On Friday, a federal judge gave approval to the settlement under which Apple’s E-book can start paying about $400 million to somewhere near 23 consumers because of charges regarding its violation of antitrust laws by conspiring with the publishers for increasing the price of e-books. In this way, the company could thwart Amazon. An unusual settlement was approved by Judge Denise L. Cote of Manhattan’s Federal District Court. According to the agreement made this summer, the iPhone maker will pay $50 million to lawyers whereas $400 million will be paid to consumers in the form of e-book credits and cash. However, it is still possible for the figures to change if the 2013 verdict in the case is overturned by an appeals court.
The verdict found the American technology giant to be guilty of conspiring with five major publishers for fixing the price of e-books. On December 15th, the court will be hearing the challenge of the company, but no changes in the ruling are expected even then. If, it does happen, i.e. the court overturns the verdict and the case does come back to Judge Cote, then the company will be paying $20 million to the lawyers and $50 million to the consumers. Initially, the Cupertino, California-based company had agreed to settle the class action suit by paying $400 million.
This was before a damages trial that had been set up two months later where class-action lawyers and attorneys in general of 33 states were expected to seek damages worth $840 million. The deal was called unusually structured by Judge Cote in the hearing, especially considering that it was agreed at the eve of trial. The suit was initiated by the Justice Department in 2012. The settlement was simply a reflection of the fatigue felt by the Justice Department, Apple, class-action lawyers and attorneys general, who were all eager for the case to end a case that had dragged on, primarily because of delays caused by Apple.
No response was given by an Apple’s spokeswoman regarding the deal. Apple was accused in the suit of being a ‘ringmaster’ as it had conspired with major publishers for increasing the average price of e-books so they were more than the $9.99 price tag that had been made standard for releases of new e-books by Amazon. The case was settled on the same day by three of the publishers, namely Hachette Book Group, Simon & Schuster and HarperCollins. The other two publishers, Macmillan and Penguin settled it months later.
The sum of $400 will be given on top of the settlements made earlier by publishers in the case who had offered the consumers of the e-books about $160 million in damages. The focus of the government lawsuit was on 2010 when the iPhone maker came into the digital book industry with the introduction of the iBookstore and iPad. The wholesale model that was applied to print books was also applied to e-books back then and retailers had to pay half the cover price, after which they were free to set any price they wanted.