Apple $450 million e-book settlement wins court approval

“Apple Inc on Friday won preliminary court approval for its $450 million settlement of claims it harmed consumers by conspiring with five publishers to raise e-book prices,” Jonathan Stempel reports for Reuters. “In approving the accord, U.S. District Judge Denise Cote in Manhattan overcame concerns she had expressed over a settlement provision allowing Apple to pay just $70 million if related litigation were to drag out. Apple has been appealing Cote’s July 2013 finding, in a case brought by the U.S. Department of Justice, that it violated antitrust laws for colluding with the publishers to drive up e-book prices and impede rivals such as Amazon.com Inc.”

“In June, Apple agreed to settle related class-action litigation brought on behalf of consumers and 33 U.S. states,” Stempel reports. “That accord calls for Apple to pay $400 million to consumers and $50 million to lawyers if the federal appeals court in New York upholds Cote’s findings, and nothing if the Cupertino, California-based company wins its appeal.”

Stempel reports, “But if the appeals court overturns Cote and returns the case to her, perhaps for a new trial, Apple will owe $50 million to consumers and $20 million to lawyers.”

Read more in the full article here.

MacDailyNews Take: You’ll get nothing and like it, silly puppet!

Related articles:
In pretrial view, judge says leaning toward U.S. DOJ over Apple in e-books case – May 24, 2013
Lawyers have complained for years that Judge Denise Cote pre-judges cases before she enters the courtroom – August 14, 2013

U.S. Federal Puppet Denise Cote says she’s troubled by Apple $450 million e-books settlement deal – July 24, 2014
U.S. Federal Puppet Denise Cote: Apple cannot escape U.S. states’ e-book antitrust cases – April 15, 2014
U.S. Federal Puppet Denise Cote: ‘Apple’s reaction to the existence of a monitorship underscores the wisdom of its imposition’ – January 16, 2014
Judge Denise Cote denies Apple request block her friend as ‘antitrust compliance monitor’ – January 13, 2014
Antitrust monitor Bromwich rebuts Apple accusations of ‘unconstitutional’ investigation – December 31, 2013
Apple seeks to freeze its U.S. e-books ‘antitrust monitor’ – December 15, 2013
The persecution of Apple: Is the U.S. government’s ebook investigation out of control? – December 10, 2013
Apple’s Star Chamber: An abusive judge and her prosecutor friend besiege the tech maker – December 5, 2013
Apple takes aim not just at court-ordered e-books monitor, but also at U.S. District Judge Denise Cote herself – December 2, 2013
U.S.A. v. Apple: Judge Denise Cote assigns DOJ monitor in Apple ebook price-fixing case – October 17, 2013
U.S.A. v. Apple: Judge issues injunction against Apple in ebooks antitrust case; largely in line with what DOJ wanted – September 6, 2013
U.S.A. v. Apple: Judge Denise Cote says Apple needs third-party supervision after ‘blatant’ ebook price fixing – August 28, 2013

60 Comments

  1. This is a bit of relief. But still not satisfied.

    There should be $0 paid, and restitution paid back to Apple for all their trouble.

    This was going to turn out like Microsoft’s butt reaming. However since the $400 million cap is now in place, at lease we don’t have to worry that it could get worse.

    I hope this appeal goes through and that Judge tosses out the whole thing and won’t even hand it back to deal old Judge “Turn Coat.”

  2. I cannot make sense of that article!
    Does the bottom line mean that Apple pays whatever scenario transpires?
    If Judge Cote’s (spit) verdict is overturned and returned to her for retrial, Apple forks out $70m.
    If her judgement is upheld, Apple cough up $450m.
    So the only option Apple inc. has is to win the case outright at the appeals level.
    How can Apple inc. expect a fair hearing from a judge who has publicly espoused her opposition to Apple incs. preliminary agreement on what it will pay should it lose the case or if it partially wins and she then has to re-try it?
    How is justice seen to be fair if the judge is not neutral or non-partial to any side of the case?
    Is a judge not meant to conduct themselves in court as uninvolved neutral entities??
    Questions, questions!

