Day 5 of the Apple ebooks trial: Publishing execs testify; Rupert Murdoch’s role

U.S. vs. Apple resumed in New York Monday after a three-day break,” Laura Hazard Owen reports for paidContent. “Amazon executives, plus Google’s Tom Turvey, had testified Thursday; Monday brought testimony from HarperCollins CEO Brian Murray and Macmillan CEO John Sargent, both appearing as government witnesses.”

“The day ‘provided more examples that publishing CEO’s are not necessarily very helpful or illuminating witnesses for the government,’ Publishers Marketplace notes. HarperCollins CEO Brian Murray said without pressure from News Corp executives (as a reminder, News Corp is the parent company of HarperCollins), he likely would not have signed an agency agreement with Apple in January 2010 before the iBookstore launched,” Owen reports.

“One of the government exhibits was an email exchange in which News Corp CEO Rupert Murdoch told Murray he wanted to ‘screw Amazon,’ after Amazon announced that it would offer authors a 70 percent royalty through Kindle Direct Publishing (essentially the same terms as an agency model),” Owen reports. “‘That move infuriated a number of publishers,’ reports Publishers Weekly, ‘including Murdoch, apparently, who saw the move as a threat from Amazon and more proof that Amazon would one day seek to woo publishers’ authors directly.'”

Read more in the full article here.

“There’s nothing unlawful about revenue sharing or most-favored-nation pricing,” L. Gordon Crovitz writes for The Wall Street Journal. “This helps explain why Apple chief executive Tim Cook calls the charges ‘bizarre’ and says, ‘We’ve done nothing wrong.'”

“As this column reported when the case was brought last year, Apple executive Eddy Cue in 2011 turned down my effort to negotiate different terms for apps by news publishers by telling me: ‘I don’t think you understand. We can’t treat newspapers or magazines any differently than we treat FarmVille.’ His point was clear: The 30% revenue-share model is how Apple does business with everyone. It is not, as the government alleges, a scheme Apple concocted to fix prices with book publishers,” Crovitz writes. “The chief executive of Simon & Schuster testified last week that during negotiations with Apple she was so taken aback by its one-size-fits-all approach that she called an executive at Paramount Pictures to confirm that the 30% commission also applied to movies. The Justice Department sued first and asked questions later.”

“This case against Apple has been a strange one from the start. Amazon had 90% of the e-book market until Apple launched the iPad. Amazon is now down to 60% market share. Isn’t antitrust law supposed to encourage competition?” Crovitz asks. “Apple’s agency model is the opposite of price fixing because it leaves prices to each publisher to decide. It only sets the share of the revenue it will take… The Apple case is Exhibit A in the case against market meddling.”

Read more in the full article here.

MacDailyNews Take: As we wrote the day the DOJ filed this lawsuit, “The U.S. DOJ is plainly inept.”

Once again: Killing real competition for the appearance of competition is just plain stupid.

