Steve Jobs was a notoriously private person and ran his company similarly, but near the end of his life, the Apple co-founder volunteered some of his secrets for an authorized biography.
Now, some of those remarks are being used as ammunition in a Justice Department antitrust lawsuit alleging that Apple colluded with book publishers to raise prices.
“I would just like to give you a flavor of the egregiousness of the alleged behavior, which took place at the highest levels of these publishing companies,” Sharis Pozen, the Justice Department’s acting assistant attorney general for antitrust, said at a news conference, according to the official transcript.
Pozen went on to quote Jobs from Walter Isaacson’s Steve Jobs book:
“‘The customer pays a little more, but that’s what you want anyway.’”
The publisher of the biography, Simon & Schuster, has settled its case with the Justice Department, along with other publishers. Apple and publishers Macmillan and Penguin have not.
“When companies get together and conspire to enter into agreements that eliminate price competition, it crosses the line,” Pozen said. “This kind of agreement is illegal and anticompetitive.”
The Jobs quote, which is also included in the Justice Department’s written complaint, comes from page 503 of the hardcover Steve Jobs. Here’s what else Jobs had to say:
“Amazon screwed it up. It paid the wholesale price for some books, but started selling them below cost at $9.99. The publishers hated that — they thought it would trash their ability to sell hardcover books at $28. So before Apple even got on the scene, some booksellers were starting to withhold books from Amazon. So we told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30%, and yes, the customer pays a little more, but that’s what you want anyway.’ But we also asked for a guarantee that if anybody else is selling the books cheaper than we are, then we can sell them at the lower price too. So they went to Amazon and said, ‘You’re going to sign an agency contract or we’re not going to give you the books.’”
The book then quotes Jobs as saying:
“Given the situation that existed, what was best for us was to do this akido move and end up with the agency model. And we pulled it off.”
Not so fast.