Apple E-Books Judge to Approve Possible $450 Million Deal

By Bob Van Voris

A federal judge said she’ll give final approval to what she called Apple Inc. (AAPL)’s unusual settlement of claims by U.S. states and consumers that it led a conspiracy to fix prices on electronic books.
An appeals court is considering a finding by U.S. District Judge Denise Cote that Apple led a conspiracy to fix e-book prices. Under the settlement, Apple may pay nothing or as much as $450 million, depending on whether the appeals court agrees.
“This is an unusual structure for a settlement, particularly one that was essentially arrived at on the eve of trial,” Cote said in a hearing today in Manhattan.
Under the agreement, Apple will pay $400 million plus $50 million in attorneys’ fees if the New York-based appeals court upholds Cote’s finding that the
Cupertino, California-based company violated U.S. antitrust laws. If Apple wins the appeal, it pays nothing.
The agreement calls for Apple to pay $50 million plus $20 million in attorneys’ fees if the appeals court sends the case back to Cote for a retrial.

Five Publishers

The judge ruled last year in a case filed by the U.S. Justice Department that Apple conspired with five of the biggest publishers to fix e-book prices in response to competition from Amazon.com Inc. (AMZN) The parties announced the settlement in June, weeks before a damages trial in which Apple would have faced claims of as much as $674 million.
States and consumers have recovered $166 million from settlements with Hachette Book Group, HarperCollins Publishers LLC, Simon & Schuster Inc., Pearson Plc (PSON)’s Penguin Group and the Macmillan unit of Verlagsgruppe Georg von Holtzbrinck GmbH.
Cote said today that lawyers for the consumers and states agreed to the settlement based on optimism that her ruling will survive appeal and a desire to avoid additional delay.
The case is In Re Electronic Books Antitrust Litigation, 11-md-2293, U.S. District Court, Southern District of New York (Manhattan).