DOJ: Email from Steve Jobs implies Apple wanted to create falsely inflated e-book pricing

Posted:
in General Discussion edited January 2014
An email from late Apple cofounder Steve Jobs to then CEO of News Corp. James Murdoch suggests the Cupertino company was looking to set the price of e-books sold through the iBookstore at rates higher than market leader Amazon, says the U.S. Department of Justice.

Jobs Email
Source: AllThingsD


First mentioned by the Justice Department court filings for its upcoming antitrust suit against Apple, the email was published in full today by AllThingsD, giving a glimpse at how the DOJ plans to run its case.

As seen above, the email may not be as damning as alluded to by the DOJ when it quoted the letter in a findings of facts filing.

The DOJ's excerpt from its memo:
?Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.?
Jobs wrote the note to Murdoch, whose company owns HarperCollins, hoping to get the major book publisher on board with Apple's iBookstore. However, when read as part of the longer email, the snippet seems somewhat less important to the DOJ's argument that Apple colluded to fix e-book prices above prevailing costs set by Amazon.

?Heck, Amazon is selling these books at $9.99, and who knows maybe they are right and we will fail even at $12.99. But we?re willing to try at the prices we proposed. We are not willing to try at higher prices, because we are pretty sure we?ll all fail.?

For its part, Apple denies the claims, asserting that the e-book industry has actaully thrived after the iBookstore launched in 2010.

?We helped transform the eBook market with the introduction of the iBookstore in 2010 bringing consumers an expanded selection of eBooks and delivering innovative new features," said Apple spokesman Tom Neumayr on Tuesday.

Both sides will present their respective arguments when they meet at a bench trial on June 3.
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Comments

  • Reply 1 of 88
    jungmarkjungmark Posts: 6,664member
    So not sure how Jobs forced the prices higher. He gave choices with his opinion.
  • Reply 2 of 88
    solipsismxsolipsismx Posts: 19,566member
    jungmark wrote: »
    So not sure how Jobs forced the prices higher. He gave choices with his opinion.

    The DOJ is using internet troll tactics here. There is nothing about that email that is collusion or a conspiracy. He compared to hardcovers, he stated Amazon's pricing, he opined what he thought was an ideal price point and even questioned his own opinion. If he's guilty of anything it's planting fear and making accusations of what Amazon will do in the future without qualifying it as "I believe Amazon will..." despite that being clear.
  • Reply 3 of 88
    hill60hill60 Posts: 6,989member


    So an analysis of possible prices based on physical books and Amazon pricing.


     


    Has anyone told the DoJ that an implication is not conclusive evidence, particularly as relates to hearsay where the writer of the email is not available to clarify the true meaning.


     


    Apple will be exonerated, they have done nothing wrong.


     


    image

  • Reply 4 of 88
    drblankdrblank Posts: 3,383member
    All Steve is doing is trying to figure out some options, he's just spiff balling some ideas.
  • Reply 5 of 88
    solipsismxsolipsismx Posts: 19,566member
    hill60 wrote: »
    So an analysis of possible prices based on physical books and Amazon pricing.

    Has anyone told the DoJ that an implication is not conclusive evidence, particularly as relates to hearsay where the writer of the email is not available to clarify the true meaning.

    Apple will be exonerated, they have done nothing wrong.

    I hope the DoJ doesn't find out the DoD has think tanks that try to conceive of every possible threat to the nation to prepare defensive and offensive tactics. They might send all these patriots to Guantanamo.
  • Reply 6 of 88
    srams123srams123 Posts: 12member
    Seems like DoJ is on to "nothing" here !!
  • Reply 7 of 88
    drblankdrblank Posts: 3,383member


    Message to DOJ, is that all you got?  You might as well go home look at yourself in the mirror, take your law degree plaque off the wall and burn it.  You guys are REACHING.  

  • Reply 8 of 88
    superbasssuperbass Posts: 688member
    Am I the only one surprised and disappointed that Jobs was colluding with Rupert Murdoch directly? Not just the fact that Murdoch is one of the worst humans on the planet, but just how stupid this is in the internet age? Shouldn't there have been at least a go-between or two when they're corresponding about fixing prices so the companies could have downplayed it somehow?
  • Reply 9 of 88
    tallest skiltallest skil Posts: 43,399member


    Originally Posted by Superbass View Post

    Shouldn't there have been at least a go-between or two when they're corresponding about fixing prices so the companies could have downplayed it somehow?


     


    Maybe if that had been happening, sure.

  • Reply 10 of 88
    mj1970mj1970 Posts: 9,002member

    Quote:

    Originally Posted by Superbass View Post



    Am I the only one surprised and disappointed that Jobs was colluding with Rupert Murdoch directly?


     


    Other than the DOJ I think you may be the only one that thinks this email is evidence of (illegal or deceptive or fraudulent) "collusion" at all.


     


     


     


    Quote:

    Originally Posted by Superbass View Post



    Not just the fact that Murdoch is one of the worst humans on the planet, but just how stupid this is in the internet age? Shouldn't there have been at least a go-between or two when they're corresponding about fixing prices so the companies could have downplayed it somehow?


