US judge troubled by Apple $ 450m e- books deal

A US judge on Thursday expressed concern over a proposed $ 450 million settlement of claims Apple Inc conspired with five publishers to fix e- book prices, saying its provisions could drastically reduce money paid to consumers depending on appeals.

US district judge Denise Cote in Manhattan said she found “most troubling” a clause requiring Apple to pay only $ 70 million if an appeals court reversed her finding that the company is liable for antitrust violations and sent it back to her for further proceedings.

Speaking on a teleconfer- ence, Cote questioned if that would be fair and what might happen if the appeals court reversed her ruling on a minor issue. She also took issue with the lack of any requirement for Apple to pay interest while the appeals go forward.

“I’m concerned about the terms of the settlement,” she said. The comments came a week after 33 US states and territories and lawyers for a class of consumers submitted the settlement for Cote’s preliminary approval, and to avoid a scheduled Aug. 25 damages trial.

Cote scheduled the trial after ruling last July that Apple was liable for colluding with publishers to impede e- book competitors such as Amazon. com Inc.

The publishers include Lagardere SCA’s Hachette Book Group Inc, News Corp’s HarperCollins Publishers LLC, Penguin Group ( USA) Inc, CBS Corp’s Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan.

Cote’s ruling came in an April 2012 lawsuit by the US department of justice and the state attorneys general.

These plaintiffs were expected to seek up to $ 840 million in damages but reached settlements in which the publishers would provide $ 166 million to ebook purchasers, reducing Apple’s exposure to $ 674 million.

The size of the Apple settlement depends on the outcome of the company’s appeal of Cote’s liability finding to the 2nd US circuit court of appeals.

If Apple loses its appeal, it would pay $ 400 million to consumers and $ 50 million to the states and plaintiffs’ lawyers.