Apple settles e-book antitrust case with US states, others

Wed Jun 18, 2014 5:07am IST

The leaf on the Apple symbol is tinted green at the Apple flagship store on 5th Ave in New York April 22, 2014. Employees and signage have been themed green to mark Earth Day.  REUTERS/Brendan McDermid/Files

The leaf on the Apple symbol is tinted green at the Apple flagship store on 5th Ave in New York April 22, 2014. Employees and signage have been themed green to mark Earth Day.

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REUTERS - Apple Inc reached an out-of-court settlement with U.S. states and other complainants in an e-book price-fixing class action lawsuit, effectively avoiding a trial in which the iPad maker faced as much as $840 million in claims.

U.S. District Judge in Manhattan Denise Cote ordered the parties to submit a filing seeking approval of their settlement within 30 days.

The terms of the settlement, reached on Monday, have not been revealed. It still needs court approval.

The U.S. Department of Justice sued Apple and five publishers in April 2012, accusing them of working together illegally to increase e-book prices.

Last July, Cote found Apple liable for colluding with the publishers to impede e-book competitors such as Amazon.com Inc after a non-jury trial in a case brought by the U.S. Department of Justice.

Nearly three dozen states and U.S. territories joined in the case against Apple on behalf of their consumers, while individual consumers in other states and territories filed a class action lawsuit.

The complainants are seeking up to $840 million in damages for e-book customers. A trial to determine the amount of damages was originally scheduled for July, but had been recently pushed back to August.

Apple is appealing Cote's decision, and Monday's settlement is contingent on the outcome of that appeal.

"As set forth in the memorandum of understanding, any payment to be made by Apple under the settlement agreement will be contingent on the outcome of that appeal," Steve Berman of Hagens Berman Sobol Shapiro, the plaintiffs' lead lawyer, wrote in a letter to the judge.

Berman declined to comment on the settlement until the final papers are filed. Kristin Huguet, a spokeswoman for Apple, also declined to comment on the settlement.

Spokeswomen for Connecticut Attorney General George Jepsen and Texas Attorney General Greg Abbott, who have taken the lead for the states, declined to comment on Tuesday.

The publishers - Lagardere SCA's Hachette Book Group Inc, News Corp's HarperCollins Publishers LLC, Penguin Group (USA) Inc, CBS Corp's Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH's Macmillan - previously agreed to pay more than $166 million to settle related antitrust charges.

Meanwhile, Apple's iTunes store has listed popular Hachette titles including preorders of upcoming books from James Patterson and J.K. Rowling, technology website Re/Code reported on Tuesday. (on.recode.net/T5iOOO)

Amazon does not permit customers to preorder digital versions of any of those titles, the website said.

The cases are in the U.S. District Court for the Southern District of New York, case no: 11-md-2293 and 12-cv-03394.

(Additional reporting by Subrat Patnaik in Bangalore; Editing by Gopakumar Warrier and Dan Grebler)

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