New details reveal Steve Jobs involved in e-book lawsuit

Previously redacted content in lawsuit against Apple shows that Steve Jobs told a publishing exec to join Apple in creating "a real mainstream e-books market at $12.99 and $14.99."

Dara Kerr Former senior reporter
Dara Kerr was a senior reporter for CNET covering the on-demand economy and tech culture. She grew up in Colorado, went to school in New York City and can never remember how to pronounce gif.
Dara Kerr
3 min read

New details have surfaced in the class-action e-book price-fixing lawsuit against Apple, according to tech news site paidContent. The most notable revelation is an e-mail from Steve Jobs to one of the bookseller's executives that was previously redacted and is now public.

The gist of the case, which was filed in April and now has 29 states, Washington D.C., and Puerto Rico involved, is an allegation that Apple and a group of book publishers illegally fixed e-book prices to "boost profits and force e-book rival Amazon to abandon its pro-consumer discount pricing."

The Department of Justice also filed a near-identical suit against the company and the same booksellers in April. The main difference in the two cases is that the states are seeking monetary restitution for consumers in the class-action lawsuit, according to paidContent. Hachette, Simon & Schuster, and HarperCollins -- three of the five booksellers targeted in this case -- have settled. Now the suit is just against Apple, Macmillan, and Penguin.

PaidContent got a copy of the amended complaint, which was released Friday, and published many previously redacted e-mails from high-level management at the booksellers and Apple. The news site writes that Apple co-founder and then CEO Jobs got directly involved in the e-book pricing negotiations in January 2010 and tried to convince one of the "Conspiring Publisher's" executives to commit to Apple's alleged deal.

This is what Jobs wrote in the e-mail:

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 e-books 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 percent of $9.99. They have shareholders too.

3. Hold back your books from Amazon. Without a way for customers to buy your e-books, 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 lawsuit alleges Apple and the book publishers employed an "agency model" in which publishers set their own e-book prices, rather than the traditional wholesale model in which publishers set a retail price and retailers set their own sales price.

Another e-mail revealed on Friday from the previously redacted sections of the complaint points to the allegation that the five booksellers "worked together to force" Random House to drop the traditional wholesale model and adopt fixed e-book pricing, according to paidContent.

Penguin CEO David Shanks sent this e-mail to Barnes & Noble's then-CEO Steve Riggio on March 4, 2010:

Random House has chosen to stay on their current model and will allow retailers to sell at whatever price they wish...I would hope that [Barnes & Noble] would be equally brutal to Publishers who have thrown in with your competition with obvious disdain for your welfare...I hope you make Random House hurt like Amazon is doing to people who are looking out for the overall welfare of the publishing industry.

CNET contacted Apple and Penguin for comment. We'll update the story when we get more information.