1. Michael Essany's Avatar

    Interesting revelations about Apple's past are coming to light amidst the ongoing DOJ ebooks trial.

    On Thursday, Apple's Eddy Cue testified in federal court as one of the executives at the center of the high-profile antitrust lawsuit.

    "I didn't raise prices," Cue said today, adding that he wasn't surprised when publishers hiked prices for new and best-selling titles after Apple's entry into the ebooks arena in 2010.

    Apple, at this time, remains the sole defendant in the lawsuit. The other involved publishers have reached settlements with the U.S. government. Apple is fighting the charges, asserting no wrongdoing was committed.

    Cue, however, did admit to feeling "tremendous" pressure to reach a deal with publishers after the late Steve Jobs finally signed off on an iBookstore to follow the first-gen iPad launch in 2010.

    Jobs, who died in 2011, was "near the end of his life" as the January 2010 unveiling of the iPad neared, Cue said. Not getting a deal done would have meant debuting the iPad without the bookstore, he said later. "I wanted to get it done in time for that as I wanted to get it done for him," Cue said.
    According to Cue, Jobs was never crazy for the idea behind the iBookstore. At first, he didn't want the iPad to be used as an ereader. That's why Apple initially planned to adopt a wholesale model like Amazon before ultimately settling on an agency model for ebooks (that's where publishers set the price and Apple takes a 30% commission).

    Publishers subsequently pushed Amazon to similarly adopt the agency model, a shift the government contends Apple encouraged through a contract clause that would allow it to reduce prices on its bookstore if other retailers sold e-books cheaper.
    As a result of this emergent dynamic in digital publishing, the government argues, prices for new and best-selling books increased markedly. According to Reuters, however, Cue said Apple "was not tying to shift its rival off of its wholesale approach, and that the price parity clause was intended only to ensure his company could effectively compete with other retailers."

    Source: Reuters
    2013-06-14 06:34 AM
  2. cmwade77's Avatar
    My issue is with the most favored nations clause. Telling publishers that they can't sell for less elsewhere is wrong.
    2013-06-14 07:23 AM
  3. Zon's Avatar
    Doesn't Costco lock wholesalers into the best price over competitors? And also QVC?
    2013-06-14 08:04 AM
  4. stolenpentium's Avatar
    Doesn't Costco lock wholesalers into the best price over competitors? And also QVC?
    You are correct.
    2013-06-14 08:12 AM