Apple settles civil class-action suit with AGs

In what appears to be another step toward resolving U.S. government claims that Apple Inc. conspired with publishers to raise the price of electronic books, the company on Tuesday struck a deal with 30 state attorneys general who wanted more than $800 million in damages for their book-reading constituents.

The deal to settle the civil class-action case allows both sides to avoid a trial scheduled to start next month. While no details were divulged, the agreement apparently means no money will change hands until Apple resolves its appeal of a larger federal-court decision which said the Cupertino, Calif., tech giant had broken antitrust laws.

U.S. District Judge in Manhattan Denise Cote, who last July found Apple liable for colluding with publishers after a separate nonjury trial in a case brought by the U.S. Department of Justice, ordered the parties in the civil case to formally seek approval of their settlement in the next 30 days.

The settlement is part of a case that’s been playing out in the shadows of a larger course of litigation. The U.S. Department of Justice sued Apple and five publishers in April 2012, accusing them of working together illegally to increase e-book prices. According to the government, Apple and the publishers used the contracts to force Amazon.com Inc., the largest e-book vendor, to change its pricing model, which sold electronic versions of best-sellers for just $9.99.

That suit prompted 33 states and U.S. territories to go after Apple on behalf of their consumers, while individual consumers in other states and territories filed a class-action lawsuit.

While the publishers have already settled these cases, Apple remains entrenched in a longer legal battle after Cote’s surprising decision. Apple continues to deny any wrongdoing in that case, and until there’s a resolution of its appeal, which Apple has said it will take to the Supreme Court if necessary, this week’s settlement will remain on hold.

“It looks as if Apple was able to show it was holding high-enough cards that it was better for the states to settle than to go all the way to trial on this,” said analyst Roger Kay with Endpoint Technologies Associates. “If the allegation was that Apple was trying to force Amazon out of business, well, Amazon doesn’t seem to be a whole lot weaker now than a few years ago. So the question of ‘harm done’ is tough.”