Apple e-books settlement gets final court approval

By Nicole Daniel

On 21 November 2014 US District Judge Denise Cote gave her final approval to a settlement of the Apple e-book class action.

The class action against Apple arose from allegations that Apple and five publishers conspired on the publishing industry’s e-book pricing model in order to drive up prices. Ahead of the related trial the five publishers settled for approximately $ 167 million in total. Apple however decided to defend its actions in court.

In July 2013 Judge Cote found Apple liable under the antitrust rules and imposed a court-monitor responsible for reporting on the antitrust policies of Apple.

In August 2014 Judge Cote gave her preliminary approval to the settlement which resolves the claims by states as well as class action plaintiffs.

When giving her final approval Judge Cote noted that the form of the settlement is “highly unusual”. Indeed the settlement is comprised of three scenarios. In case Apple loses its appeal it will pay $400 million and another $50 million in attorney’s fees. If the appeals court vacates Judge Cote’s earlier decision but sends it back to her or if her decision is reversed and also sent back to her or if a retrial is ordered than Apple pays $50 million to consumers and a further $20 million in attorney’s fees. However in case Judge Cote’s decision is completely reversed by the appeal court and survives a further appeal then Apple does not owe consumers, states or their attorneys anything.

Judge Cote also said that the settlement deal makes sense given Apple’s “delaying tactics” since if they continued they would have forced consumers to wait to receive any money from Apple.

On 15 December 2014 a federal appeals court hearing is scheduled to hear Apple’s appeal. It remains to be seen which scenario will apply after the appeal court hands down its decision.