Apple to Pay $450 Million to Settle E-Book Price Fixing Case

ibooks-iconAccording to court records filed on Wednesday, July 16, Apple will pay $450 million as part of an out-of-court settlement with class action lawyers and state district attorneys over e-book price fixing, reports Reuters.

Apple first reached a settlement agreement with the 33 U.S. states and territories involved in the lawsuit in June, successfully avoiding a lengthy and expensive damages trial. Settlement details were sealed at that time, however, pending court approval. $400 million of the $450 million is earmarked for consumers.

The settlement is contingent on a pending appeals case Apple filed in February with the U.S. Circuit Court of Appeals in New York. In the filing, Apple asked the court to overturn the original ruling that found the company guilty of conspiring to fix e-book prices.

"We have obviously studied Judge Cote's July 2013 ruling in detail, and believe that the 2nd Circuit will agree with her conclusion that Apple did violate federal antitrust laws," said Steve W. Berman, managing partner of Hagens Berman and lead attorney representing the consumer class. "In any case of this magnitude, there are high degrees of uncertainty, and Apple's appeal of Judge Cote's well-reasoned ruling is an example of that uncertainty."

Though found guilty, Apple has maintained its innocence throughout the dispute, claiming that it "kick-started competition in a highly concentrated market, delivering higher output, lower price levels, and accelerated innovation." Should Apple's appeal be successful, sending the claim back to District Court, the company will pay out $50 million to settle consumer damages claims. If the appeals court reverses the initial decision entirely, Apple will pay no damages.

Along with $450 million in damages, Apple has also been subjected to several penalties levied by the U.S. Department of Justice, including an order to hire an external antitrust monitor. Publishers involved in the case, including Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin also settled for a total of $166 million, which has already been making its way to customers in the form of refunds.

Popular Stories

M4 Mac mini Ortho Silver Cooler

Amazon Leaks Smaller Mac Mini With M4 and M4 Pro Chips, Two Front USB-C Ports, Up to 64GB of RAM, and More

Monday October 28, 2024 7:16 pm PDT by
Amazon has seemingly leaked the rumored next-generation Mac mini ahead of Apple's announcement this week, revealing several details. Our concept of a smaller Mac mini According to a comparison chart on Amazon's product listing for the new iMac, the new Mac mini will be available with M4 and M4 Pro chip options, with up to a 14-core CPU and up to a 20-core GPU. In addition, the chart indicates ...
M4 iMac With Magic Accessories

Apple Announces iMac With M4 Chip, Upgraded Camera, Nano-Texture Display Option, and More

Monday October 28, 2024 8:01 am PDT by
Apple today announced that it has updated the 24-inch iMac with the M4 chip, which debuted in the iPad Pro earlier this year. This upgrade comes around one year after the previous iMac with the M3 chip was released. Subscribe to MacRumors on YouTube for more videos! As expected, the M4 chip in the iMac is available with up to a 10-core CPU and up to a 10-core GPU. Apple says the iMac with the ...
maxresdefault

Apple Announces Redesigned Mac Mini With M4 and M4 Pro Chips, Two Front USB-C Ports, and More

Tuesday October 29, 2024 8:01 am PDT by
Apple today announced fully redesigned Mac mini models featuring the M4 and M4 Pro chips, a considerably smaller casing, two front-facing USB-C ports, Thunderbolt 5 connectivity, and more. Subscribe to the MacRumors YouTube channel for more videos. The product refresh marks the first time the Mac mini has been redesigned in over a decade. The enclosure now measures just five by five inches...
apple oct 2024 mac tease

Apple Promises Two More Mac Announcements This Week Following New iMac Today

Monday October 28, 2024 11:18 am PDT by
Apple introduced a new iMac today with the M4 chip and more, but that's not all, as it still has two more Mac announcements planned this week. "This is a huge week for the Mac, and this morning, we begin a series of three exciting new product announcements that will take place over the coming days," said Apple's hardware engineering chief John Ternus, in a video announcing the new iMac....
maxresdefault

Apple Releases iOS 18.1 and iPadOS 18.1 With Apple Intelligence

Monday October 28, 2024 8:07 am PDT by
Apple today released iOS 18.1 and iPadOS 18.1, the first major updates to the iOS 18 and iPadOS 18 updates that came out in September. iOS 18.1 and iPadOS 18.1 come six weeks after the release of iOS 18 and iPadOS 18. Subscribe to the MacRumors YouTube channel for more videos. The new software can be downloaded on eligible iPhones and iPads over-the-air by going to Settings > General >...
tvOS 18 Thumb 3

