The settlement the Justice Department is seeking could shutter the iBookstore
Reuters and Bloomberg have both reported -- citing a pair of unnamed sources -- that Apple (AAPL) and one or two major publishers are preparing to get sued for antitrust violations, perhaps as early as today.
Three of the five publishers accused of colluding with Apple to fix the prices of e-books have reportedly accepted deals offered by the European Commission and the U.S. Department of Justice.
The settlers -- CBS's (CBS) Simon & Schuster, Lagardère SCA's Hachette Book Group and News Corp.'s (NWS) HarperCollins -- are presumably trying to avoid the cost of engaging in a protracted legal war with the government.
Apple and the two remaining publishers -- McMillan and Pearson's (PSO) Penguin -- are reportedly prepared to go the mat.
The publishers are trying to preserve the right to set their own prices under the so-called agency model. Using a wholesale pricing scheme, Amazon (AMZN) had been selling their e-books below cost -- typically $9.99 for bestsellers -- making it harder for publishers to charge full price for printed books.
Apple, for its part, is trying to save the iBookstore.
At issue is the 2010 deal Steve Jobs made to get e-books on the iPad that he described to biographer Walter Isaacson as follows:
"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.
"They went to Amazon and said, 'You're going to sign an agency contract or we're not going to give you the books.' "
Jobs also insisted that publishers sign a so-called most-favored nation clause that said they couldn't sell their books more cheaply to Amazon or any other e-book rival.
It's not hard to see why such an arrangement raised eyebrows in antitrust divisions on both sides of the Atlantic.
The settlement the DOJ has proposed -- and which three publishers have reportedly accepted -- would, according to the Wall Street Journal, do two things:
According to the Journal, the government has argued that the waiting period would allow publishers and booksellers to resume a one-to-one relationship, "free of the taint of collusion."
The length of that cooling-off period is reported to be one of the sticking points for Apple, and it's easy to see why.
An extended cooling-off period -- in which Amazon goes back to selling bestselling e-books for $9.99 and Apple is still adding its 30% surcharge to the publishers' prices -- could seriously damage Apple's e-book business.
Worse still, it could keep the books off the iBookstore altogether.
Apple's lawyers seem to think they can make a case that going to the agency model actually increased competition, allowing e-book rivals to take back some of the 90% market share Amazon had amassed.
Moreover the company -- unlike most book publishers -- has pockets deep enough to do legal battle with the U.S. government for as long as it takes to get a settlement more to its liking.
UPDATE: The hammer, as expected, fell Wednesday morning. See Why the market shrugged off the Apple antitrust suit.
Jobs invited Leslie Moonves to help him disrupt show business. Moonves passed.
"I told Steve, 'You know more than me about 99 percent of things but I know more about the television business.' "
That's Leslie Moonves, CEO of CBS (CBS), recalling a meeting with Steve Jobs last year.
Jobs was trying to talk him into providing TV shows and movies for a subscription content service Apple (AAPL) was assembling.
Moonves declined, according to MOREPhilip Elmer-DeWitt - Mar 11, 2012 7:19 AM ET
As rumors of a "real" Apple TV heat up, ideas that could upend the industry resurface
In late 2009, the Wall Street Journal ran a story that sent shivers through the television industry.
Quoting unnamed sources familiar with Apple's (AAPL) negotiations, the Journal reported that CBS (CBS) and ABC (DIS) were seriously considering Steve Jobs' plan to offer TV subscriptions over the Internet.
One form those subscriptions might take, according to these sources, MOREPhilip Elmer-DeWitt - Dec 28, 2011 4:23 PM ET
The drumroll begins with Walter Isaacson's appearance on CBS TV Sunday night
This just tweeted by @60Minutes:
SUNDAY: Steve Kroft sits down with historian Walter Isaacson for the first look at the authorized biography of Steve Jobs.
This is the book every serious student of Apple (AAPL) will want to read.
It's been kept under extraordinarily tight wraps. No review copies have been distributed. The worldwide lay down is scheduled for overnight Monday.
For more on MOREPhilip Elmer-DeWitt - Oct 19, 2011 4:32 PM ET
The network has dropped the celebrity blogger whose site issued the erroneous report
Hours after a false report Friday that Apple's (AAPL) CEO had died set newsrooms around the world scrambling for confirmation, CBS News severed its relationship with both What's Trending, the site that issued the erroneous tweet, and the celebrity blogger who produced it, according to The Hollywood Reporter.
Shira Lazar, 28, a Canadian-born actress and TV personality, launched the MOREPhilip Elmer-DeWitt - Sep 10, 2011 9:40 PM ET
Says he's addicted to "the damn thing." Reads top 10 reasons to buy one.
Update: CBS posted a non-iOS friendly version of the video to YouTube. Oh, the irony. iOS users and those who just prefer HTML5 can check out the Late Show website, where CBS posted an iOS friendly video. H/t Sac to Joe.
Apple (AAPL) scored another free media coup on Tuesday night's episode of Late Show with David Letterman. MOREPhilip Elmer-DeWitt - Mar 16, 2011 7:26 AM ET
To me, this is one piece of shovelware that makes a lot of sense
Unlike, some old-line media giants, CBS's (CBS) 60 Minutes isn't looking to Apple's (AAPL) iPad to save its skin.
The longest continuously running prime-time show in any format, 60 Minutes is still the most successful broadcast in U.S. television history. It was a top-10 rated show for 23 seasons in a row -- from 1977 to 2000. For MOREPhilip Elmer-DeWitt - Nov 22, 2010 8:16 AM ET
It appears that the networks are letting some content through to GoogleTV users.
Yesterday, GoogleTV users were greeted with messages that ABC, CBS and NBC would not work. This morning however, I had a look around and was able to watch an episode of 30 Rock on NBC as well as a few minutes of Talk (my threshold, not GoogleTV) and Medium on CBS. Disney-owned ABC and Hulu are still blocked, MORESeth Weintraub - Oct 22, 2010 9:26 AM ET
Every day, the Fortune staff spends hours poring over tech stories, posts, and reviews from all over the Web to keep tabs on the companies that matter. We've assembled the day's most newsworthy bits below.
ABC, CBS and NBC are blocking TV programming on their web sites from being viewable on the newly-launched Google TV. (IT World)
HP is finally releasing a tablet, the Windows 7-loaded HP Slate MORE
This is the spot for our live coverage of Apple's (AAPL) Sept. 1 music event.
In sum, Steve Jobs delivered on most of the rumored new products and services. The headlines:
A new $99 Apple TV that streams (rather than downloads) $4.99 movie rentals and 99-cent TV rentals from ABC and Fox.
A new lineup of iPods, chief among them the iPod touch equipped with two cameras, one a front-facing camera that can MORE
|NJ agrees to ban Tesla direct sales|
|Inside the underground sex economy|
|Five predictions for the World Wide Web that were way, way, way off|
|West prepares sanctions against Russia over Ukraine|
|Premarkets: China concerns hitting sentiment|