    Just saying…

    1. I was thinking about this.

      $70 million was the DOJ fee for not going to trial in the first place. The book publishers paid this, because they knew better. So I am thinking, this is Apple’s way of saying, begrudgingly, we will drop the whole thing if you do, and pay that $70 mil, if we all get to go home.

      Anyone else see it like that?

  3. I still don’t get exactly what Apple is allegedly guilty of, except for being successful at doing a kick ass job bringing ebooks to consumers. The government should butt the hell out and concentrate on doing what it’s constitutionally obligated to do rather than hound successful companies and try to extract millions of dollars out of them. I don’t feel harmed by Apple’s actions at all.

    1. The book companies are considered a monopoly. Apple facilitated their monopoly power by pricing the way they (and Apple) want. Then the book companies were able to force Amazon to change their pricing scheme. Voila. Apple is the bad guy by entering a new market and setting prices so that they can turn a profit.

      1. “What Apple is allegedly guilty of”.

        The accusation is basically that Apple and book publishers worked together to harm the (consumer) market for ebooks. (Note that working together to do something legal is called cooperation, while working together to do something illegal is called collusion.) Apple and the book publishers are accused of collusion to harm consumers by allegedly illegally causing ebook retail prices to rise, by moving Amazon off the wholesaler basis of buying and selling the publishers’ ebooks.

        The publishers previously arranged to sell ebooks to Amazon on the traditional “wholesaler basis”. In this scenario, legal title to the publishers’ ebooks is conveyed to the wholesaler — here, Amazon — for onward retail sale. Since the wholesaler holds legal title to the ebooks, Amazon can then legally determine whatever retail price they wish for these books. This includes selling them into the retail market at prices below what the wholesaler bought them for. (And also below what the publishers’ themselves would charge if they were to set the retail prices for their ebooks on their own account, since publishers wished to manage sales of their titles in two markets — the physical book market and the ebook market — and undercutting sales in the paper book market by selling ebooks at low prices is not in the publishers’ best long-term business interests.)

        When Amazon began to sell publishers’ new & best-selling paper book titles as ebooks at prices that undercut the former, the publishers realized the mistake they made in ceding retail price control of their ebook titles to an online retailer by selling to them as if they were wholesalers for paper books.

        Apple basically told the publishers “your problem is easy to fix”. Do not sell your ebook titles outright _to_ middlemen. Sell them instead _through_ middlemen on the “agency basis”. In this scenario, the publishers (principals) retain legal title to their ebooks (and the right to determine their prices), which books are sold by middleman (acting as agents for their principals) to consumers, with the agents receiving an appropriate commission on sale. Easy-peasy.

        None of this is illegal per se. And the agency basis of sale makes a lot of sense in this situation for a number of reasons, including the fact that Amazon here is really just distributing someone else’s product without really taking on any substantial ‘ownership risk’.

        The DOJ case boils down to this: (1) Apple and the publishers talked about the strategy of selling publisher ebooks on the agency basis, which also meant changing Amazon away from the wholesaler basis, (2) DOJ claims this caused the retail prices of ebooks to rise, since Amazon no longer had the right to sell the publishers’ ebooks at prices below Amazon’s purchase cost.

        So: Apple and the publishers acted together, and since the DOJ claims ebook prices consequently rose and consumers were harmed, the DOJ feels the basic criteria for “collusion” have been met. Yet the DOJ case fails to consider the context of these actions. Or to consider the optimal decision-theoretic optimum scenario for the parties.

        Anyway, the case has many shortcomings (as has been noted elsewhere), and I believe the lower court’s decision is likely to be reversed on appeal. Anti-trust law and precedent are very old and are overdue to be updated in the context of the modern era.

        1. No, you’re wrong, the bulk of it is supposed to be refunded to customers. . . in the form of cash or discounts on future purchases. A percentage goes to the states for bringing the suits.

