New York Federal Judge OKs $450M Settlement for eBook Price Fixing Case

Nov 23, 2014 07:57 AM EST

(Photo : Reuters) Manager Paul Cowan displays some of the many lost e-book readers, in front of shelves of traditional print books waiting to be claimed at the Transport for London Lost Property Office (LPO) in central London February 14, 2013. It is estimated that over 15 million items of property have been found across the London transport network since 1933, when it was started. The LPO receives up to 1,500 items per day. REUTERS/Toby Melville (BRITAIN)

Judge Denise Cote of the United States District Court in Manhattan gave her final approval on Friday, the preliminary approval she granted Apple in August a $450 million settlement over its eBook price-fixing case. She described the amount as fair and reasonable.

The amount is broken down into $400 million that the Cupertino-based tech giant has to refund to eBook users who bought some books from 2010 to 2012. The $50 million is lawyers' fee.

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The court found in 2013 that Apple conspired with HarperCollins, Penguin, Hachette, Macmillan and Simon & Schuster to fix or inflate prices of eBooks from the standard $9.99 that Amazon charges for new eBook releases.

When Apple introduced the iPad in 2010, publishers at that time were selling the eBooks to retailers at half the price, but the company co-founder, Steve Jobs, who was still alive then, convinced the publishers to set their own prices for the eBooks. His move was in response to complaints by publishers that they were losing money with Amazon's $9.99 fixed price. Jobs convinced the five to sell their books through Apple's iBookstore and ditch Amazon.

The five, which were also charged and found guilty of price-fixing, were ordered to pay $166 million separately from the $450 that Apple has to pay, bringing to $566 million the total settlement involved.

But Apple is hoping to win in an appeal of a 2013 ruling that would drastically reduce its settlement fee to $50 million and another $20 million lawyers' fee. The hearing of the appeal is scheduled in December 2015 in the same Manhattan court, but Thenextdigit pointed out that lawyers who favour the consumers believe that court would decide against Apple.

If Apple would lose its appeal, those who filed claims would receive about $6.5 for every New York Times bestseller they purchased as an eBook, while if the court would favour Apple, the consumers would only get about $1 refund for each overpriced eBook.

There are about 23 million consumers who would get a refund from Apple.

TagsE-book, price-fixing