Barnes & Noble VP delivers a bruising blow to DOJ case against Apple
Apple received a boost in its defense against the Department of Justice allegations about e-book price-fixing yesterday from a company that had already settled in the case: Barnes & Noble. The bookseller's Vice President of Digital Content, Theresa Horner, told the court that her company was in the process of negotiating agency pricing deals with publishers well before Apple came into the e-book market.
The DOJ has repeatedly attempted to paint Apple as the nefarious ringleader conspiring with book publishers to raise prices on e-books. During her court appearance, Horner essentially shut down that argument by noting that Apple had nothing to do with Barnes & Noble talking with book publishers about agency pricing, which means that publishers set book prices rather than resellers.
Barnes & Noble CEO William Lynch apparently proposed the idea to publishing companies in late 2009, before Apple even started negotiations with the same companies. Lynch felt that agency pricing was a must if his company was to compete and make money against Amazon's Kindle bookstore.
The DOJ's case against Apple has received other blows. Penguin CEO David Shanks told the court that Apple seemed indifferent to the e-book market and was going to walk away from the market if it couldn't ink deals with publishers. Other evidence shows that even Amazon was working on the same agency pricing deals with publishers, with identical price-matching terms (i.e., other retailers couldn't sell e-books at lower prices) to what Apple and Barnes & Noble eventually achieved with their deals.
Judge Denise Cote heard the case and felt before the trial that the DOJ had a strong case against Apple. Yesterday, at a point when Apple was going to demonstrate the "page curl" feature devised by Steve Jobs, Cote interrupted by saying "I have an iPad. I love my iPad. I have seen this feature." In contrast to her start-of-trial comments, Cote noted yesterday, "It seems to me the issues have somewhat shifted during the course of the trial. Things change. People have to stay nimble. I'm looking forward to understanding where we are now."
The parties in the case deliver their summations today, and a ruling from the bench will be forthcoming in the future -- possibly as long as two months from now.
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