A revised filing from the plaintiff states and consumer class made public this week puts the total damages in their lawsuit against Apple over fixing e-book prices at more than $307 million. While it is unclear what percentage of those damages could ultimately be assessed to Apple following a damages trial, suffice it to say it is a big number considering that Judge Denise Cote can potentially triple the final damage award.
The damages model was created for the plaintiffs by a team led by Roger G. Noll, Professor Emeritus of Economics at Stanford University and a Senior Fellow in the Stanford Institute for Economic Research, and the director of the program in regulatory policy. For those interested in the math, there is plenty to geek out on in the filing, which offers significant details on the e-book market during the litigation period.
According to Noll, the “total number of e-books sold for which damages are calculated” is 149,424,374. Excluding textbooks, Noll's team then created a data set of 1,348,121 e-book titles “purchased at least once” after April 1, 2010 through May, 21, 2012, of which 83,463 titles were sold by the five Publisher Defendants.
Using a “before-after” model, Noll compared the prices from the “collusion period” with a control group, thus calculating the total damages for the Publisher Defendants at $307,808,414, on total combined revenue of $1,548,223,900—an average added margin due to “the effect of collusion” of about 19.9%.
Of that $307 million in damages, the filing states that $282,109,378 was calculated “directly from the transactions data” and $25,699,036 was “estimated for the last seven weeks of the collusion period.” That total excludes titles where prices were actually dropped, only about 0.5% of e-books, the filing states with a total value to consumers “during the entire collusion period” of just $151,876.
The filing also breaks out estimated e-book revenues and damages by publisher:
Hachette’s damages were put at $54,971,899 on total e-book revenues of 280,353,383 during the period.
HarperCollins damages were $62,033,851 on $279,204,694 in e-book revenues.
Macmillan’s damages were put at $17,013,853 on e-book revenues of $212,238,705.
Penguin was assessed with damages of $105,779,657 on e-book revenues of $481,408,045.
Simon & Schuster was assessed with damages of $68,009,155 on total e-book revenues of $295,019,073.
The latest calculations come after Judge Denise Cote’s July 10 verdict finding Apple liable for its role in a scheme to fix e-book prices. The publishers have settled the charges against them, and have paid over $166 million, based on an earlier estimate that put total damages at $218 million. The final two settlements, Macmillan and Penguin, are set for a final hearing on December 6, after which payouts to consumers could begin.
Apple, meanwhile, is on track for a damages trial in May of 2014. Apple attorneys, however, are fighting hard on the degree to which liability in its federal price-fixing case translates to liability for money damages in its state and consumer case. Apple also intends to fight class certification. Apple has also appealed Judge Cote’s verdict, and the proceedings could at some point be stayed until the appeal is decided.