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Apple e-mails are at the center of the DOJ e-book price-fixing trial

The Justice Department’s e-book price fixing trial – alleging that Apple conspired to raise e-book prices – is scheduled to end this week.

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Louis Lanzano/AP
Apple's senior vice-president of Internet Software and Services, Eddy Cue, leaves the e-book price-fixing trial.
  • By Husna Haq

The late Steve Jobs and a series of mysterious emails dominated day nine of the Justice Department’s e-book price fixing trial, which wraps this week.

The federal government is alleging that Apple was a ringmaster conspiring with five top publishers to raise e-book prices in an effort to unseat Amazon’s dominance in the e-books market. The publishers have all settled their cases, leaving Apple as the sole defendant in the trial.

The DOJ and Apple sparred about the Apple founder’s intent in several emails the government cited as evidence of the company’s alleged role in raising Amazon’s prices.

In one such email, dated Jan. 30, 2010, Jobs wrote to Eddy Cue, Apple’s senior vice president of Internet software and sales, “Wow, we have really lit the fuse on a powder keg.”

The DOJ argued that the email was a congratulatory note to Cue on how Apple’s entry into e-books shook up the market, particularly Amazon, pressuring it to switch from the wholesale pricing model to agency pricing, where publishers set the price on e-books.

Apple’s Cue said that was not Jobs’s intent and that the Apple founder was simply “remarking on the company’s ability to ‘cause ripples’ in the e-book industry, which was then largely dominated by Amazon,” as the New York Times reported. 

Another episode of email sparring had the DOJ present the following email, sent by Jobs to Cue on Jan. 14 2010, as evidence of Apple’s leading role in fixing prices: “I can live with this as long as they move Amazon to the agent model too for new releases for the first year. If they don't, I'm not sure we can be competitive...”

Apple said the email was simply a draft that was never sent, CNET reported. They cited another version of the email that they claimed was sent. It read: “I can live with this as long as they also agree to the other things you told me you can get: The retail price they will set for any book will be the LOWER of the applicable 'iTunes' price below OR the lowest wholesale price they offer the book at to anyone else, with our wholesale price being 70% of such price.” 

For its part, the DOJ has tried to make the late Apple founder the star of its case, including not only emails but comments Jobs made to the press and to his biographer, Walter Isaacson, as evidence of his conspiracy to fix e-book prices.

Apple’s defense has argued that the comments are taken out of context, misinterpreted, and misrepresented. 

The trial is expected to finish this week, with closing arguments scheduled for Thursday. US District Judge Denise Cote is expected to take roughly three weeks to issue her decision, according to Fortune.

Husna Haq is a Monitor correspondent.

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