Apple expected to pay $450M in e-book case

March 08 05:21 2016

Apple is expected to pay $450 million after the Supreme Court on Monday refused to consider the tech giant’s appeal of a ruling that found the company conspired with five major publishers to inflate e-book prices. The nation’s highest court issued the denial without comment, a move that let stand the June 2015 decision in which a lower court ruled that  Apple “orchestrated a conspiracy among the publishers to raise e-book prices.”apple3-9-1331322264

Most of the Apple payment would go to e-book purchasers who were forced to pay higher prices as a result of the improper agreement. The overall payment to consumers will total more than $560 million when previous settlements publishers reached with the Department of Justice and state attorneys general are included. The decision represents a financial blow for Apple, whose representatives did not immediately respond to a message seeking comment. Apple continued to pursue appeals of the federal government’s antitrust allegations despite the publishers’ settlements.

After losing last year’s decision by the Court of Appeals for the 2nd Circuit, Apple insisted it “did not conspire to fix ebook pricing” and said the company was disappointed that the court did not “recognize the innovation and choice the iBooks Store brought for consumers.” However, government attorneys presented evidence during a 2013 federal court trial that showed Apple struck agreements with the publishers that led to higher prices on e-book best sellers and new releases. The secret agreements effectively raised the cost of e-book new releases and New York Times best sellers as high as $19.99 and $14.99, respectively, higher than the $9.99 charged by Amazon, the government alleged.

U.S. District Court Judge Denise Cote, who issued the 2013 ruling after presiding over a bench trial of the legal dispute, found that Apple was “fully complicit” in a pricing scheme that represented a violation of the U.S. Sherman Antitrust Act, or unreasonably restrained trade. Rejecting arguments by Apple, Cote ruled that “it is difficult to see how competition will be stifled” by the decision against the company. Amazon said Monday it was ready to distribute the court-mandated settlement funds to customers of its Kindle e-reader as soon the company is instructed to move forward.