Apple must stump-up $450m for fixing the e-books

7 Mar 2016

Apple has lost an appeal in the US supreme court and must now pay a $450m settlement for conspiring with publishers to fix the price of e-books

Apple has to pay $450m after the Supreme Court of the US refused to allow it to appeal against a ruling that said it had conspired with book publishers to raise the price of digital books.

As a result, a US Circuit Court of Appeals ruling favouring the US Justice Department and more than 30 states still stands.

This means Apple must comply with a settlement it reached with the 30 states in 2014 whereby it agreed to pay $400m to e-book consumers, $20m to the various states and $30m in legal fees.

The case arose following Apple’s entry into the e-book marketplace, which had been dominated by Amazon and its Kindle e-reader.

Apple’s arrival into the market was welcomed by book publishers because it allowed them to set their own prices.

It had been alleged that Apple had enabled five of the biggest publishers to engage in a price-fixing conspiracy.

In its defence, Apple said that its arrival in the market enhanced competition in the e-books space, benefiting authors, consumers and publishers.

Apple said that it effectively disrupted a monopoly and created long-term competition.

However, the Justice Department disagreed. It said that the conspiracy with publishers saw some e-book prices rise to $12.99 or $14.99 compared with $9.99 charged by Amazon for the same titles.

“Apple’s liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all,” said assistant attorney general Bill Baer, who runs the department’s antitrust division.

iBooks image via Shutterstock

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years