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Apple To Begin Issuing Refunds In E-Book Settlement Case June 22

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Three months after the Supreme Court left Apple on the hook for $450 million in the settlement of a 2012 antitrust case against the company and five major book publishers, the tech giant is poised to begin handing out payments to customers starting tomorrow. 

MacRumors reports that customers who purchased e-books from Apple between April 1, 2011 and May 21, 2012 will begin receiving refunds based on the type of book they bought.

In all, $400 million of the settlement has been earmarked for refunds to e-book customers who purchased any e-book from Hachette, HarperCollins, Macmillan, Penguin Group USA, and Simon & Schuster during the time the alleged price-fixing occurred.

Books from the New York Times bestseller list are credited at $6.93 per book, while all other books are credited at $1.57 per book. Credits can be used for a year to purchase e-books or anything else the retailer sells.

The funds will automatically be sent to customer accounts and Apple will issue emails confirming the funds by June 24.

The refunds will put to bed a nearly four-year price collusion case against Apple and other publishers.

This case goes back to the days before Apple launched the iPad and was prepping to become a player in the e-book market, which was then — as it still is — dominated by Amazon.

At the time, Amazon purchased e-books rights at a wholesale rate and then determined on its own where it would set the retail price. Publishers did not like this model because they felt that Amazon was willing to lose money on e-books in order to get customers buying other things on the site. Likewise, Amazon’s competitors didn’t have vast warehouses on non-book products to make up for thin profits on e-books.

So Apple allegedly colluded with the nation’s largest book publishers to establish what’s known as the “agency model,” wherein the publishers determine the retail price with Amazon, Apple, et al, getting a set percentage of that price.

This effectively allowed publishers to determine the price that customers paid. And since it is in publishers’ financial interest to sell the books for as much as consumers are willing to pay, pricing on many e-books actually went up, even as iPads and new tablets and phones made the products more desirable.

In 2012, the U.S. Dept. of Justice brought an antitrust case against Apple and the publishers. The book folks all eventually settled, resulting in a reversion to the old pricing model and refunds for consumers who overpaid.

Apple chose to go to trial in 2013, but was unable to convince the court that its actions were actually in the best interest of consumers and competition.

In March, the Supreme Court declined to hear the case for a final time, and Apple was left on the hook for refunds to customers.

For more information on the refunds customers can visit the settlement website.

E-Book Buyers to Start Receiving Credits on Tuesday as Part of Apple Price Fixing Settlement [MacRumors]


by Ashlee Kieler via Consumerist

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