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“Is this a joke? Are we being punked?” That’s what we asked when we cautiously reprinted an alleged email thread setting up a dinner among executives of major publishing companies to discuss “The $9.99 Problem”, a coded reference to Apple’s entrance into the e-book business in competition with Amazon’s $9.99 e-book price ceiling. (See On the Dinner Menu: Fishy Discussions about “$9.99 Problem”
It looks like it was no joke. The Justice Department’s brief against five publishers and Apple, accusing them of colluding to fix prices, alludes to “private meetings”. “Prior to the formation of and throughout Publisher Defendants’ agreement,” states the DoJ filing, “their CEOs and other high-level executives frequently communicated with each other in both formal and informal settings. From these communications emerged a pattern of Publisher Defendants improperly exchanging confidential, competitively sensitive information.” (If you’re a trial junkie you can read the complete brief here).
Though three publishers have settled with the government and two are fighting back, Apple’s role may hinge on whether Steve Jobs or another representative of Apple actually attended that dinner or any other group meeting of publishers to discuss pricing. The legal principle seems to be that setting the same terms for everybody is fine if you deal with them unilaterally, but dealing with them as a group is conspiracy.
Says Bloomberg News: “Apple Inc.’s best defense against accusations it conspired to fix e-book prices may turn on its absence from meetings in Manhattan restaurants where publishing executives allegedly worked out the scheme.”