A federal judge slammed a recent court settlement in which Apple Inc. (NASDAQ: AAPL) agreed to pay $450 after being accused of conspiring with five major book publishers to artificially raise e-book prices, saying that the proposed agreement would be too easy on the company.
US District Judge Denise Cote said in Manhattan Thursday that, upon reviewing the settlement in which Apple agreed to pay $450 million, she found it “most troubling” that Apple was required to pay only $70 million if an appeals court reversed her decision that the company committed antitrust violations. Cote sent the case back for further negotiations, also questioning a stipulation that allowed Apple to avoid paying any interest while the company’s appeal moves forward, reports Reuters.
“I’m concerned about the terms of the settlement,” she said.
Her ruling comes nearly two weeks after Apple and lawyers from the US Department of Justice, alongside 33 state attorneys general, submitted the preliminary settlement agreement to Cote for her approval before a scheduled August 25 damages trial.
The issue was first raised in the form of a 2012 Justice Department lawsuit alleging that Apple executives regularly met with the heads of five of the largest U.S. publishers in the private dining rooms of upscale New York City restaurants to plot the best ways to counteract the Amazon.com Inc. (NASDAQ:AMZ) practice of providing large discounts on their e-books. According to the Wall Street Journal, the executives emailed each other about "the wretched $9.99 price point” and settled on a deal that lifted the price of most best-selling e-books to $12.99 to $14.99.
“As a result of this alleged conspiracy, we believe that consumers paid millions of dollars more for some of the most popular titles,” Attorney General Eric Holder said at the time.
Apple has consistently denied any wrongdoing.