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Apple’s iBooks customers to net $450m price fixing payout

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Apple has lost its appeal against a court ruling that found it guilty of conspiring with publishers to keep ebook prices artificially high.

The company must now pay a $450m (around £285m) fine, most of which will be returned to customers who purchased items from the Apple iBooks store prior to the ruling.

Apple had agreed to pay the sum should it lose the appeal, but would have gotten off with a $70m (around 44.5m) levy if it had managed to overturn the 2013 verdict.

Second Circuit Judge Debra Ann Livingstone said (via WSJ): “We conclude that the district court correctly decided that Apple orchestrated a conspiracy among the publishers to raise e-book prices,” before adding the pact “unreasonably restrained trade.”

Apple had been left to defend the case alone after the five major publishers decided to settle out of court.

Cupertino’s 2010 efforts had been centred around undermining Amazon’s dominant position in the ebook market. In an attempt to negate Amazon’s large discounts, Apple gave publishers the power to set their own prices in what’s known as an ‘agency model.’

As part of this accord, the publishers would not be able to offer their titles for a lower price on any other store, leading to a large increase in e-book prices.

Judge Livingstone added: “Apple understood that its proposed contracts were attractive to the publisher defendants only if they collectively shifted their relationships with Amazon to an agency model -- which Apple knew would result in consumers facing higher e-book prices.”

Despite the ruling, Apple maintained its innocence, but hinted it would not be fighting on in a higher court.

In a statement, the firm said: “Apple did not conspire to fix e-book pricing and this ruling does nothing to change the facts. We are disappointed the Court does not recognize the innovation and choice the iBooks Store brought for consumers.

“While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010 and are assessing next steps,” the company continued.

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