Apple Smacked Down by Supreme Court: Ebook Price Fixing Case is Over
Posted on March 7, 2016
It's all over, except for the big pay out. The Supreme Court rejected Apple's request for the court to grant certiorari the landmark antitrust case, United States v. Apple Inc. in which federal judge Denise Cote found that Apple and five major book publishers ( Hachette Book Group (USA), HarperCollins Publishers L.L.C., Holtzbrinck Publishers LLC (which does business as Macmillan), Penguin Group (USA) Inc. and Simon & Schuster Inc. ) orchestrated a price-fixing conspiracy in violation of U.S. antitrust laws. Judge Cotes found that the publishers and apple raised ebook prices as part of their conspiracy.
Because the Supreme Court refused to hear the case, the lower court's judgement stands. Apple must now pay out $400 million to consumers who purchased ebooks at inflated prices. The amount was agreed upon in a court approved settlement between Apple and the attorneys general of 33 states.
Ebook purchasers will receive the funds in the form of a credit at the e-retailer where they purchased ebooks that are included in the settlement. If you purchased books from Amazon.com, a credit will appear in your account. So far $166 million in credits have been paid to customers by the book publisher who settled the case long before Apple did.
Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division said in a statement, "Apple's liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all and consumers will be made whole." But he didn't stop there, getting in a dig at Apple and the book publishers saying, "The outstanding work of the Department of Justice team – working with our steadfast state attorney general partners -- exposed this cynical misconduct by Apple and its book publisher co-conspirators and ensured that justice was done."
This is a big blow to Apple, which was convinced it had a chance on appeal. But the facts were crystal clear and Steve Jobs himself talked about meeting with the book publishers to fix prices in his biography by Walter Isaacson. His own testimony doomed the case from the start. Once the attorneys' and other fees are calculated, Apple is on the hook for $450 million, which is mere pocket change for the company which has more cash on hand that most countries.