Here’s Why the E-Book Settlement Won’t Hurt Apple
Apple’s (NASDAQ:AAPL) long-running e-books price-fixing saga may soon be coming to an end. On Wednesday, New York Attorney General Eric Schneiderman announced that Apple had agreed to a settlement that could see the iPhone maker paying out as much as $400 million to consumers. However, according to court documents obtained by Reuters, the total payment amount could go as high as $450 million, with the extra $50 million presumably going to the lawyers involved with the case. Although the settlement deal was announced in June, the details were not known until this week. The deal is pending approval from U.S. District Judge Denise Cote, the same judge who oversaw the original e-books antitrust trial.
Last year, Judge Cote ruled that Apple violated antitrust laws when it orchestrated a price-fixing conspiracy with CBS’ (NYSE:CBS) Simon & Schuster; Lagardere SCA’s 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 agreed to a settlement that included paying over $166 million to consumers. After the original trial against Apple concluded, Judge Cote scheduled another trial to determine the damages that the company should pay. The damages trial was scheduled to begin in August after Apple lost its bid to get it delayed while it appealed the original verdict.
“This settlement proves that even the biggest, most powerful companies in the world must play by the same rules as everyone else,” stated Schneiderman. “In a major victory, our settlement has the potential to result in Apple paying hundreds of millions of dollars to consumers to compensate them for paying unlawfully inflated E-book prices.”
However, while the U.S. Department of Justice, the state attorneys general, and many consumers view this as a major victory, there is little indication that the payout will have much of a financial effect on the Cupertino-based company. While $450 million is a sizable amount for most companies, it will scarcely register as a ripple in Apple’s massive pool of financial resources.