![]() ![]() The DOJ pointed to records of more than 100 phone calls the publisher CEOs had made among themselves in one month after Apple proposed the agency model. When the prosecutors asked Cue if, for instance, the publisher CEOs were talking among themselves about Apple’s proposed move to the agency model, Cue denied knowing anything about their discussions, or even admitting that he suspected that they were talking among themselves. Apple pioneered the agency model in the electronic realm with its app store. Under that model, the publisher sets the price and the seller, in this case Apple, gets a fixed percentage. ![]() The company presented the idea of moving the book industry from a wholesale model, where retailers buy books at the wholesale rate and then charge whatever price they want, to an agency model. ![]() DOJ prosecutors spent the morning Thursday asking Cue to elaborate on his emails with publishing CEOs and Jobs.Īccording to the Justice Department, book publishers were worried in 2009 that Amazon, then the largest retailer of electronic books, was lowering the perceived wholesale value of the books, due to its strategy of discounting books for $9.99.Īpple, eager to get into the ebook business with the iPad, used the “Amazon threat” as a calling card for the publishers, according to the DOJ. The agency has offered a large collection of emails and phone records that strongly suggest that publishing company CEOs, Jobs and Cue worked together to hammer out an agreement. Asked who had decision-making authority regarding ebooks pricing, Cue replied that Jobs, who died in October 2011, was the ultimate arbitrator for all decisions made at Apple during that time.ĭepartment of Justice charges that Apple colluded with the book publishers, including Harper Collins, the Penguin Group and Simon & Schuster, to set up a new pricing model, in violation of the Sherman Antitrust Act. ![]()
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