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June 21, 2016

Iowa E-book Buyers to Receive Additional $5.5M from Apple Price-Fixing Case

33 states, DOJ prevailed in antitrust case to address artificially inflated e-book pricing; Apple pays $400 million nationwide

DES MOINES – Iowa consumers who were wrongly overcharged for electronic books will receive an estimated $5.5 million in account credits or checks as early as this week, after the U.S. Supreme Court earlier this year declined to hear Apple Inc.’s challenge to lower court rulings that it conspired to fix e-book prices.

Eligible consumers will receive account credits or payments beginning today, depending on the seller. Consumers who ordered e-books through Amazon, Apple, Barnes & Noble, or Kobo will automatically receive credits in their accounts (unless they previously requested to receive checks). Consumers who bought e-books through Sony or Google will receive checks in the mail.

Consumers receiving account credits should expect to receive a confirmation email between now and Friday. Consumers can use credits to purchase anything sold by these retailers, including e-books.

33 States, Feds Prevailed in Antitrust Lawsuit
In April 2012, 33 states, including Iowa, along with the U.S. Department of Justice, sued Apple, alleging it conspired with five of the top six U.S. publishers to fix e-book prices.

In July 2013, a New York federal judge ruled that Apple conspired to raise prices with Penguin Group (USA) Inc. (now Penguin Random House); Holtzbrinck Publishers LLC d/b/a Macmillan; Hachette Book Group Inc.; HarperCollins Publishers LLC; and Simon & Schuster Inc.

In June 2015, the Second U.S. Court of Appeals in New York affirmed the decision.

In March, the U.S. Supreme Court declined to review the case.

Publishers Previously Settled, Consumer Funds Distributed
All five publishers settled prior to trial, and paid a total of approximately $166 million in nationwide consumer compensation. In March 2014, Iowans received $1.4 million of that settlement.

Additional Funds Going to Consumers and States from Apple
This week’s distribution includes the $400 million payment from Apple, and remaining funds from the previous publisher settlements. The $566 million total nationwide compensation to consumers is more than twice the estimated amount of actual damages.

Iowa consumers account for approximately one percent of e-book purchases, and thus are expected to receive nearly $5.5 million from this week’s distribution, in addition to the money already paid to Iowans.

The amounts received by e-book purchasers will be based on the number of E-books they purchased between April 1, 2010 and May 21, 2012. For each e-book that was a New York Times bestseller, consumers will receive $6.93. For all other e-books, the payment will be $1.57.

The states’ settlement with Apple was contingent on the outcome of Apple’s appeal of the ruling, meaning Apple must now pay the maximum amounts. In addition to the $400 million going to consumers, including those represented by private counsel in a related class-action case, Apple will pay $20 million to the states to reimburse fees and costs, and to resolve civil penalty claims. The payment includes approximately $271,000 to Iowa’s antitrust fund.

Consumer Questions
Consumers can find out additional information about the settlement and payment process through a settlement administrator’s website at ebooklawsuits.com, or call (866) 686-9333.

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