Judge says Ap­ple may take bite out of profit

The Star Early Edition - - BUSINESS REPORT INTERNATIONAL - Nate Ray­mond

A US judge on Fri­day gave fi­nal ap­proval to Ap­ple’s agree­ment to pay $450 mil­lion (R4.9 bil­lion) to re­solve claims it harmed con­sumers by con­spir­ing with five pub­lish­ers to raise e-book prices.

Dur­ing a hear­ing in Man­hat­tan, US Dis­trict Judge Denise Cote ap­proved what she called a “highly un­usual” ac­cord. It called for Ap­ple to pay $400m to as many as 23 mil­lion con­sumers if the company was un­suc­cess­ful in ap­peal­ing a rul­ing that found it li­able for an­titrust vi­o­la­tions.

The $400m comes on top of ear­lier set­tle­ments with five pub­lish­ers in the case, which pro­vided $166m for e-book pur­chasers.

Ap­ple agreed to the set­tle­ment in June, ahead of a da­m­ages trial set for two months later in which at­tor­neysgen­eral in 33 states and ter­ri­to­ries and lawyers for a class of con­sumers were ex­pected to seek up to $840m.

Dur­ing Fri­day’s hear­ing, Cote said it was an “un­usu­ally struc­tured set­tle­ment, es­pe­cially for one ar­rived at on the eve of trial”.

The deal al­lows Ap­ple to con­tinue to ap­peal the judge’s July 2013 rul­ing that Ap­ple had vi­o­lated an­titrust laws by col­lud­ing with the pub­lish­ers to drive up e-book prices and im­pede ri­vals such as Ama­zon.com.

That ac­cord calls for Ap­ple to pay $400m to con­sumers and $50m to lawyers if Cote’s find­ings are up­held on ap­peal, and noth­ing if the company wins its ap­peal.

If the ap­peals court over­turns the judge and re­turns the case to her, per­haps for a new trial, Ap­ple would owe $50m to con­sumers and $20m to lawyers. While the deal was un­usual, the judge said that she un­der­stood why the plain­tiffs de­cided to go with it, given de­lay tac­tics by Ap­ple.

An Ap­ple spokesman did not re­spond to a re­quest for com­ment.

A fed­eral ap­peals court is sched­uled to hear Ap­ple’s ap­peal on De­cem­ber 15. – Reuters

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