Supreme Court Ruling: Apple cynical misconduct in e-books price-fixing scheme

Apple to pay $400 million to e-book purchasers for its cynical misconduct.

Posted by CotoBlogzz

Rancho Santa Margarita, CA -  The U.S. Supreme Court today denied Apple’s petition for certiorari in United States v. Apple Inc., making final lower court decisions that Apple orchestrated a price-fixing conspiracy with five major e-book publishers and substantially raised e-book prices, according to announcement by the Department of Justice Antitrust Division.

The Supreme Court’s action triggers Apple’s obligation to pay $400 million to e-book purchasers under Apple’s July 2014 agreement to settle damages actions brought by the attorneys general of 33 states and territories and a private class of e-book purchasers.  

Most e-book purchasers will receive reimbursement for the higher prices Apple’s conduct caused them to pay through automatic credits at their e-book retailers.  They will be able to apply these credits to future purchases.  With the $166 million previously paid by the conspiring publishers to settle claims against them, Apple’s payment will bring to $566 million the amount repaid to e-book purchasers overcharged as a result of Apple’s and the publishers’ illegal conspiracy.

“Apple’s liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all,” said Assistant Attorney General Bill Baer of the Justice Department’s Antitrust Division.  “And consumers will be made whole.  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.”

On April 11, 2012, the department filed its civil antitrust lawsuit challenging Apple’s orchestration of a price-fixing conspiracy with five e-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.  

The lawsuit, brought in the U.S. District Court for the Southern District of New York, alleged that Apple and the defendant publishers conspired to fix prices and end e-book retailers’ freedom to compete on price, and that they succeeded in substantially increasing the prices that consumers paid for e-books.  

The department reached settlements with the defendant publishers before trial and, along with the plaintiff states, proceeded to trial against Apple before U.S. District Judge Denise L. Cote of the Southern District of New York on June 3, 2013.  Judge Cote issued her opinion and order on July 10, 2013, finding Apple liable for orchestrating a conspiracy with the publishers.  On June 30, 2015, the U.S. Court of Appeals for the Second Circuit affirmed Judge Cote’s decision.