Apple has tried to paint a picture of itself as a consumer champion, which injected choice and competition into a virtual monopoly. Photo: Getty Images
9:35PM BST 04 Jun 2013
On the
second day of a trial which pits the technology giant against the US
Department of Justice (DoJ), Apple said it was “indifferent” to what model
of pricing rivals such as Amazon used.
The DoJ has accused Apple of “knowingly and intentionally” corralling five
publishers to raise the price of ebooks from the $9.99 (£6.52) Amazon had
established as standard, and to force Amazon to follow suit by withholding
key titles if it refused to comply.
Its case centres on the “agency model” of pricing, whereby Apple allowed
publishers to dictate the price of ebooks, as long as it could take 30pc of
the sales. The iPhone and iPad maker’s contracts with publishers stipulated
that no other retailer would be allowed to undercut it.
On Tuesday, Kevin Saul, a lawyer who has worked for Apple for 17 years and was
instrumental in drafting the agreement, said Apple did not care how
publishers ensured that happened. “It was all about Apple and our ability to
launch a bookstore that was the greatest bookstore on the planet,” he said.
“We needed to compete with the lowest retail price out there.”
Apple’s contracts with publishers did not instruct them to sign rival
retailers up to the agency model, but executives suggested they should force
Amazon’s hand by holding back highly anticipated titles.
The Department of Justice claims that Apple colluded with publishers – Harper
Collins, Simon & Schuster, Macmillan, Penguin and Hachette – to raise
the price of ebooks so that it could release the stranglehold that Amazon
had established on the market.
Apple has tried to paint a picture of itself as a consumer champion, which
injected choice and competition into a virtual monopoly. However, it will
spend the next three weeks battling against a mountain of evidence which
suggests that the six companies were acting in concert.
All five publishers settled the case before it went to trial, leaving Apple to
fight it out with the DoJ alone, at a federal court in Manhattan. The case
continues.
Separately on Tuesday, Samsung won a round in its long-running patent battle
with Apple on Tuesday when a US trade panel banned the import and sale of
some older models of the iPhone and iPad.
The quasi-judicial International Trade Commission said it issued a "limited
exclusion order" for certain devices made by Apple, in a victory for the
South Korean company after a huge loss in a court battle with its US rival
last year.
But the victory could be largely symbolic because the ban covers devices that
are no longer actively sold in the US market - the AT&T iPhone 4 and iPhone
3 and 3GS, as well as the iPad 3G and iPad 2 3G, also sold by AT&T.