TMCnet Feature
May 15, 2013

Government Paints Steve Jobs as Key Figure in Alleged e-Books Price-Fixing Scheme

By Ed Silverstein, TMCnet Contributor

Steve Jobs (News - Alert) was a highly feared CEO who brought glory to Apple. But now federal prosecutors are claiming he was also a key player in improper efforts involving publishing companies to raise the retail price of e-books in a corporate conspiracy.

Though Jobs died in 2011, the case against Apple (News - Alert) is continuing. Apple responded, saying that it was never involved in any attempts at price fixing.

However, the Justice Department is claiming that Apple was the “ringmaster” in a scheme to fix prices of e-books. It had Apple leading several well-known publishing companies to force Amazon to increase e-book prices.

A trial against Apple will start on June 3 in New York.

Five publishing companies — identified by TMCnet as Hachette, HarperCollins, Macmillan, Penguin and Simon & Schuster — have settled the charges against them already.

Tom Neumayr, a spokesman for Apple, has denied the price-fixing allegations to The New York Times.

“We helped transform the e-book market with the introduction of the iBookstore in 2010, bringing consumers an expanded selection of e-books and delivering innovative new features,” Neumayr said. “The market has been thriving and innovating since Apple’s entry, and we look forward to going to trial to defend ourselves and move forward.”

"Apple did not conspire to fix e-book prices. The evidence proves that Apple acted independently, to further its own legitimate business goals, in negotiating agency agreements with the publishers to enter the e-book market," the company added in a court filing.

To build its case, the government recalled how Jobs was quoted as once saying, “We'll go to the agency model, where you set the price and we get our 30 percent and yes, the customer pays a little more, but that's what you want anyway," The Register said.

Also, in an e-mail to News Corp’s (News - Alert) James Murdoch, Jobs said, "Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99," according to judicial documents quoted by The Hill newspaper. This compares to Amazon’s price for most e-books at that time of $9.99, the report said.

Edited by Alisen Downey
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