Apple's request for an appeal in a case over e-books price fixing has been denied by the US Supreme Court.
The court's decision means a June 2015 ruling by the New York 2nd US Circuit Court of Appeals that found Apple guilty of e-book price fixing will stand, the Department of Justice said Monday. Apple will now have to pay out $400 million to e-book purchasers under its July 2014 agreement promising to settle damages.
In April 2012, the DOJ filed a civil antitrust lawsuit accusing Apple of conspiring to fix e-book prices with five publishers: Hachette Book Group, HarperCollins Publishers, Holtzbrinck Publishers, Penguin Group and Simon & Schuster. The suit 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.
The e-book market introduced a new yet controversial era in the world of publishing. Publishers were initially suspect of delivering digital books to e-readers, like Amazon's Kindle, for fear of e-book sales cutting into profits on traditional printed books. The Apple case also illustrated their concern with e-book pricing models. Publishers became so desperate to retain control over pricing that several of them were willing to violate antitrust laws.
In its civil suit, the DOJ accused Apple and the publishers of working together to set e-book prices and break Amazon's market dominance with its Kindle e-book reader. The DOJ said Apple and the publishers forced Amazon to move to an agency model where publishers rather than retailers set prices and "caused e-book consumers to pay tens of millions of dollars more for e-books than they otherwise would have paid." The conspiracy pushed the prices on some e-books to $12.99 or $14.99 from the $9.99 charged by Amazon, the DOJ added.
Apple's $400 million in damages will be paid out in the form of credits that e-book buyers can use for future purchases. The company will pay an additional $50 million in attorneys' fees to the plaintiffs' counsel. The $450 million adds to the $166 million that the states received from all the publishers involved in the scheme.
"Apple's liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all," said Bill Baer, assistant attorney general for the Justice Department's Antitrust Division, in a statement. "And consumers will be made whole."
Apple did not immediately respond to a request for comment.