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

iPhone 17 Pro 34ths Perspective

iPhone 17 Pro Launching Later This Year With These 10 New Features

Sunday March 23, 2025 10:00 am PDT by
While the iPhone 17 Pro and iPhone 17 Pro Max are not expected to launch until September, there are already plenty of rumors about the devices. Below, we recap key changes rumored for the iPhone 17 Pro models as of March 2025: Aluminum frame: iPhone 17 Pro models are rumored to have an aluminum frame, whereas the iPhone 15 Pro and iPhone 16 Pro models have a titanium frame, and the iPhone ...
iOS 18

iOS 18.4 Expected Next Week - Here Are the Release Notes

Friday March 28, 2025 2:01 pm PDT by
With the second release candidate of iOS 18.4 that Apple seeded out today, the company finally provided us with release notes that give a full rundown on what to expect. There's an Apple Vision Pro app, new Apple Intelligence features for notifications and additional language support, plus an Apple News Food feature for Apple News+ subscribers, and several updates that should improve the...
Magic Mouse Green

What to Expect From the Magic Mouse 3

Saturday March 29, 2025 10:15 am PDT by
Apple is reportedly working on a new Magic Mouse. Below, we recap what to expect. The two key rumors for the Magic Mouse 3 so far include a relocated charging port, along with a more ergonomic design. It was briefly rumored that the Magic Mouse 3 would also feature voice control, but that was misinterpreted information. Relocated Charging Port While the Magic Mouse switched from...
top stories 2025 03 29

Top Stories: WWDC 2025 Announced, iPhone 17 Pro and iOS 19 Rumors, and More

Saturday March 29, 2025 6:00 am PDT by
Apple's big developer event is a little over two months away, and rumors about what we can expect to see in Apple's next major operating system updates are becoming increasingly frequent. A public release of iOS 18.4 is also imminent with a number of updates and improvements, although we won't be getting the major Apple Intelligence Siri upgrades that had reportedly been planned for this...
Foldable iPhone 2023 Feature Homescreen

Six Things to Know About Apple's Upcoming Foldable iPhone

Friday March 28, 2025 3:54 pm PDT by
We've been hearing rumors about a foldable iPhone for almost a decade now, but it looks like we might finally see the device come to fruition in 2026. We're going to be waiting many more months for the foldable iPhone, but so far we're hearing good things. Apple wants to make it creaseless. It's taken Apple multiple years to design a foldable iPhone that it's satisfied with because Apple ...
iOS 19 visionOS UI Elements

Apple Codename Provides Clue About iOS 19's Rumored New Design

Sunday March 30, 2025 6:40 am PDT by
Multiple sources have claimed that iOS 19 will introduce a new design with more translucent buttons, menus, notification banners, and more, and there is now another clue that points towards this glass-like appearance. Bloomberg's Mark Gurman today said the new design project is codenamed "Solarium" internally. A solarium is a room with glass walls that allow in plenty of sunlight, so this...
ipad pro 2024

Gurman: New iPad Pro and MacBook Pro Models With M5 Chips to Launch Later This Year

Sunday March 30, 2025 6:06 am PDT by
Apple's next-generation iPad Pro models with the M5 chip will "launch this year," according to Bloomberg's Mark Gurman. In his Power On newsletter today, Gurman said the new iPad Pro models have progressed to an "advanced testing" stage, and he expects mass production of the devices to begin in the second half of this year. If that timeframe is met, the new iPad Pro models could launch...
Facebook Feature

Facebook's New iPhone App Feature Turns the Clock Back to 2007

Thursday March 27, 2025 1:59 pm PDT by
In the mid-to-late 2000s, Facebook was all about staying connected with friends and family. However, as the social media platform added new features and grew over time, that core experience began to get drowned out. That changes starting now, according to Meta, which today introduced a new feature that will "bring back the joy" of classic Facebook. Specifically, Meta has redesigned the...

Top Rated Comments

heyyoudvd Avatar
140 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
140 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
140 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
140 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
140 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
140 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)