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Apple starts to shell out $400 million to customers in e-book settlement

The tech giant must pay millions in damages following the settlement of a lawsuit that charged it with colluding to set the prices of e-books.

Apple now has to start doling out money to the plaintiffs as part of its e-book price-fixing suit.


E-book buyers affected by Apple's alleged price-fixing scheme will receive a bit of money starting Tuesday.

Millions of e-book purchasers will get either credits or checks for twice their losses, legal firm Hagens Berman, which helped litigate the class action lawsuit, said on Tuesday. Apple is on the hook for $400 million in damages plus an additional $30 million to pay the legal fees for Hagens Berman and $20 million to the state attorney generals who became involved in the case.

On an individual basis, each plaintiff in the suit will receive $1.57 in credit for most e-books they bought and a $6.93 credit for every e-book purchased that was on the New York Times bestseller list. Consumers who purchased e-books from Amazon, Barnes & Noble, Kobo and Apple between April 1, 2010 and May 21, 2012 are eligible to receive credits deposited directly in their accounts or checks sent through the mail.

The e-book market opened up a new but potentially precarious arena for publishers, who were initially worried that sales of digital books would cut into those of traditional printed books. The Apple case also exemplified concerns over how to price electronic books. Publishers became so obsessed with controlling the prices of e-books that several of them were willing to break antitrust laws.

In August 2011, a lawsuit filed by two individuals accused Apple of conspiring to fix e-book prices with five publishers: Hachette Book Group, HarperCollins Publishers, Holtzbrinck Publishers, Penguin Group and Simon & Schuster. The Department of Justice and the attorneys general of several states joined in with their own suits against the publishers. The initial lawsuit, the DOJ's civil action and the suits by the AG's were eventually coordinated together in the Southern District of New York.

The lawsuits charged that the actions of Apple and the publishers prevented other e-book sellers from competing on price, thereby increasing the prices that consumers had to pay for e-books. Attorneys for the plaintiffs alleged that the price-fixing between Apple and the publishers pushed the cost on some e-books to $12.99 or $14.99 from the $9.99 charged by Amazon. The $12.99 and $14.99 numbers are general examples to help explain the impact of the conspiracy, according to a spokeswoman for Hagens Berman.

After being found guilty of violating antitrust laws by a US District Judge in 2013 and by an Appeals court in 2015, Apple's request for an appeal to the US Supreme Court was denied this past March, forcing it to settle with the plaintiffs. The other publishers settled before the trial. Hagens Berman litigated the case jointly with the DOJ and attorneys general from 33 US states and territories.

Apple did not immediately respond to CNET's request for comment.