Apple Hit With $840M in Claims Over E-Books Conspiracy


Apple (AAPL) may have to pay out more than $840 million in damages over antitrust claims stemming from the company’s e-book price-fixing conspiracy, reports Bloomberg. According to court documents seen by the news service, this is triple the $280 million damages amount that was previously determined by an expert.

However, lawyers for the state attorneys general and consumers who are suing Apple noted that antitrust laws allow them to seek triple damages because the U.S. Department of Justice had “conclusively proven” that the California-based company had orchestrated the e-book price-fixing conspiracy. Per Bloomberg, the amount sought by the plaintiffs is about 0.5 percent of the nearly $159 billion in cash that Apple had at the end of last year.

Last summer, U.S. District Judge Denise Cote ruled that Apple violated antitrust laws when it orchestrated  a price-fixing conspiracy with Simon & Schuster, Hachette Book Group, HarperCollins, Penguin Group, and Verlagsgruppe Georg von Holtzbrinck GmbH and Holtzbrinck Publishers LLC (doing business as Macmillan). The five publishers that were charged all settled with the government, rather than going to trial.

In her ruling, Cote noted that some e-book prices increased from $9.99 to as much 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 supposedly raised the average retail price of e-books by coordinating the use of agency model contracts with various publishers.

In order to remedy Apple’s antitrust behavior, Cote issued an injunction that put restrictions on how Apple could conduct its e-book business and required the company to hire an external compliance monitor for a period of at least two years. Cote also called for another trial in order to determine the damages that Apple would have to pay to the 33 states that were included in the U.S. Department of Justice’s lawsuit against Apple.

Earlier this month, Cote denied Apple’s motion that sought to suspend the monitor provision of the injunction while it appealed its guilty verdict from last year’s e-book price-fixing trial. Apple has accused Michael Bromwich — the compliance monitor appointed by Cote — of “conducting a roving investigation that is interfering with Apple’s business operations, risking the public disclosure of privileged and confidential information, and imposing substantial and rapidly escalating costs.”

Bloomberg reports that a federal appeals court judge has temporarily removed Bromwich from his position until Apple can bring its appeal before a panel of judges.

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