Related articles:
U.S. v. Apple iBookstore case could go to the Supreme Court – June 5, 2013
Apple accuses DOJ of unfairly twisting Steve Jobs’ words in e-book case – June 4, 2013
U.S. DOJ prosecutors accuse Apple of driving up e-book prices – June 3, 2013
U.S. v. Apple goes to trial; DOJ claims e-book price-fixing conspiracy with Apple as ringmaster – June 3, 2013
U.S. DOJ takes Apple to trial alleging e-book price-fixing – June 2, 2013
In pretrial view, judge says leaning toward U.S. DOJ over Apple in e-books case – May 24, 2013
Penguin to pay $75 million in e-book settlement with US State Attorneys General – May 23, 2013
The hot mess that is Apple’s e-book legal fight with U.S. DOJ – May 16, 2013
Apple: Deals with publishers improved e-books competition – May 15, 2013
Apple tells U.S. DOJ of tough talks, not collusion, with publishers – May 15, 2013
EU ends e-book pricing antitrust probe into e-book pricing; accepts offer by Apple, four publishers – December 13, 2012
Apple, publishers offer EU e-book antitrust settlement – September 19, 2012
Judge rubber-stamps U.S. e-books settlement – September 6, 2012
Apple, four publishers offer e-books antitrust concessions, says source – August 31, 2012
Apple bashes Amazon, calls U.S. DOJ settlement proposal ‘fundamentally unfair, unlawful, and unprecedented’ – August 16, 2012
U.S. antitrust settlement with e-book publishers should be approved, feds say – August 4, 2012
U.S. Justice Department slams Apple, refuses to modify e-book settlement – July 23, 2012
U.S. senator Schumer: Myopic DOJ needs to drop Apple e-books suit – July 18, 2012
Apple’s U.S. e-books antitrust case set for 2013 trial – June 24, 2012
U.S. government complains, claims Apple trying to rush e-books antitrust case – June 21, 2012
Barnes & Noble blasts U.S. DOJ e-book settlement proposal – June 7, 2012
Apple: U.S. government’s e-book antitrust lawsuit ‘is fundamentally flawed as a matter of fact and law’ – May 24, 2012
Federal Judge rejects Apple and publishers’ attempt to dismiss civil case alleging e-book price-fixing – May 15, 2012
Court documents reveal Steve Jobs email pushing e-book agency model; 17 more states join class action suit – May 15, 2012
Apple vs. Amazon: Who’s really fixing eBook prices? – April 17, 2012
Apple: U.S. DOJ’s accusation of collusion against iBookstore is simply not true – April 12, 2012
Apple not likely to be a loser in legal fight over eBooks – April 12, 2012
16 U.S. states join DOJ’s eBook antitrust action against Apple, publishers – April 12, 2012
Australian gov’t considers suing Apple, five major publishers over eBook pricing – April 12, 2012
DOJ’s panties in a bunch over Apple and eBooks, but what about Amazon? – April 12, 2012
Antitrust experts: Apple likely to beat U.S. DOJ, win its eBook lawsuit – April 12, 2012
Why the market shrugged off the Apple antitrust suit – April 11, 2012
What’s wrong with the U.S. DOJ? – April 11, 2012
Macmillan CEO blasts U.S. DOJ; gov’t on verge of killing real competition for appearance of competition – April 11, 2012
U.S. DOJ hits Apple, major publishers with antitrust lawsuit, alleges collusion on eBook prices – April 11, 2012
U.S. DOJ may sue Apple over ebook price-fixing as early as today, sources say – April 11, 2012


  1. The more I read and learn about this suit by the government the more ridiculous it sounds. Am I missing something or does the DOJ perhaps have some sort of political agenda we may not know about?

  2. I Have to confess that this eBooks lawsuit, coupled with Samsung winning a (potential) ban on Apples products in what seems like no time at all considering Apples lawsuit, which they won, is stalled, together with the hauling over the coals about tax and other anti-Apple things going on (stock-price anyone?) all seems like it all might be payback for not playing nice with “Prism”? Call me a conspiricy theorist —which I’m not—but it seems to fall into place when looked at like that.

    1. I know you asked me so, Conspiracy Theorist!

      It is simply Amazon’s money spread around to key Congressmen and Senators. No conspiracy there just grateful public servants.

  3. I’m very, very interested to see the final ruling in this case. I just can’t see how the DOJ can win when Apple isn’t setting ebook prices.

    Our tax dollars at waste.

  4. “The Justice Department sued first and asked questions later.”

    Inept is a compliment, more like incapable or incompetent

    They can’t prove a conspiracy and I think they’re starting to see it, heads should roll at DOJ over bringing this baseless and frivolous lawsuit.

  5. Look at the scope of federal budget deficits, trade imbalances that favor everybody except the US, our Postal system, how the DOJ picks and chooses criminal investigations, military procurement, and now they want to take over your health care.

