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Apple settles e-books price-fixing class action lawsuit

The settlement brings an end to one of the biggest and longest-lasting legal cases of the e-book era.

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Mark Lennihan/AP
The Apple logo is illuminated in the entrance to the Fifth Avenue Apple store in New York City.
  • By Husna Haq

After more than two years of legal battles, Apple has agreed to settle an e-books price-fixing class action lawsuit, bringing an end to one of the largest and longest legal cases in the book biz since the rise of digital books.

Announced Monday, the settlement allows Apple to avoid trial, which had been set for July and in which the company faced as much as $840 million in damages.

Details of the settlement have not been revealed and still await court approval.

One of the biggest lawsuits in the book world, the case began in April 2012 when the US Department of Justice sued Apple and five of the largest publishers for illegal price-fixing of e-book costs. The DOJ said Apple, along with publishers Hachette, HarperCollins, Penguin Group, Macmillan, and Simon & Schuster, illegally colluded to raise e-book prices in competition against Amazon.

Each of the publishers settled out of court, leaving Apple to battle the DOJ. Additionally, 33 states and US territories separately sued Apple on behalf of consumers, and individual consumers in other states filed a class action lawsuit.

Apple had been facing as much as $840 million in damages from the lawsuits.

And as the case wore on, it became clear that Apple’s chances were narrowing.

Judge Denise Cote has rejected two key witnesses in Apple’s case and denied a bid for an emergency stay from the Second Circuit Court of Appeals. 

Plaintiff attorney Jeff Friedman told Publishers Weekly that Apple had “very few arrows left in its quiver." 

In July 2013, Judge Cote, in a separate non-jury trial, ruled that Apple had taken part in a price-fixing conspiracy to fight Amazon’s dominance of the market.

Apple is appealing that decision and the settlement is contingent on the outcome of that appeal, according to reports. 

As the Wall Street Journal noted, the lawsuit only amplified the turbulence of an industry already experiencing massive change.

“The lawsuit upended an industry already undergoing wrenching change as printed books continued to give way to electronic books and publishers tried to keep their role as gatekeeper and ensure that e-books were profitable,” WSJ reporter Daisuke Wakabayashi wrote.

Husna Haq is a Monitor correspondent.

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