            1. I fully agree. I, as a consumer, was far more harmed in the long run by the cut rate policies of Amazon making the viability of the publishing industry incapable of paying authors for their works. As an author, I want to be paid appropriately for the months, sometimes years, of effort that goes into writing the books that Amazon denigrates by discounting below market value so far that no one can profit in publish or selling them. This insults me and other authors by implying our work is not worth even the cost of production. . . and tells us we are wasting our time to write more. As a reader, I want to reward the authors I enjoy reading and am willing to do that with cash. As an author, the best appreciation of my work I can receive is not letters from fans but cold, hard cash from them that supports me and my family so I can afford to write more to please them.

            2. How does Amazon paying wholesale prices and receiving revenue lower than what they paid affecting what the author receives? How much do you really think authors get paid for each copy of their book? If you feel your favorite authors are getting a raw deal with Amazon paying wholesale prices, they would be worse off with Agency pricing that was capped at 50% MSRP by Apple minus the 30% commission. Maybe you should convince that author to sell ebooks directy via iBooks, Amazon, etc. and get the full 70% rather than a much smaller fraction they receive from the Publisher. That would be the best way to reward your favorite authors.. As an author I strongly suggest independent publishing unless you are willing to give up the majority share of revenue to have your work marketed and such.

            3. It effects the sale of dead tree books and their value. The fewer dead tree book that are sold the less money the publishers had because of competing with their own too far discounted ebooks, the less they from sales overall from brick-and-mortar to pay everything, including future royalties on new books. These cost do not come from nothing. The mix of sales is very carefully calculated. Amazon’s super discounts undercut every other retailer and distorted all that, forcing the prices of traditional books down squeezing profits, margins, and royalties as fewer and fewer dead-tree books could be sold UNLESS they too were price competitive. Nothing happens in a price vacuum, especially when the largest retailer is ALSO discounting your hardbacks to below cost. This pressure was forcing the publishers’ major retail customers out of business.

            4. Publishers also provide many services other than just printing and shipping books that are of value to both authors and readers. Editing and marketing plus promotion are among these. An author can write, but a skilled editor can vastly improve even a famous author’s work

            5. Damn system.

              I am an excellent writer, but I am not so arrogant as to assume my writing can stand on its own without the help of a good editor who can help me check for errors, continuity, and facts. I belong to a writers’ group which is blessed with two New York Times Best Selling writers who are working on new works while I am working on two novels of my own. We edit each others’ works as we go along, critiquing for style, usage, among other things. I’ve made constructive suggestions for them, and they for me. Our books will be better for it, but their editors at their publishers will still have a lot to say before they go to press. . . as will mine.

              Self e-publishing has other failings. You may be the best writer in the world, but how will anyone know? Promotion is not easy at best for experts. For every “Fifty Shades” there are thousands of self-published ebooks that have disappeared without a trace. Getting an agent and a publisher behind you, publicizing your work, is much better. Getting a hardback print version is gold. . . and e-publishing is not going to get you there.

              It gets down to how many copies do you want to sell. Do you want 70% of a thousand ebooks sold on iBooks at $10 that you have to self promote? Or would you want to gamble and get a royalty on hundreds of thousands or millions of books sold through a publisher? It won’t happen on iBooks. How much do you believe in your book and your writing?

            6. You make a good point that publishing houses do provide valuable services which include editing, marketing and promotion. With the advent of self-publishing perhaps the time has come to change the model from the author’s perspective and allow more control of their work. If an author becomes confident/popular enough to go free agent there may be a market to provide 3rd party services for editing, marketing/promotion and on-demand printing instead of being contracted to a large publishing house. As you said it’s a gamble but these days there is a lot more opportunities for authors than ever before to get their work out into readers’ hands..

            7. There’s room for both approaches and the agency model, ala the software method where the one man startup operates happily alongside the behemoth software foundry and both may flourish.

            8. Judge Cote and the Justice department at the behest of Amazon have attempted to allow Amazon to control it all. That is where the problem truly lies. The ignored the true monopoly and in fact acted to protect it.

            9. In the long run, Amazon’s practices will undermine the publishing industry. That is bad for authors. At least the authors that would get picked up by the publishing industry.

