DOJ Points to Draft Email as Proof of Apple Ebook Price Fixing

The U.S. Department of Justice showed an email from Steve Jobs as evidence that Apple pushed publishers into forcing Amazon to move to an agency pricing model as part of its plan to artificially raise book prices. The message in question, however, was a draft that turned out to be very different from the final version he sent to Senior Vice President of Software and Services Eddy Cue.

DOJ: Email shows intent to control ebook prices. Apple: Nope.DOJ: Email shows intent to control ebook prices. Apple: Nope.

In reference to the move to an agency model where publishers set book prices instead of retailers, the draft version of the email from Mr. Jobs stated, "I can live with this as long as they move Amazon to the agent model too for new releases for the first year. If not, I'm not sure we can be competitive."

That line, according to the DOJ, backs up its argument that Apple was actively working to help manipulate the ebook price market with publishers, according to AllThingsD. The problem with that argument is that the message was never sent, and Apple went so far as to submit evidence showing as much.

The email that Mr. Jobs actually sent to Mr. Cue told a different story:

I can live with this as long as they also agree to the other thing you told me you can get: The retail price they will set for any book will be the LOWER of the applicable 'iTunes' price below OR the lowest wholesale price they offer the book at to anyone else, with our wholesale price being 70% of such price. For example, normally our retail price for a $26 book will be $12.99 and we will pay 70% of that, or $9.10. However, if they offer the same book to Amazon for a wholesale price of, say $12.50, then our retail price for the same book shall be set at $12.50 and we will pay 70% of that price for the book.

Apple, along with Penguin, MacMillan Simon & Schuster, HarperCollins, and Hachette Book Group were all accused of working together to push ebook prices higher by forcing retailers into using what's called an agency pricing model where publishers set book prices instead of stores. All of the publishers eventually settled out of court instead of taking their chances at trial, while Apple has held strong that it did nothing wrong and is the only company from the original case that's fighting the DOJ in court.

The DOJ had hoped to bolster its case against Apple with the apparently damning email, and could still say it shows the company's intent even though it wasn't ever sent. With the actual message in evidence now, too, the agency may have a more difficult time using it to help make their case, especially since Penguin CEO David Shanks backed up Apple's claims when he testified last week.

Mr. Cue is scheduled to take the stand on Thursday where the DOJ will likely focus on establishing him as the point man for Apple's grand plan to control ebook prices. Apple will continue to assert that it wasn't interested in the types of deals publishers had with other retailers and instead only wanted to ensure that it was able to offer competitive prices through its iBookstore.