You may have heard about the Apple e-books price-fixing scandal by now. If not, here is the short version: on the verge of releasing the iPad, Apple allegedly went to all of the major publishers, negotiated common contracts with all of them, all with the understanding (and Most Favored Nations clauses) that Apple would get equal or better treatment than other online e-book retailers, such as Google and Amazon.
The arrangements also ensured that the publishers would set universal pricing and commission models that would fix prices, decrease competition, and gouge customers.
All of those nasty anti-competitive allegations were found valid by a judge earlier this week. A second trial, to determine damages, is set to follow.
Besides the obvious paper trail of identical contracts, the market rates hiking immediately upon the release of the iPad, and the fixed prices between publishers, one thing that truly helped the government's case was good old-fashioned e-discovery.
Emails between the late Steve Jobs and James Murdoch, the head of HarperCollins, were leaked before trial to a number of outlets, including TechnoBuffalo. The court opinion itself cited a number of conversations between executives, lawyers, and other parties that all help to flesh out the scheme and show awareness that what the parties were doing wasn't exactly on the up-and-up.
One example began with Steve Jobs' statements to reporters after announcing the iPad. When a reporter asked why consumers, who were used to paying $9.99 at Amazon for an e-book, would pay more at the iBook store, Jobs first ensured the reporter that the prices between outlets would be the same and then stated, "Publishers are actually withholding their books from Amazon because they are not happy."
Simon & Schuster's General Counsel later wrote, via email, to the CEO, that she "cannot believe that Jobs made the statement" and considered it "[i]ncredibly stupid."
Folks, you know what else is
stupid unwise? Talking about an ongoing conspiracy via email. We've seen case after case of e-discovery emails coming back to bite a company in the behind. As in-house counsel, you may want to take the lead in educating others on the risks of e-discovery and the use of alternative communication channels for "sensitive information," such as mediums that do not provide written transcripts (telephones, a self-destructing text app, etc.)
For purposes of litigation, the e-discovery trail can be your worst nightmare. We've known this for about a decade now. Isn't it about time to proactively address the issue?
- Is Apple Resisting E-Book Antitrust Settlement? (FindLaw's In House Blog)
- Judge Pressures Apple to Settle E-book Price-Fixing Lawsuit? (FindLaw's Technologist Blog)
- Top 10 Things I Wish I Knew Before I Went In-House (Part 2) (FindLaw's In House Blog)