Apple $450 million e-book settlement wins court approval

Fri Aug 1, 2014 3:41pm EDT
 
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By Jonathan Stempel

NEW YORK (Reuters) - Apple Inc (AAPL.O: Quote) on Friday won preliminary court approval for its $450 million settlement of claims it harmed consumers by conspiring with five publishers to raise e-book prices.

In approving the accord, U.S. District Judge Denise Cote in Manhattan overcame concerns she had expressed over a settlement provision allowing Apple to pay just $70 million if related litigation were to drag out.

Apple has been appealing Cote's July 2013 finding, in a case brought by the U.S. Department of Justice, that it violated antitrust laws for colluding with the publishers to drive up e-book prices and impede rivals such as Amazon.com Inc (AMZN.O: Quote).

In June, Apple agreed to settle related class-action litigation brought on behalf of consumers and 33 U.S. states.

That accord calls for Apple to pay $400 million to consumers and $50 million to lawyers if the federal appeals court in New York upholds Cote's findings, and nothing if the Cupertino, California-based company wins its appeal.

But if the appeals court overturns Cote and returns the case to her, perhaps for a new trial, Apple will owe $50 million to consumers and $20 million to lawyers.

During a July 24 teleconference, Cote called that last scenario "most troubling."

But in Friday's decision, she noted that the states and consumers "strongly believe" such a scenario is unlikely, and that the settlement has provisions to reduce its likelihood.   Continued...

 
The Apple logo is pictured inside the newly opened Omotesando Apple store at a shopping district in Tokyo June 26, 2014. REUTERS/Yuya Shino