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Apple must pay $400m to consumers

21 July 2014, 06:44

New York - Apple will pay up to $400m to compensate consumers for illegal price-fixing conspiracy for electronic books, officials said on Wednesday.

The settlement would reimburse consumers in 33 states whose authorities sought damages for Apple's price-fixing, according to a statement from New York's attorney general.

But the settlement is contingent on the upholding of a verdict in a July 2013 federal court ruling that Apple violated antitrust laws by orchestrating a conspiracy with five publishers to raise e-book prices.

Apple is appealing the ruling by a federal judge last year.

If Apple's federal conviction is overturned, no money will be paid. If the case is retried, the settlement amount will be $50m, the statement said.

Apple will also make payments to the 33 states totalling $20m to cover costs, fees, and civil penalties if its conviction is upheld.

"This settlement proves that even the biggest, most powerful companies in the world must play by the same rules as everyone else," said New York state attorney general Eric Schneiderman.

A separate settlement in a class-action case against Apple could add around $30m to the amount to be paid out by the California giant.

The case centres on Apple's deal with the publishers as it introduced its iPad tablet, which shook up the existing model in what US officials said was an illegal conspiracy which raised prices.

The states' complaint, filed on behalf of consumers, accused Apple of working with five top publishers in 2009 and 2010 to set the prices of electronic books in an Apple-led effort to break into rival Amazon's dominance of the market.

Their complaint was filed on the heels of last July's federal court verdict against the iPhone and iPad maker, finding Apple guilty of conspiracy to fix prices of e-books with the publishers.

The judge in the case issued an injunction barring Apple from any similar practices and ordered the company to work with a court-appointed monitor on compliance.

Prior to Apple's entry into e-books, the publishers - all of whom have settled in the case - complained about Amazon's $9.99 price for most titles.

Apple and the publishers agreed on contracts that let publishers set the price of most bestsellers at $12.99 or $14.99, but Apple won a provision that allowed it to match the prices of Amazon or any other retailer.


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