     


     


    Seriously? There's no price-fixing going on here. There's a business deal being discussed about how to compete and present and sell a product in the market. You're imagining things. That said, there may be a place for you in the USDoJ.


     


    image

  • Reply 11 of 88
    hill60hill60 Posts: 6,989member

    Quote:

    Originally Posted by Superbass View Post



    Am I the only one surprised and disappointed that Jobs was colluding with Rupert Murdoch directly? Not just the fact that Murdoch is one of the worst humans on the planet, but just how stupid this is in the internet age? Shouldn't there have been at least a go-between or two when they're corresponding about fixing prices so the companies could have downplayed it somehow?


     


    Colluding, really?


     


    Is there any evidence at all in support of your claim?


     


    Are you aware of the role the presumption of innocence plays in US law?

  • Reply 12 of 88
    hill60hill60 Posts: 6,989member

    Quote:

    Originally Posted by drblank View Post


    Message to DOJ, is that all you got?  You might as well go home look at yourself in the mirror, take your law degree plaque off the wall and burn it.  You guys are REACHING.  



     


    It seems that wall degree plaque was purchased off the Internet for $9.99 along with the degree, going by the complete lack of understanding of the law that the perpetrators of this farcical nonsense portray.

  • Reply 13 of 88
    rob53rob53 Posts: 2,007member

    Quote:

    Originally Posted by hill60 View Post


     


    ....


     


    Are you aware of the role the presumption of innocence plays in US law?



    Presumption of innocence went away with McCarthy. Now you have to prove your innocence and even when you do, the court of public opinion has already convicted you. There is no justice in the US anymore and the DOJ is leading the way with baseless accusations. 

  • Reply 14 of 88
    drblankdrblank Posts: 3,383member
    Here's what this is all about.

    We're the DoJ and since Apple has more cash than the Federal Reserve and we have this huge deficit, what we're doing is taking some silly email creating something illegal when there isn't, and see if we can shake down for some cash to help lower the deficit, especially since the author of the email isn't around to explain their position. Real great DoJ.

  • Reply 15 of 88


     There is no conspiracy here, at least one that Apple had cajoled. Lets review the short history of ebooks. So this new marked comes along that never existed in the past. The new market begins with Amazon selling ebooks at $9.99. Amazon is all about market share, so they are willing to take a low profit to begin. Amazon's high PE is present due to the presumption that Amazon will make a profit in the future. So per Steve's letter, Amazon initiated ebooks sales at less then a 30% royalty that Apple is accustomed to.  So along comes Apple, with the new fangled iOS operating system on stylish readers called iPhones and iPads. Steve the CEO states to publishers, come with me, I will take my customary 30% cut, but you keep an equivalent royalty as our customers are willing to pay a premium to our reading experience. Or you can skip us and stay with Amazon, but expect them to raise their royalty with time, as per the sky high PE, Amazon will one day want to make a profit. A third option is to skip this new fangled ebook market. So the DOJ is saying Apple set the rate at which Amazon must sell other companies products. All Apple did was say we can sell through our store at a premium as our platform is awesome. I suspect that Apple did not tell Amazon to raise their prices. Do the math, 70% royalty off $12.99 is $9.01. Amazon likely began selling ebooks with a 10% royalty, and with $8.99 quite close to $9.01. Now we know where Apple came up with the 12.99 recommendation. Steve, being Steve, tried to push it to 14.99 as he was running a profit oriented business. 

  • Reply 16 of 88
    virtuavirtua Posts: 207member
    Reading it over it looks like a response to HC whose position may have proposed higher prices still - job's response was to highlight the lower amazon price and proposed a middle ground. As he's also saying higher wont work alluding to HC's stance at the time which makes sense of the email.
  • Reply 17 of 88
    enzosenzos Posts: 344member
    The full letter confirms Jobs and Apple as fair and honest traders. End of story.
  • Reply 18 of 88
    spacepowerspacepower Posts: 208member
    Another crappy AI post with little to no insight

    Another copy and past from mainstream media.

    If someone read the whole email, Jobs was suggesting price caps, not inflated prices..

    Will the DOJ win this, who knows. The government bent over for the banks so they probably want a win.

    I would hope the the gov won't waste tax payers money if they can't win, but lawyers always want to make a name for themselves so they can be Attorney Generals or Supreme Court Justices.

    Why aren't they investigating Amazon? Selling bellow cost is dumping, an antitrust violation.
  • Reply 19 of 88
    solipsismxsolipsismx Posts: 19,566member
    enzos wrote: »
    The full letter confirms Jobs and Apple as fair and honest traders. End of story.

    The DoJ will only submit...

    James,

    Our proposal does set [...] higher prices because we are all pretty [...]

    Regards,
    Steve
  • Reply 20 of 88
    pbrstreetgpbrstreetg Posts: 184member


    So Apple wants to sell eBooks at a higher price than Amazon...soo where is the story here DOJ?

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