News Column

Apple Settles E-Book Class Action Suit

June 17, 2014

Patrick May, San Jose Mercury News

June 17--In what appears to be another step toward resolving U.S. government claims that Apple conspired with publishers to raise the price of e-books, the company has struck a deal with 30 state attorneys general who wanted more than $800 million in damages for their book-reading consumers.

The deal to settle the civil class-action case, reached late Monday, allows both sides to avoid a trial scheduled to start next month. While no details were divulged, the agreement apparently means no money will change hands until Apple resolves its appeal of a larger federal court decision which said the Cupertino tech giant had broken antitrust laws.

U.S. District Judge Denise Cote, who last July found Apple liable for colluding with publishers after a separate nonjury trial in a case brought by the Department of Justice, ordered the parties in the civil case to formally seek approval of their settlement in the next 30 days.

The settlement is part of a case that's been playing out in the shadows of a larger course of litigation. The Justice Department sued Apple and five publishers in April 2012, accusing them of working together illegally to increase e-book prices. According to the government, Apple and the publishers used the contracts to force Amazon, the largest e-book vendor, to change its pricing model. Amazon's electronic versions of best-selling books were selling for $9.99, which was often below cost.

That suit prompted 33 states and U.S. territories to go after Apple on behalf of their consumers, while individual consumers in other states and territories filed a class-action lawsuit.

While the publishers have already settled these cases, Apple remains entrenched in a longer legal battle after Cote's surprising decision last summer. Apple continues to deny any wrongdoing in the e-book pricing case and until there's a resolution of its appeal, which Apple has said it will take to the Supreme Court if necessary, this week's settlement in Manhattan federal court will remain on hold.

Apple spokeswoman Kristin Huguet declined to comment on the settlement. And Steve Berman, an attorney for the plaintiffs, did not immediately respond to a call.

"It looks as if Apple was able to show it was holding high-enough cards that it was better for the states to settle than to go all the way to trial on this," said analyst Roger Kay with Endpoint Technologies Associates. "If the allegation was that Apple was trying to force Amazon out of business, well, Amazon doesn't seem to be a whole lot weaker now than a few years ago. So the question of harm done is tough."

Contact Patrick May at 408-920-5689 or follow him at Twitter.com/patmaymerc.

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(c)2014 the San Jose Mercury News (San Jose, Calif.)

Visit the San Jose Mercury News (San Jose, Calif.) at www.mercurynews.com

Distributed by MCT Information Services

Original headline: Apple settles civil class-action e-books suit with state attorneys general


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Source: (c)2014 the San Jose Mercury News (San Jose, Calif.)


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