Apple Loses Bid for E-Book Damages Trial Delay

Source: Thinkstock

Source: Thinkstock

The U.S. Court of Appeals for the Second Circuit in New York has rejected Apple’s (NASDAQ:AAPL) request to delay an upcoming e-books trial in which multiple state attorneys general and consumers are seeking damages from the Cupertino-based company over its role in a price-fixing conspiracy, reports Reuters. According to the appeals court’s ruling, Apple can proceed with its appeal of the original verdict separately while the damages trial goes forward as scheduled. Apple had secured a temporary reprieve last month in order to make its arguments for a stay of the upcoming damages trial.

The plaintiffs — who were previously granted class certification to sue as a group by U.S. District Judge Denise Cote — are eligible for up to $840 million in damages under antitrust laws. However, the final damages award amount will be determined by Judge Cote at a trial that is scheduled for July 14.

As noted by Reuters, the states’ case is being spearheaded by Connecticut Attorney General George Jepsen and Texas Attorney General Greg Abbott. “We are pleased with the decision and continue to prepare for the upcoming damages trial,” said a spokesperson for Jepsen, according to Reuters.

Last year, Judge Cote ruled that Apple violated antitrust laws when it orchestrated a price-fixing conspiracy with CBS’ (NYSE:CBS) Simon & Schuster; Lagardere SCA’s Hachette Book Group, Inc.; News Corp.’s (NASDAQ:NWS) (NASDAQ:NWSA) HarperCollins; Pearson Plc’s (NYSE:PSO) Penguin Group; and Holtzbrinck Publishers, LLC (doing business as Macmillan.) As noted by Reuters, all five of the publishers have already agreed to a settlement that included paying over $166 million on behalf of consumers.

In her ruling for the original e-books trial, Judge Cote noted that some e-book prices increased from $9.99 to as high as $14.99 after the price-fixing conspiracy took effect. Before 2010, Amazon (NASDAQ:AMZN) was dominating the market by selling e-books at a standard price of $9.99. However, Apple allegedly raised the average retail price of e-books by coordinating the use of exclusive agency model contracts with various publishers.

As part of the corrective measures implemented after the original e-books trial, Judge Cote issued an injunction that required Apple to hire an “External Compliance Monitor” for a period of at least two years. Apple has repeatedly tried to get the monitor provision of the injunction suspended while its appeal was pending but has so far also been unsuccessful in that endeavor. Unlike the five publishers that were also investigated by the U.S. Department of Justice, Apple has never admitted to being part of a price-fixing conspiracy. According to PCWorld, Apple maintained that position in its latest appeal, noting that the agency model contracts it used were “attractive to the publishers, who were frustrated with Amazon.”

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