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back to article STEVE JOBS hits back at ebook ruckus FROM BEYOND THE GRAVE

The "smoking gun" Steve Jobs email that US prosecutors hope will nail Apple at its ebook price-fixing trial was NOT sent by the doomed biz baron, lawyers claim. The fruity firm has been defending itself against allegations that it conspired to artificially hike the prices of digital tomes sold through its iTunes store. The US …

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Wilful

Surely this would just mean that Jobs knew full well that what he was proposing was illegal and he went forward with it anyway. In Apple's normal court room dramas they insist that behaviour like this constitutes wilful infringement and ask the good judge to triple the sum on the table.

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Holmes

Re: Wilful

Not normally one to defend apple, but for *patent* lawsuits, willful infringement automatically incurs triple damages. This isn't a patent lawsuit.

It does appear that a minimum Jobs knew that he was walking a fine enough line that his original wording would be interpreted as price fixing.

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Re: Wilful

Or he just realized Amazon doing agency or retail model was irrelevant if you can get MFN ('the other thing').

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So

Oh, better not say that in an email, change it to

"I can live with this as long as they also agree to the other thing you told me you can get:" Nudge, nudge, wink, wink...

"with our wholesale price being 70% of such price. "

So if they wanted to pay 30% less then Amazon and everyone else if they didn't get the agency model.

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Paris Hilton

Puzzled

I'm still just plain puzzled how Apple thinks a trial will end well for them when the parties they are alleged to have colluded with have all admitted they did it. If it was a jury trial they might try to have evidence of those settlements excluded, but this is not a jury trial...

Paris, 'cos she's a puzzle.

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Re: Puzzled

Because those settlements say no such thing. They say they've reached an out of court settlement in which the publishers do not admit guilt. It's only freetards like yourself who insist the settlements say something they don't.

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Re: Puzzled

Ok Tom, if you're really 13 I guess you might think that they settled out of court because they were innocent. The reality is they settled because they thought they'd lose in court. They probably thought they'd lose in court because they had agreed to do something illegal. It might not be so, but that's the simplest reason....

It's not that freetards think settlements mean something they don't. it's you confusing "not found guilty in court" with "didn't do it". Those two things are very different.

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Stop

Re: Puzzled

Sometimes settling out of court is cheaper than going through the whole legal process, even if you believe that you're innocent. If nothing else it can damage your sales and reputation pending the verdict.

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Re: Puzzled

I guess it also depends on where the alleged collusion happened. If it was between publishers themselves and didn't involve Apple then it is an entirely different situation to the one the DOJ is currently pursuing against Apple.

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jai
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Re: Puzzled

it's you confusing "not found guilty in court" with "didn't do it". Those two things are very different.

but equally, "not found guilty in court" is not the same as "did do it"

sometimes the cost of the settlement is much less than the cost of losing at court. and going to court is just a gamble that your lawyers are better than the opposition. the truth doesn't really have any bearing in a court case.

the publishers evidently don't have that confidence in their legal teams.

Apple does.

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@sabroni Re: Puzzled

I've settled out of court before in a case where (a) I knew I was right and (b) I was pretty sure the court would agree with me. I settled out of court because the settlement cost me £1250 and the cost of the solicitor, barrister and lost billable time for a two day court hearing was going to be £8000+. I would not have been able to recover my costs from the other party.

In the end you realise that paying an extra £7K just so that you have a piece of paper from the court agreeing with you is not really worth it. If you're a corporation I guess that the decision is even easier.

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Re: @sabroni Puzzled

If someone settles out of court because they are guilty they're not going to post about it on here if the whole point was to keep it quiet. Your story is an interesting example but it doesn't really shed any light on the goings on in this particular case.

In my original post I foolishly said they'd settled because they were guilty, which of course I don't know. By settling out of court they specifically kept it so we don't know and that leads to speculation. I think it's likely that they had something to hide (they have pleny of cash to spend on litigation and a public image to protect and it sounds like they would have made money by colluding illegally) but without evidence we're all left making guesses...

