Apple is trying to tell a US court that its former messiah, Steve Jobs, was lying when he bragged about bullying publishers into an epublishing deal.
In his biography, Jobs said that he told publishers: “We’ll go to the agency model, where you set the price, and we get our 30 per cent, and yes, the customer pays a little more, but that’s what you want anyway”.
While that looked good to the Apple faithful, the quote upset the US Justice Department which said that it was proof that Cupertino conspired with publishers to jack up electronic book prices.
Now, Apple’s defence has emerged, Yahoo reports. With Steve Job’s biographer uninvolved in the case, Apple is claiming that the publishers had decided, independent of Apple, to eliminate discounts on wholesale book prices of e-books. Instead they would sell lucrative hardcover books first to bookstores in a practice called windowing and to take other measures to push Amazon to raise prices.
Each publisher had different counterproposals, Apple said in a filing, and these were “tough negotiations” rather than Steve Jobs telling everyone what to do.
The publishers were not that happy about having to give a third of their profits to Jobs and in one case, Apple appealed to News Corp, the parent of HarperCollins, to press the publisher to sign an e-book deal.
The Justice Department claims that Apple and the publishers colluded to push prices higher via agency pricing, in which publishers set retail prices in order to break Amazon’s dominance. The result was to push US e-book prices up by an average of $2 to $3 in a three-day period in early 2010.
Apple insists that its actions exploded ebook demand and the average retail price of an e-book dropped to $7.34 from $7.97.
Its legal arguments does not really explain why Steve Jobs basically admitted the price-fixing conspiracy. It would appear that the DoJ thinks it has enough evidence without having to call in Jobs’ biographer or conducting a court room séance. What is funny is that Apple feels the need to distance itself from its founder.