Judge Cote is the judge in the DOJ’s case against Apple and various publishers; this is an interesting background piece.
Since introducing the Kindle in 2007—and setting e-book prices at, or more often substantially below, its own costs—Amazon has wreaked havoc, and panic, among publishers. Beyond devaluing lucrative hardcover books, such rock-bottom prices have helped destroy the “brick-and-mortar” stores where books are showcased. Nothing the publishers did—delaying the release of e-books, complaining to Amazon, upping their wholesale prices to the company, or, in the case of one house, Hachette, actually going to the Justice Department to gripe—seemed to work.
But Apple offered salvation. By opening up an iBookstore in tandem with the new iPad, Apple could “trounce” Amazon, Eddy Cue, the Apple executive who’d pioneered iTunes and other Apple content stores, wrote Jobs in late 2009. Jobs quickly signed on. But Cue had to move fast: the iPad was to make its debut on January 27, 2010, and Jobs wanted to unveil iBooks with it. And Jobs himself was dying.
To each of the Big Six publishing houses, Cue offered the same deal: rather than selling e-books wholesale and letting retailers price them, the publishers themselves would set e-book prices; Apple would only be an agent, collecting 30 percent of sales. By January 26, five of the publishers—only Random House refused—had agreed. Amazon, too, quickly fell in line. E-book prices quickly rose. Soon came the lawsuits—class actions on behalf of consumers; cases filed by various state attorneys general. And then, in April 2012—largely, Apple has charged, at Amazon’s instigation—came the Justice Department’s case. All said Apple and the publishers had conspired together in violation of federal anti-trust laws.
David Margolick. “The Judge That Apple Hates.”
