Apple Inc. has agreed to pay a settlement of as much as $400 million if it loses its appeal in a price-fixing case brought by state attorneys general on behalf of consumers who they claim were hurt by artificially inflated e-book prices.
“The settlement proves that even the biggest, most powerful companies in the world must play by the same rules as anyone else,” New York Attorney General Eric T. Schneiderman said in a statement.
Apple continues to fight a federal district court’s July 2013 ruling that it violated antitrust laws, in a case brought by the U.S. Department of Justice. The Cupertino company has appealed the finding that it orchestrated a conspiracy with five book publishers to artificially inflate e-book prices.
The amount Apple would pay in consumer damages and civil penalties hinges on the outcome of this appeal. If the district court’s antitrust ruling is upheld, Apple would be on the hook to pay as much as $400 million to consumers to resolve claims in 33 states. If Apple is found not to have violated antitrust laws, it wouldn’t pay anything.
Apple issued a statement reiterating its position that it did not conspire to fix prices, and it pledged to continue fighting those allegations on appeal. It said the iBooks Store has been good for consumers, the publishing industry and authors.
“We did nothing wrong and we believe a fair assessment of the facts will show it,” the company said in a statement. “As we wait for the court to hear our appeal, we have agreed to a settlement which is contingent on the outcome of the appeal. If we are vindicated by the appeals court, no settlement will be paid.”
Legal scholars have been skeptical, though, of Apple’s chances of winning on appeal.
Meanwhile, five book publishers in the price-fixing case have already paid $166 million in settlement funds for their role in the conspiracy. They are among the nation’s biggest publishers: Penguin Group, which is now part of Penguin Random House; Holtzbrinck Publishers (known as Macmillan); Hachette Book Group; HarperCollins Publishers; and Simon & Schuster.