New court reports this week suggest Apple(s aapl) is sinking ever deeper into legal quicksand, as the company fights a court judgment over ebook price-fixing that could ultimately cost it close to $1 billion dollars.
In the latest bit of bad news for Apple, U.S. District Judge Denise Cote on Tuesday confirmed that 33 state attorneys general can proceed with a lawsuit to seek triple damages for “injury inflicted on their economies and their citizens.” (Consumers in the other 17 states who overpaid for ebooks will be represented by class action lawyers, who obtained class certification last month.)
Cote’s opinion this week, which came in response to a motion by Apple to block the states’ claims on standing grounds, clears the way for the damages phase of the trial to get underway on July 14 – even as Apple asks an appeals court to reverse Cote’s decision last year that it brokered a price-fixing conspiracy over ebooks.
The ultimate price-tag for Apple in all this is anyone’s guess. The book publishers that were sued alongside Apple agreed to pay about $160 million (check your Kindle account), but that came as part of a settlement. For Apple, if it loses, the bill will be much higher since the company decided to fight rather than settle, and because antitrust law includes a nasty penalty clause that triples actual damages.
“Consumers could see a judgment of between $750 to $850 million,” Steve Berman, who is leading the class action, said last month. And that doesn’t even include Apple’s mounting legal bills.
Meanwhile, Apple had to endure a further dose of legal misery this week in the form of a long scolding from the court-appointed antitrust monitor that the company tried to remove in January.
In a 77-page report, the monitor Michael Bromwich bemoans Apple’s earlier lack of cooperation, and describes his affronts over Apple’s failure to immediately grant his requests to interview senior executives like Johnny Ive and board member Al Gore (neither of whom have anything to do with Apple’s ebook policies).
Bromwich’s behavior has been the subject of acerbic editorials in the Wall Street Journal, which have pointed out that he is a personal friend of Judge Cote’s and has no background in antitrust law.
Bromwich’s report is “the first in a series,” for which Apple must foot every penny. It notes the company’s “promising start to enhancing its Antitrust Compliance Program, but that Apple still has much work to do” — and carries on in that vein for many more pages (it’s embedded below, with some key parts underlined, if you want to take a look for yourself).
As I’ve said in the past, this case jumped the shark a long time ago. Apple is now a bit player in an ebooks market dominated more than ever by Amazon(s amzn). And unlike, say, the Comcast-TimeWarnerCable merger, there are no pressing antitrust issues here — but that’s unlikely to stop Cote, Bromwich and the merry band of lawyers from trying to torment Apple a little longer.
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