Apple has had its day in court in the e-book price-fixing
case. So, why didn’t the computer company just settle like the five publishers also
named in the lawsuit?
Apple executives have been saying throughout the
process that they went to court because they did nothing wrong. Even when
Macmillan finally decided to settle last February, the publisher’s CEO, John
Sargent, argued it only settled “because the potential penalties became too
high to risk even the possibilities of an unfavorable outcome.”
In Apple’s case, the company was also defending the way
it does business. Letting its partners set the price of their product is the
same approach used in both its iTunes and App Stores, so Apple needs to be able
to negotiate favorable terms to compete with rivals, according to technology reporter
Jessica E. Lessin in The Wall Street Journal.
“A win would help Apple maintain negotiating clout with
media companies, which are searching for new ways to make money in markets
shifting online,” Lessin wrote.
“A loss could hamper its ability to compete with rivals like Amazon.com Inc. to
land increasingly important media deals on favorable terms.”
Losing the case could also mean Apple would have to
submit to regular monitoring by the government, which is also pushing to
prohibit Apple from using “most-favored-nation” clauses in its contracts. Such clauses
allowed Apple to match any lower price a publisher offered to other e-book
distributors and is something Apple uses in its iTunes deals.
Apple CEO Tim Cook told attendees at the All Things
Digital conference: “We’re not going to sign something that says we did
something we didn’t do and so we are going to fight it.” But as Lessin points
out, an Apple lawyer added during the trial that a ruling against the company
would have a chilling effect on how companies negotiate.
