September 26, 2020

U.S. Cites Phone Calls in Apple Pricing Case

At least three publishers confided with one another about their plans, Lawrence Buterman, a Justice Department lawyer, said on the opening day of the government’s antitrust case against Apple, being argued in United States District Court for the Southern District of New York in Manhattan. Government lawyers presented a timeline that included not only the records of the phone calls but also e-mail transcripts. The government also showed an e-mail with the travel itinerary for Apple’s lawyer, which shows him meeting with publishers in December 2009, and his notes from those meetings.

E-mails from Eddy Cue, Apple’s senior vice president of Internet software and services, were part of the publishers’ discussions, suggesting that he assured each of them that they were part of a collective effort to destroy Amazon’s model of selling e-books for a uniform $9.99, the government said.

All this adds up to proof that Apple led an elaborate scheme to fix prices of e-books, they said. “The publishers needed a facilitator and a go-between,” Mr. Buterman said, “a company large enough to give the publishers the confidence that their conspiracy would prove successful. And that company was Apple.”

In the case, brought a year ago, the Justice Department accused Apple and five book publishers of working together in the six weeks before Apple’s deadline of Jan. 21, 2010, to raise the average price of an e-book. The government casts Apple as the “ringmaster” in the conspiracy, arguing that it presented the publishers with the opportunity to sell books at higher prices — from $12.99 to $14.99 — putting pressure on Amazon, which had been selling new e-books for $9.99, to raise its prices.

Simon Schuster, HarperCollins and the Hachette Book Group settled the day that charges were filed; Penguin and Macmillan settled months later.

Apple insists it has done nothing wrong. Its lawyer, Orin Snyder, a partner at Gibson, Dunn Crutcher, said Monday that the government had no direct evidence that a conspiracy took place. He said that government lawyers had taken quotes out of context and completely ignored the details of Apple’s negotiations with the publishers to create a “chain of inferences” that is “tortured and multifaceted.”

In its opening statement, the government brought up comments that Steven P. Jobs made to a reporter after he introduced the iPad and the iBookstore in January 2010. When asked why consumers would purchase an e-book from Apple’s store instead of Amazon.com, where e-books were $9.99, Mr. Jobs replied, “The prices will be the same.”

Mr. Buterman noted an e-mail exchange between Simon Schuster executives talking about Mr. Jobs’s comment. “I can’t believe that Jobs made the statement below. Incredibly stupid,” wrote Elisa Rivlin, Simon Schuster’s general counsel at the time. Mr. Buterman said this remark showed that Simon Schuster felt Apple had given away that they had all been working to fix e-book prices.

But Mr. Snyder, in arguing for Apple, said the e-mail conversations show that the company had to negotiate aggressively to persuade publishers to adopt a different business model known as agency pricing, which allowed the publishers to set their own prices for e-books, giving Apple a 30 percent commission for books sold in its online store.

Mr. Snyder brought up an e-mail exchange between Mr. Jobs and James Murdoch, an executive of News Corporation, the owner of Harper Collins, which the Justice Department was presenting as evidence. Mr. Jobs had written, “Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.” But other parts of that e-mail showed that Mr. Jobs was unsure of whether the $12.99 price would succeed.

Article source: http://www.nytimes.com/2013/06/04/technology/us-cites-book-publishers-phone-calls-in-apple-price-fixing-case.html?partner=rss&emc=rss

Japanese Finance Minister Seeks to Firm Up Position on Inflation Targets

TOKYO — Taro Aso, the newly appointed finance minister of Japan, said Friday that he wants the government to firm up its position on an accord with the central bank on an inflation target in January, before the bank’s next policy meeting, to attack the country’s entrenched deflation.

Mr. Aso also said the Japanese authorities stood ready to act against speculators’ driving the yen up or down excessively, saying that such activity could cause difficulties for the economy.

Prime Minister Shinzo Abe’s government is pursuing a policy of aggressive monetary easing — manipulation of interest rates and money supply — and heavy spending to beat deflation and weaken the yen and calling on the Bank of Japan to adopt an inflation target of 2 percent, double the current target.

Asked about the timing of a policy accord on the inflation target, Mr. Aso, a former prime minister, said it could come in January after the government mapped out an extra stimulus budget, shortly compiling requests Jan. 7 and before the Bank of Japan holds its next policy meeting Jan. 21.

The Bank of Japan eased monetary policy last week and has promised to debate setting a new price target at the January meeting.

The yen fell to its lowest level in more than two years versus the dollar Friday, to 86.64, under pressure from expectations that the new Japanese government would push the central bank into more aggressive easing. The yen strengthened in later trading.

“If excessive rises or falls in the yen due to speculation cause trouble for a lot of people, intervention would be a powerful tool, so there’s no reason why we would not use it,” Mr. Aso said.

“Under the current situation, where movements are gradual, I think it should basically be left to market mechanisms and fundamentals,” he added.

Asked whether Japan’s efforts to ease monetary policy and weaken the yen might lead to competitive currency devaluations, Mr. Aso said: “It’s wrong to say Japan is intervening unreasonably.”

Potentially adding more pressure on the Bank of Japan was the release of data Friday showing that Japanese factory output had fallen 1.7 percent in November, more than triple the median market forecast for a 0.5 percent drop. That followed a 1.6 percent gain in October, the first rise in four months.

Japanese manufacturing activity also put in a bleak performance in the Markit/JMMA Japan manufacturing purchasing managers index for December, released Friday, which declined at its fastest pace in more than three years.

Separate data released Friday showed Japan’s core consumer prices, which exclude volatile fresh food prices, edged down 0.1 percent in November from the level of a year earlier, in line with the median market forecast.

“If you look at data closely, there are also signs the economy will probably be bottoming out, so the data could simply offer the government a pretext to use its stimulus plan to support the recovery,” said Takeshi Minami, chief economist at Norinchukin Research Institute.

Many economists warn that Mr. Abe’s emphasis on stimulus might have only short-term effects.

Article source: http://www.nytimes.com/2012/12/29/business/global/japanese-finance-minister-seeks-to-firm-up-position-on-inflation-targets.html?partner=rss&emc=rss