Apple Must Face E-Book Price-Fixing Trial Before Appealing

May 30, 2014 12:01 am ET

May 30 (Bloomberg) -- Apple Inc. lost a last-ditch effort to challenge a ruling that millions of e-book buyers could sue the company as a group, setting the stage for a trial where it faces claims by consumers for as much as $840 million in price-fixing damages.

The U.S. Court of Appeals in New York yesterday rejected Apple’s request to challenge the ruling before the trial set for July 14.

U.S. District Judge Denise Cote in Manhattan, who last year concluded that Apple violated antitrust laws in its contracts with e-book publishers, in March allowed consumers in 23 states and territories to sue Apple as a group. The ruling came after a nonjury trial in antitrust cases filed by the U.S. Justice Department and 33 states and territories.

The Justice Department sought only corrective orders in the case and didn’t ask for damages. Cote said consumers in the states and territories that didn’t take part in that trial may pursue their claims together as a class action, which allows plaintiffs to pool resources.

Apple said in its request to the appeals court that the judge’s decision would result in a windfall to millions of consumers who weren’t harmed.

Representatives of Cupertino, California-based Apple didn’t immediately respond yesterday to an e-mail seeking comment on the decision. Ted Boutrous, a lawyer for Apple, didn’t immediately return a call to his office seeking comment.

Consumers Harmed

The U.S. sued Apple and five of the biggest publishers in April 2012, claiming the maker of the iPad pushed publishers to sign agreements letting it sell digital copies of their books under a model that raised prices and harmed consumers. In that so-called agency model, publishers and not retailers, set book prices, with Apple getting 30 percent.

The intent was to force Amazon.com, the No. 1 e-book seller, to change its pricing model, the government claimed. At the time, Amazon was selling electronic versions of best-selling books for $9.99, which was often below cost.

The case is In Re Electronic Books Antitrust Litigation, 11-md-2293, U.S. District Court, Southern District of New York (Manhattan).