Apple Settles Ebook Lawsuit, Contingent on Price-Fixing Appeal

Apple, facing a July civil-action lawsuit over claims that it fixed the prices of ebooks, has reached an out-of-court settlement with consumers and the 33 U.S. states suing it on behalf of residents.

The amount of the settlement is unknown. According to The Wall Street Journal, the plaintiffs were seeking $840 million—three times the $280 million that they said Apple overcharged consumers.

Steve Berman, a lawyer representing the plaintiffs, told Bloomberg that all the consumers and involved U.S. attorneys had reached a settlement, and that he had filed a memorandum of understanding. The court filing is “under seal,” however, preventing him from sharing details.

A federal judge in Manhattan on June 16 gave all parties one month within which to submit a filing, seeking approval of their deal.

The settlement is, however, contingent on the outcome of an appeal Apple filed against a federal court’s findings last July. That court found Apple—during a period of preparation ahead of the launch of the first iPad, and with it the iBookstore—guilty of colluding with the nation’s largest book publishers to raise prices and wrest control of the ebook market from Amazon.com

“Apple did not want to compete with Amazon (or any other ebook retailer) 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 the ebook market and raise the price of ebooks above $9.99” U.S. District Court Judge Denise Cote wrote in her 160-page, July 10 ruling.

In a Sept. 6 ruling, Cote granted the U.S. government oversight of all content-distribution deals negotiated by Apple, but stopped short of allowing it a say in Apple’s sales and distribution of television shows, music and movies, as the Justice Department had requested.

Assistant Attorney General Bill Baer was pleased with the ruling, though, and told The New York Times, “Consumers will benefit from lower ebooks pricing as a result of the department’s enforcement action to restore competition in this important industry.”

Apple didn’t offer a comment on the settlement. Following the July ruling, however, Apple spokesperson Tom Neumayr said in a statement, “Apple did not conspire to fix ebook pricing. The iBookstore gave customers more choice and injected much-needed innovation and competition in the market.”

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