Ebooks Price-fixing War, Apple’s Eddy Cue “I’d do it again”


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iBooks chief fighting US court ruling that the company ‘conspired’ to fix prices in its competition with Amazon is defiant before trial. Tim Cook ‘feels the same’

Apple goes before a US federal appeal court in two weeks to try to overturn a US Justice Department ruling on ebooks price-fixing. But speaking to Fortune this week, the company’s chief iBooks negotiator, Eddy Cue, defended raising prices – and said Apple would do it all over again.

“Is it a fact that certain book prices went up? Yes. If you want to convict us on that, then we’re guilty,” said Cue, Apple’s senior vice president of internet software and services.

“I knew some prices were going to go up, but hell, the whole world knew it, because that’s what the publishers were saying: ‘We want to get retailers to raise prices, and if we’re not able to, we’re not going to make the books available digitally.’ You have to fight for your principles no matter what. Because it’s just not right.”

In July 2013, Apple was deemed by judge Denis Cote to have “facilitated and executed a conspiracy” with publishing houses including Hachette, Harper Collins, MacMillan, Penguin, and Simon & Schuster in order to compete with Amazon in the ebooks market.

Publishers settled the case for $69m. Apple also agreed a conditional settlement: if Apple loses its appeal on 15 December, it will pay $450m, but if the company wins, it will pay nothing.

Before the introduction of the iPad in 2010, Amazon had a virtual monopoly on ebooks, controlling around 90% of the market. The company had a fixed opening price-point of $9.99 on titles, sold for its Kindle e-reader, which was threatening the physical paper book market.

After Apple introduced its iBookstore with the iPad on 3 April 2010, however, prices of new release ebooks spiked overnight by 17%.

Cue’s comments appear to suggest that Apple’s stance is more about its reputation than money. He also said that he had Tim Cook’s, full support in the matter, saying the Apple CEO felt “exactly like I do”.

Apple’s biggest rival in the ebooks space is Amazon.com, who were accused by book publishers of sabotaging traditional bookstores by selling ebooks at $9.99. Apple’s move reinvigorated the books market.

Cue, who was instrumental in the launching of iTunes, Siri and more recentlyApple Pay, said: “If I had it to do all over again, I’d do it again. I’d just take better notes.”

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