Quill and Quire


« Back to

Email reveals Steve Jobs’ involvement in agency pricing negotiations

Seventeen more U.S. states, including New York, have joined the class action lawsuit against Apple, Macmillan, and Penguin, accused of allegedly colluding to raise the price of ebooks. Unlike the U.S. Department of Justice’s investigation, the 31 states involved are seeking monetary compensation for consumers, who, according to the amended complaint, “paid over $100 million in overcharges.”

New information, previously redacted from the DoJ lawsuit, has also been revealed about Steve Jobs’ role in the negotiations with the five big publishers involved (Hachette, HarperCollins, and Simon & Schuster have already settled).

According to Paid Content, Jobs wrote to an unnamed publishing executive:

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 per cent 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 complaint also suggests that Apple and the five publishers worked together to force Random House to adopt the agency model (which it did a year later). According to the complaint, Penguin CEO David Shanks sent an email to former Barnes & Noble CEO Steve Riggio asking the retailer to stop any promotion or advertising of Random House titles and to “make Random House hurt like Amazon is doing to people who are looking out for the overall welfare of the publishing industry.
Although, as Paid Content writer Laura Hazard Owen astutely points out, this doesn’t prove the five publishers acted together.