Apple held firm until the end. When they were accused alongside Hachette, Harpercollins, MacMillan, Penguin, and Simon & Schuster of conspiring to raise retail prices of e-Books, the publishers fell one-by-one, settling rather than continue with the courts. Apple stayed firm, saying they had done nothing wrong. And the court ruled against them.
Apple will, of course, file an appeal, but it looks like they will have to pay to settle with the states and consumers right along with the publishers. The total monetary damage awards are staggering.
The publishers have thus far paid $166,158,426 to settle the state and consumer price fixing charges, with an additional $3,909,000 to settle those claims in Minnesota, whose suit was filed separately as they were not a part of the original lawsuit.
The three publishers that settled first, Hachette, HarperCollins, and Simon & Schuster, appear to have negotiated a better deal than the two who lagged behind. Hachette owes $62,280,000 and has paid about half of that at present. HarperCollins has paid $20,168,710 of the $31,140,000 it is liable for. Simon & Schuster has paid $18,303,551 of the nearly $43 million it owes in damages.
MacMillan and Penguin joined the settlement process later. Penguin settled shortly before Apple’s trial with a $75 million payment – 121% of its liability. MacMillan settled at $20 million, also more than its assessed liability of $18.5 million.
Total damages calculated for the publishers is approximately $219 million. Publishers are in the process of paying the funds. The total awards could become much more significant if Apple is found liable. If they lose their appeal, they will have to settle state and consumer claims as well. The damages hearing will determine how much Apple owes to consumers and states.
As with the publishers who settled later, Apple’s deal, should they lose on appeal, will include special damages. Jeff Friedman, the lead lawyer in the class action case, says that Apple’s liability will be determined by “harm to consumers times three, minus the $166 million paid by publishers”. This could easily reach $500 million.
What does this mean for consumers? Those who purchased e-Books that were published by Hachette, HarperCollins, Simon & Schuster, Penguin, and MacMillan between 4/01/2010 and 5/21/2012 will receive their settlements in the form of retail credits from the online retailer from whom the books were purchased. Some payments may take the form of a check. The credits or checks will not be issued until after the settlement hearings are final.
If Apple loses the appeal, they won’t have difficulty paying the bill. Cash won’t be their undoing. Public image may be their biggest problem. The damage to their reputation as the leader in this antitrust case may hit their brand in unexpected ways. Whether through iBooks or in general, the public may not want to give business to a company that engages in illegal behaviors and price fixing. Until this is over, nobody knows the real price Apple will have to pay.