The Price-Fixing Email That Steve Jobs Sent To James Murdoch

As part of the ongoing Apple e-book price fixing investigation by the US Department of Justice, a new email sent from Steve Jobs to James Murdoch has come to light.

Murdoch, ultimately in control of what happens at Harper Collins, was approached by Steve Jobs to undermine Amazon’s $US9.99 e-book pricing model, reports All Things D. Jobs explains in the email that he thinks Haper Collins should "throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $US12.99 and $US14.99.”

That said, the rest of the email softens the overall message: those prices are really suggested as caps, and Jobs admits that the idea might not work out. But it is clear that the plan was to organise a market which charged more than Amazon. It will, of course, be up for the courts to decide just how signifacent such evidence is. The full filing, from which this email is taken, can be found below. [All Things D]

Jobs-Murdoch-exchange


Comments

    hmmm, hate to be seen to defend James Murdoch but there is nothing wrong with that email.

    They are not "undermining" Amazon. They are discussing creating a higher price point and an exclusive agreement.

    If anything this is a response to Amazon trying to monopolise the market through undermining publishers.

    Again, not trying to defend JM or HC, publishers are as bad as music execs when it comes to absurd pricing of digital products, just pointing out that this email on its own is not particularly incriminating.

    Publishers IMO are free to distribute their books through only one store and set prices how they wish. Like any other business though they need to balance margins with volume. They also need to factor in that authors can increasingly choose to successfully self publish and cut them out altogether.

    Hopefully more authors choose the self published route and more money gets distributed to authors while keeping prices even lower.

    What should probably be investigated is the arrangements between publishers and authors (and music execs and artists) that seek to remove the choice to self publish down the track.

      Jobs appears to be attempting to undermine the agreement between Amazon and HC by offering a greater profit margin to Murdoch & HC through price fixation at a higher price point. They're attempting to drive the price of eBooks higher by means of price fixation. Whether this is conspiratorial or not is up to the lawmen, as far as I can see.

        Yes, that is what it appears they are doing. they are offering a more competitive arrangement to HC to rty and win their business. I don't think it qualifies as price fixing though. If Amazon and Apple sat down and agreed a minimum price, that is clearly price fixing. HC choosing to sell through Apple as they will return higher margins through higher prices is just competition.

        It's like if you sell T-shirts and you choose to sell them through DJs rather than Kmart because DJs will sell at a premium and return higher margins. That's not price fixing, it's just balancing margins vs volume through differing distribution channels.

          It was considered price fixing, because apple and the book companies went into an agreement that the minimum price for books must be X. And that other sellers could not price there books lower then the price that apple and the companies agreed on.

          Now what that meant was that Amazon could not sell the books at a loss. or lower then x price.

          for example they pay the book company 7 dollars per book sold no matter what, but Amazon sells it for 5 dollars on special, the book company still got 7 dollars, but Amazon lost money.

            The publisher is free to sell their wares at any price they so wish, likewise so is amazon even if it is at a loss.

            Although the publisher is not allowed to speak with other publishers to agree on a common price between each other. Nor are they allowed to dictate a sell price to Amazon.

            I can't really say that the email is unequivocally doing either, although it is suggesting that HC stop selling to Amazon but that's not price fixing in itself

    I thought price fixing is when 2 (or more) companies that are in competition in the market meet and set a price so they don't have to compete on price. I may have read it wrong, but don't all companies who are introducing a product discuss the prices competitors are charging?

    The letter is to only one company, but, this would be the same letter sent to all companies that signed up to Apple ebooks.

    Hence the lawsuit and price fixing.

      sorry that was meant to replay to @alexbien

        Ok i kind of understand, but still, as far as price fixing goes, wouldn't it be price fixing if apple was agreeing with apple's competitors (not their suppliers) to sell at a price rather than competing? Apple is the retailer in this game. HC are the suppliers. HC don't actually sell anything on Apple's store (even though that's how we generally state it). Apple sell it, HC supplies and receives commission. I don't know. I guess we'll find out.

          Apple was forcing their competitors to have to sell at the same price they were.

          Apple was the instigator in this and is in trouble, because it helped the big companies into an agreement where no stores could sell an ebook for less then x price. No matter what.

          That's the agreement that apple made with the suppliers. and the reason apple are in trouble now.

    ahhh ok. yeah, that's dodgy
    (was meant to be @blake_g )

    Last edited 23/05/13 12:13 pm

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