Apple Inc. (NASDAQ:AAPL) agreed to pay $400 million to settle allegations of U.S. states and consumers that it colluded with publishers to fix the prices of e-books.
The iPhone and iPad maker is scheduled to face trial in connection with a lawsuit filed on behalf of 30 states and U.S. territories, as well as consumers at the Manhattan Federal Court this month. The complaint is seeking as much as $840 million in damages from Apple Inc. (NASDAQ:AAPL).
In his first-quarter letter to investors of Greenlight Capital, David Einhorn lashed out at regulators. He claimed that the market is "fractured and possibly in the process of breaking completely." Q1 2021 hedge fund letters, conferences and more Einhorn claimed that many market participants and policymakers have effectively succeeded in "defunding the regulators." He pointed Read More
“This settlement proves that even the biggest, most powerful companies in the world must play by the same rules as everyone else. 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,” said New York Attorney General Eric Schneiderman in a statement.
Details of the settlement
In June, United States District Judge Denise Cote was informed by a lawyer that both parties in the e-book price fixing case “signed a binding agreement in principal.” The court received the details of the agreement today.
The settlement is conditional on the outcome of the appeal of Apple Inc. (NASDAQ:AAPL) on the ruling of Judge Cote last year on a case filed by the United States Department of Justice (DOJ). Last year, the Judge Cote ruled that the iPhone and iPad maker conspired with publishers to fix the price of e-books prior to its entry in the market—a violation of the antitrust law.
Apple Inc. (NASDAQ:AAPL) will pay $400 million to consumers if the court of appeals upholds the Judge’s Cote’s ruling. The tech giant will pay $50 million if the ruling will not be affirmed, and the case returns to trial. Apple will not pay anything if the court of appeals reverses the ruling, and find that it did not violate antitrust laws.
Outcome of Apple’s appeal unpredictable
In a statement, Connecticut Attorney General George Jepsen said, “While we cannot predict the outcome of the appeal with certainty, we are confident in the case we made against Apple at trial.”
On the other hand, Apple Inc. (NYSE:AAPL) said it will continue to press its argument on the appeal. The tech giant’s spokesperson, Kristin Huguet reiterated the company’s position that it did not conspire with publishers in fixing the prices of e-books. She said, “We did nothing wrong, and we believe a fair assessment of the facts will show it.”