Apple to Pay $450 Million to Settle E-Book Price Fixing Case

ibooks-iconAccording to court records filed on Wednesday, July 16, Apple will pay $450 million as part of an out-of-court settlement with class action lawyers and state district attorneys over e-book price fixing, reports Reuters.

Apple first reached a settlement agreement with the 33 U.S. states and territories involved in the lawsuit in June, successfully avoiding a lengthy and expensive damages trial. Settlement details were sealed at that time, however, pending court approval. $400 million of the $450 million is earmarked for consumers.

The settlement is contingent on a pending appeals case Apple filed in February with the U.S. Circuit Court of Appeals in New York. In the filing, Apple asked the court to overturn the original ruling that found the company guilty of conspiring to fix e-book prices.

"We have obviously studied Judge Cote's July 2013 ruling in detail, and believe that the 2nd Circuit will agree with her conclusion that Apple did violate federal antitrust laws," said Steve W. Berman, managing partner of Hagens Berman and lead attorney representing the consumer class. "In any case of this magnitude, there are high degrees of uncertainty, and Apple's appeal of Judge Cote's well-reasoned ruling is an example of that uncertainty."

Though found guilty, Apple has maintained its innocence throughout the dispute, claiming that it "kick-started competition in a highly concentrated market, delivering higher output, lower price levels, and accelerated innovation." Should Apple's appeal be successful, sending the claim back to District Court, the company will pay out $50 million to settle consumer damages claims. If the appeals court reverses the initial decision entirely, Apple will pay no damages.

Along with $450 million in damages, Apple has also been subjected to several penalties levied by the U.S. Department of Justice, including an order to hire an external antitrust monitor. Publishers involved in the case, including Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin also settled for a total of $166 million, which has already been making its way to customers in the form of refunds.

Top Rated Comments

heyyoudvd Avatar
109 months ago
What a joke.

Apple tries to save the e-book industry from an abusive monopolist (Amazon) and instead of being thanked for improving the state of competition, the government slaps it down to protect the monopolist.
Score: 29 Votes (Like | Disagree)
Roger Wade Avatar
109 months ago
What a shame ...

Yes, I agree with you 100%.

it's too bad that Apple has to resort to these measures when they've got billions in the bank.
Score: 21 Votes (Like | Disagree)
ouimetnick Avatar
109 months ago
What a joke.

Apple tries to save the e-book industry from an abusive monopolist (Amazon) and instead of being thanked for improving the state of competition, the government slaps it down to protect the monopolist.
Hi Tim! :cool: didn't know you have a MacRumors account.
Score: 14 Votes (Like | Disagree)
johnnnw Avatar
109 months ago
What a joke.

Apple tries to save the e-book industry from an abusive monopolist (Amazon) and instead of being thanked for improving the state of competition, the government slaps it down to protect the monopolist.
Hahahahahahahahaha you are so brainwashed it's unbelievable

Hope you don't get an email signed "Tim Cook" telling you to jump off a bridge or something, you'd believe it was him.

Tip: it's fake

Apple can do no wrong in your eyes
Score: 12 Votes (Like | Disagree)
CarpalMac Avatar
109 months ago
Though found guilty, Apple has maintained its innocence throughout the dispute
Yes, paying $450m as an out of court settlement screams "we are innocent" to me.
Score: 12 Votes (Like | Disagree)
jclo Avatar
109 months ago
I never understood that judgement. What exactly was the damage?

Legit question here, what is the difference between what Apple did and what Amazon does? Because I hear people say that Amazon gets away with worse than what Apple did.

is this the things about Apple and Publishers making prices "set" for ebooks?


This is an odd thing. it sounds like stopping the "price fix" means a company can sell books for a really low price (even at a loss) which is GOOD for the consumer.
BUT, that means smaller companies that cannot afford to sell that low or at a loss will LOOSE OUT. Which means less competition overall which isn't good for the consumer.

Like a double-edged (or triple-edged) sword.

Under the original wholesale model, companies like Amazon would pay a set amount for books from publishers and were then free to price ebooks however they wanted. Amazon often sold books at a loss or at very small profit margins to edge other sellers out of the market (and to encourage customer loyalty), which in turn forced publishers to continually cut the price on books. Publishers dislike the wholesale model because it encourages consumers to expect lower priced books, a burden that ultimately falls on them.

Under the agency model, set up by Apple, publishers set the price for books and retailers like Amazon were paid a set amount for every book sold (a 30/70 split, more or less). Because Amazon wasn't buying outright and setting its own prices, this ultimately led to higher e-book prices and more profit for publishers. Apple and six major publishers forced Amazon into an agency model over a wholesale model.

