NEW YORK — A top Apple executive described as Steve Jobs’ right-hand man took the witness stand at a price-fixing trial and denied scheming with major book publishers to drive up the cost of electronic books.
Eddy Cue was questioned about meetings he had in 2009 with chief executives of publishing houses about what they called their “Amazon problem” — the discounted $9.99 price the Seattle company set for e-books on its Kindle.
“They expressed to us that they wanted higher prices,” he said under questioning by a government lawyer.
Cue was the chief negotiator in deals with the publishers that allowed them to set prices as high as $14.99 for sales in Apple’s then-new iBookstore. But he denied that the deals were calculated to force Amazon into similar agreements that would raise its prices, too.
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Jobs closely monitored the negotiations but was “indifferent” about the outcome for Amazon, Cue testified. However, when asked if Jobs knew that there was a chance that once the iBookstore launched, publishers would withhold best-sellers and new releases from Amazon if it didn’t adjust its prices, he responded, “I believe so, sure. Smart guy.”
Cue also claimed he had no knowledge the publishers were colluding with each other as he negotiated with them, despite phone records showing their chief executives were in constant communication.
“I don’t believe they were working together to do the deal I was working on,” Cue said.
Cue, a senior vice president of Internet and Software Services at Apple, oversees the iTunes Store, App Store, iBookstore and iCloud services.
He testified at a trial stemming from an antitrust lawsuit brought last year by the Justice Department accusing Apple and the publishers of harming consumers by devising a plan that allowed publishers to convert retailers into “agents” who were restricted from lowering the publisher-set retail price.
The arrangement guaranteed Apple a 30 percent commission on each e-book.
The five publishers — Hachette, HarperCollins, Simon & Schuster, Macmillan and Penguin — settled with the government before the nonjury trial. Apple chose to go to trial, denying claims that its agreements required publishers to force Amazon to charge more for e-books.
Lawyers for Apple have accused the government of basing its case “on mere allegations, faulty assumptions and unfounded conclusions.”
Evidence in the case includes emails written by Jobs before he died in 2011. At the time, Jobs was losing his battle with cancer — which made Cue push even harder to get the publisher deals done so the Apple founder could demonstrate the iPad’s book capabilities on stage at the January 2010 launch of the device.