U.S. District Judge Denise Cote has granted Preliminary approval to Apple’s proposed $450 million settlement for claims that it colluded with the five major U.S. publishers to increase e-book prices. The settlement fee is still pending the appeal of Judge Cote’s 2013 ruling, but if it stands, Apple will pay $400 million to consumers and $50 million to lawyers. However, Judge Cote says she was deeply troubled by a provision that could see Apple pay as little as $70 million. Apple first came under fire for e-book price fixing in 2012, when the company was accused of conspiring with Hachette, Penguin, Random House, HarperCollins and Simon & Schuster to drive down the price of e-books in order to loosen Amazon’s death grip on the market. The publishers all reached settlements with the state, while Apple only filed its $450 million proposal last month.
The judge in the Apple e-book case has given preliminary approval to a proposed $450-million settlement, Reuters reports. Apple was found guilty in 2013 of colluding with five major publishers to fix e-book prices. The settlement will provide $400 million to consumers and $50 million to attorneys. The e-book price-fixing case found Apple had colluded with publishers to set e-book prices. It moved e-book pricing sales from a wholesale-retail model, in which retailers paid a flat rate to publishers and then set their own end prices, to an “agency model,” in which Apple took a percentage of an agreed-upon sales price. The judge determined that this resulted in raising e-book prices for consumers. Although it has completed the terms of the settlement, Apple filed an appeal that is moving through the courts. Terms of the settlement include reduced payments if Apple should win on appeal. If Apple wins on appeal, it will owe nothing; if the case is returned to U.S. District Court Judge Denise Cote’s court, Apple will pay just $50 million to consumers and $20 million in lawyers’ fees, an arrangement Cote had said was “most troubling.” Less than two weeks later, she has set aside her concerns. “The proposed settlement agreement is within the range of those that may be approved as fair and reasonable, such that notice to the class is appropriate,” Cote said. “Preliminary approval is granted.”