              Incidentally, it sounds to me like you have a bone to pick, or had a bad experience, with a publishing house.

              I don’t think anyone has a problem with online publishing or publishers, per se. But the case with Amazon is not about authors who WANT to publish online. Power to them. It is about publishers who do NOT WANT their best titles published online at cut-rate prices. This is a huge difference you seem unable or unwilling to appreciate.

            10. I just feel that if you don’t want something to be sold at cut rate prices just don’t offer it for sale by that vendor. Simple, no fuss and no overreaching side effects on others not involved directly in the mess. I purchase Epubs and PDFs for the sole purpose of not being locked into a single vendor. What this entire situation did was affect vendors that had nothing to do with Apple or Amazon. If Amazon was like Apple and limited availability of ebooks to only their devices it wouldn’t make much sense to go so far since the Apple community famed for spending money would easily overcome sales by any other company. However the Kindle format is accessible to practically every type of mobile computing device as well as desktops of every OS. If Apple had competed at the wholesale level, like they intended to before entering negotiations with the publishers, even with matching prices, the more accessible Kindle format would most likely be more popular of the two. Other methods that could have been used include additional content. An example is how Barnes&Noble has editions of some popular computing books I have bought that have content exclusive to B&N for the same MSRP. Amazon would have to price their book at a significant discount to B&N for me to purchase their copy instead.

      1. The consumer was ‘harmed’ by the actions of the publishers and Apple ‘colluding’ to remove pricing competition at the retail (consumer) level. In other words the crux of the argument is that with the Agency model agreement that was made, a ‘monopoly’ of price control for any unique ebook title was formed. This may not have gone this far if the publishers involved did not also control the major market source for such material.

        1. I still don’t see why publishers can’t set agency pricing or a standard retail price if they choose which sellers cannot deviate from. Many do it and get away with it, including Apple, Hallmark cards, etc.. And most of those publisher offerings weren’t sold as agency, it applied mostly to only very new releases. Striking when the iron is hot as it were.

          1. I understood the Agency agreement applying to ALL ebooks published by the 5 of the big 6 publishers regardless of age of title. Also that the publishers had issues with only the $9.99 Amazon pricing for new titles. Maybe all of this could have been avoided if they had been able to negotiate an agreement where Agency pricing would be used for a limited time on new titles the publisher wished to ‘protect’ from too deep discounts keeping disruption to a minimum.

            1. There is nothing illegal about the Agency Basis of sale. In fact, it is fairly common. Particularly when a company has a desirable premium product that, for legitimate business reasons, the company does not wish to see discounted. There is no law that says a company cannot control the selling prices of its own products. For companies that wish to control the retail price of its products, they must maintain legal title to their products and sell them through a middleman who is their agent. Agent: one who acts on behalf of another party, called the principal.

            2. I’ve never said the Agency model was illegal. And I understand your point of using it when you have a desirable product. However it seems rather drastic when you switch over your entire model and affect not just one retailer and your entire line of products. As I have suggested, perhaps an agreement could have been negotiated where only the Best Sellers, which seems was the pain point for Publishers, is sold on an Agency basis for a limited time (say 6 weeks or so). Another method could have been to simply include a clause in the current agreement to have penalties for deviating from MSRP for Best Sellers during a set time period.

            3. When I say drastic, I mean that the Publishers were willing to enter the Agency model agreement that they initially proposed to Apple even after Apple added clauses to cap retail prices at 50% MSRP and ‘recommended’ price points. What this meant was that instead of receiving about 50% total in the wholesale model they received at most 35% (50% minus 30% Apple commission). The publishers changed over their entire ebook sales model and were willing to lose money on ALL ebooks in order to get some price control. If it stopped there and the Publisher alone absorbed that loss it wouldn’t be so bad but since authors are paid as a percentage of revenue, their royalties were also reduced about 30%. Thus I believe what I suggested earlier would have been the best solution for all parties concerned from what I have gathered on this entire debacle. What insight do you have that may shed more light on this matter?

            4. I agree, you don’t know what your talking about. As a person with my degrees in Economics and Business, I can tell you you can’t mix the models. It’s one or the other. You just want what you want.

