Apple Loses E-Book Case Appeal, Offically on the Hook for $450 Million
A $450-million settlement is to be paid upon the Appeals Court's decision.
Apple got some bad news today (Jun. 30), the same day of its Apple Music launch. An appeals court judge found that Apple conspired to fix e-book prices, agreeing with a lower court judge that ruled against the company in 2013.
In a 2-1 vote, the 2nd Circuit Court of Appeals said Apple helped increase e-book prices by conspiring with the five major publishers. The Department of Justice had argued Apple worked with publishers to remove Amazon's retail pricing ability and push e-book prices higher. "Those higher prices were not the result of regular market forces but of a scheme in which Apple was a full participant," U.S. District Judge Denise Cote wrote in the opinion.
As a result of Tuesday's ruling, Apple will pay $450 million as part of a 2014 settlement reached that called for Apple to pay $400 million to consumers and $50 million to lawyers if Cote's ruling was upheld on the appeal.
In an ironic twist, the words of Steve Jobs, who died before the trial began, ended up hurting Apple. Jobs had told a reporters Amazon's $9.99 price for a new book "is eroding the value perception of their products." His emails to James Murdoch of News Corp showed attempts to persuade HarperCollins to raise e-book prices. "In this and every other instance, Apple’s efforts to explain away Jobs’s remarks have been futile," wrote Cote.