Apple’s E-Books Lawsuit Yields Miniscule ‘Credits’ for Readers, $50 Million for Lawyers

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By Emily Zanotti | 4:18 pm, June 21, 2016

First Ticketmaster, now Apple. Late Sunday night, Ticketmaster users began discovering vouchers and coupons for free tickets in their accounts, thanks to a class action lawsuit over the company’s fees. Tuesday morning, Amazon users (and other e-book retail customers) who purchased e-books discovered their own prize: credits, a “gift” from Apple, who just settled their own class action over e-book price fixing.

Last week, Apple agreed to a $450 million settlement after a collection of 33 attorneys general (and lawyers for a class of disgruntled e-book buyers) socked the tech giant with claims for consumer damages, anti-trust and price fixing, alleging that Apple had worked with five major publishers to “settle” the price of e-books.

According to the suit, In Re: Electronic Books Antitrust Litigation, Apple engaged in what’s known as a “most favored nation” deal, allowing publishers to sell e-books on its platform, with the caveat that no other e-retailer was allowed to sell the same e-books at a lower price.

Apple was found to be colluding with Hachette Book Group, HarperCollins, Penguin, Simon and Schuster, and Macmillan publishers by the Department of Justice in 2013. (Harper Collins is owned by News Corp, as is Heat Street.) The damages trial, where Apple faced up to $850 million in penalties from the 2013 finding, was due to start August 25. This settlement precludes that trial — and as a result, thousands of Amazon, Barnes & Noble, and and Kobo customers will split $400 million in gift cards for their e-book trouble (the publishers settled last year for $166 million).

Consumers will get $6.93 per New York Times bestselling e-book purchased between April of 2010 and May of 2012. They’ll receive $1.57 for every other e-book purchased in the same time frame. If you bought your overpriced books through Apple’s iBooks, you may have to fill out some paperwork before getting a mailed check.

The other $50 million of the $450 million settlement will go to lawyers: $30 million to the lawyers guiding the consumer class action and $20 million for the 33 states to split between themselves. While you enjoy your double-digits of Amazon credit, lawyers for Amazon customers will be checking out luxury yachts — as is usually the case with class action lawsuits.

In a win for e-book users over the long term, Apple is also enjoined from entering into anymore sweetheart deals with e-book publishers, so Amazon is free to price e-books according to the market.


FULL DISCLOSURE: The author of this story received $17.27 in Amazon credits, which she promptly used to buy that tell-all Kardashian family biography and a mega-pack of paper towels.