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iBooks Pricing Lawsuit Looking Bad For Apple, Turns Out Steve Jobs Was Directly Involved In Price Negotiations

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Apple has recently been hit with a major lawsuit across U.S and Canada for allegedly colluding with book publishers in order to raise prices for e-books. Even though Apple has already responded by stating that none of these allegations are true, some very interesting details regarding the case have just been brought forward by Paid Content‘s reporter Laura Hazard, the most important of which is a Steve Jobs e-mail. As noted by Fortune, Steve’s email basically “hands the attorneys general their price-fixing case”, which he wrote to a book publisher’s executive, revealing his direct involvement in the pricing negotiations.

According to the source:

In a note to a publishing executive nervous about sticking it to Amazon, Jobs wrote:

As I see it, [Conspiring Publisher] has the following choices:

1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.

2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.

3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started, there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.

Maybe I’m missing something, but I don’t see any other alternatives. Do you?

Interestingly, Steve telegraphed all this in a brief on-camera exchange with the Wall Street Journal‘s Walt Mossberg at the launch of the original iPad in January 2010 which can be seen in this video (from AllThingsD). The Steve Jobs part starts at the 1:40 mark in which he’s asked why customers would pay $14.99 for an iBook when they could get the same title from Amazon for $9.99.

The prices will be the same,” Jobs assures him. “The publishers are actually going to withhold their books from Amazon.”

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  • Okina

    So let’s wait for the smoke to blow away from this gun.

    You certainly would like to ask SJ about this email, but obviously that’s not possible.

    I wonder if Apple still feels like rolling the dice on this?

  • Adsf

    I miss seeing Steve… 🙁

  • ibooks are consistently higher then amazon, or directly from the publisher. Books going  for 5 or 6 dollars everywhere else will be 11 or 12 on iBooks. Most people don’t realize you can get your books from other sources and read them on iBooks if you want, and it was this portion of the public that was taken advantage of. While i read constantly on my phone I never buy iBooks, if they were more competitive then I would. So while I don’t think its price fixing, because the same books were offered by others at lower prices, they were higher.

  • Kosmo

    This is not a contract of anything like that. This is clearly a sales pitch, which compares the Amazon’s model with Apple’s model (70% of $12.99-$14.99 is $9.09-$10.49, i.e. roughly the same as Amazon’s $9.99).

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