E-Book Trial Requires Tim Cook's Presence on the Stand
Mar 14, 2013 12:56 PM PT
Apple CEO Tim Cook has been ordered to testify in the antitrust case that accuses his company of e-book price-fixing.
Apple has tried to keep Cook from having to appear, claiming it was unnecessary considering 11 other top company executives have given depositions in the case.
The case involves an alleged e-book price-fixing scheme orchestrated by Apple and other publishers in order to help them better compete against Amazon. The Department of Justice is not seeking damages but is trying Apple on antitrust charges.
The other publishers named in the suit -- Pearson Pic's Penguin Group, News Corp's HarperCollins Publishers, CBS Corp's Simon & Schuster Inc, Hachette Book Group Inc and MacMillian -- have settled. Apple's trial is set for June.
Apple did not respond to a request to comment for this story.
Cook On the Stand
It's still unclear exactly what knowledge Cook might have of the alleged illegal activity. The prosecution is likely citing his longevity and relationship with former company CEO Steve Jobs, who was named in the suit as a key player in devising the price-fixing plan. That relationship was cited as evidence that Cook could provide valuable information at the deposition, said James Hetz, attorney at Hetz, Jones and Goldberg.
"The DOJ obviously convinced the judge that Cook's testimony was needed to provide them with specific information they needed to prove their case," he told MacNewsWorld. "Also, Cook has been with Apple since 1998 and was the acting CEO when Jobs took medical leave in August 2011, and is now the new Apple CEO. So he would have had first-hand knowledge of the e-book business, both through his relationship with Jobs and as CEO."
It's not uncommon to call top executives to the stand, since they represent responsibility for what happens at the company, even if they don't have direct knowledge of particular events, said Jonathan Kirsch, author and independent publishing attorney.
Calling the CEO of one of the world's most high-profile companies to the stand to testify in an antitrust trial, however, might not always be the most direct way to get to the bottom of the case, Kirsch said. That's especially true in a modern era of corporate executives that are often well aware of the conversations they can legally have.
"There is a little bit of showboating by the prosecution here -- to subpoena a high-profile corporate executive and put him on the witness stand," he told MacNewsWorld. "In an antitrust case, you're trying to show that companies were working in concert with each other to gain an illegal competitive advantage. But the notion that there are robber-baron, cigar-smoking CEOs plotting together is 100 years old, and to prove that modern corporate executives conspired with each other is much more difficult."
Apple's No Victim
Unfortunately for Apple, though, Tim Cook might not be able to play the victim card to full effect, said Kirsch.
"The irony of the case is that Amazon is the 800-pound gorilla in the market," he said. "The publishers are the ones who have been charged with wrongful conduct, but they were just desperately trying to survive in a market where they were - and still are - being killed by Amazon."
Illegal activity is illegal no matter the circumstances, he admitted. Publishers whose businesses are struggling might have been able to elicit more sympathy had they gone to trial, however, as opposed to the CEO of a company that is a leader in other markets and has an infamous pile of cash.
If the defendants are hoping to generate sympathy by presenting the publishers as hopeless competitors against online retail giants, Cook's presence could help the prosecution, Kirsch noted.
"Some might see the real victims here as the small publishers who are at a significant disadvantage to Amazon," he said. "Having the head of Apple present in the courtroom adds some luster to the prosecution's case, because people might not be as sympathetic towards Cook as they would towards the small, disadvantaged publishers."
Still, the burden of proof lies with the government, and Apple can play up its innocence in the matter relatively well, said Hetz.
"The DoJ generally has a tough case, as they must prove a conspiracy between Apple and the publishers," he pointed out. "The direct evidence for this type of claim is usually hard to uncover, as a paper or digital trail admitting such is usually not found."