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.

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Apple accuses DOJ of unfairly twisting Steve Jobs’ words in e-book case – June 4, 2013
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U.S. DOJ takes Apple to trial alleging e-book price-fixing – June 2, 2013
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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
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21 Comments

  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.

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