Apple Inc. (AAPL): Tim Cook May Take Stand in DOJ E-book Case

Published on March 8, 2013 at 7:26 pm by David Woodburn in News

Apple Inc. (NASDAQ:AAPL) – the second most-popular stock holding among hedge funds we track – is the only company left standing in a E-book price-fixing case filed by the U.S. Department of Justice, and it appears that not only does Apple intend to take this case all the way to court rather than settling, but there is talk that the head man himself, CEO Tim Cook, may just be asked to testify to make the case that Apple did not willfully conspire with five major book publishers to fix e-book prices in order to harm the market share of e-book retail king Amazon.com Inc. (NASDAQ:AMZN).

The request, according to a report, may come from the DOJ, which filed a letter with U.S. District Judge Denise Cote to settle what it calls a “discovery dispute” surrounding Cook’s deposition. This case gained a share of national tech headlines when the DOJ filed the lawsuit, claiming that Apple Inc. (NASDAQ:AAPL) arranged to artificially hike e-book prices with the five publishing houses – HarperCollins, Simon & Schuster, Macmillan, Hatchette and Penguin = by convincing those firms to instill the pricing model where the publishers dictated the prices of e-books instead of the retailers. Amazon.com Inc. (NASDAQ:AMZN) had dominated the e-book market by offering very low prices for their inventory of e-books, and Apple wanted to get a hold in the marketplace through its iBookstore.

All five publishing houses agreed to settle the case, and Apple has refused to capitulate. It claims it did not meet or “conspire” with the publishing houses, and was just looking to establish distribution contracts with the publishers for their e-books. This week, the two parties agreed not to use interviews of Steve Jobs by biographer Walter Isaacson as evidence in the case. That leaves Cook, who was not the CEO when these contracts were struck with the publishers. Therefore, it will be interesting to see how much light he will be able to shed on this alliance and the intended outcomes.

What do you think? Is this a big deal for Apple Inc. (NASDAQ:AAPL), and do you think Cook can help the case? Let us know your thoughts in the comments section below.

DISCLOSURE: I own no positions in any stock mentioned.

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