Apple tells DOJ: 'we negotiated individually with publishers'

Apple has responded to the US Department of Justice's charge that it conspired with publishers to raise e-book prices, filing a defence which asserts that it "conducted individual negotiations" with the publishers involved in the case.

In documents filed on 26th April and released yesterday [14th May], Apple said its agreements with the publishers were "the result of hard-fought negotiations, reached through compromise and discussion". It said: "Apple denies that competition has been hampered by its entry into the e-book business; rather, competition on price, selection, and content quality has flourished, along with technological and retail innovation".

According to a Reuters report on the filing, Apple said that the publishers were at the time battling with Amazon over selling books cheaply, but that they had decided independently of Apple to eliminate wholesale discounts on e-books, sell hardbacks first to bookshops and take other measures to "push Amazon to raise prices".

Apple's filing stated that it underwent tough negotiations with each publisher: "Early—and constant—points of negotiation and contention were over Apple's price caps and 30% commission. After Apple sent draft agency agreements to each publisher c.e.o. on 11th January, each immediately opposed Apple's price tiers and caps."

Reuters reported that Apple's filing also disputes that the agency model forced e-book prices to rise, saying that the launch of the iPad "exploded" demand for e-books, and that the average retail price of an e-book fell to $7.34 from $7.97 following its release.

The Washington Post reports that Apple's filing said that Amazon also considered the agency model and that publishers had also talked to companies such as Barnes & Noble about the idea. However, in its filing, the Department of Justice went into great detail about its case against the technology company, and said that Apple's c.e.o. at the time of the e-book deals, Steve Jobs, "conceded the price-fixing conspiracy" when he told his biographer that Apple had "told the publishers, 'We'll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that's what you want anyway.'"

In April 2012, the DoJ accused Apple of colluding with five publishers—HarperCollins, Simon & Schuster, Hachette Book Group, Macmillan and Penguin—to raise e-book prices. HarperCollins, Simon & Schuster and Hachette all settled with the DoJ in April last year, with Penguin proposing a settlement in December 2012 and Macmillan settling in February this year.

The case is due to be heard on 3rd June.