Apple E-Book Class Action Settlement Gets Final Approval

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A New York federal judge has awarded final approval to a $450 million class action settlement over allegations Apple Inc. conspired with publishing companies to raise the prices of e-books.

The Apple e-book class action settlement will provide $400 million in compensation to consumers, an award that U.S. District Judge Denise Cote declared an “excellent recovery.”

Judge Cote preliminarily approved the Apple e-book class action settlement on Aug. 1, despite some initial hesitation over the structure of the deal, which provides for different outcomes based on an upcoming decision from a federal appeals court.

State Attorneys General from 33 states had filed an antitrust lawsuit against Apple for its alleged conspiracy with Hachette Book Group Inc., HarperCollins Publishers LLC, Macmillan, Penguin Group (USA) Inc. and Simon & Schuster Inc. This alleged conspiracy caused the prices of digital books to increase from $9.99 to as much as $14.99, resulting in customers being charged hundreds of millions of dollars.

Following a trial held in 2013, Judge Cote ruled that Apple had violated antitrust laws. Apple has appealed the ruling, and the 2nd U.S. Circuit Court of Appeals is scheduled to hear the appeal on Dec. 15. Under the terms of the Apple class action settlement, Apple will pay $50 million to consumers and $10 million to the states if the decision is vacated or reversed and sent back to the lower court. Apple will not be required to pay the $50 million if the appeals court overturns Judge Cote’s ruling.

The claims administrator and e-book retailers have reportedly notified nearly 23 million consumers that they are eligible to receive compensation from the Apple e-book class action settlement.

The five book publishers have already reached class action settlements over the alleged e-book pricing conspiracy and have agreed to pay a total of $166 million to consumers who purchased electronic books.

Under the terms of the e-book price-fixing settlements, Class Members who purchased books from Apple, Amazon, Barnes & Noble, Kobo or Sony will automatically receive an account credit for eligible e-book purchases. Consumers who purchased e-books from any other retailer had to submit a claim by Oct. 31 in order to be eligible for benefits.

The Class is represented by Steve Berman, Jeff Friedman and Shana Scarlett of Hagens Berman Sobol Shapiro LLC, and Kit Pierson and Jeffrey Dubner of Cohen Milstein Sellers & Toll PLLC.

The Apple E-Book Price-Fixing Class Action Lawsuits are In re: Electronic Books Antitrust Litigation, Case No. 1:11-md-02293, and State of Texas, et al. v. Penguin Group (USA) Inc., et al., Case No. 1:12-cv-03394, in the U.S. District Court for the Southern District of New York.