Judge Grants Class Certification for Consumer E-Book Lawsuit Against Apple
Apple (NASDAQ:AAPL) continues to endure legal repercussions from its e-book price-fixing conspiracy. On Friday, U.S. District Judge Denise Cote granted class certification to consumers suing the iPhone maker over the e-book price-fixing conspiracy that it orchestrated with five publishers, according to a press release from national consumer-rights law firm Hagens Berman Sobol Shapiro LLP. Judge Cote also rejected the majority of arguments made by Apple’s two economists who were attempting to lower the amount of any potential damages award.
“We are thrilled about what the certification means for consumers — with automatic trebling they could see a judgment of between $750 to $850 million,” said Steve Berman, managing partner of Hagens Berman and lead attorney for the e-books litigation and class action against Apple. “Apple has remained stalwart, and the company’s goal has been shown clear — to eliminate pro-consumer pricing in favor of higher corporate profit.”
Last summer, Judge Cote ruled that Apple violated antitrust laws when it orchestrated a price-fixing conspiracy with CBS’ (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 (doing business as Macmillan.) All five of the publishers have already reached a settlement on behalf of consumers, leaving Apple as the only defendant. Now multiple states and consumers are seeking damages from Apple that will be determined in an upcoming damages trial.
In her ruling that granted the lawsuit class certification, Judge Cote wrote, “This is a paradigmatic antitrust class action. If certification were not appropriate here, no antitrust class action could be certified.”
This most recent class action suit isn’t the only lawsuit that Apple has faced over its antitrust law violations. Four other lawsuits have been filed against Apple and the five publishers, including one action brought by private plaintiffs as a class action. In the private plaintiffs’ case, Hagens Berman recently announced the settlement of approximately $62 million for consumers as part of a $166 million nationwide settlement.
In her ruling last summer, 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 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 can conduct its e-book business and required the company to hire an “External Compliance Monitor” for a period of at least two years. Apple tried to get the monitor provision of the injunction suspended while its appeal was pending, but the request was rejected by a court last month. The damages trial is expected to be scheduled for this summer.
Follow Nathanael on Twitter (@ArnoldEtan_WSCS)