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Email reveals e-book talk between Steve Jobs, James Murdoch

updated 10:08 pm EDT, Wed May 15, 2013

Indicates Apple was pushing for prices higher than Amazon

US Department of Justice filings in the e-book price-fixing case against Apple reveal an exchange between former Apple CEO Steve Jobs and News Corporation/HarperCollins' James Murdoch, notes AllThingsD. In the course of a Jobs-penned email, which dates back to January 2010, the CEO explains why Apple is proposing to tie e-book prices to hardcover ones. "We simply don't think the e-book market can be successful with pricing higher than $12.99 or $14.99," Jobs writes.

"Heck, Amazon is selling these books at $9.99, and who knows maybe they are right and we will fail even at $12.99," he continues. "But we're willing to try at the prices we proposed. We are not willing to try at higher prices, because we are pretty sure we'll all fail."

Jobs claims that HarperCollins has three choices: to see if Apple and the publishers "can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99;" to keep going with Amazon's standard $9.99 price, risking low profits; or lastly, to boycott Amazon. He dismisses the status quo as ultimately non-viable, and suggests that an Amazon boycott would just spur piracy.

The Department of Justice is using the email as part of its evidence that Apple colluded with publishers to artificially inflate e-book prices, particularly with the aim of defeating Amazon's $9.99 model. The launch of Apple's iBookstore saw several major publishers suddenly shift to an "agency" model, effectively killing Amazon's previous pricing structure. The case is scheduled to go to trial June 3.



By Electronista Staff
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Comments

  1. macvette

    Fresh-Faced Recruit

    Joined: 02-20-04

    Hmmmm... aren't retailers able to set whatever price they think the market will bear? If I want to sell t-shirts for $100 even though Target and Wal-mart sell the same t-shirts for $10, is that illegal? Price fixing and collusion are when my (pretend) company, Target and Wal-mart all decide to set the price of the t-shirts at $100 with a "secret handshake" agreement. That's not what happened with the e-books. Everyone was still able to shop at Amazon, Barnes & Noble, etc. if they wanted to (or not buy e-books at all). I would think the book suppliers could make deals with whomever they wanted. If Apple provided a more profitable method for selling books, then that's whom they should partner with. Maybe someone with more legal experience can explain this more accurately. I honestly don't see what the problem is.

  1. nycnikato

    Fresh-Faced Recruit

    Joined: 08-19-06

    It is ridiculous to tell a retailer that they cannot set a price that is both as low as possible and also profitable.

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