Newspaper article International Herald Tribune

Apple Trial Examines E-Mail by Steve Jobs ; Executive Says Message Does Not Indicate Firm Colluded with Publishers

Newspaper article International Herald Tribune

Apple Trial Examines E-Mail by Steve Jobs ; Executive Says Message Does Not Indicate Firm Colluded with Publishers

Article excerpt

A senior vice president at Apple denied the U.S. government's charges that the company was working with e-book publishers to raise prices.

Just days after Apple introduced the iPad and opened an e- bookstore, the biggest player in the e-book market, Amazon.com, changed the way it sold digital titles. Steven P. Jobs shot off an e-mail to the Apple executive who had negotiated deals with the publishers.

"Wow, we have really lit the fuse on a powder keg," Mr. Jobs, the late Apple chief executive officer, wrote in the e-mail, dated Jan. 30, 2010, to Eddy Cue, the company's senior vice president of Internet software and services.

The e-mail was brought up as evidence during the second half of Mr. Cue's testimony in a New York courtroom on Monday, where much of the discussion focused on whether Apple had intended to help the publishers raise Amazon's prices.

Mr. Cue testified Monday that Mr. Jobs's e-mail had not been a memo congratulating him about how Apple's entry into the e-book market affected Amazon, causing it to switch to a business model called agency pricing, in which the publishers, not the retailer, sets the price of the books.

Mr. Cue said Mr. Jobs had been remarking on the company's ability to "cause ripples" in the e-book industry, which was then largely dominated by Amazon.

While Mr. Cue conceded that some e-book prices had gone up as a result of agency pricing, he noted that many titles might not have become available in any digital store at all if Apple had not introduced agency pricing to the market.

He said he had learned from his meetings with publishers that they were unhappy with Amazon's uniform $9.99 pricing for e-books and that they were planning to use a tactic known as windowing -- delaying the release of an e-book until after the more expensive hardcover had been in stores for a while.

Mr. Cue testified that both he and Mr. Jobs believed that "withholding books is a disaster for any bookstore."

The U.S. Justice Department was not persuaded. Lawrence Buterman, a Justice Department lawyer, asked Mr. Cue whether he was aware that only 37 e-books had ever been windowed.

"The number doesn't matter," Mr. Cue said. …

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