On Monday, the US Supreme Court declined to hear Apple’s request for an appeal on a ruling that said the company was liable for violating antitrust laws and engaging in price-fixing by letting publishers set prices for e-books sold on Apple’s iBooks platform. Now out of options, Apple will have to pay $400 million to e-book consumers and $50 million to plaintiff’s lawyers, as per a settlement that the company reached in 2014.
In 2012, Apple and five publishers (Penguin, HarperCollins, Hachette, Simon & Schuster, and Macmillan) were sued by the Department of Justice and 33 states’ attorney general offices for conspiring to offer e-books at a higher price than Amazon’s loss-leading $9.99.
The publishers all eventually settled for a total of $166 million to states and consumers, but Apple held out and eventually lost a judgement in Manhattan district court.
The company then appealed to the US Second Circuit Court of Appeals, arguing that it had actually boosted competition by offering new-release books for $12.99 to $14.99. “Antitrust laws are intended to foster competition, not keep prices down at any cost,” Apple wrote in a rebuttal to the district judge’s ruling in 2014.
Later that year, Apple worked out a settlement deal with plaintiffs—if it appealed and lost, it would pay $450 million to consumers and lawyers.
If it appealed and earned a retrial, it would pay $50 million to consumers and $20 million to lawyers.
And if the district court’s decision were overturned, it would pay nothing.
After the Second Circuit agreed with the District Court that Apple was liable for price-fixing, Apple’s last hope was to get the US Supreme Court to hear its case.
But with that court’s refusal to hear Apple’s argument, the company now must agree to the initial terms of settlement.
In a press release, the Department of Justice’s Assistant Attorney General Bill Baer called Apple’s actions “cynical misconduct” and wrote, “Apple’s liability for knowingly conspiring with book publishers to raise the prices of e-books is settled once and for all.”