Posted on July 17, 2014 Posted in News

Will solve complaints made in 33 states and territories

Apple has agreed to pay $450 million to settle a class-action lawsuit over e-book price fixing, brought against it by states and consumers, according to New York’s Attorney General, Eric Schneiderman. The payment will settle allegations made in 33 states and territories, including New York. Schneiderman says that of the total amount, up to $400 million could reach consumers, depending on whether Apple wins its appeal.

A settlement was initially announced last month, but no terms were disclosed at the time. Even now, the deal must be approved by US District Judge Denise Cote. If Cote decides against it, the court will have retry liability, although the settlement terms allow for a smaller recovery of $50 million. In what could be a clever tactic, the deal is structured so that Apple would pay nothing if it’s ruled in its appeal that the company didn’t break antitrust laws.

The lawsuit accused Apple of conspiring with five major publishers to inflate e-book prices. At the same time as the company launched the iBookstore in 2010, the publishers switched to an agency model forcing companies like Amazon — which was selling mainstream Kindle titles for average of $10 — to raise their prices to at least those established by Apple. It and the publishers were initially targeted for investigation by the US government, but the publishers settled quickly, leaving Apple as the only party resisting. The company has so far failed to win in civil or government e-book rulings, but is appealing the case to get an opinion from judges other than Cote, who has made all the rulings thus far.