Apple has received a new damages claim of over $840 million for conspiring with publishing companies to raise the price of ebooks across the entire industry. The claim, filed Friday in New York by an attorney leading a class action lawsuit on behalf of ebooks customers in 33 states, stems from the US Justice Department's successful antitrust lawsuit against Apple that took place in the summer of 2013. Using evidence presented during the course of that trial last year, attorney Steve Berman begins by arguing that Apple owes American ebooks customers a bare minimum of $231 million in damages, and probably far more money than that.
bare minimum of $231 million in damages
The $231 million figure comes from an estimate provided by one of Apple's witnesses during the trial, who said that Apple's deal with publishers to use an "agency model" for pricing ebooks – an agreement under which publishers set the final price of ebooks that Apple would charge consumers, and Apple took 30 percent of each sale – resulted in a 14.9 percent increase in sales dollars. This increase came about because Apple charged an average of price of $12.99 for each new ebook, higher than the average $9.99 previously charged when Amazon was the major ebooks retailer and could lower the price for consumers.
But Berman goes even further, pointing out in his new claim that his witness, a Stanford economist, estimated that the increase in ebooks sales was 18.1 percent, or a total $280 million worth of sales. Berman says that the judge should force Apple to pay triple this amount so that it can be divided effectively between the various states and consumers suing Apple for damages. That may sound like a lot for most of us, but if the judge agrees and forces Apple to turn over that amount, it would be equal to just 0.5 percent of the cash on hand Apple reported at the end of last year, as Bloomberg observes. Apple hasn't commented on the latest filing but it is appealing the original ruling in the case.