Apple settles e-book price fixing lawsuit

Tech giant avoids July trial in which it faced as much as $840 million in claims

Apple has reached a settlement with US states and consumers seeking damages over the company’s fixing of electronic book prices. Photo: Bloomberg
Apple has reached a settlement with US states and consumers seeking damages over the company’s fixing of electronic book prices. Photo: Bloomberg

Apple has reached a settlement with US states and consumers seeking damages over the company's fixing of electronic book prices, avoiding a July trial in which it faced as much as $840 million in claims.

A lawyer for a class of e-book buyers told US District Judge Denise Cote in Manhattan that the parties signed a “binding agreement in principal” to resolve the claims.

The agreement, which is filed under seal, will be replaced in a month by a publicly filed settlement agreement spelling out the details, the lawyer Steve Berman, said in the letter.

Ms Cote ruled last year in a case filed by the US Justice Department that Apple had orchestrated a price-fixing conspiracy among five of the biggest publishing companies in violation of US antitrust law.

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Apple has appealed that ruling, which the consumers and states had been using to try to recover damages from the iPhone maker.

“Any payment to be made by Apple under the settlement agreement will be contingent on the outcome of that appeal,” Mr Berman said the letter.

The government sued Apple and the five publishers in April 2012, claiming Apple pushed them to sign agreements letting it sell digital copies of their books under a pricing model that made most e-books more expensive.

Under the contracts, the publishers set book prices, with Apple getting 30 per cent.

Apple and the publishers used the contracts to force Amazon. com, the No. 1 e-book seller, to change its pricing model, the government claimed. At the time, Amazon was selling electronic versions of best-selling books for $9.99, which was often below cost.

Ms Cote ruled against Apple after a non-jury trial. The publishers settled with the government before the trial.

As part of her ruling in the Justice Department case, Ms Cote appointed lawyer Michael Bromwich to monitor Apple’s policies for preventing antitrust violations at the company.

Two months ago, Mr Bromwich reported that the previously “contentious” relationship between him and the company had improved.

In February, the company failed to persuade a federal appeals court panel in Manhattan to halt Bromwich’s oversight while it challenges Cote’s rulings.

Mr Berman, the lawyer representing the plaintiffs, said yesterday in a phone interview that all the US attorneys general and consumers involved in the case had agreed to settle. Kristin Huguet, a spokeswoman for California- based Apple, declined to comment on the settlement.

Bloomberg