              What you fail to recognize is that best-sellers and new-releases ARE a good 50-60% of the income of any book store. They are the bread-and-butter income that allows a bookstore to carry the b-list and other books that must be kept in inventory but are very slow sellers. These are what bring customers into the store. . . but not into a virtual store. Low prices in a virtual store merely poach customers who buy the single best-seller. They seldom browse non-existent shelves and buy other books on their visit. It’s hit and run. That’s the Amazon model.

              Amazon just posted a quarterly LOSS of $150,000,000. . . after squeezing publishers to force them to let Amazon PRINT hard-copies of out-of-stock hardback books from “unauthorized digital copies Amazon had made” to quickly fill orders instead of ordering them from the publishers. . . and threatening to cut off sales of in-stock books unless the publishers agreed! Can you say “monopoly abuse?” I certainly can. Now we see Amazon’s ultimate plan.

          2. Xenner1170, it is impossible to have an illegal monopoly of a single product produced by a single producer where there are similar product produced by other producers. Your claim that Apple and the publishers created an illegal monopoly of price control for that “unique title” is the error Judge Cote fell into. For example, does Ford have a monopoly on Ford automobiles? Yes. Does Apple have a Monopoly on Apple iPhones? Yes. Can Apple, as a matter of contract with its retailers set the price ranges its iPhones may be retailed for. Yes. Is it illegal. No. It is a matter of contract law.

            Apple was never party to any of the joint meetings where the publishers colluded. In fact, those meetings, which DID apparently take place, occurred months before Apple ever decided to open an ebook store. Apple carefully approached the publishers with a similar offer to the model they use for app sales, the agency model used in the IOS App Store, all but one of the publishers signed on separately. No collusion. Judge Cote imputed a non-existent joint meeting in which Apple orchestrated the whole thing. The US Supreme Court has outlined the elements necessary for this collusion “crime” to be illegal and none of them are present in this case. One of them was that there could not be a legitimate, business reason for Apple’s involvement. Another was that one of the acts itself must be itself illegal. None were. All, in fact, were standard business practices, often included in business negotiation. The government claimed the agency model itself was somehow, de facto, suspect, and Judge Cote found it different enough to be not within normal business practices, ignoring fact. Judge Cote ignored the court’s guidance, the evidence, the experts, and created her own new law out of whole cloth. She had ninety percent of her decision written before the case evidence was heard, based only on the government’s claims.

            1. My current understanding of the ebook case is pretty much based on the following 3 articles that seem to discuss it quite clearly. Tell me what you think.

              Pretty well broken down here
              http://tidbits.com/article/13912

              price chart showing before and after Agency pricing implemented:
              http://www.washingtonpost.com/blogs/wonkblog/wp/2013/07/10/a-judge-says-apple-fixed-e-book-prices-this-chart-shows-how-they-did-it/

              An article about why Agency pricing works in one type of market over another:
              http://www.voxeu.org/article/apple-s-pricing-and-ebooks

            2. In response to the first article, the author says “the anti trust laws are intended to prevent increases in prices” but he’s 100% wrong. Antitrust laws are to foster competition. The US Supreme Court made a specific point about this in the guidelines the specifically wrote for lower courts which Judge Cote ignored. I cited that earlier. Anti-trust is not about consumer pricing and Judge Cote made it about consumer pricing. . . as does the second link. In my opinion, in re your third link, as an economist, ebooks are the perfect case where agency pricing should work.

            3. So basically having the 5 publishers that together would constitute the huge majority of published material agreeing to use identical pricing tiers simultaneiously fosters competition? Sounds like price control preventing competition to me… Regarding your opinion on the third link I think the point was that for App Stores there are literally thousands of developers setting prices in an Agency model, why this is not working in the ebook market is that the control falls to the 5 publishing houses and not the authors. If the publishing houses allowed the authors to set the prices it may have been a better argument for competition. As it was set up between Apple and the publishers it didn’t work out that way.

