Apple Pays $400 Million to Settle E-Book Pricing Conspiracy

 

Apple Pays $400 Million to Settle E-Book Pricing Conspiracy

Apple has agreed to pay USD400 million to settle allegations against it following a price fixing conspiracy concerning how it set the prices of e books sold through its iTunes store.

The settlement agreement, which must be approved by a New York court, has the potential to result in payments to consumers of $400 million, and would resolve claims for consumer damages and civil penalties brought by New York and 32 other states and territories.

"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."

Under the settlement, the amount that Apple must pay E-book consumers is contingent on what happens in Apple's 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.

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.

Any amount received by consumers pursuant to the settlement with Apple will be in addition to those amounts already recovered from several E-book publishers. E-book purchasers nationwide have already received compensation from $166 million in settlement funds paid by the five publishers involved in the conspiracy - Penguin; Macmillan; Hachette; HarperCollins and Simon & Schuster.

Many E-Book consumers received these funds through automatic credits sent by Amazon and other E-book retailers.

The E-book antitrust cases involved lawsuits brought by the state attorneys general, a related action by the U.S. Department of Justice, and a related class action brought by private counsel representing consumers in 18 additional states. New York, together with Texas and Connecticut, played a leading role in the state AG cases during the damages phase of the litigation. Apple has also agreed to make a payment of attorneys' fees to counsel in the class action in the event that there is a consumer recovery under the settlement.