Apple Appeal in $450M Ebook Case Rejected by U.S. Supreme Court

The court chose not to hear Apple's appeal of a lower court ruling, which means the company must now pay the money to end the case.

Apple, ebooks, ebook, price-fixing suit, Supreme Court, Justice Department, appeals, settlement

Apple must pay out about $450 million to U.S. consumers and states to settle claims that it illegally conspired with ebook publishers to raise ebook prices starting in 2010.

The coming payout will now be made after the U.S. Supreme Court rejected Apple's last appeal and declined to hear arguments in the antitrust case, according to a March 7 announcement by the U.S. Department of Justice.

By declining to hear Apple's appeal, the high court allowed the previous lower court decision to stand, which found that "Apple orchestrated a price-fixing conspiracy with five major e-book publishers and substantially raised e-book prices," according to the statement.

"Apple's liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all," Assistant Attorney General Bill Baer of the Justice Department's Antitrust Division, said in a statement. "And consumers will be made whole. The outstanding work of the Department of Justice team—working with our steadfast state attorney general partners—exposed this cynical misconduct by Apple and its book publisher co-conspirators and ensured that justice was done."

Apple will now have to pay out about $400 million to ebook buyers under an earlier July 2014 agreement to settle damages after actions were brought by the attorneys general of 33 states and territories and by a lawsuit filed by ebook buyers, according to the Justice Department. Another $20 million will go to the affected states, and $30 million will be for legal fees.

Under that settlement, most ebook purchasers "will receive reimbursement for the higher prices Apple's conduct caused them to pay through automatic credits at their ebook retailers" and the credits will be available for use toward future purchases.

The involved ebook publishers previously paid some $166 million in penalties for their part in the case, according to the Justice Department.

The government originally filed its civil antitrust lawsuit against Apple on April 11, 2012, alleging that the company orchestrated a price-fixing conspiracy with five ebook publishers: Hachette Book Group (USA), HarperCollins Publishers, Holtzbrinck Publishers (which does business as Macmillan), Penguin Group (USA) and Simon & Schuster, according to the Justice Department.

The government's lawsuit "alleged that Apple and the defendant publishers conspired to fix prices and end e-book retailers' freedom to compete on price, and that they succeeded in substantially increasing the prices that consumers paid for e-books," the government argued.

Apple has been pursuing appeals of lower court rulings in the price-fixing case for several years. In June 2015, a three-judge panel in the Second U.S. Circuit Court of Appeals in Manhattan issued a 2-1 ruling upholding an earlier lower court ruling, which found that Apple violated U.S. civil antitrust rules in taking its alleged actions on ebook prices, according to a earlier eWEEK story. Apple fought the case, which was brought by the Justice Department, for more than three years.

In November 2014, Apple had reached an agreement with private plaintiffs and 33 states to pay some $450 million in damages for the allegations, but that settlement was contingent on the ongoing appeals.