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Court documents reveal Steve Jobs email pushing e-book 'agency model'


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New details that were previously redacted from a class action suit claiming Apple and two publishing houses colluded to falsely inflate e-book prices revealed that Steve Jobs personally persuaded one of the publishers to ink a commitment to the company's "agency model."

An amended complaint to the class action lawsuit that accuses Apple, MacMillan and Penguin of e-book price-setting was released on Friday and saw the plaintiffs grow by 17 states as New York and the District of Columbia joined the fray, reports Paid Content.

First filed in April on the same day as a Department of Justice antitrust suit regarding the same matter, the states' case has revealed previously sealed statements and evidence including an email from Jobs to an executive at an unnamed publisher's parent company.

In the recently amended complaint, the states claim that Apple Senior Vice President of Internet Software and Services Eddy Cue, who was acting as Apple's liaison with the publishers, “could not secure one of the Conspiring Publisher’s commitment directly from an executive."

At issue was Apple's agency model which allows publishers to set prices under a "most favored nations" clause that contractually keeps them from selling the same content to other resellers at a lower price. This went against the the then-dominant wholesale model used by Amazon which let resellers set their own prices, sometimes at a loss, in order to drum up sales.

Not all of the five major book companies were on board with Apple's pricing plan, and Jobs apparently stepped in with a personal email in late January.

From Jobs' email:

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?

The publisher reversed its decision and signed on with Apple three days later.

Thus far, the class action suit has seen moderate progress and the DoJ has separately settled with Hachette, Simon & Schuster and HarperCollins. Internationally, an identical suit was filed in Canada and the issue is being examined by the European Commission.