The late Steve Jobs has taken centre stage in the latest twist in the Apple antitrust trial on ebooks.
A federal court attempted to plumb the meaning of a series of unsent emails Jobs addressed to Eddy Cue, an Apple senior vice president assigned with negotiating ebook contracts with major publishers in late 2009 and early 2010 before the launch of the iPad.
Even though the emails were never sent, government prosecutors argue that they help establish a pattern of Apple serving as a “ringleader” in a conspiracy with the publishers to force the retail book industry to adopt higher prices of ebooks.
The government contends that Apple forced publishers to change their pricing system with Amazon, resulting in higher ebook prices across the industry and costing consumers hundreds of millions of dollars.
Apple maintains that it was indifferent to Amazon’s contracts with the publishers and that higher ebook prices were set by publishers, not Apple.
All of the draft emails responded to a message from Cue outlining the emerging price of Apple ebooks, which would be $12.99 or $14.99, up from the $9.99 Amazon had sold for bestsellers.
In most of the drafts, dated January 14, 2010, Jobs is seen picking over the impact of the emerging deal between Apple and the publishers, according to testimony.
This included the effects of an Apple “most favoured nation” (MFN) provision requiring publishers to make available to Apple any ebook offered on another retailer for the same price.
The bombshell was a draft note to Cue in which Jobs said, “I can live with this as long as they move Amazon to the agent model too for new releases for the first year.”
“If they don’t, I’m not sure we can be competitive.”
The Amazon note appears to be the last draft email in the series, said Cue. It is also the only one in the series signed by Jobs.
US Justice Department lawyer Lawrence Buterman depicted Jobs’s draft Amazon email as part of a pattern of Apple demanding publishers to change their terms from a “wholesale” model in which retailers set price to an “agency” model in which publishers set price but guaranteed booksellers a 30 percent commission.
The government contends this shift led to higher ebook prices.
Buterman also pointed to a January 4 letter from Cue to the publishers demanding that all publishers shift their other retailers to the agency model.
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Nov 24, 2014