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Apple settles ebook case, agrees to pay consumers over price-fixing

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Apple(s appl) has finally bowed out of a high stakes legal battle over ebooks and agreed to a settlement that could soon see the tech giant paying out millions to customers who purchased titles at online retailers like Amazon(s amzn) and Barnes & Noble(s bn).

According to a letter to the court filed in New York, and embedded below, Apple has reached an agreement with class-action lawyers and state attorneys general that will see the parties cancel a damages trial set for July.

The settlement is under seal for now and must be approved by the court, but is likely to be worth hundreds of millions of dollars. The money will come on top of the $160 million or so that the five publishers agreed to pay as a result of settlements reached last year.

Apple will, however, continue to appeal a verdict from last year in which U.S. District Judge Denise Cote concluded that the company had masterminded a scheme to raise the price of ebooks.

Apple will likely make its case to a New York appeals court this summer, but the appeal can be considered a long shot. According to a letter describing the settlement, the money reserved for consumers will be contingent on that appeal.

In agreeing to settle the case, Apple may be seeking avert a triple damages rule that could have been imposed at trial. Apple did not immediately respond to a request for comment.

The agreement comes after class-action lawyers and state governments sought civil penalties from Apple for violating antitrust laws. Under a complicated legal process, consumers in 17 states are represented by the class action lawyers, while those in other states are represented by their respective state governments.

Here is the letter from class action lawyer Steve Berman and one from Judge Cote, which contain further details. Update: here’s a Q&A about what happens next, including how you might get paid.

An earlier version of this story incorrectly referred to a jury verdict; the verdict was by Judge Cote.

Steve Berman Settlement Letter

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Cote Letter Re Apple Settlement

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7 Responses to “Apple settles ebook case, agrees to pay consumers over price-fixing”

  1. Robotech’s point is important. If the DoJ took the civil, not criminal, process because the criminal process requires a jury and is harder to win.

    Still JJR’s point stands. This is likely a fait accompli.

    But so what?

    The cost to Apple is negligible. Most consumer will not bother with the paper work to collect. The major costs to all parties are legal and process. A big nothing.

    • Robotech_Master

      Actually, consumers don’t need to bother with paperwork. That’s all handled by the e-book stores from which the consumers bought. I already got about five bucks back in combined credit from Amazon and Barnes & Noble thanks to the publishers’ settlement.

  2. Robotech_Master

    Note that the verdict Apple continues to appeal is not a “jury” verdict; it was decided solely by the judge in a non-jury trial.

  3. john V

    Hey writer of this article, since you don’t seem to have a good understanding of this case. I’m going to refer people to here:

    Basically, this is NOT apple giving up, but a smart tactical move by them to neutralize the biased Juge Cote’s decision. Contrary to what YOU think, there is a pretty good chance that at least some of the decisions will be overturned(just like how they overturned the judge’s monitoring decisions). That means this settlement probably will be moot.

    • Robotech_Master

      Actually, they didn’t overturn anything. They said the monitoring could continue subject to certain restrictions…restrictions identical to the ones that had already been explicitly spelled out in the original settlement document. Apple partisans like to spin that as a victory, but it really wasn’t—not when you consider that what Apple WANTED was to get rid of the monitor entirely.

      And more recently, when Apple asked for a stay of the damages trial altogether until their appeal of the verdict was settled, the appeals court said “nuh-uh.” So, settling was the smart thing in this case. It effectively takes the damages trial off the table, by accepting that if they lose, there’ll be damages; if they don’t, there won’t.

      And given that the appeals court has turned Apple down twice now, it doesn’t seem terribly likely the appeal will be going their way either.

    • john V, as someone who has been tracking this case since it began, I think it’s pretty unlikely the verdict will be overturned. The Second Circuit did not remove the monitor as Apple asked, but just defined his powers. But that is just a detail in the larger picture – note that the Second Circuit has had several occasions to put the brakes on the class action process, but chose not to.

      I don’t think the Judge or the DOJ handled this case very well but, at this point, it seems to be a fait accompli.