Apple has agreed to pay consumers $400 million, as part of a government lawsuit that claimed Apple conspired with the nation's largest book publishers to fix the prices of ebooks—but only if its appeal of a New York federal judge's ruling from last year is unsuccessful.
According to a July 16 court filing, if the ruling is denied and the settlement confirmed, Apple will pay $400 million to consumers—on top of the $166 million already paid by publishers in earlier settlements—as well as $50 million in attorneys' fees and payments to the states involved. (Apple was sued by the attorneys general of multiple states.)
If the liability finding is "vacated or remanded or reversed and remanded for reconsideration or retrial on the merits," said the filing, Apple will pay consumers $50 million and pay $20 million in attorneys fees and payments to the states.
If the judge's ruling is overturned, Apple won't pay anything to anyone.
Should Apple have to pay the $400 million, the filing stated, it would represent "a consumer recovery of more than 200 percent of the maximum estimated consumer damages, placing this case among the exceedingly rare cases that provide consumers nationwide with double the amount of their estimated damages."
Apple maintains that it behaved properly.
"We did nothing wrong and we believe a fair assessment of the facts will show it," an Apple spokesperson said in a statement.
New York Attorney General Eric Schneiderman, in a July 16 statement, called the settlement a "major victory."
He added, "This settlement proves that even the biggest, most powerful companies in the world must play by the same rules as everyone else."
Apple Keeps Fighting
In March 2012, the U.S. Justice Department first warned Apple and publishers Simon & Schuster, Hachette, Penguin, Macmillan and HarperCollins that it planned to file an antitrust suit against them for price-fixing ebooks. The publishers soon after settled out of court, leaving Apple alone to insist on its innocence. The trial finally got under way in June 2013, and was based largely around Apple's internal emails.
On July 10, U.S. District Court Judge Denise Cote ruled that Apple had conspired with the publishers to drive the prices of ebooks beyond the $9.99 set by Amazon, the major ebook seller at the time.
"Apple and the Publisher Defendants shared one overarching interest—that there be no price competition at the retail level," Cote wrote in her 160-page ruling. "Apple did not want to compete with Amazon … on price; and the Publisher Defendants wanted to end Amazon's $9.99 pricing and increase significantly the prevailing price point for ebooks. With a full appreciation of each other's interests, Apple and the Publisher Defendants agreed to work together to eliminate retail price competition."
In September, Cote gave the U.S. government oversight of all content-distribution deals negotiated by Apple, but stopped short of also allowing it to have a say in Apple's sales and distribution of movies, music and other content.
It's unclear when Apple's appeal of the July ruling will be addressed.