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@mccp

>>"I've settled out of court before in a case where (a) I knew I was right and (b) I was pretty sure the court would agree with me. I settled out of court because the settlement cost me £1250 and the cost of the solicitor, barrister and lost billable time for a two day court hearing was going to be £8000+. I would not have been able to recover my costs from the other party."

I can certainly understand that, though possibly less so in a case where the settlement costs are in the tens of millions of dollars, unless lawyers are horrifically expensive.

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Re: Puzzled

"Ok Tom, if you're really 13 I guess you might think that they settled out of court because they were innocent. The reality is they settled because they thought they'd lose in court."

Not necessarily. The cost of litigation plays a big part in that decision and it may have been the case that the other defendants chose to take it on the chin and settle for a defined fine and no admission rather than much less certain per hour legal billing to prove their case.

While Apple, of course, for some strange reason, just *love* paying legal fees!

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Re: Puzzled

They can probably write those fees off against their profits to avoid the tax liability.

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Re: Puzzled

So you're saying corporate legal strategy is based on guilt or innocence, is that right? You bet, and those same corporations issue product recalls out of concern for our safety. And so on and so forth.

Whatever you're smoking, I want some.

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Re: Puzzled

A few facts: The publishers have *not* settled out of court. That would involve an agreement between the parties and the dismissal of the action. That is not what has happened. They *have* stipulated to a final judgement. I suggest you go read that (proposed) final judgement: https://www.federalregister.gov/articles/2013/02/25/2013-04234/united-states-v-apple-inc-hachette-book-group-inc-harpercollins-publishers-llc-verlagsgruppe-georg

Does that read like "paying to make the case go away" to you? It reads very much like admitting guilt to me. The statement which the publishers have agreed to includes things like this:

The evidence showing conspiracy is substantial and includes: Practices facilitating a horizontal conspiracy ... Direct evidence of a conspiracy ... Recognition of illicit nature of communications ... Acts contrary to economic interests ... Motive to enter the conspiracy, including knowledge or assurances that competitors also will enter ... Abrupt, contemporaneous shift from past behavior.

That's what these publishers have admitted. Does it sound like a "no liability admitted, we're just paying to make it go away" sort of affair to you?

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So

To summarise, Jobs had second thoughts about sending out an overt anti-consumer message and decided to couch his language. I don't see that it gets Apple off the hook any more than me drafting a message to the hitman telling them to "shoot Vinnie in the head" and actually sending a post that says "do that job we were talking about wrt V".

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Re: So

Because unless you're a pig-headed anti-corporate shill you'll see it isn't about conspiring to set prices.

The email actually sent expresses a legitimate business concern that Amazon was in a position to use it's monopoly position in the market to squash Apple's foray into the market. The draft email could be seen as price fixing, or it could be the legitimate concern expressed in the actual email but badly worded.

The real scandal here is the DoJ presenting a known DRAFT email as one which was actually sent. I believe if it was a witness who made that statement they would be hauled up on PERJURY charges.

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FAIL

Re: So

How do you know for sure it was a draft, because Apple's lawyers said so? LOL, you are in no position to ascertain the veracity of their claims so for the time being, shut up about 'the real scandal is, etc'

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Thumb Up

Re: pig-headed anti-corporate shill

pig-headed anti-corporate shill > pig-headed corporate shill * 100

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Re: So

The email actually sent expresses a legitimate business concern that Amazon was in a position to use it's monopoly position in the market to squash Apple's demand of a 30% cut.

I don't remember Amazon being declared a monopoly...

Apple could not compete with others, and keep their fixed 30% cut unless they could get the book sellers to sell to them for 30% less then what everyone else charges retail. The only way they can do that is price fixing.

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Facepalm

Re: pig-headed anti-corporate shill

The problem there is that anyone with a fairly open mind and offering even the most piss-poor of arguments is greater then both of them by several orders of magnitude.

I reckon a pig-headed shill is a pig-headed shill and deserves to have their opinions treated with the greatest of contempt, regardless of what they're shilling for.

