E-Book Drama: Did Amazon Muddle Evidence Against Apple?

e-book ipadAn antitrust case over the pricing and contracts of e-books is underway in a Manhattan courtroom. Involved are two of the biggest Internet companies: Apple (NASDAQ:AAPL) and Amazon (NASDAQ:AMZN).

The controversy started around the time when Apple introduced its iPad and opened an e-bookstore. Shortly thereafter, according to The New York Times, Amazon changed the way it sold digital titles to a model called “agency pricing”: one that allows publishers, not the retailer (in this case, Amazon) to set the price of the books.

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The case the U.S. Department of Justice is trying to make states that publishers were unhappy with Amazon’s uniform price of $9.99 for e-books, because they wanted to raise the price on new releases and bestsellers. The Justice Department believes Apple conspired with five big publishing companies by opening up an e-bookstore to force Amazon to switch to agency pricing, thus allowing publishing companies to price bestsellers at, say, $20 instead of the typical $9.99.

Apple, specifically Eddy Cue, Apple’s senior vice president of Internet software and services, vehemently denies this claim, stating that “meetings with publishers that they were unhappy with Amazon’s uniform $9.99 pricing for e-books and that they were planning to use on new releases a tactic known as windowing — delaying the release of a title’s e-book until after the more expensive hardcover had been in stores for a while.”

Cue then went on to state that he and Apple’s late CEO Steve Jobs believed that “withholding books is a disaster for any bookstore.”

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And back and forth the two sides went. However, the Times did note that the Apple litigation team presented their evidence in a much smoother format, compared with the government. Apple’s team was able to flawlessly shift back and forth between slides, displaying emails side-by-side if need be. Whereas the Justice Department could only show one email at a time, and one video they tried to show didn’t have the audio needed to make a crucial point.

“Judge Denise L. Cote of the Federal District Court for the Southern District of New York provided some comic relief when she asked whether the government lawyers were using a Mac. The Justice Department said it was a Hewlett-Packard (NYSE:HPQ) computer.”

Although tough to draw any conclusions form just one day of testimony, it seems that if the Justice Department (and Amazon) are to have any shot in this trial, they may want to invest in a Mac.

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