March 10, 2016

SCOTUS denies Apple’s appeal, bringing an end to four-year ebook pricing case



You don’t have to go home, but you can’t stay here.

Apple Inc. v. United States of America et al. is no more. Despite the support of multiple high-profile author and bookseller advocates, the Supreme Court refused to consider the case, which means that the lower court’s ruling against the tech behemoth stands. NPR’s Bill Chappell reports:

In a decision that triggers hundreds of millions of dollars’ worth of payments to consumers, the Supreme Court on Monday denied Apple’s request to hear its appeal of a lower court’s ruling that the tech company had illegally fixed prices with publishers of e-books.

“The Justice Department says today’s decision means Apple’s liability in the price fixing case is settled once and for all,” NPR’s Lynn Neary reports. “The Supreme Court let stand a $450 million settlement reached in a lower court in 2014.”

All of the publishers that were named in the case have already settled with the government, paying a combined $166 million.

In late 2014, Apple settled a class-action lawsuit over e-book pricing that had been brought by consumers and 33 U.S. states, but the payments in that case were predicated upon the outcome of Apple’s appeal of the federal antitrust case. Today’s rejection by the Supreme Court triggers Apple’s payment of some $400 million to people who bought e-books.

The court did not provide any comment on their decision. So what’s the next step? And who gets a piece of that gigantic settlement, and how? Neil Hughes at Apple Insider has a handy primer for any of you who bought ebooks between six and four years ago, so it looks like it’s time to dig into your receipt box! Here are the salient details:

Importantly, the payout does not solely apply to e-books purchased through Apple’s iBooks store. For example, told AppleInsider on Monday that the company is prepared to distribute settlement funds to Kindle customers as soon as they are instructed to move forward.

[…]The settlement applies to purchases made between the dates of April 1, 2010 and May 21, 2012. The settlement applies only to American citizens, and does not apply to rented, free or gifted e-books.

Citizens who bought an affected title will have their residency determined by the billing address of the credit card they used to buy the e-book.

Those who bought New York Times bestsellers in the appropriate window of time will receive between $6.05 and $6.54 per e-book. Non-bestsellers will result in compensation of between $1.39 and $1.50 per e-book.

E-book purchases from Amazon, Apple, Barnes & Noble and Kobo will result in an automatic account credit. Purchases through Sony will result in a check in the mail. No forms are needed.

Anyone who bought from Google and filed a claim before the October 2014 deadline will also get their payout. And as Laura Northrup at Consumerist helpfully points out, the best indicator that you’ll be receiving a payout is if you received one when the publisher plaintiffs originally settled in 2014. This won’t exactly be a significant loss for Apple, though; they made $11 billion in profit in Q4 of 2015 alone.

This is a whimper-not-a-bang ending for a legal saga that redefined how we as publishers create (and are legally allowed to discuss) modern book pricing. And while all publisher defendants have long since divested themselves of the case via settlement, it’s unfortunate that we won’t have the opportunity to see (or rather, hear) an argument against predatory ebook pricing presented to the land’s highest, and now tied, court. At least, not on this case.




Liam O’Brien is the Senior Sales & Marketing Manager at Melville House, and a former bookseller.