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Facepalm

Re: So

The real scandal here is the DoJ presenting a known DRAFT email as one which was actually sent. I believe if it was a witness who made that statement they would be hauled up on PERJURY charges.

Except it is Apple, and only Apple that claims that the DoJ mail was a draft. It might be that both emails were sent, or that the second one is forged, in which case it would be the Apple lawyers who end up hauled on perjury!

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Happy

Re: pig-headed anti-corporate shill @TeeCee

I agree, it was supposed to be a witty, post-modern youtube-comment style putdown, not an actual mathematical proof....

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Stop

Re: So

And you think they can't produce technical evidence to back their case up? It's unlikely they'd make the claim if they couldn't prove it.

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Re: So

>>"The email actually sent expresses a legitimate business concern that Amazon was in a position to use it's monopoly position in the market to squash Apple's foray into the market."

Seems to me that if company X is established and selling Item A for $10, and after company Y enters the market they both end up selling item A for $15, the citizen was much better off when company Y wasn't around, whether company X was paying $9, $10 or even $11 to buy item A.

The point of having 'competition' isn't to provide money for uncompetitive competing companies, it is to provide better value for end users (which requires the companies to be actually competing on price) and/or more choice for end users (though in this case the 'products' were the same thing, and being produced by existing companies which had (and still had) monopoly rights over them).

Given a choice of a benign monopoly or a significantly more expensive duopoly or oligopoly, only someone with a personal interest or a half-arsed understanding of economics based on 'principles' treated like dogma would seem likely to favour the latter options.

There might be some argument to be made for declaring it 'unfair' for a company to sell items below cost except maybe in temporary promotions, especially if below-cost selling was seemingly being done to stifle competition with an eye to future profiteering, but in this case it seems likely Apple would have been just as unhappy with Amazon selling books at cost or even at a slim margin with a level playing field of equal wholesale prices for everyone, since that wouldn't have given Apple a nice fat margin in return for doing next to bugger all in a market area other people had already developed.

That is, they had a significant profit (43% markup) in mind but wanted to both have that profit, and also to prevent anyone else being able to undercut them at retail, and as far as they were concerned, the consumers could go and *&^% themselves.

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Re: So

The point of having 'competition' isn't to provide money for uncompetitive competing companies, it is to provide better value for end users

In fact, it isn't. The purpose of competition is that it promotes healthy markets, where everyone from producer to distributor to consumer is getting a fair deal. Since Amazon launched the kindle, they have been massively manipulating the ebook market, using predatory pricing to pick up users and forcing the producers (authors) to bear the cost.

At the point the agency pricing model in around 2010, Amazon had 90% of the ebook market, and were buying bestsellers for around $12-14 and retailing them at $9.99, subsidizing the sales with profits from everything else Amazon does. The purpose of this undercutting was to drive B&N out of the ebook market, and seriously damage their book market. By offering predatory pricing only on the bestsellers, and only on their device, they were hooking the end user into a kindle world, with all your books coming from Amazon.

That's just the 'prime' books from major publishers. The smaller publishers have an even rawer deal with Amazon, Amazon tell them how much they get for a sale. If you've priced your book at $5, and Amazon decide to sell it for $1, you get a cut of that dollar, that's all.

Whilst all that was going on, consumers were getting a great deal on bestsellers. In fact, when iBooks launched - with the agency model - most people were distinctly unimpressed with Apple's prices. Apple refused to sell books for less than they paid for them, whilst Amazon was perfectly happy to do so.

The DoJ lawsuit against Apple simply confirms Amazon's book monopoly.

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Re: So

As I said, there are valid arguments to be made against companies selling things below cost for anticompetitive reasons, though there can be distinct grey areas there, but that's not obviously much to do with the Apple issue - if what Amazon were doing was considered illegal, the way to deal with that would be via the legal system*, and if what they were doing was immoral, Apple could have tried to take the moral high ground rather than pushing for an anticompetitive system.

(*unless people think that the legal system is scared to go up against Big Business Amazon while simultaneously keen to go after Apple.)

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Re: So

(*unless people think that the legal system is scared to go up against Big Business Amazon while simultaneously keen to go after Apple.)

