trust laws, the comapny started providing credits to iTunes customers for the settlements previously reached with the publishers during the case.

“This settlement proves that even the biggest, most powerful companies in the world must play by the same rules as everyone else,” said Attorney General Schneiderman. “In a major victory, our settlement has the potential to result in Apple paying hundreds of millions of dollars to consumers to compensate them for paying unlawfully inflated E-book prices. We will continue to work with our colleagues in other states to ensure that all companies compete fairly with the knowledge that no one is above the law.”

While Apple has agreed to the settlement that has now been submitted to the federal court in New York, it will first have to be approved by the courts.

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Comments

  1. darrenoia - 10 years ago

    Thank goodness the government intervened to save Amazon from true competition in the ebook marketplace. We’re seeing the fruits already with their very reasonable treatment of Hachette.

    • OneOkami (@OneOkami) - 10 years ago

      How is eliminating price competition among retailers true competition? Just how much benefit does that have for the consumer?

      • herb02135go - 10 years ago

        So people on this forum, who decry any sense of balanced information, are suddenly pro-consumer? Funny.

      • OneOkami (@OneOkami) - 10 years ago

        herb02135go,

        Please, show me my acts of decrying any sense of balanced information as well as evidence to show I am “suddenly” pro-consumer.

        I would love to see that. It’ll be quite an eye-opener for me.

  2. Mike Dorsey - 10 years ago

    This is an f’ing travesty. Samsung gets away with what they do and is penalized less money than this. And Apple provides a different pricing model (the same model they use for music and movies!) and is called for price-fixing. Nothing could be further from the truth. Amazon was/is in fact dumping ebooks at or below cost. Apple’s model allowed the publishers to make money and Apple to make money and the customer always had the option to purchase from Amazon (or anyone else) if they wished. This is our retarded US Dept. of Justice.

    • malcolmtucker1 - 10 years ago

      Well, you know, this is a win for outsourced legal counsel everywhere.

      Still, I’m curious how much Durward “Bruce” salary is. It can’t be much… It seems all he does is sign the checks to the outsourced team in Los Angeles; similar to the work Tim did with outsourced teams at Foxconn.

      Ok, it’s Apple Lawyer Joke Time, because I haven’t heard a good lawyer joke since reading Bruce Sewell’s bio, and learning that he’s been disbarred in Washington DC for non-payment of membership dues to the Bar Association. (I hope Tim Cook gives him a raise.)

      Q: If an Outsourced Apple Lawyer jumps out of a window, what is he..?
      A: A Windows user.

  3. Chris Cooper (@clcooper) - 10 years ago

    Didn’t Tim Cook even say last year that Apple would not approve a settlement since they did nothing wrong and would fight to prove it? I guess that is what a CEO is supposed to say, though.

    • WaveMedia (@WaveMedia) - 10 years ago

      They made it too expensive to not settle.

    • Rhys Eunson - 10 years ago

      Apple only settled to take loony tunes Cote out of the equation. She already had the upcoming case decided and since Apple isn’t showing any remorse she would have tripled the damages. (I’m not sure how you can show remorse and essentially admit your guilt while you are appealing a ruling)
      If the case had gone ahead, Apple need not have bothered turning up, they had already lost.

Author

Avatar for Jordan Kahn Jordan Kahn

Jordan writes about all things Apple as Senior Editor of 9to5Mac, & contributes to 9to5Google, 9to5Toys, & Electrek.co. He also co-authors 9to5Mac’s Logic Pros series.