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Judge expresses concerns over Apple's e-book settlement deal

updated 11:09 pm EDT, Thu July 24, 2014

Doesn't like possibility Apple will pay nothing if found innocent on appeal

In an unsurprising move, US District Court Judge Denise Cote hinted that she may overrule a settlement worked out between Apple and the attorneys general of 33 states and territories along with consumer groups over e-book pricing, expressing "concern" that one of the terms of the deal allows Apple to pay little or nothing if they are ultimately found innocent on appeal. She also objected to another agreed-upon aspect that allowed Apple to pay no interest on the monetary damages while the appeal was in process.

In an agreement forged by and agreed to by both parties, Apple offered to pay $450 million to settle the civil suit over its role in an alleged e-book price-fixing scandal. However, in what could turn out to be a brilliant legal maneuver, the company would owe nothing to the states if it was found innocent of the charges on appeal -- something legal experts have said is a real possibility. Further, the company would only owe $70 million to the states and consumer groups if the conviction was remanded back to Cote rather than reversed or tossed.

"We thought given that unlikely scenario and the legal risk we would face, it would be a good outcome for consumers," said Steve Berman, a lawyer representing the plaintiffs. However, after hearing Judge Cote's concerns about the lack of interest charges on the damages and the lower $70 million payment even if the case was sent back on a minor technicality, Berman said his team would reconsider the deal.

Apple's agreement to settle the case would have been unusually pro-consumer compared to most settlements of this size, requiring that $400 million of the $450 million go directly to consumers rather than attorneys. Apple was found guilty in a bench trial by Judge Cote in 2013 of colluding with major book publishers to "inflate" the prices of e-books by using an "agency model" that allowed publishers to set what they felt were sustainable market prices, rather than the "wholesale model" used predatorily by Amazon to sell e-books at a loss in an effort to shut out competitors and establish itself as the dominant e-bookseller. The action did temporarily raise prices on some best-sellers, but overall the average price of e-books dropped during the period due to increased competition.

Since then, critics' fears about what Amazon would do in a near-monopoly position have begun to come true. The online retail giant has been pursuing more favorable terms for itself that force publishers to sell e-books at discounted rates, using a blackmail-like withdrawal of titles against publishers who refuse to accept the lower rates that has drawn wide criticism from authors and book buyers, but which the company defends as a "normal negotiating tactic."




by MacNN Staff

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Comments

  1. pairof9s

    Mac Enthusiast

    Joined: 01-03-08

    This is the biggest bunch of crap....the classic example of judicial activism. This judge is dead set on delaying, obstructing or outright stopping Apple, an entity large enough to battle w/ Amazon, from being a major player in the book business.

  1. Inkling

    Dedicated MacNNer

    Joined: 07-25-06

    "... one of the terms of the deal allows Apple to pay little or nothing if they are ultimately found innocent on appeal." In short, Judge Cotes wants Apple to pay $450 million even if an appeals court later finds the company innocent. This judge's inability to understand the law is downright scary.

  1. Flying Meat

    Dedicated MacNNer

    Joined: 01-25-07

    In Judge Cotes' mind, even if Apple is found innocent on appeal her decision to make Apple pay would stand?
    That is some bizarre logic there.

  1. LenE

    Fresh-Faced Recruit

    Joined: 05-19-04

    What a corrupt b****!

  1. apostle

    Junior Member

    Joined: 04-16-08

    This story is long and winding. By all "official" accounts and documentation, "Judge" Denise Cote has been suffering from senile dementia for quite some time. A perfect pawn.

    Amazon "bought off" the United States Department of Justice (U.S.D.O.J.). The U.S.D.O.J. Is Anybodys whore for the right price. Google it.

    But this is politics, people. Yeah, "We The Peedles" may be experiencing an injustice. But look at the (big) picture.

    Dense Cote's mental illness is being abused for the benefit of others. Denise Cote either has no family who care about her or, a) could care less about her or b) are anyboy's whore for a price.

    One possible solution. Require voters to pass a test proving they have an intelligent understandng of each candidates policies and history.

    Or allow people to vote for historically losers like O'BAMA Just because he's black.

    Too many stupid people have been allowed to vote.

    If people lack the ability to think for themselves, they should not be allowed to have a voice in our government.

    ...stepping off my soapbox,

    =0)

  1. EstaNightshift

    MacNN Staff

    Joined: 07-19-12

    Warning to all.

    This is a front page news item. It's not going to turn into a huge political ideology discussion. Take it to the forum intended for that.

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