Apple $450 million e-book settlement wins court approval

NEW YORK Sat Aug 2, 2014 1:13am IST

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NEW YORK (Reuters) - Apple Inc 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.

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.

She also said the plaintiffs agreed to provide more details about the settlement to consumers, to help them decide whether to accept its terms or sue Apple separately.

"The proposed settlement agreement is within the range of those that may be approved as fair and reasonable, such that notice to the class is appropriate," Cote said. "Preliminary approval is granted."

Cote set a final fairness hearing for Nov. 21.

The publishers are 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. They previously agreed to pay $166 million to consumers.

The case is In Re: Electronic Books Antitrust Litigation, U.S. District Court for the Southern District of New York, No. 11-md-02293.

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown)

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