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Friday, 14 June 2013 10:36

Apple didn’t care about book pricing

Written by Nick Farrell

Best form of defence

An Apple executive has told a court that Jobs’ Mob did not really give a monkey's if publishers jacked the prices up of their books.

Prosecutors claim that that Apple set up a cartel with publishers to push up the prices of books. But Apple’s Eddy Cue said while he was not surprised when publishers increased prices for new and best-selling titles after Apple entered the e-books market he denied it was Jobs’ Mob’s fault. Cue said that he didn’t raise the prices, the publishers did.

Prosecutors claim that he was the "chief ringleader" of the conspiracy. Cue said that he was under a lot of pressure after former CEO Steve Jobs gave him approval in late 2009 to pursue an iBookstore for the iPad. Cue said he wanted to get the deal done so Jobs could see the iBookstore before he snuffed it. After talking with publishers, Apple instead went with a so-called agency model, in which publishers set the price and Apple received a 30 percent commission on sales.

They then pushed Amazon to also adopt the agency model, which prosecutors claimed Apple encouraged through a contract clause that would allow it to reduce prices on its bookstore if other retailers sold e-books cheaper. But the move caused prices for new and best-selling books to increase, the government contends. Amazon's shift to agency also contributed to its e-books market share falling to 45 percent in 2012, Morgan Stanley said in a February report.

Cue’s argument was that if there was a cartel operating then the publishers would have come up with deals faster and it would have been easier to negotiate.

Nick Farrell

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