Apple Slapped With $450 Million Fine for Price-Fixing

Photo (cc) by RobertG NL

Apple Inc. had its day in court and it lost. A federal appeals court upheld a 2013 ruling that the tech giant violated antitrust laws by conspiring with five major book publishers to raise digital book prices. Now Apple will have to cough up $450 million to settle the e-book price-fixing case.

The 2-1 ruling Tuesday by the 2nd U.S. Circuit Court of Appeals in Manhattan follows three years of litigation, millions of dollars in legal fees and a bold decision by Apple to challenge the U.S. Department of Justice to a trial, even after all the publishers with which it was accused of colluding had settled their cases,” The Wall Street Journal said.

The majority of the $450 million is expected to benefit e-book consumers as part of a 2014 settlement of a class-action lawsuit filed by private plaintiffs and 33 states.

The appeals court called Apple’s transgressions “the supreme evil of antitrust,” The Washington Post reports.

Apple has the option to appeal the court’s decision to the Supreme Court.

“Apple did not conspire to fix e-book pricing and this ruling does nothing to change the facts,” Apple said in a statement. “We are disappointed the court does not recognize the innovation and choice the iBooks Store brought for consumers. While we want to put this behind us, the case is about principles and values. We know we did nothing wrong back in 2010 and are assessing next steps.”

The alleged price-fixing occurred in 2010, when Apple was attempting to gain a foothold in the digital book market dominated by Amazon.com, which had between 80 and 90 percent of all e-book sales, the WSJ said. The price-fixing scheme, which involved book publishers Penguin, HarperCollins, Hachette, Simon & Schuster and Macmillan, caused some books to jump from the $9.99 price charged by Amazon to $12.99 or even $14.99.

“The decision confirms that it is unlawful for a company to knowingly participate in a price-fixing conspiracy, whatever its specific role in the conspiracy or reason for joining it,” Assistant Attorney General Bill Baer said in a statement. “Because Apple and the defendant publishers sought to eliminate price competition in the sale of e-books, consumers were forced to pay higher prices for many e-book titles.”

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