Apple settles e-book price fixing class action suit, dodges possible $840M in claims

By Mikey Campbell

In a court filing on Monday, an attorney representing the plaintiffs in a class action suit seeking damages from Apple's e-book price fixing scheme informed federal Judge Denise Cote that the company has agreed to settle.


Apple's closing slide in its e-book antitrust case. | Source: U.S. District Court

The letter addressed to Judge Cote was handed in by plaintiffs' representative Steve Berman, a well-known class-action attorney who told Bloomberg that all parties involved agreed to the settlement. This includes Apple, general consumers and state attorneys general representing citizens in 33 U.S. states and territories.

Details of the arrangement have not been revealed as the memorandum containing the specifics of the deal is sealed pending each party's preparation and filing of the final settlement agreement for preliminary approval by the court. All parties must file their version of the agreement within 30 days.

Judge Cote later filed an order recognizing the letter, effectively halting a trial scheduled for July that was set to determine damages suffered from Apple's e-book price fixing scheme. The class was seeking as much as $280 million in claims associated to the Cupertino, Calif. company's actions, which could have been trebled to $840 million.

Apple is in the process of appealing a ruling by the U.S. District Court for the Southern District of New York -- the same court overseeing the class-action suit -- that found the company guilty of colluding with major book publishers to falsely inflate pricing of content sold through the iBookstore.

The U.S. government leveled the suit after an investigation into Apple's "agency model" price structure, which operates on a "most favored nations" basis that disallows content owners to sell their wares to another retailer for a lower price. Apple's model ran counter to Amazon's "wholesale model" that allows retailers to buy content from publishers in bulk, then set resale prices at or below cost as they see fit.

As it stands, the settlement payable to state attorneys general and consumers announced today is contingent on the outcome of Apple's appeal.

Prior to today's settlement agreement, Apple attempted to dismiss or stay the class-action suit, but both motions were shot down by Judge Cote.

Letter Informing Court of Apple E-books Class Action Settlement