In the recently amended complaint, the states claim that Apple Senior Vice President of Internet Software and Services Eddy Cue, who was acting as Apple's liaison with the publishers, “could not secure one of the Conspiring Publisher’s commitment directly from an executive."
At issue was Apple's agency model which allows publishers to set prices under a "most favored nations" clause that contractually keeps them from selling the same content to other resellers at a lower price. This went against the the then-dominant wholesale model used by Amazon which let resellers set their own prices, sometimes at a loss, in order to drum up sales.
Not all of the five major book companies were on board with Apple's pricing plan, and Jobs apparently stepped in with a personal email in late January.
From Jobs' email:
As I see it, [Conspiring Publisher] has the following choices:
1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.
2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.
3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started, there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.
Maybe I’m missing something, but I don’t see any other alternatives. Do you?
The publisher reversed its decision and signed on with Apple three days later.