Antitrust “Damages” Could Hit $1 Billion in Apple Ebook Case

The judge who found Apple guilty of ebook price fixing has approved a class action against the company. An expert estimates “damages” to consumers at $280 million. That number gets tripled under antitrust law. So Apple may have to write a check for $840 million to people who don’t deserve one thin dime.

Let’s review. Back in 2010, when Steve Jobs was introducing the iPad, he knew that delivering content attractively was a key to success. He had proved that point with iTunes, which fed musical content stylishly to the iPod.

So Apple arranged with America’s five biggest publishers to sell their ebooks undiscounted, at the list price each publisher set. Apple would take 30% as a sales commission. The strategy worked. The iPad was a hit, and reading ebooks on the iPad brought pleasure to millions of customers.

Each of those consumers made a conscious decision to pay the asking price. They did it because they would rather have the ebook on their iPad than the money in their pockets. They were not entitled to a refund the next day, and they are not entitled to a refund three years later. Nothing has changed in the interim, except that the federal government has attacked the publishers and Apple under antitrust law. For what “crime”? For acting in concert — which means, for having had the intelligence to understand and agree that the pricing plan made economic sense for all of them.

The publishers all decided to settle rather than defend a lawsuit brought by the Department of Justice. They paid out $166 million, which was recently distributed through credits. In a recent post I called that blood money, because it was wrongfully extorted by threat of force under antitrust laws that deserve to be repealed.

If this new class action forces Apple to pay $840 million or any fraction thereof, no matter how small, that’s blood money too. I’m continuing to solicit ideas for how to turn these unearned and undeserved credits, which threaten to exceed $1 billion, into a visible protest against the bloodsucking antitrust laws. I’ll be monitoring my Twitter feed @thomasabowden for more of your suggestions.