Steve Jobs had just wrapped up his Jan. 27 introduction of the iPad and iBookstore when the Wall Street Journal’s Walt Mossberg got his ear in the post-keynote press scrum.
Why, Mossberg asked Jobs, would anyone buy an e-book from Apple for $14.99 when they could buy the same book from Amazon (AAPL) for $9.99?
“That won’t be the case,” Jobs replied after a pause. “The prices will be the same.”
Jobs went on to predict that the publishers would “actually withhold their books from Amazon … because they’re not happy with the price.”
That, according to the Department of Justice, is direct evidence that Apple conspired with the publishers to raise the price of e-books, in violation of the Sherman antitrust act. It entered an edited version of the video into evidence in U.S.A. v. Apple as Plaintiffs Exhibit 607, along with an e-mail exchange between Carolyn Reidy, CEO of Simon & Schuster, and Elisa Rivlin, then the company’s general counsel.
“I can’t believe that Jobs made the statement,” Rivlin wrote. “Incredibly stupid.”
Reidy testified Wednesday morning that she didn’t understand what Rivlin meant by “incredibly stupid” until it had been explained. Apple’s attorneys will get their chance with her after lunch.
UPDATE: Reidy was asked in cross examination what she understood Jobs to be referring to when he said “the prices will be the same.”
The MFN is the provision in Apple’s publisher contracts that said if Amazon sold an e-book for $9.99, the publisher had to offer it for $9.99 on the iBookstore as well. See: Meet the man who created the “linchpin” of Apple’s e-book strategy.