Another issue surrounding Apple's agreement with the major publishers included a "most favored nation" clause that prevented publishers from selling books at other retailers at a price lower than what was available in the iBookstore. Basically, publishers set book prices higher and no one could sell them lower than what was available in the iBookstore, and according to the DOJ, this resulted in artificially higher prices across the board for consumers. Definitely somewhat of a lose/lose situation -- either customers get higher prices or Amazon kills competition by taking a loss.
Score: 10 Votes (Like | Disagree)

Popular Stories

applefifthavenue

Man Robbed After Buying 300 iPhones From Apple Fifth Avenue

Tuesday November 29, 2022 11:54 am PST by
An unnamed 27-year-old man who purchased 300 iPhones from Apple Fifth Avenue on Monday morning was robbed shortly after leaving the store, according to 1010Wins Radio in New York. He was carrying 300 iPhone 13s in three bags and walking to his car at 1:45 a.m. when another car pulled up next to him. Two men jumped out and demanded that he hand over the bags. Not wanting to hand over 300...
app store awards 2021

Apple Announces 2022 App Store Award Winners, Highlighting Best Apps of the Year

Tuesday November 29, 2022 3:10 am PST by
Apple today announced its 2022 App Store Award winners, highlighting the 16 best apps and games selected by Apple's global App Store editorial team. The top apps were chosen by Apple for their quality, innovative technology, creative design, positive cultural impact, and ability to deliver "exceptional experiences." Apple CEO Tim Cook said: This year's App Store Award winners reimagined...
Cyber Monday Deals Feature 2022

Best Cyber Monday Apple Deals Still Available for AirPods, Apple TV, iPad, and More

Monday November 28, 2022 5:24 am PST by
The Black Friday and Cyber Monday holiday shopping rush is drawing to a close, but there are still some good deals to be had out there. For Apple products, many of the deals you've seen since last week are still available, though some have expired. So for anyone who missed out on Black Friday deals, there's still an opportunity to get some of the year's best prices on many Apple devices. Note: ...
iPhone 14 Pro Rear Camera

iPhone 15 to Use 'State-of-the-Art' Image Sensor From Sony for Better Low-Light Performance

Monday November 28, 2022 11:00 am PST by
Apple's upcoming iPhone 15 models will be equipped with Sony's newest "state of the art" image sensors, according to a report from Nikkei. Compared to standard sensors, Sony's image sensor doubles the saturation signal in each pixel, allowing it to capture more light to cut down on underexposure and overexposure. Nikkei says that it is able to better photograph a person's face even with...
eufy camera

Anker's Eufy Cameras Caught Uploading Content to the Cloud Without User Consent [Updated]

Tuesday November 29, 2022 1:01 pm PST by
Anker's popular Eufy-branded security cameras appear to be sending some data to the cloud, even when cloud storage is disabled and local only storage settings are turned on. The information comes from security consultant Paul Moore, who last week published a video outlining the issue. According to Moore, he purchased a Eufy Doorbell Dual, which was meant to be a device that stored video...
rapid security response

Apple Releases Another Rapid Security Response Update for iOS 16.2 Beta Users

Monday November 28, 2022 10:16 am PST by
Apple today released a Rapid Security Response update that is available for those running the iOS 16.2 beta, marking the launch of the second RSR update since the feature was released in iOS 16. The Rapid Security Response Update is designed to provide iOS 16.2 beta users with bug fixes without the need to install a full update. The initial RSR release for iOS 16.2 beta users was a test with ...
Apple Watch Ultra Oceanic Plus App

Apple Announces Oceanic+ App Now Available for Apple Watch Ultra

Monday November 28, 2022 6:11 am PST by
Apple today announced that the Oceanic+ app is available for the Apple Watch Ultra starting today. Designed by Huish Outdoors in collaboration with Apple, the app serves as a dive computer for recreational scuba diving at depths up to 40 meters/130 feet. Apple already offers a basic Depth app on the Apple Watch Ultra for viewing your current depth, maximum depth reached, water temperature,...
14 vs 16 inch mbp m2 pro and max feature 1

'M2 Max' Geekbench Scores Leak Online, Revealing Rumored Specs and Performance

Wednesday November 30, 2022 2:39 am PST by
Geekbench scores allegedly for the upcoming "M2 Max" chip have surfaced online, offering a closer look at the performance levels and specific details of the forthcoming Apple silicon processor. The Geekbench results, first spotted on Twitter, are for a Mac configuration of with the M2 Max chip, a 12-core CPU, and 96GB of memory. The Mac listed has an identifier "Mac14,6," which could be...
iphone 11 tesla cybertruck close up

Elon Musk Pledges to Build iPhone Rival If Apple Ousts Twitter

Tuesday November 29, 2022 2:48 am PST by
Elon Musk has pledged to offer an "alternative phone" if Apple and Google remove Twitter from their app stores, adding to long-standing rumors about an iPhone rival from Tesla. Modified iPhone 11 Pro in the style of the Tesla Cybertruck, by Caviar. Musk's remark came after being asked about the potential scenario of Twitter being removed from app stores, which could conceivably happen if the...
iOS 16

Apple Releases iOS 16.1.2 With Carrier Improvements and Crash Detection Optimizations

Wednesday November 30, 2022 10:09 am PST by
Apple today released iOS 16.1.2, another minor bug fix update that comes one week after the release of iOS 16.1.1 and three weeks after the launch of iOS 16.1, an update that added support for iCloud Shared Photo Library, Matter, Live Activities, and more. The iOS 16.1.2 update can be downloaded on eligible iPhones over-the-air by going to Settings > General > Software Update. According...