A top publishing executive Wednesday acknowledged Apple's role in reshaping the pricing model for electronic books, as the government sought to prove its case in a price-fixing trial.
AFP - A top publishing executive Wednesday acknowledged Apple's role in reshaping the pricing model for electronic books, as the government sought to prove its case in a price-fixing trial.
Carolyn Reidy, chief executive of Simon & Schuster, admitted her company's involvement in a series of meetings, phone conversations and email exchanges ahead of the introduction of the iPad and a new price scheme for ebooks.
Reidy only grudgingly acknowledged these events in a tense series of exchanges with US Justice Department lawyer Lawrence Buterman in New York federal court, on the third day of the antitrust trial against Apple.
She testified that she met with Apple executive Eddy Cue and that she was aware that other major publishers were in talks with the California tech giant in an effort to end the pricing model imposed by Amazon, which was the leading ebook retailers.
"You left the meeting understanding Apple didn't want (Amazon's price of) $9.95 to continue?" Buterman asked.
"Clearly," Reidy responded.
Reidy had submitted written testimony supporting Apple's defense, and the government called her to corroborate facts in the alleged conspiracy.
During her testimony, the government introduced an email from Reidy to Cue, in which she said she "looked forward" to his progress in "herding us cats."
Reidy appeared reluctant to offer details on the alleged conspiracy, but her testimony could allow the government to slowly build its case in the three-week trial which could deal a blow to the reputation of one of America's leading companies.
Simon & Schuster was among five publishers named in an indictment last year, but the first all settled the charges, leaving Apple alone in the price-fixing conspiracy trial.
The case centers on an intense month and a half of negotiations between Apple and the six largest US publishers ahead of Apple's January 2010 launch of its iPad and the announcement of its e-bookstore.
Prior to then, the publishers sold books to Amazon and other online booksellers through a "retail" model in which the retailer set the price.
After Apple's entry, the industry shifted to an "agency" model, where the publisher sets the price and the online bookseller receives a 30 percent commission.
The government contends that this shift, orchestrated by Apple and imposed on Amazon and other booksellers, ended the days of Amazon's $9.99 online bestsellers and cost consumers hundreds of millions of dollars.
Apple has argued that its interests were in conflict with those of the publishers and that the negotiations were contentious.
Apple insists its updates to the publishers on the overall status of the negotiations were not evidence of collusion, but a pressure tactic to get other publishers to join.
David Shanks, chief executive of Penguin USA, testified on Tuesday that Apple was the "facilitator" of the plan to impose the new pricing scheme for ebooks.