Apple senior vice president Eddy Cue pop the question only poor answer in testimony Thursday in Union court when questioned by U.S. Justice Department prosecutors trying to solidify their causa that Apple , along with five of the large book publishers , worked together to illegally set the prices of electronic book for the grocery store .
Apple carbon monoxide - founder Steve Jobs , who was instrumental in the negotiation , hurtle an even larger shadow across the proceeding . Cue , who is elderly vice Chief Executive of net software system and services , led the effort in late 2009 through 2010 to get publishing company to eject their titles on Apple ’s iBookstore reader for the soon - to - be - establish iPad , and consulted frequently with Jobs .
Eddy Cue
“ Steve and I worked very close on this , ” Cue said .
demand who had decision - ready authority regarding ebooks pricing , Cue replied that Jobs , who die in October 2011 , was the ultimate arbiter for all decision made at Apple during that sentence .
The Department of Justice charge that Apple colluded with the script publishers , including Harper Collins , the Penguin Group and Simon & Schuster , to arrange up a new pricing theoretical account , in violation of the Sherman Antitrust Act . The agency has offered a with child collection of email and phone records that powerfully suggest that release fellowship CEOs , Jobs and Cue worked together to forge out an agreement . DOJ prosecutor spent the morning Thursday asking Cue to enlarge on his emails with publishing CEOs and Jobs .
fit in to the Justice Department , book publisher were worried in 2009 that Amazon , then the largest retailer of electronic books , was lowering the perceive sweeping time value of the books , due to its scheme of discount books for $ 9.99 .
Apple , eager to get into the ebook job with the iPad , used the “ Amazon menace ” as a vocation card for the publishing house , according to the DOJ . The companionship presented the idea of moving the book industriousness from a wholesale manikin , where retailers buy books at the sweeping rate and then burden whatever terms they need , to an bureau model . Under that model , the publisher sets the price and the seller , in this type Apple , gets a fixed percentage . Apple pioneer the agency model in the electronic land with its app store .
With the agency model , Apple could tender the publishers the ability to set up the prices at whatever level they liked , such as $ 12.99 , $ 14.99 or $ 16.99 . Crucial to this deal , originally , was the precondition that all the publishers would flip over to the agency model , and that they would switch all the retail merchant , include Amazon , to this model of book buying .
Cue , who often work in between the CEOs and Jobs himself , is the primal witness in thetrial at the U.S. Southern District Court of New York , with District Judge Denise Cote presiding . Cue confirmed the e-mail and other documentation that the DOJ had assembled to show this chain of events , but seldom flesh out in his answers to DOJ question , even when he disagreed with the prosecutors ’ assertions .
When the prosecutors asked Cue if , for instance , the publishing firm CEO were talking among themselves about Apple ’s proposed move to the agency role model , Cue denied love anything about their discussions , or even admitting that he suspected that they were lecture among themselves . The DOJ point to phonograph recording of more than 100 phone telephone call the publisher CEOs had made among themselves in one month after Apple purport the agency good example . “ No one [ at Apple ] had noesis that newspaper publisher meeting were happen , ” he said .
Cue was careful to repoint out that while Apple was call that it could sell books at the publishing house ’ preferred rate , it made no promise as to whether these preferred rates would be take by other retail merchant . At one point . , Apple offered to move away from the representation modelling , should the newspaper publisher offer it “ Most preferred land ” ( MFN ) pricing , in which the publisher ensure that Apple could sell their ebooks , with the 30 per centum markup , at the humble price offered by any retailer . The publishers balked at this proposal , however .
The DOJ also point to an e-mail that one bookman sent to job asking why Apple was heighten the damage of ebooks , which the student summarize as greedy . Job responded in an electronic mail to the scholar that it was the publishers , not Apple , who were raise the prices . The DOJ asserted that Apple was only interested in ensuring that it would get a 30 percentage cut of the sale , which was in air with what Apple gets with its sales of other content , such as music and television show .
Cue also downplayed any assertions that Apple was set about to replicate what Amazon was doing with its Kindle - based ebook marketing . The DOJ guide to one electronic mail exchange between Cue and Jobs , in which Jobs asked if Amazon is selling ego - bring out book , and Cue replied that it was , so Jobs then decide to view the idea for Apple , and by and by include ego - publishers . But when the prosecuting officer then asserted , from this exchange , that Jobs was found his decision on what Amazon was doing , Cue responded that the idea was “ incorrect , ” without elaborating .
Cue will take the viewpoint again later Thursday and is anticipate to be more extroverted with details when question by Apple ’s chief direction , Orin Snyder .
