{"id":4869,"date":"2013-06-07T09:56:25","date_gmt":"2013-06-07T09:56:25","guid":{"rendered":"http:\/\/praag.org\/?p=4869"},"modified":"2013-06-07T09:57:22","modified_gmt":"2013-06-07T09:57:22","slug":"apple-clashes-with-amazon-in-e-book-case","status":"publish","type":"post","link":"https:\/\/praag.org\/?p=4869","title":{"rendered":"Apple clashes with Amazon in e-book case"},"content":{"rendered":"

\"\"<\/a>Apple attorneys in the US antitrust case on e-books went on the offensive Thursday, attacking the credibility of government witnesses and seeking to debunk key elements of the government’s case.<\/p>\n

Apple attorneys grilled a trio of witnesses from Apple rival Amazon and undertook a bruising cross-examination of a Google executive.<\/p>\n

Apple attorney Howard Heiss peppered Amazon executives during a series of contentious exchanges with skeptical questions on Amazon statements about its business profile and pointed out inconsistencies between Amazon testimony and documentary evidence.<\/p>\n

Amazon is very “metrics-focused,” Heiss said to Amazon’s vice president for Kindle Russell Grandinetti during a cross examination.<\/p>\n

Grandinetti had previously testified that he did not know Amazon’s market share of the e-books market.<\/p>\n

“We were a very large seller of e-books,” Grandinetti said, while denying he could estimate Amazon’s market share.<\/p>\n

Heiss then presented a news article quoting another Amazon executive estimating the company’s market share at 70-80 percent.<\/p>\n

Amazon is a key witness in the government’s case, which maintains that Apple conspired with publishers to orchestrate a transformation of the e-book market in early 2010 that cost consumers hundreds of millions of dollars.<\/p>\n

In entering the market, Apple signed a series of “agency” model contracts with publishers, in which publishers set the price and guaranteed Apple a 30 percent commission.<\/p>\n

Prior to Apple’s entry, the e-book industry was dominated by Amazon and run on a “wholesale” model where retailers set the prices. Amazon charged $9.99 for bestsellers prior to Apple’s entry into the market.<\/p>\n

Part of the government’s case is that Apple and publishers forced Amazon to switch to the agency model, resulting in higher prices.<\/p>\n

Apple attorneys sought to show that Amazon faced an increasingly difficult market in late 2009 and early 2010 in which publishers were already planning hardball tactics — even before Apple’s entry.<\/p>\n

Amazon’s pricing model was unpopular not only with publishers, but also with agents and authors who worried about the erosion of intellectual property.<\/p>\n

Grandinetti confirmed that by the end of 2009 four of the “Big Six” publishers announced plans to “window” bestselling books, meaning they would delay release of the Amazon e-book for a period of months until after the release of the physical book.<\/p>\n

As five of the major publishers signed agency models with Apple, they contacted Amazon to renegotiate terms.<\/p>\n

The first negotiation was with MacMillan Chief Executive John Sargent, who presented Amazon with the choice of shifting to an agency model or accepting a wholesale model with windowing for seven months.<\/p>\n

“We expressed quite strongly how unpalatable the choice was,” Grandinetti said of his encounter with Sargent. “The meeting was very tense.”<\/p>\n

Amazon initially tried to punish MacMillan by removing the “buy” button from MacMillan titles.<\/p>\n

But Amazon ultimately capitulated after three days and quickly negotiated the agency model with MacMillan.<\/p>\n

Soon after that, Amazon negotiated similar contracts with the other four publishers.<\/p>\n

Apple attorneys sought to show that Amazon’s shift to the agency model was its own decision and not orchestrated by Apple.<\/p>\n

But Amazon officials testified that the publishers were forcing the change at Apple’s behest.<\/p>\n

Laura Porco, who was director of Amazon’s Kindle Books at the time, told the court in a written declaration that the publishers informed Amazon that they were switching to agency “because that’s what Apple made them do.”<\/p>\n

Porco told the court Thursday she was “alarmed” when the publishers demanded agency from Amazon.<\/p>\n

“I felt like we were being pushed into something that was really terrible for consumers,” Porco said.<\/p>\n

Following Porco’s testimony, Apple attorney Orin Snyder aggressively questioned Thomas Turvey, an executive in Google’s book selling division.<\/p>\n

Turvey said in a written deposition that publishers told him that they could not accept wholesale terms with Google because of their terms with Apple.<\/p>\n

During the testimony, Turvey was unable however to name a single publishing executive who said this. -AFP<\/p>\n","protected":false},"excerpt":{"rendered":"

Apple attorneys in the US antitrust case on e-books went on the offensive Thursday, attacking the credibility of government witnesses and seeking to debunk key elements of the government’s case. Apple attorneys grilled a trio of witnesses from Apple rival Amazon and undertook a bruising cross-examination of a Google executive. Apple attorney Howard Heiss peppered … Continue reading “Apple clashes with Amazon in e-book case”<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":4880,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,86],"tags":[2876,1203,2931,2934,2130,2933,2932,2930,12251],"class_list":["post-4869","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","category-technology","tag-amazon","tag-apple","tag-case","tag-e-books","tag-google","tag-grandinetti","tag-howard-heiss","tag-law-suit","tag-united-states"],"cc_featured_image_caption":{"caption_text":false,"source_text":false,"source_url":false},"jetpack_featured_media_url":"https:\/\/praag.org\/wp-content\/uploads\/2013\/06\/ipad-2-reading-ebook.jpg","_links":{"self":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/4869","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=4869"}],"version-history":[{"count":3,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/4869\/revisions"}],"predecessor-version":[{"id":4882,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/posts\/4869\/revisions\/4882"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=\/wp\/v2\/media\/4880"}],"wp:attachment":[{"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=4869"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=4869"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/praag.org\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=4869"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}