Here’s what you might get from Apple’s $400M settlement over ebook price fixing

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There are new details available about a landmark settlement in which Apple has agreed to end a long-running legal fight over its role in brokering a conspiracy among big publishers to fix the price of ebooks.

A new court filing, which provides details of a sealed settlement announced last month, shows that Apple will pay $400 million to consumers plus another $50 million to state governments and class-action lawyers.

The deal is contingent, however, on the Second Circuit Court of Appeals upholding a lower court’s ruling against Apple. If the appeals court sends the case back for a new trial, Apple will pay $70 million plus $20 million in legal fees, and if the appeals court reverses, Apple will pay nothing at all.

What does this mean for consumers? According to a key sentence in the new filing, the payment arrangements will be modeled on earlier deals under which most consumers received a credit to their Amazon Kindle or Barnes & Noble based on how many books they bought. The per-book credit was significantly higher if the book in question was ever a New York Times bestseller.

The new payments, however, will likely be significantly higher because Apple is paying more to settle than did the publishers, who together paid around $160 million. That publishers settlement resulted in top payments of around $3 per book  — so, based on the $400 million number, payments could be up to $6 per book. (Another way to look at it is to see if you received an earlier payment, and do the math).

The refunds only apply to books purchased from one of the big 5 publishers — Hachette, HarperCollins, Simon & Schuster, Penguin or Macmillan — between April 1, 2010 to May 21, 2012.

The credits will appear in the account the retailer from whom the consumer bought the book to begin with, which will typically mean Amazon, Barnes & Noble, Apple or Google. The deal also says that consumers don’t have to spend it on ebooks, but can spend it on anything the retailer sells.

The new filing also refers to “checks,” meaning consumers could seek to receive the payment in cash. Based on the other settlements, however, that process would likely be far more complicated for consumers.

As for when the payments will arrive, that will depend on the outcome of the Second Circuit ruling. The court hasn’t even heard oral arguments yet, and so a decision (which will determine the amount of the payout) may not arrive until 2015. The settlement also refers to the Supreme Court, though it’s unlikely the process will get that far. Here’s a copy of the filing:

Apple eBook Settlement

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