Apple, Google sign $415m antitrust deal

Google and Apple have agreed on a $415m settlement, $90.5m more than a previously rejected accord, to end an embarrassing chapter of litigation showing how they and other Silicon Valley companies conspired to avoid hiring one another’s employees.

The agreement requires the approval of the United States District Judge, Lucy Koh, in San Jose, California, who in August rejected the initial $324.5m accord on grounds it didn’t offer enough money for affected workers.

According to Bloomberg, Koh said the companies, which include Adobe Systems and Intel Corporation should pay at least $380m given “ample evidence” of antitrust violations that might result in damages of more than $9bn if the case went to a jury.

For the companies, approval of the new accord would avoid the risk of a trial scheduled for April and finish off a 2011 lawsuit that produced troves of internal emails detailing anticompetitive agreements among the chief executive officers at technology giants.

The four months it took to hammer out the new agreement suggests “serious sustained negotiation” between the two sides, Orly Lobel, a law professor at University of San Diego who specialises in labour and employment issues, said in an email.

“My prediction is she will approve the settlement,” Lobel said, referring to Koh. “It is not a bad result even if it is still fairly low relative to the potential high win when a trial proceeds. But that’s typical for settlements.”

One of the objections to the original settlement was filed by former Adobe employee Michael Devine, who left the company in 2008 and was a lead plaintiff in the case.

Devine’s lawyer, Daniel Girard, argued that if workers’ lawyers hadn’t initially agreed to settle for an average payout of about $3,572, they could have won damages at trial of as much as $141,331 each.

Daniel Girard, a lawyer representing Devine, said the new settlement comes out to about $6,400 for each employee. Girard said that when a San Francisco-based appeal court agreed in September to consider the companies’ request to overrule Koh’s rejection of the initial settlement, it presented a “meaningful risk.” That factored into Devine’s decision to support the $415m agreement, Girard said.

Devine “has signed on to the settlement but he believes everyone should make their own assessment,” Girard said. “We believe this is the maximum number that can be obtained at this point in the litigation.”

Kristin Huguet, a spokeswoman for Cupertino, California-based Apple, and Aaron Stein, a spokesman for Mountain View, California-based Google, declined to comment on the new settlement agreement.

Rejections of antitrust settlements are rare, especially when objections are based on the amount and not the law. The rejected settlement would have given the employees’ lawyers $81m in fees plus $1.2m in costs.