            4. And there are thousands of publishers as well. It works the same way. The DOJ stepped in on a complaint filed by. . . Amazon, because Amazon’s monopoly was being disrupted. . . Many other publishers were signing the same agreement. The DOJ just targeted these five and claimed Apple was the “ringleader when Apple was late to the game, was not even a player at the time, and spoke only individually, and never in concert. Apple established the terms Apple was willing to sell ebooks in their bookstore under. The publishers, big and small, were free to agree or not. Amazon’s system did lock out the small publishers. . . and in fact, Amazon was forcing small publishers to accept Amazon’s dictated wholesale pricing under threat of not accepting their books. This happened. Contrary to your assertion, it DID increase competition under Apple’s agency model. Facts are sticky.

            5. Independent, small and medium publishers have never been locked out as you state.. Here are two articles, one from Smashwords (fairly medium sized ebook publisher) that may show that..
              http://authorearnings.com/report/may-2014-author-earnings-report/?replytocom=819

              http://blog.smashwords.com/2012/03/does-agency-pricing-lead-to-higher-book.html

              what I find interesting in the smashwords article is that they feel Agency pricing is ok for small and independent publishers, but in the hands of the big publishers ebooks tend to be priced too high.

            6. Your chart of ebook prices is a limited example because it shows ONLY data from Amazon and the distorted pricing that Amazon was imposing on ebook before and after the switch to agency model. The data does not include what other venders were or would have priced ebooks at in a free market absent the deep artificially supported discounts only Amazon could afford. Ergo, it’s a valueless chart as far as making any conclusion about price increases and again shows the bankrupt nature of Judge Cote’s decision because it out of these data she based her decision.

            7. Incidentally, that chart shows at the beginning, pricing when the market was dominated by Amazon with a 90% plus share of ebooks. It does not show the result of three years of competition later since it ends in January when Amazon still had essentially 87% of the ebook market. Three years later, after Apple and other competitors on the Agency model had matured, Amazon’s monopoly position in erte ailing of ebooks had been cut to under 60% and ebook pricing had DROPPED overall by 7%!

              Competition, the actual purpose of the antitrust laws was fostered.

            8. Yes, Amazon started predatory pricing again with Judge Cote killing agency model. . . and competition has taken a big hit. Nook is just one example of how competition cannot survive such predatory pricing. RIP Nook.RIP Sony eReader, too. There are more that can’t survive. It takes DEEP pockets to subsidize such discounts. Only Amazon can somehow afford to stay in business posting $150,000,000 losses. Judge Cote is an economic idiot.

            9. Your chart is too gross to show the resultant drop before the lawsuit. The testimony at trial demonstrated the overall drop. . . Which preceded the discontinuation of the agency model.

              Ask yourself WHY would the publishers embrace a model that would return less profits per book sale if it did not foster the overall health of the industry? Was it mere spite because they wanted to “stick it to the consumer,” as some consumer organizations claimed, or was it concern for survival against a predatory, destructive economic practice by a monopolistic retailer who did not care about the health of the publishing industry. I tell you it was the latter. Amazon cares only about market share, not even profit. . . destroying competition in the process.

            10. The mistake is thinking that publishers are protecting the publishing industry.. They are protecting the PHYSICAL publishing industry. The ebook publishing industry (outside of the big 6) is doing better every year despite the big waves this mess has caused. Progress is being made in freelancing editing, art, on-demand printing services. Having access to backlist, out-of-print is higher than ever. Big publishers continue to release ebooks simultaneously with the HC version when they could wait till release of the PB because they don’t want to ‘lose’ sales to early ebook buyers. Seems like they want the cake and eat it too. I submit that big publishers are reluctant to change their business model but want the benefits of ebooks while keeping their profit margin.

        2. “In other words the crux of the argument is that with the Agency model agreement that was made, a ‘monopoly’ of price control for any unique ebook title was formed. ”

          — No; the above statement is not the crux of the DOJ’s argument. The crux is: (a) companies agreed among themselves on a scheme to (b) raise prices.

