Apple E-Book Antitrust Class Action Lawsuit

Top Class Actions’s website and social media posts use affiliate links. If you make a purchase using such links, we may receive a commission, but it will not result in any additional charges to you. Please review our Affiliate Link Disclosure for more information.

A class action lawsuit has been filed against Apple and five of the country’s top book publishers for allegedly conspiring together to drive up the prices of e-books. The e-book antitrust class action lawsuit HarperCollins, Hachette, MacMillan, Penguin and Simon & Schuster worked with Apple to break Amazon’s discount pricing strategy and help Apple’s iPad compete with Kindle’s lower prices.

According to the e-book antirust litigation, “Apple believed it needed to neutralize the Kindle when it entered the e-book market with its own e-reader, the iPad, and feared that one day the Kindle might challenge the iPad by digitally distributing other media like music and movies.”

“[T]he publishers believed that Amazon’s wildly popular Kindle e-reader device and the company’s discounted pricing for e-books would increase the adoption of e-books, and feared Amazon’s discounted pricing structure would permanently set consumer expectations for lower prices, even for other e-reader devices.”

The e-book class action lawsuit goes on to allege that the five publishing houses forced Amazon to abandon its discount pricing and adhere to a new agency model, in which publishers set prices of e-book titles. This would prevent retailers such as Amazon from offering lower prices on e-books. If Amazon defied the publishers and tried to sell e-books titles below the publisher-set levels, the publishers would simply deny Amazon access to the book title, the complaint says.

Apple had already established such a pricing model on its App store, taking 30 percent revenue on sales while the publishers receive 70 percent. According to the e-book lawsuit, the prices of e-books have risen as much as 50 percent since the switch to an agency model.

The e-book antitrust class action lawsuit claims Apple and the publishers have violated a variety of federal and state antitrust laws, the Sherman Act, the Cartwright Act and the Unfair Competition Act.

If approved, the Apple e-book class action lawsuit would represent any purchaser of an e-book published by a major publisher after the adoption of the agency model by that publisher. The class action lawsuit is seeking damages for the purchase of the e-books, an injunction against pricing e-books with the agency model and forfeiture of the illegal profits received by the defendants as a result of their anticompetitive conduct, which could total tens of millions of dollars.

The case is Anthony Petru, et al. v. Apple, Inc, et al., Case No. 11-03892, United States District Court, Northern District of California.

UPDATE 1: Apple Inc. announced June 16, 2014, that it had reached an undisclosed class action lawsuit settlement in the e-book antitrust litigation. 

UPDATE 2: The judge presiding over the Apple e-book litigation expressed reservations about approving the proposed class action settlement, leading lawyers from both sides to go back to the drawing board to try and modify the deal.

UPDATE 3: A federal judge preliminarily approved a $450 million Apple e-book class action settlement on Aug. 1, 2014. A Final Fairness Hearing is scheduled for Nov. 21, 2014. 

UPDATE 4: On Nov. 21, 2014, U.S. District Judge Denise Cote granted final approval to the Apple e-book class action settlement.