price - fixing

Apple loses e-books price-fixing appeal in U.S. Supreme Court

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Apple looks to have come to the end of the road in a long running legal saga involving allegations of an e-books price inflating conspiracy. Today the United States Supreme Court declined to hear the company’s challenge to an appellant court decision that it had conspired with five publishers to increase e-books prices — meaning Apple now faces having to stump up a previously agreed $450 million settlement. The news was reported earlier by Reuters.

At the time of writing Apple had not provided comment on the Supreme Court decision. The company has consistently denied it was involved in e-books price-fixing — arguing instead that its iBooks store offered customers “more choice and injected much-needed innovation and competition into the market”, and that its 2009-2010 contract negotiations with publishers over ebooks constituted ‘normal business practice’.

Apple has also continued to appeal the original antitrust judgement, despite also agreeing a settlement with 33 US states, back in July 2014, to pay $400 million to consumers to settle the suit. Attorneys’ fees and payments to states bumps the overall settlement figure to $450 million — which Apple faces having to pay now.

In a statement today the Justice Department welcomed the ruling. “Apple’s liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all,” said Assistant Attorney General, Bill Baer, of its Antitrust Division.  “And consumers will be made whole.  The outstanding work of the Department of Justice team — working with our steadfast state attorney general partners — exposed this cynical misconduct by Apple and its book publisher co-conspirators and ensured that justice was done.”

A US District Court judge handed down the original ruling on the e-books pricing case, back in fall 2013, placing a raft of conditions and restrictions on Apple’s interactions and negotiations with publishers in a bid to curtail its power to influence pricing with publishers.

The five publishers alleged by the Justice Department to have conspired with Apple to inflate e-book prices — by, in some instances, as much as $5 vs the cost previously charged for the same e-book by Amazon — are Hachette, HarperCollins, Penguin, Simon & Schuster and Macmillan.

According to the Justice Department, $166 million has already been paid by the “conspiring publishers”. Once Apple’s portion is added in the total figure being repaid to e-book purchasers will be $566 million. The Justice Department said most e-book purchasers will receive reimbursement for the higher prices via automatic credits at their e-book retailers.  “They will be able to apply these credits to future purchases,” it added.

Update: In a statement, Amazon added: “We are ready to distribute the court-mandated settlement funds to Kindle customers as soon as we’re instructed to move forward.”