Ruling upheld on ebook price-fixing

Apple Inc. is a step closer to paying $400 million (U.S.) back to ebook consumers after losing a bid to overturn a court ruling that it orchestrated a price-fixing scheme in the electronic-book market.

A sharply split U.S. federal appeals court left intact a judge’s opinion that Apple “played a central role” in conspiring with five publishers to fix the prices of ebooks.

The company agreed to pay $400 million, plus $50 million in lawyers’ fees, if it lost its appeal of the antitrust claims filed by the Justice Department and 33 states.

Apple hasn’t said whether it will seek review by the U.S. Supreme Court. If the decision stands, the total payout would be 4.4 per cent of the company’s estimated profit for the current quarter.

It would pay nothing if Tuesday’s decision is overturned.

The appeals court upheld a 2013 decision by U.S. District Judge Denise Cote that spurred changes in how ebooks are priced. The Manhattan judge imposed a monitor to ensure that Apple’s antitrust compliance policies are adequate.

In her ruling, Judge Cote said Apple lost the case in part because of statements by its deceased founder, Steve Jobs. The government argued the former Apple chief revealed his company was unfairly targeting ebook leader Amazon.com Inc.

“Apple found an easy path to opening its iBookstore, but it did so by ensuring that market-wide ebook prices would rise to a level that it, and the publisher defendants, had jointly agreed on,” U.S. Circuit Judge Debra Ann Livingston wrote in the majority opinion joined by U.S. Circuit Judge Raymond Lohier.

“Apple did not conspire to fix ebook pricing and this ruling does nothing to change the facts,” Cupertino, Calif.-based Apple said in a statement.

U.S. Circuit Judge Dennis Jacobs dissented, agreeing with Apple that it behaved legally in setting up a new pricing structure to compete with Seattle-based Amazon.