Judge: Apple Can’t Duck E-Book Class Action Suits
Judge Denise Cote has denied Apple’s (NASDAQ:AAPL) request that states that have filed class action lawsuits against the company over the e-book pricing scandal be stopped from pursuing those lawsuits, meaning class action suits against the company from thirty-three state attorneys general and attorneys for consumers will now be able to move forward. State attorneys general and consumer advocates believe they can get up to $840 million from the company to refund people who paid too much for e-books from Amazon (NASDAQ:AMZN) and other e-book sellers. The trial date is set for July 14.
Cote’s Opinion and Order on the matter says that since the five publishers involved in the scandal chose to settle outside of court and paid a significant amount of money to each of the states that sought damages, then consumers have the right to sue Apple for damages as well. She also referenced her previous decision made last month to grant class certification to the consumers suing Apple for artificially raising the cost of e-books. At the time, Cote rejected the majority of arguments made by Apple’s two economists who were attempting to lower the amount of any potential damages awarded.
In her ruling Cote said, “This is a paradigmatic antitrust class action. If certification were not appropriate here, no antitrust class action could be certified.”
Last summer, Judge Cote found Apple guilty of engaging in anticompetitive behavior and breaking antitrust law in a price-fixing scandal over e-books. It was discovered that Apple conspired with five major publishers — CBS’s (NYSE:CBS) Simon & Schuster; Hachette Book Group, Inc.; News Corp.’s (NASDAQ:NWS) (NASDAQ:NWSA) HarperCollins; Pearson Plc’s (NYSE:PSO) Penguin Group; and Holtzbrinck Publishers, LLC‘s Macmillan — to artificially raise the price of e-books after Amazon’s super-low pricing in its Kindle Store became a threat to both publishers and Apple’s own e-book business.
At the end of last month, Amazon started handing out refunds from the settlement with the publishers to customers who paid too much for Kindle titles due to the Apple conspiracy. Anyone who purchased an e-book from any of the aforementioned publishers between April 1, 2010, and May 21, 2012, is eligible to be refunded part of the purchase price. And it’s not just Amazon customers who are eligible for the refunds, although Amazon was the clear target in the scheme. E-book purchases from Barnes & Noble (NYSE:BKS), Kobo, Apple, and Sony (NYSE:SNE) will all be eligible for refunds, as well.
If the attorneys can get the $840 million in damages they’re looking for, then the people who were eligible for the first refund will receive cash from Apple as well. Meanwhile, the company continues to deny any wrongdoing and at the end of February filed to overturn July’s ruling that found it guilty. The Justice Department is set to respond to that request for an appeal in May.
More From Wall St. Cheat Sheet:
- 6 Reasons Why Apple’s E-Book Defense Failed
- Amazon Hands Out Refunds Over Apple E-Book Pricing Scandal
- Things Are Going Better For Apple’s Antitrust Monitor
Follow Jacqueline on Twitter @Jacqui_WSCS