Apple settles ebook antitrust case, set to pay millions in damages
Less than a month before the trial was scheduled to begin, Apple has reached an out-of-court agreement to close an antitrust lawsuit alleging the company conspired with publishers to raise ebook prices.
The class-action lawsuit, brought forward by 33 U.S. states, alleged that Apple was a dominant figure in an ebook price-fixing conspiracy designed to increase ebook prices and challenge Amazon's hold within the ebook industry.
By reaching a settlement outside of court, Apple is avoiding the trial, scheduled for July 14, in which the iPad and iPhone maker faced over $840 million in potential damages.
Manhattan-based U.S. District Judge Denise Cote has ordered the parties to submit filings detailing the terms of the settlement within 30 days, but the details have not been revealed and must still be approved in court.
In 2012, the U.S. Department of Justice (DoJ) accused Apple and five publishers of ebook price fixing, and since then, 33 states have sued Apple on behalf of their consumers. In addition, a class action lawsuit has also been filed by individual consumers.
In a non-jury hearing last year, Cote concluded that Apple orchestrated the conspiracy. The publishers accused of conspiring to fix ebook prices -- Hachette Book Group, HarperCollins Publishers, Penguin Group (USA) Inc, Macmillan and CBS-owned Simon & Schuster (ZDNet is also owned by CBS) -- agreed to pay over $160 million in settlement charges.
Originally, the state attorneys general sought $280 million in damages from Apple, but this was tripled following Cote's ruling, to $840 million. However, Apple is appealing Cote's decision, and the settlement -- as well as any damages payment -- is dependent on the outcome of such an appeal. The settlement out of court may have also been designed to avoid the tripled damages sought.
Apple has maintained that it "did not conspire to fix ebook pricing" throughout, although the judge's decision was called a "victory for millions of ebook readers" by the DoJ. A letter sent to the judge by attorney Steve Berman stated that "any payment to be made by Apple under the settlement agreement will be contingent on the outcome of that appeal."