Apple has finally run out of steam in its long-running fight to overturn a judge’s finding that it created a conspiracy among book publishers to fix the price of e-books.
In an order on Monday morning, the Supreme Court held it would not hear an appeal of the case, which means a price-fixing verdict from 2013 will stand. It also means that a $450 million class action settlement, which was contingent on the outcome of an appeal, will now go into effect and Apple
will begin making payments to e-book customers.
The Supreme Court, as is customary, did not give reasons for refusing to hear the appeal. Apple did not immediately respond to an email request for comment.
The price-fixing case, which transfixed the publishing industry, began in 2010 when Apple’s late CEO, Steve Jobs, persuaded five major publishers to sell books on the iPod.
Under the arrangement, which was designed to wrest pricing power from Amazon
, the publishers shifted to a so-called “agency pricing” model in which they set the price and passed along a commission to Apple.
The Justice Department, however, declared this amounted to antitrust conspiracy and sued the companies in federal court. It alleged the arrangement amount to horizontal price-fixing and that Apple was the hub of an illegal conspiracy.
The publishers—Hachette, Penguin, Simon & Schuster, HarperCollins and Macmillan—promptly settled the case, but Apple chose to fight the charges in court. This led to a highly publicized trial in which U.S. District Judge Denise Cote issued a lengthy ruling that Apple had clearly violated Section 1 of the Sherman Act.
In its appeal, Apple argued that Judge Cote erred by finding an automatic antitrust violation, rather than looking at whether the arrangement harmed consumers. The company has long contended that it did not create an illegal monopoly, but instead created new competition against industry behemoth Amazon.
Ironically, Apple today is barely a bit player in an e-book market that Amazon still dominates.
The e-book pricing controversy also triggered a flurry of class action lawsuits against Apple and the publishers. The latter resolved the litigation years ago, paying tens of millions to consumers, mostly in the form of credits to their Amazon Kindle and Barnes & Noble accounts.
In the case of Apple, the company agreed to a settlement in which it would pay out $450 million in the form of $400 million to consumers and $50 million to the class action lawyers.
The settlement was approved in late 2014, but the payout was contingent on the final outcome of Apple’s appeals. Those appeals are now exhausted.
This story has been updated several times to provide background of the case.