A three-judge Second Circuit Court panel has upheld an agreement by Apple to settle with consumers for $450 million in a price-fixing lawsuit. It was claimed that Apple conspired with publishers to raise e-book prices. The settlement was upheld on appeal. The panel heard a complaint from consumer John Bradley, who objected to the proposed settlement, saying the U.S. District Judge Denise Cote acted too hastily in approving the settlement plan in 2014.
Bradley says the settlement plan as proposed could leave consumers with no recovery at all if Apple escapes liability in the appeals process. However, the Second Circuit ruled the New York District Court thoroughly reviewed the company’s role during the bench trial, and that Judge Cote found reasonable evidence to support the claim that Apple played a central role in the e-book pricing scheme.
The U.S. Department of Justice joined 33 states in alleging that Apple forged deals with five publishers – Simon & Schuster Inc., Penguin Group USA, Macmillan Publishers USA, Hachette Book Group Inc. and HarperCollins Publishers LLC – in 2010 to raise the prices of digital books by as much as $5 per book. The publishers settled, while Apple proceeded to trial.
If Apple’s liability stands, the $450 million settlement will provide $400 million to compensate consumers, with $30 million designated for attorneys’ fees and $20 million for the states that brought the claims against the tech giant. Apple has appealed the liability finding to the U.S. Supreme Court, which could vacate the liability finding, in which case consumers would share a $50 million settlement and the states and class counsel would receive $10 million each; or it could reverse the decision and dismiss the case, and Apple would pay nothing. The case on appeal is in the U.S. Court of Appeals for the Second Circuit. The district court case is in the U.S. District Court for the Southern District of New York.
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