Last March, I wrote a diary for the
All Things Bookstore Series,
e-books, Amazon, Apple, the Big Six and the Independent Bookstore, that laid out the Department of Justice's restraint of trade suit against Apple and five of the big six publishers.
Since then, the Big Six Publishers have become the Big Five and the ones involved in the DOJ complaint (Penguin, HarperCollins, Macmillan, Simon & Schuster and Hachette) settled with both the DOJ and the States Attorneys General, who sued on behalf of consumers for monetary damages. Because the publishers did not take the case to court, they were only on the hook for their share of the actual damages ($232 million), which totaled $166 million. Most eBook customers received a credit in March of this year. More information can be found in this eBook diary: About that Credit You Got From Amazon
Apple, however, refused to settle and took its case to Federal District Court. It lost. (It also lost its appeal to remove or restrict the court appointed monitor.) eBooks: Apple is Guilty in The Battle of the $9.99
When a defendant, under the Sherman Anti-Trust Act, loses its case in a courtroom, it is exposed to a judgement of triple the actual damages incurred. Based on the estimate of one of the plaintiff's lawyers in the civil suit, those were actually $280 million. Triple that would be $840 million, which was the number bandied about earlier this year.
Apple is still appealing its guilty verdict in the DOJ case, but has agreed to a settlement with the 33 states and e-book consumers. The parties have agreed to a $450 million settlement, of which the consumers will receive $400 million. (Which is about 2.4 times as much as the earlier settlement that you may have gotten as a credit at your ebook retailer.)
That amount, however, is conditional upon Apple losing its appeal. According to Reuters
A ruling by the 2nd U.S. Circuit Court of Appeals in New York reversing the judge could, under the settlement, either reduce the amount Apple pays to $70 million, with $50 million for consumers, or eliminate payments altogether.
The $70 million figure is based on Apple's share of the actual damages which had been established as $232 million in the publishers settlement.
So, if the guilty verdict is upheld on appeal, those who got a credit in March will get an additional, even larger credit. If it is reversed by the appeals court, consumers will get about a third of what they got in March unless the court decides that no payment from Apple is required, in which case they will receive nothing.
The trial for damages was scheduled to begin next month and the court must still approve the proposed settlement.
According to the press release from New York Attorney General Eric Schneiderman's office:
“This settlement proves that even the biggest, most powerful companies in the world must play by the same rules as everyone else,” said Attorney General Schneiderman. “In a major victory, our settlement has the potential to result in Apple paying hundreds of millions of dollars to consumers to compensate them for paying unlawfully inflated E-book prices. We will continue to work with our colleagues in other states to ensure that all companies compete fairly with the knowledge that no one is above the law.”
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