Yes. Lots of people think this. DoJ was extremely happy with Amazon fucking over businesses and consumers left, right and centre. See this article, which came out when DoJ initiated this storm.

http://www.ilsr.org/dojs-lawsuit/

The authors of this report are no Apple fans, but they really dislike what Amazon were allowed to do.

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Re: So

If Apple's intention had actually been a noble one, it would seem odd that they didn't make more of that at the time.

There are arguments for things such as retail price-fixing, but they aren't all one-sided, and some of them are less solid on the net than with physical stores.

Having a small bookshop not being undercut on popular titles by a bigger retailer does help avoid a market dominated by big stores, or where supermarkets selling bestsellers at little profit make small stores uneconomic, but in that situation customers are effectively being forced to subsidise a small store even if they're unlikely to buy anything but the bestsellers.

On the internet, there isn't the same kind of obvious convenience benefit from having multiple stores that there is in real life in having a decent small bookshop in towns too small for a large chain to bother with, even if there may be competition benefits from staving off a monopoly.

The article does cover some important issues, but it does seem to be let down somewhat by an eagerness to ascribe anything good to Apple-led competition, including stuff like having newer versions of Kindles, as if that wouldn't have happened nearly as quickly otherwise.

And is it really impossible to use a Kindle to read ebooks other than ones Amazon sell (should Amazon have to support any competing DRM system, for example)?

Also: "Unchecked free-riding could doom independent bookstores, and their demise would drastically reduce the range of books published and sold. Marketing studies show that, beyond the bestseller list, the main way people discover new authors and “mid-list” books is by browsing in a store."

does seem to be risking a logical fallacy.

1970s-man: "Cheques are the most common way of people buying expensive goods.Therefore in a world with no cheques, far lower sales of expensive goods would be expected."

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Anonymous Coward

Easy

Just ask NSA for copies of ALL emails regarding this issue and the case will be finished in no time with all the evidence everyone wants.

Simplzz.

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Anonymous Coward

If this was an unsent draft, how did the DoJ get it? Presumably they got some sort of court order, compelling Apple to hand over all relevant emails relating to this deal. Does that mean that the order also included any unsent emails too? That would be one hell of a search, as surely that would mean going through every backup, to see if any drafts were sitting unsent at the time the backup was made.

As the second email was sent "minutes later", it seems unlikely it was sitting as an unsent draft, though. If Jobs decided not to send the first one, surely he would have just deleted the text and restarted typing? Or deleted the entire email and started afresh? How many people draft an email, change their mind, start again with a new message and leave the first one just sitting there?

Finally, if it was unsent, surely the date/time sent field would be blank?

Whatever that status of the email, still doesn't alter the fact that it was what Jobs was thinking at the time he typed it.

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All of those questions can be answered with some fairly simple forensics

They only need to be answered of the DoJ disagrees and claims it was actually sent

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Anonymous Coward

"minutes later"

El Reg is making that seem like it's just 1 or two minutes. Another report has it at 20 minutes, which suggests that he did go away and think more about the subject.

still doesn't alter the fact that it was what Jobs was thinking at the time he typed it.

but i'm sure i saw an episode of The Practice or Boston Legal or similar where they showed that you can't convict someone just because they were thinking about something. You need evidence that they acted upon it, at least for a court case.

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Dats wat i waz just about to ask, onyl u wrote it better like then wot I wood av.

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WTF?

but i'm sure i saw an episode of The Practice or Boston Legal or similar

Sweet! Actually, I've watched Scooby Doo a few times and I think you'll find it was old Mr. Grainger, the caretaker. Yoinks!!!

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Anonymous Coward

"You need evidence that they acted upon it, at least for a court case."

I'd say the multiple contracts with the various publishers do show they acted upon it.

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Pint

@ A.C. 15:35

"where they showed that you can't convict someone just because they were thinking about something."

While that may be true, it would seem the idea res ipsa loquitur would have some weight in the matter. To modify someone elses analogy If I type an email telling someone to burn down my business for the insurance, save it to drafts, then later send a copy that just says "Go a head and do that thing we talked about" when my business burns down and they find the original unsent draft should I claim that I'm not guilty because I only thought it?

