Feds sign off on stunning $400 million settlement in Apple e-books case

Feds sign off on stunning $400 million settlement in Apple e-books case

The settlement is tentative pending a ruling from an appeals court, expected Dec. 15.

If a federal judge’s approval issued on Nov. 21 stands, Apple will move forward with a $400 million settlement in its e-books price fixing case. The Cupertino company reached the deal over the summer, agreeing to dole most of the money to consumers through cash and e-book credits. Another $50 million will be paid to lawyers.

The class action covers more than 23 million consumers who would benefit from the deal, which stems from a 2012 Justice Department lawsuit accusing Apple of conspiring with five major publishers to fix e-book prices. Apple was found culpable in 2013, and has appealed the verdict.

If the appeals effort prevails, the iPad and iTunes maker would be liable for only $50 million to consumers and $20 million to lawyers. “The court, which will hear Apple’s challenge on Dec. 15, is not expected to change its previous ruling,” according to the New York Times.

The Justice Department pursued Apple’s collusion with the publishers beginning in 2010, when Steve Jobs disrupted the digital book marketplace with the iPad and iBookstore. In lieu or the wholesale model in which publishers “charged retailers about half the cover price for a book, and the retailers then set their own prices,” Apple introduced “the so-called agency model … which let publishers set their own prices for e-books,” the New York Times reported.

Simon & Schuster, HarperCollins and the Hachette Book Group quickly settled and Penguin and Macmillan followed soon after that. The companies paid out more than $166 million in damages to consumers.

 

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