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Apple Settles on Damages in Digital Book Case

Apple Settles on Damages in Digital Book Case
By Michael Liedtke

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After a prolonged legal battle, Apple has agreed to settle an e-books price-fixing class action lawsuit. Lawyers representing consumers had been seeking up to $840 million in damages. The Justice Dept. filed its antitrust case against Apple and the publishers in 2012 after an investigation concluded that Steve Jobs spearheaded the price-fixing.
 



Apple has reached a settlement on the damages owed to consumers for orchestrating a scheme to drive up the prices of digital books.

Terms of the settlement weren't disclosed in a document filed late Monday. More details will emerge in a filing due by July 16 in a New York federal court.

Lawyers representing consumers across the country had been seeking up to $840 million in damages. A trial on the damages claims had been scheduled to begin Aug. 25 in New York.

In another trial last year, U.S. District Judge Denise Cote ruled that the iPad and iPhone maker colluded with several major publishers to boost electronic book prices from April 2010 to May 2012.

Apple Inc. has appealed Cote's decision. The Cupertino, California, company has steadfastly contended that its deals with several major publishers helped foster competition by giving consumers more choices in an electronic book market that had been dominated by Amazon.com Inc.

If Apple prevails on the appeal, the settlement on the damages becomes moot.

Steven Berman, a Seattle lawyer representing the shoppers in the suit, declined to comment on the settlement Tuesday because of a court order.

Apple also declined to comment.

Five major publishers -- Hachette, HarperCollins, Simon & Schuster, Macmillan and Penguin Group -- were found to be involved in the price-fixing conspiracy. Those publishers previously agreed to pay a total of about $166 million to cover their damages.

The U.S. Department of Justice filed its antitrust case against Apple and the publishers in 2012 after an investigation concluded that Apple's late CEO, Steve Jobs, came up with a new pricing formula designed to counter Amazon's aggressive discounting on digital books.

Jobs worked out the agreements as Apple was preparing to introduce its iPad to compete against Amazon's electronic reader, the Kindle.

The arrangements resulted in digital books selling for several dollars above the $9.99 pricing standard that Amazon had been pushing.

Apple's plot resulted in millions of consumers being overcharged for electronic books, according to the lawsuits filed by 33 states and U.S. territories and other lawyers representing consumers across the country. The damages were being sought as part of those lawsuits.

An expert hired by the suing attorneys estimated that the higher prices for electronic books collectively cost buyers an additional $280 million. Those damages could have been tripled under U.S. antitrust law.

Attorneys general in 24 of the states involved in the case also were seeking to force Apple to pay another $9 million in civil penalties, according to estimates in court documents. It's unclear if the settlement will cover the additional penalties sought by those states.
 


© 2014 Associated Press under contract with NewsEdge. All rights reserved.
 

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