Apple SVP Eddy Cue Takes Stand in E-Book Trial, Admits Some E-Books Rose in Price
Cue is Apple's chief negotiator and was in charge of all discussions with the major book publishing houses. The DoJ is alleging that Apple illegally worked with publishers to artificially increase e-book prices, a violation of U.S. antitrust laws.
In testimony today, Cue admitted that the prices of some e-books -- including many of those appearing on the New York Times best sellers list -- did rise after the iBooks Store was opened, but it was more the result of publishers being unhappy with Amazon's pricing of $9.99/book than anything untoward that Apple did.
Instead, Cue said that prices rose because publishers "expressed to us that they wanted higher prices". Apple's pricing model for e-books is the same agency model that it uses on the App Store -- publishers set book prices and Apple takes 30% of the revenue while returning 70% to the publishers.
He also said that he didn't know if publishers were working together on the negotiations with Apple and Amazon, but because all the publishers had issues with different parts of Apple's proposed contract Cue said that "if they talked together, I assumed it would be easier to get the deals done." Cue also said that he "wasn't trying to negotiate" for the entire e-book market and he wasn't attempting to fix issues the publishers had with Amazon.