Steve Jobs Implicated in Apple E-Book Scheme, Company Found Guilty of Price Fixing
The late Steve Jobs played a crucial role in the non-jury court case in which Apple was found guilty for its role in a scheme to fix the prices of e-books so that publishers could charge more for them, according to the The New York Times.
A key piece of evidence in the trial against Apple was an email Jobs wrote, which was referred to on several occasions by the prosecution. The Justice Department argued the email proves that Apple assisted publishers in forcing Amazon to adopt the computer manufacturer's business model, where publishers--not retailers--set prices for e-books.
"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," Jobs wrote in an email.
Prosecutors say as a result of Apple's model, publishers were able to raise prices on their e-books, which cost consumers hundreds of millions of dollars. Apple suggested price caps of $12.99 and $14.99.
The Justice department also said Apple included a clause in their business deal with the publishers, which allowed the maker of the iPhone to sell e-books at the same prices as the books would be sold for in other stores therefore defeating price competition.
The publishers involved in the alleged scheme, including Hachette, HarperCollins, Holtzbrinck, Simon & Schuster and Penguin, all settled out of court with the Justice Department, but Apple insisted it was not guilty of any wrong doing and choose to go to trial
United States District Judge Denise Cote, however, ruled that the company violated antitrust laws and said Apple "played a central role in facilitating and executing that conspiracy" among publishers. The judge said a trail to address the damages Apple caused would take place in the future.