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Apple could pay dearly in ebook case

About two weeks ago, U.S. District Judge Denise Cote ruled that Apple conspired with book publishers to raise the price of e-books across the industry. If you recall, five publishing companies -- Penguin, Random House, HarperCollins, Simon & Schuster and Hachette -- were also targeted by the DOJ but all decided to settle instead of trying their luck in court.

Apple, however, took a principled stance, asserting that it wasn't going to admit to something it didn't do. In doing so, and subsequently coming out on the wrong end of Cote's decision, Apple may wind up having to fork over a lot of cash.

Gigaom, citing a recently publicized court document, writes that Apple may end up paying close to $500 million in damages when all is said and done.

Apple could pay dearly in ebook case

The chart above shows that publishers thus far have already paid out approximately $166 million in damages for their role in the "conspiracy."

Meanwhile, the total amount of damages Apple may be on the hook for is $218.8 million. The rub, however, is that Apple may be on the hook for triple damages. That results in a damages amount of $656.6 million. Less the damages already paid out by publishers leaves us with a final tally of approximately $490 million.

As for why Apple may end up paying triple damages, Jeff Roberts wrote the following back in early July:

Apple is in a different position. It vehemently denies wrongdoing and has fought the price-fixing accusations at all turns, in court and in the press. Now, if a verdict is entered after the damages phase of the trial, Apple is on the hook to pay special damages under a section of the Clayton Act that automatically triples antitrust awards. Apple's liability, according to lawyer Jeff Friedman, will be determined by this formula: harm to consumers x 3, minus the $166 million paid by the publishers.

It's worth noting that Friedman is a partner with the law firm leading the class action charge in this particular case.

Apple, of course, has every intention of appealing the decision, but legal scholars contacted by AllThingsD in the wake of the verdict were pessimistic about Apple's chances to prevail on appeal.

UC Berkeley Law Professor Pam Samuelson explained:

Apple may have a tough time getting this ruling reversed because the judge made findings of fact about the antitrust violation that appellate courts typically defer to. Most reversals happen as to interpretations of the law.

Not a good situation for Apple, but it may be some time before the case concludes and Apple has to pay up.

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