US technology giant Apple has agreed to pay $400 million (£233 million) to settle a lawsuit into accusations that it colluded with publishers to fix the price of e-books.
The company was set to face trial this month in Manhattan federal court on claims brought on behalf of more than 30 states and US territories as well as consumers, in which it faced as much as $840 million in damages.
The settlement will only apply if Apple loses an appeal into a 2013 ruling that it orchestrated a price-fixing conspiracy among five of the biggest publishing companies in violation of U.S. antitrust law.
If approved by a judge, the $400 million will go to consumers, while Apple will pay an additional $20 million to states and for attorney fees, according to the documents filed on Wednesday (July 16th).
If the decision is thrown out, Apple will not have to pay anything.
The publishers who are accused of colluding with Apple – Hachette Book Group, HarperCollins Publishers, Penguin Group (USA) Inc, Macmillan and Simon & Schuster Inc – have already settled for $166 million in a separate suit, the BBC reports.
New York Attorney General Eric Schneiderman, said in a statement: "In a major victory, our settlement has the potential to result in Apple paying hundreds of millions of dollars to consumers to compensate them for paying unlawfully inflated e-book price."
“This settlement proves that even the biggest, most powerful companies in the world must play by the same rules as everyone else,” he added.
The Cupertino based company denies the charges: "Apple did not conspire to fix e-book pricing and we will continue to fight those allegations. We believe a fair assessment of the facts will show it,” Kristin Huguet, an Apple spokeswoman, said, quoted by Bloomberg.
Apple's shares rose 0.50 per cent to $93.56 at 09:35 ET in early trading in New York.
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