US judge 'troubled' by Apple's $450m bid to end ebook price-fixing row

Beak questions whether settlement is fair to customers

US federal judge Denise Cote is not particularly chuffed with Apple and its proposed $450m settlement in an ebook price-fixing lawsuit – because the odds are stacked against customers if the appeals process goes Cupertino's way.

Apple and 33 American states and territories came to the deal on how much the company should pay after Cote found it liable for antitrust violations in a separate trial. The parties were due to have another trial on the amount of damages before they agreed on the settlement.

The deal gives ebook readers a pot of $400m, while legal beaks will get as much as $50m on top of that. But the settlement only goes ahead if the appeals court declines Apple’s arguments.

Judge Cote said yesterday that she found it “most troubling” that the settlement included a clause that would require Apple to part with a mere $70m if the appeals court sent the case back to her for further proceedings or a new trial.

She wondered if it was fair for customers if the appeals court only returned the case to her because of a minor issue. She also questioned the lack of requirement for Apple to pay interest while the appeals go ahead, Reuters reports.

Cote found Apple liable for conspiring with the five major publishers to fix the price of ebooks in July last year, after cases brought by the US Department of Justice and the state attorneys-general. Hachette, HarperCollins, Penguin, Simon & Schuster and Macmillan all settled at various points in the suits and have paid up, but Apple is still fighting on in the appeals court.

The damages trial was originally expected to end up with as much as $840m in the pockets of plaintiffs, if their arguments succeeded and Judge Cote went for triple damages.

Steve Berman, a lawyer for consumers, told Judge Cote that they reckoned that the scenario where customers only got $70m was unlikely, but he said that the parties would consider her concerns. ®

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