Wednesday, June 12, 2013, 03:53 pm PT (06:53 pm ET)
US DOJ points to Steve Jobs email as 'smoking gun' in e-book trial [Update: email was draft]An email from late Apple cofounder Steve Jobs is being used by the U.S. Department of Justice to suggest the company was leaning on book publishers to push Amazon to the agency model, a main contention of the government in its e-book antitrust suit.
In what is being called a "smoking gun," the Justice Department on Wednesday presented the email in an attempt to prove Apple was complicit in colluding with major book publishers to fix the price of e-books sold through the iBookstore, reports Fortune.
"I can live with this, as long as they move Amazon to the agent model too for new releases for the first year," Jobs wrote. "If they don't, I'm not sure we can be competetive "
The note was a response to SVP of Internet Software and Services Eddy Cue regarding a request from publishers that sales prices be raised in the then fluid contract negotiations.
Up to this point, Apple has contended it was indifferent to the publishers' deals with Amazon, which at the time were based on the wholesale model. Under that strategy, content owners sell properties to retailers, which can then price the e-books at or below cost to drive sales.
Counter to wholesale was Apple's agency model. Using a most favored nations clause, agency put control back into the hands of publishers by allowing them to set prices on e-books as long as they didn't sell the same content elsewhere for less.
Over the course of last week's proceedings, U.S. District Court Judge Denise Cote heard testimony from book publishing executives that seemingly lined up with Apple's assertions of non-collusion. Even one of the DOJ's witnesses, Google Thomas Turvey, faltered on the stand as he failed to name a single publishing executive who supposedly told him Apple required conformity with the agency model in its contracts. The allegations were part of Turvey's he written testimony.
The Jobs email was inserted into the Just Department's case in the final hour of testimony on Wednesday, when Apple's iBookstore head Keith Moerer was on the stand. DOJ lawyer Dan McCuaig asked Moerer if the letter reflected "indifference" to publishers' Amazon dealings, to which the Apple executive said, "No."
As a curious follow-up, Apple's lead counsel Orin Snyder asked Moerer if he was aware that the email was never sent. The DOJ snapped to object, and Snyder's question was stricken from the record. It seems that there is much more to the email than was presented by the government.
More information regarding the email will likely come to light on Thursday, when Eddy Cue is scheduled to testify.
Update: According to AllThingsD, the email from Jobs submitted into evidence today was a draft of a message which was never sent. In the actual correspondence, a copy of which Apple filed following Wednesday's proceedings, there was no mention of a plan to push Amazon to agency and Jobs actually recognized that wholesale pricing may continue.
Also in the final version of the email sent to Eddy Cue, Jobs expresses concern that Apple may get the short end of the stick when it came to content costs, which was one of the main reasons MFN was applied in its contracts with book publishers.
It is unclear how the DOJ will deal with the new document, though it is likely that it will argue the draft showed Jobs' intent despite it not ever being sent. Whether that's enough to sway Judge Cote has yet to be seen, though the government's assertions today may carry less weight in light of the new evidence.
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