APPLE EXECUTIVE Eddy Cue faced a long day of questioning defending the firm against allegations of antitrust behaviour over its iBookstore, admitting that publishers wanted to raise book prices.
Apple's negotiations with publishers ahead of its iBookstore launch have become the focus of a US Department of Justice (DoJ) antitrust investigation. Cue was the Apple executive that led discussions with publishing houses and he took to the stand yesterday, saying that the publishers wanted to raise prices.
Those publishers, including Pengiun, Harper Collins, Simon and Schuster, Hachette and Macmillian previously had to put up with Amazon's market power that led to most books being priced at $9.99 at launch. The publishing houses then signed with Apple, with prices rising to between $12 and $14.
According to Cue, he had no idea that the book publishers were talking to each other while they were also talking with Apple. He said, "I don't believe they were working together to do the deal I was working on," even though extensive records show the publishing executives were working together.
Instead Cue painted a picture of a negotiator who wanted to seal a deal for an ailing Steve Jobs, then CEO of Apple. Cue said, "He was near the end. [...] This had tremendous meaning for me."
Cue did however say that Jobs might well have been aware that by offering higher prices on the iBookstore, publishers would choose to avoid Amazon and sell though Apple's marketing outlet.
Some of the book publishers have already settled with the DoJ, so their statements that they were talking with each other during negotiations with Apple are not surprising. However, Apple is trying to defend itself, perhaps to save face. µ