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Apple agrees to $400 Million settlement in ebook price fixing scandal


Apple has denied the ebook price fixing scheme thrown at it in the past and filed a court appeal in 2013 regarding the case. Today, however, the Cupertino, California company’s decided to pay $400 million to put an end to the allegations.

It’s been said that Apple used the introduction of its iPad in 2010 to work with five companies – HarperCollins, Hachette Book Group, MacMillan, Penguin, and Simon & Schuster – to raise ebook prices rather than charge a flat rate for its iBook collection.

The five book companies that are implicated with Apple already agreed to a $166 million settlement for customers back in 2013.

Apple’s ebook price fixing scandal has one obstacle on the table at the moment: the company’s 2013 appeal. It could be the case that Apple’s appeal is approved; if so, consumers will get very little from the case and Apple won’t owe anywhere near $400 million. If, on the other hand, Apple’s appeal is denied, the company will owe the $400 million that’s been agreed to in this new settlement.

Apple’s willingness to settle the class-action lawsuit, filed by 33 states, has some tech analysts scratching their heads. After all, if Apple is innocent, why file an agreement to simply “put an end” to it all? On the other hand, some companies settle because bad publicity can put a dent into sales – even if it’s a small one.

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Nevertheless, some see this as a win for customers, and a statement to Apple that it can’t squeeze money from customers without cost (pun intended). New York State Attorney General Eric T. Schneiderman said that the Apple settlement “proves that even the biggest, most powerful companies in the world must play by the same rules as everyone else.”

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Apple’s also been under scrutiny in days past for American tax loophole laws that’ve allowed the company to hire two-thirds of its workforce in the US while maintaining two-thirds of its income in dummy corporations overseas, particularly in Ireland. Tim Cook’s testimony before the Senate brought to light the fact that Apple believes the American corporate tax to be too high and that, if the US reduced it, the company could see the majority of its profit return to its native country. Apple’s said that it’s not breaking any laws, but some view Apple’s actions as nothing short of tax evasion.

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