Apple Releases tvOS 18.1

Monday October 28, 2024 8:04 am PDT by
Apple today released tvOS 18.1, the newest version of the tvOS 18 operating system that came out in September. tvOS 18.1 comes over a month after Apple released tvOS 18, and it is available for the Apple TV 4K and the Apple TV HD models. tvOS 18.1 can be downloaded using the Settings app on the ‌Apple TV‌. Open up Settings and go to System > Software Update to get the new software. ‌Apple...
watchOS 11 Thumb 2 1

Apple Releases watchOS 11.1

Monday October 28, 2024 8:05 am PDT by
Apple today released watchOS 11.1, the first major update to the operating system that runs on the Apple Watch. watchOS 11.1 comes one month after Apple released watchOS 11. watchOS 11.1 is compatible with the Apple Watch Series 6 and later, all Apple Watch Ultra models, and the Apple Watch SE 2. watchOS 11.1 can be downloaded on an iPhone running iOS 18.1 by opening up the Apple Watch app...
iOS 18

iOS 18.1: What You Get If You Don't Have an iPhone With Apple Intelligence

Monday October 28, 2024 3:49 pm PDT by
iOS 18.1 is the first iOS 18 update with Apple Intelligence capabilities, and that's what a lot of the coverage about the new software has focused on. If you don't have an iPhone that's capable of Apple Intelligence, you're probably wondering just what's in the update for you. While Apple Intelligence does make up the bulk of what's new, if you have an older device, you still get some solid...

Top Rated Comments

heyyoudvd Avatar
134 months ago
What a joke.

Apple tries to save the e-book industry from an abusive monopolist (Amazon) and instead of being thanked for improving the state of competition, the government slaps it down to protect the monopolist.
Score: 29 Votes (Like | Disagree)
Roger Wade Avatar
134 months ago
What a shame ...

Yes, I agree with you 100%.

it's too bad that Apple has to resort to these measures when they've got billions in the bank.
Score: 21 Votes (Like | Disagree)
ouimetnick Avatar
134 months ago
What a joke.

Apple tries to save the e-book industry from an abusive monopolist (Amazon) and instead of being thanked for improving the state of competition, the government slaps it down to protect the monopolist.
Hi Tim! :cool: didn't know you have a MacRumors account.
Score: 14 Votes (Like | Disagree)
johnnnw Avatar
134 months ago
What a joke.

Apple tries to save the e-book industry from an abusive monopolist (Amazon) and instead of being thanked for improving the state of competition, the government slaps it down to protect the monopolist.
Hahahahahahahahaha you are so brainwashed it's unbelievable

Hope you don't get an email signed "Tim Cook" telling you to jump off a bridge or something, you'd believe it was him.

Tip: it's fake

Apple can do no wrong in your eyes
Score: 12 Votes (Like | Disagree)
CarpalMac Avatar
134 months ago
Though found guilty, Apple has maintained its innocence throughout the dispute
Yes, paying $450m as an out of court settlement screams "we are innocent" to me.
Score: 12 Votes (Like | Disagree)
jclo Avatar
134 months ago
I never understood that judgement. What exactly was the damage?

Legit question here, what is the difference between what Apple did and what Amazon does? Because I hear people say that Amazon gets away with worse than what Apple did.

is this the things about Apple and Publishers making prices "set" for ebooks?


This is an odd thing. it sounds like stopping the "price fix" means a company can sell books for a really low price (even at a loss) which is GOOD for the consumer.
BUT, that means smaller companies that cannot afford to sell that low or at a loss will LOOSE OUT. Which means less competition overall which isn't good for the consumer.

Like a double-edged (or triple-edged) sword.

Under the original wholesale model, companies like Amazon would pay a set amount for books from publishers and were then free to price ebooks however they wanted. Amazon often sold books at a loss or at very small profit margins to edge other sellers out of the market (and to encourage customer loyalty), which in turn forced publishers to continually cut the price on books. Publishers dislike the wholesale model because it encourages consumers to expect lower priced books, a burden that ultimately falls on them.

Under the agency model, set up by Apple, publishers set the price for books and retailers like Amazon were paid a set amount for every book sold (a 30/70 split, more or less). Because Amazon wasn't buying outright and setting its own prices, this ultimately led to higher e-book prices and more profit for publishers. Apple and six major publishers forced Amazon into an agency model over a wholesale model.

Another issue surrounding Apple's agreement with the major publishers included a "most favored nation" clause that prevented publishers from selling books at other retailers at a price lower than what was available in the iBookstore. Basically, publishers set book prices higher and no one could sell them lower than what was available in the iBookstore, and according to the DOJ, this resulted in artificially higher prices across the board for consumers. Definitely somewhat of a lose/lose situation -- either customers get higher prices or Amazon kills competition by taking a loss.
Score: 10 Votes (Like | Disagree)