e-books buyers of Amazon to get a bonanza, courtesy Apple

If you bought an e-book from a major publisher between April 2010 and May 21, 2012, on Amazon, then you have a surprise in store as the online retailer is giving away free money to its buyers. And if you bought a best-seller, then more reason to cheer. The generosity by Amazon is on account of Apple and other major book publishers, who had to pay up the inflated amount they charged on e-books.

The publishers lost an antitrust case in 2012 after the Justice Department sued the companies for price fixing of e-books. The alleged collusion between Apple and other publishers was determined in comparison with Amazon, who set the price of e-books at $9.99 per title when it launched the Kindle in 2007. The price is at par with what publishers sold them to retailers for, meaning there was barely any profit involved. Steve Jobs of Apple instead wasn’t happy without a profit margin, so when Apple launched iPad, the company worked with publishers to set the price for e-books at $12.99 or $14.99, with a 30 percent cut for Apple. The Department of Justice said this was price-fixing.

While some publishers washed their hands off with an out-of-court settlement, Apple fought it to the end and lost. In March, the Supreme Court refused to hear Apple’s appeal on the verdict, thus allowing the $450 million settlement to go into effect. About $400 million of that will go to e-book buyers.

Customers will get a $6.93 credit for every e-book bought between April 1, 2010, and May 21, 2012, that was a New York Times bestseller. For books not on the best-seller list, it’s a $1.57 credit per book. The payouts are not just for Amazon customers, but also those who bought e-books from Barnes & Noble, Kobo, and Apple. There could be at least 23 million users who will be compensated.

Jobs, in an email to Rupert Murdoch’s son James, had reportedly said that Amazon’s $9.99 e-book pricing was “eroding the value perception of their products in customer’s minds, and they do not want this practice to continue” for newly released books.