The third day of the U.S. Department of Justice’s antitrust suit against Apple saw Amazon’s vice president of Kindle content Russell Grandinetti testify that the agency model used by Apple and five major book publishers was intended to damage the success of the Kindle, the online merchant’s e-book reader.
According to in-court reports from Reuters, Amazon’s vice president of Kindle content Russell Grandinetti testified that his company told publishers it may have to modify business relationships as a result of adopting the agency model.
Further, Gardinetti said publishers came to Amazon with an “ultimatum” after reaching deals with Apple in 2010, demanding they be allowed to set e-books prices on Amazon.com. Unless an agreement was made, Amazon would have been barred from selling Kindle-ready e-books on the same day that hardcover versions of the titles were released, he said.
Gandetti testified that in 2010, Macmillan’s CEO Jon Sargent offered a choice of moving to the agency model, or being forced to delay an e-book’s sale until seven months after a hardcover version of the same book had been on the market.
“I think I expressed how unpalatable the choice presented was,” Grandinetti said.
Amazon resisted signing a deal with the publishing houses for a short time, eventually signing a three year deal based on the agency model.
That model is the central part of the DoJ’s case against Apple, as they allege that the company colluded with five major book publishers to fix e-book prices. The DoJ has held up Amazon as one of the injured parties in Apple’s alleged scheme.