          1. Until they can show me five publishers selling the same title at the same price, at multiple retail outlets, there is no price fixing. The concept that books are an “interchangeable commodity,” subject to price fixing is absurd on its face. There is far too much competition in the fiction genres OTHER than price to make the absurdity obvious. People do not buy reading materials like they do gasoline or wheat. Choice is made based on matters of taste, habit, amusement, and other imponderables, including whim. Price may be among the least of them. I have purchased a book for ten times a normal RETAIL price because I wanted to read it. . . NOW, price didn’t matter. Similarly, I wanted a 3D BluRay copy of Avatar a year before they were generally available on the market. They were available only to people who bought a certain make of 3D TV and some were being sold on eBay. I wanted one, I didn’t want to wait, so I paid $115 for a BluRay that a year later would sell for $30. It was worth it to me. (I accidentally wound up with two copies, when the first auction I bid and lost, was re-instated when the winner turned out to be a fraudulent bidder. Both copies were later stolen in a burglary at my home where the only things taken were $12,000 in BluRay disks! Seems, according to the police, they’re the easiest thing to fence.) In any case, treating a change in an industry sales model as price fixing is insane. . . especially when the testimony and all evidence showed that overall, the prices of ebooks had, overtime GONE DOWN, to the benefit of consumers everywhere, due to increased competition!

            Incidentally, the US Supreme Court guidelines specifically stated that “mere price increases are not evidence of price fixing” and could not be used as such evidence, yet Cote used the fact that prices increased as the proof that “prices were obviously fixed.”

            1. Good point with your “want it NOW”.. But that makes little sense for the case if you want an ebook in iBook format NOW.. No one but Apple will sell it to you and that should not be affecting prices for vendors of other formats. Similarly purchasing books in Kindle format, no one but Amazon sells that format.. Kobo will sell you the same book in kEpub or PDF format. Each format has its pros and cons and may have more features that are desirable that the other formats don’t have. Or maybe the consumer wants a format that is barebones. You also bring up a great point with the DVD and Blu-ray.. Some want one format over the other due to price or having the equipment to make use of it.. The video company decides to create 3 types of packaging in increasing price, DVD alone, Blu-Ray alone, both in one box w/ digital copy. The publishing industry could do the same but Baen is the only publisher that seems to have attempted this with the CD-ROM included with the HC.. Not all mind you, like I said it was an attempt. They also have a nice self-run ebook segment that gives you access to several formats of the same ebook.

    1. And one more thing…….
      The Federal government will compensate Apple
      For all expenses payed for the court approved overseer
      when this case is overturned. Additionally Apple attorneys
      will be reimbursed at the rate of $1250/hour

  4. “In approving the accord, U.S. District Judge Denise Cote in Manhattan overcame concerns she had expressed over a settlement provision allowing Apple to pay just $70 million if related litigation were to drag out.”

    Yeah, overcame is right you Koh Cote, what happened, the kick back from Amazon just covered your Kotex you bleeding rag.

  5. I am not sure I understand the logic of a $50M payout to consumers BEFORE any new trial. A different judge may agree with Apple and find they have nothing to answer for. Will consumers then have to give the money back?

    1. There won’t be a new trial in any case. The parties are agreed that they don’t want to appear in front of Judge Cote again.

      So, if the case is sent back, Apple will agree to pay $50MM and the states will accept it as a final settlement of all their claims. If Apple loses outright on appeal, its liability is capped. If Apple wins outright, the states agree not to further pursue their claims. Their lawsuits are independent of the DOJ suit, so that isn’t automatic without the settlement.

      Attorney fees of 1/9 the total is about a third of the usual market rate in contingent fee cases.

  6. I think the agreement is brilliant.

    Cote ate a lot of crow in (reluctantly) going along with this. Perhaps wiser folk pointed out the handwriting on the wall. Another way of looking at it is she had no choice.

      1. That may still happen. . . with a vacating of all consequent resulting cases. If the appellate court finds the judge erred in her legal theory of her judgment, and I think she did, the everything ensuing from her error must in law be remedied.

Reader Feedback

This site uses Akismet to reduce spam. Learn how your comment data is processed.