    The ONLY people that don’t object to that are the ones that don’t pay taxes (about half) and/or for healthcare.

  6. Oversimplify (adj): simplify (something) so much that a distorted impression of it is given.

    You fanboys cherry pick whatever suits your view.

    No, this says nothing about what happened:

    “Let’s make a go at creating and $12.99 and $14.99 eBook market”. Steve Jobs

    Apple colluded with industry to fix and inflate eBook prices.

    1. Thanks for defining what you do every day on this forum, sfgh. And thanks for doing it yet again in your most recent post.

      People can think for themselves and disagree with you without being lemmings, fanboys, etc.

  7. No sfgh, Apple made the deals just like Amazon. So if Apple colluded then so did Amazon. Has nothing to do with fanboy status. It’s all about the facts. Amazon testified they had the same kind of deals and even asked for more in some cases than Apple. There was no inflation whats so ever. Everyone who’s testified so far has proven Apple’s case that Apple has done nothing different than anyone else including Amazon. The DOJ is miss guided and is losing this case badly every single day this goes on. Even the judge who thought this was an open and shut case already commented that things are not what they seem and is rethinking this case over. Facts are facts period.

    1. No b9bot. No.

      You will not insert your delusions and twist the facts.

      I don’t give a fuck about Amazon. Do you get that? This has nothing to do with Amazon and everything to do with Apple. Because company X did something wrong and hasn’t or isn’t being persecuted for it, company y, who is doing the same thing and getting persecuted for it, shouldn’t be until company x is tried.

      In other words, why am I getting a ticket for jaywalking when so many others do it everyday and don’t get a ticket?

      Just shut the fuck up. This is about Apple and neither you nor anyone else will distract away from that by inserting other companies that you perceive to be doing wrong.

      Amazon in fact did nothing wrong or illegal. All they did was undercut their competition. THEY lost money. Amazon did nothing wrong. If they did, you lay out the evidence and show, demonstrate, how Amazon broke the law.

      Don’t worry, I’ll save you the trouble because they did nothing wrong according to the law.

      “Let’s create a $12.99 and $14.99 eBook market”. Steve Jobs.

      HarperCollins, in writing, resisted Apple/Jobs because they didn’t want to lock in their prices and have zero flexibility elsewhere.

      1. No, sfgh, you are wrong. Amazon’s pricing of e-books below market pricing when they had 90% of the market is, by definition, “doing something wrong.” I write as an educated economist. They were practicing “predatory pricing” to prevent anyone else from entering that market because most potential competitors cannot afford to meet the below cost prices Amazon was selling the e-books for, including the publishers themselves. This is classic monopolist behavior that would be deemed illegal if prosecuted. It should have and most likely would have been but for the massive lobbying activity from Bezos and company to the Democrats.

  8. I don’t think this trial is about Apple. Something tells me it is more about Amazon, sort of a back door attempt to find evidence against Amazon that can only be found in a trial. Why? Amazon is an economy-wrecking company. It centralizes money and poor-paying jobs in a few centers, denies states local sales tax revenues and is making the bookstore obsolete, just as Apple made the record store and Blockbuster obsolete. I think these charges were brought up with the hope that they will find something else, a sort of trial based on serendipity.

  9. “One of the government exhibits was an email exchange in which News Corp CEO Rupert Murdoch told Murray he wanted to ‘screw Amazon,’

    So is this bullshit trial really about dickhead Rupert Murdoch? Then prosecute dickhead Rupert Murdoch!

    Q: What does Apple have to do with anti-competitive behavior in the publishing market?
    A: Nothing at all!

    1. Derek:

      You’re a delusional fanboy idiot troll who will twist facts to suit your own pathetic support of a fucking corporation.

      That’s how pathetic you are.

  10. DOJ … What can I say?
    True, they looked first and asked questions later. How ever, I think they have another view of reality and will probably force their will on Apple.

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