Blog Post

Ebook buyers will get $0.25 to $1.32 per book in Apple price-fixing case

Consumers in 49 states (all except Minnesota) and five territories will be reimbursed at least 25 cents for every ebook purchase they made from large publishers between April 1, 2010 and May 21, 2012.

The news comes from court filings that offer fresh details about a sweeping settlement between state governments and three publishers over an alleged conspiracy with Apple (s aapl) to fix the price of e-books.

As my colleague, Laura Owen, reported last night, Simon & Schuster, Hachette and HarperCollins will pay a total of $69 million to consumers. Here are some fresh details based on today’s filings:

  • Consumers will receive $1.32 for each New York Times (s NYT) bestseller they bought between April 1, 2010 and May 21, 2012
  • They will receive 32 cents if a book was not on the NYT bestseller list at the time but was in its first year of publication, and 25 cents if it was an older backlist book
  • Most consumers will receive the reimbursement in the form of a credit to their Amazon (s amzn), Barnes & Noble (s bks), Kobo or Apple (s aapl) account unless they state they prefer a check
  • Those who bought ebooks through Google (s goog) and Sony (s sne) will get a check
  • Any money left over will go to literacy related charities

If a court approves the deal, the publishers will put aside money into a dedicated consumer account within 30 days and retailers will begin notifying customers by email. The notification process will also include Google and Facebook ads.

The publishers will also put aside $7.6 million to compensate the states’ for investigation and attorneys’ costs and an additional $750,000 each to pay for the notification process.

Consumers in five territories and every state except Minnesota, whose attorney general has opted out of the deal, are eligible to receive money. (We’ve reached out to Minnesota for comment and will update when we hear back).

Even though only three of the five accused publishers are part of the deal, publishers who bought an ebook from any one of the five will be compensated. The office of Connecticut’s attorney general said by email that this is because any conspirator is responsible for the actions of a co-conspirator.

The states are continuing a related lawsuit against Apple and the two hold-out publishers, Penguin and Macmillan. If they prevail, according to the memo below, more money could be forthcoming to consumers.

Here’s the memo with key parts underlined:

Memo in Support of Plaintiff States’ Motion for Preliminary Approval of Settlements Copy

8 Responses to “Ebook buyers will get $0.25 to $1.32 per book in Apple price-fixing case”

  1. Between Apr 1, 2010 and May 21 2012 I purchased 286 ebooks from Amazon. I should get back at most $71.50 (each book multiplied by $0.25). Some of them may be bestsellers.

    • David Thomas

      Sheila: the award will be limited to those books published by the three publishers who settled. If your purchases were subdivided by the aggregate market share during that time frame (and I’m not suggesting this is entirely accurate ), that would account for no more than 108.68 books. That makes your award around $27. Still, it will take a dent out of your Amazon Prime membership fee. However, depending on your reading tastes, it could be much less.

  2. Costa K.

    It wasn’t a group of private individuals who sued, it was the States themselves, the 7.6 million was to reimburse the tax payers. And since 49 states and 5 territories are part of this, that means that it has to be split 54 ways, meaning each state ends up with a mere $140,000, on average, to cover all the time and effort they put into the case. And while some lawyers get rich off these deals, Attornies General do not, the highest paid is the Attorney General is that of Alabama making $168,000 a year…not very good for being at the pinnacle of your profession.

    The point of the lawsuit wasn’t to make money, either for the states or for those who were overcharged because of corrupt business practices. The purpose was to punish the publishers for engaging in an unlawful conspiracy to fix prices; which will hopefully discourage similar shenanigans in the future.

    • David Thomas

      “Unlawful conspiracy” is still an opinion, not any legally established fact. The publishers who settled did so because its always cheaper to do so — less lawyer fees. One of the key pieces of evidence the DOJ relies on is a dinner meeting among top publisher CEOs that occured nearly two years before the announcement of the Apple iPad. The point of the Attorney General’s class action lawsuits — distinct from the DOJ injunction — was to garner easy attention for political careers.

  3. Michael W. Perry

    Let’s see. Thirty-two cents for recent non-bestsellers. Ten such books would be $3.20. For almost everyone but the most destitute, that’s not enough to make the filing worthwhile. And of course no one who is destitute would have been buying an iPad.

    Here’s the real reason for this lawsuit:

    “The publishers will also put aside $7.6 million to compensate the states’ for investigation and attorneys’ costs and an additional $750,000 each to pay for the notification process.”

    That’s lawyers either drawing large salaries or billing $200 per hour or more for their services. They get well-paid for their labors. Those who bought ebooks, the so-called victims of alleged corporate greed, are likely to earn far less than the minimum wage if they file.

    The settlements for these lawsuits follow a pattern that I first saw when I owned two Mac computers, circa 2000, that Apple had to pay damages for claiming they’d run OS X better than they did. The paperwork I’d have had to file was so laborious and burdensome, it wasn’t worth the bother.

    That’s how these settlements often work. Lawyers on both sides make filing a claim so burdensome and poorly rewarded, that few bother to file. That saves the defendant millions on dollars. On the other side, the plaintiff lawyers get to collect handsomely for the time they spent, with perhaps a bit extra for time they weren’t really working. They make out like the bandits they are.

    And the public, meaning you and I, get shafted since all these costs get passed along to us as consumers.

    That’s why I hate these lawyers and the courts that let them get away with these all-too-obvious miscarriages of justice. Some legal issues are hard to parse. What’s wrong with these sorts of settlements is all too obvious.

    • David Thomas

      The lawyers were state employees from the respective Attorney Generals offices. What they got out of it was an easy campaign claim to be fighting for the average consumer.