Apple e book settlement.

                                                  Comments by Nov 28, 2014
A federal judge on Friday approved a settlement in which Apple could begin
paying $400 million to as many as 23 million consumers related to charges
that it violated antitrust law by conspiring with publishers to raise e-book
prices and thwart efforts by Amazon.

In the hearing on Friday, Judge Denise L. Cote of Federal District Court
in Manhattan approved an unusual settlement reached this summer in
which Apple agreed to pay $400 million to consumers in cash and e-book
credits, and $50 million to lawyers.

Those figures could still change, however, if an appeals court overturns
a 2013 verdict in the case, in which Apple was found to have conspired with
five major publishers to fix the price of e-books. The court, which will hear
Apple’s challenge on Dec. 15, is not expected to change its previous ruling.
In the event the court overturns the verdict and returns the case to
Judge Cote, Apple would pay $50 million to consumers and $20 million to
the lawyers.

Apple initially agreed to pay up to $400 million to settle the class action
in June, ahead of a damages trial set for two months later in which attorneys
general in 33 states and class-action lawyers were expected to seek up to
$840 million.

In the hearing, Judge Cote called the deal an “unusually structured
settlement, especially for one arrived at on the eve of trial.” The Justice
Department initiated the suit in 2012.

The settlement appeared to reflect fatigue by Apple, the Justice
Department, state attorneys general and class-action lawyers eager to
conclude a case that has dragged on, largely because of delays by Apple.
An Apple spokeswoman declined to comment on the deal.

The suit accused Apple of being a “ringmaster” of a conspiracy with the
five major publishers to raise the average price of e-books from the $9.99
price that Amazon had made standard for new e-book releases. Simon &
Schuster, HarperCollins and the Hachette Book Group settled the day the
case was filed; Penguin and Macmillan settled months later.

The $400 million will be paid on top of earlier settlements with
publishers in the case, which provided $166 million in damages for
consumers of e-books.

The government’s lawsuit focused on 2010, when Apple entered the
digital book industry with the introduction of the iPad and the iBookstore.
At that time, publishers’ agreements to sell e-books were made under the
so-called wholesale model of print books; publishers charged retailers about
half the cover price for a book, and the retailers then set their own prices.
But with the iPad and iBookstore, Apple offered publishers a new
business model. The government said Apple’s co-founder and then chief,
Steve Jobs, persuaded publishers to agree to the so-called agency model for
selling books, which let publishers set their own prices for e-books.

The case was first tried before Judge Cote in July 2013. In her guilty
verdict, she concluded that Apple had been fully aware of the publishers’
frustration with Amazon’s pricing of $9.99 for new releases because it was
eroding the perceived value of their books. She said Apple used that
leverage, combined with a tight deadline for the introduction of the iPad, to
pressure publishers into agreeing to sell their books through Apple’s
iBookstore.

“Apple seized the moment and brilliantly played its hand,” Judge Cote
wrote in that ruling.Mr. Jobs’s words were resurrected throughout the trial
 and ultimately proved to be the most damning. The Justice Department presented his
statements and emails as crucial evidence of a conspiracy.
In one instance, Mr. Jobs made comments to a reporter after he
introduced the iPad and the iBookstore in January 2010. When asked why
consumers would buy an e-book from Apple’s bookstore instead of
Amazon.com, Mr. Jobs replied, “The prices will be the same"