The fact is that Apple and the book publishers came to an agreement on the "Agency model". The case will most likely be decided based on what that looks like to the jury after both sides present their case.

It's Friday and I need a drink. Cheers

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Anonymous Coward

"But we would urge fanbois to keep their faith."

Who is urging iSheeple to keep the faith?

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Anonymous Coward

Absolutely Zero Doubt....

that Jobs intentions were akin to price fixing. Regardless if the email was sent....guaranteed Jobs discussed it and probably knew legally not so put it down in writing.

Jobs was a super salesman and marketer. He was very slick as the term "Salesman" implies and would NOT hesitate to pull that kind of tactic.

Simply Google :Steve Jobs Breakout" to read how Jobs swindled Steve Wozniak out of an unknown $5,000 bonus back in 1979.

Jobs was a salesman/con-artist from the beginning IMO.

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Anonymous Coward

Jobs edited a little for anti-trust

Jobs knew anti-trust concerns hampered his writing style a bit so he deleted the offending passage and indirectly referred to 'the other thing' , but he's guilty as hell for trying to hide it!

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Devil

Difficult enough to believe Apple on any legal claim!

I hope that the copies of these emails will eventually be made public because I have a difficult enough time believing Apple in any legal circumstances, let alone where they say this email doesn't count because it was a "Draft".

If it exists, it proves "intent" beyond a shadow of a doubt in my opinion.

However, the real crime here, is not the price fixing to the consumers of E Books; but the price fixing to the Authors who get a pittance compared to the publishers share.

Lets hope that the Authors share in the punative damages. That way, there may be some reason to continue to create the content that this whole industry hinges on.

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Re: Difficult enough to believe Apple on any legal claim!

>>"However, the real crime here, is not the price fixing to the consumers of E Books; but the price fixing to the Authors who get a pittance compared to the publishers share."

>>"Lets hope that the Authors share in the punative damages. That way, there may be some reason to continue to create the content that this whole industry hinges on."

What determines the author's royalty per ebook?

Surely that's a matter for the contract between author and publisher, and unless people were tricked into signing a poor contract or had a poor contract illegally imposed on them, why is what they get paid someone else's fault?

If they have been the victim of illegal actions, that would seem to be a separate issue from retail pricing, and one which they should pursue themselves.

If they have not been the victims of illegal actions but simply of practice of debatable morality, why should that legally justify them getting some kind of compensation?

In any case, these days can't people self-publish ebooks, and take all the wholesale price, assuming they can sort out things like editing for themselves?

That would seem to be 'a reason to continue to create content.'

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Re: Difficult enough to believe Apple on any legal claim!

In any case, these days can't people self-publish ebooks, and take all the wholesale price, assuming they can sort out things like editing for themselves?

Yes, they can, however..

The biggest market for ebooks is Amazon, and unless you are a publishing house or best selling author, self publishing on Amazon means that Amazon can set your price and determine your cut. If Amazon decide to give your book away for free - and they can - then you get nothing.

This isn't necessarily a problem, you can sell your books wherever you like, however .... Amazon are slowly destroying all other market places by systematically undercutting competitors on bestsellers - and only on bestsellers - using a cross-subsidy from their other departments in order to destroy competition. Is it cool to just have one market place, that entices you in with one hand and gouges you with the other?

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Re: Difficult enough to believe Apple on any legal claim!

>>"The biggest market for ebooks is Amazon, and unless you are a publishing house or best selling author, self publishing on Amazon means that Amazon can set your price and determine your cut. If Amazon decide to give your book away for free - and they can - then you get nothing."

In practice, do Amazon actually deviate from the author's stated 'list price' arbitrarily, or do they only do it when they're being undercut elsewhere?

Reading their T&C information, it states circumstances when they might cut the retail price but doesn't make it clear what other circumstances might exist.

However, it does seem like if someone goes for the 35% royalty option, they get 35% of the list price whatever Amazon set the retail price at.

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