Apple CEO Must Give Deposition in E-Books Antitrust Suit

Apple Inc. Chief Executive Officer Tim Cook was ordered by a judge to give a deposition in the U.S. Justice Department’s e-books pricing lawsuit against the world’s biggest technology company.

The possibility of Cook’s deposition was disclosed March 8 in a brief order by U.S. District Judge Denise Cote in Manhattan, who is overseeing the case. Cote granted a request by the U.S. and ordered the deposition yesterday, limiting it to four hours, according to the court.

Lawyers for the Justice Department’s Antitrust Division asked Cote in a letter on March 6 for “assistance in settling a discovery dispute” with Cupertino, California-based Apple over Cook’s deposition. The March 6 letter wasn’t part of the publicly available court file.

Lawrence Buterman, a lawyer for the U.S., said in a letter, filed March 12 in court and also dated March 6, that Cook is the only defendant CEO who hasn’t agreed to be questioned under oath as part of the case.

The U.S. sued Apple and a group of book publishers last year, claiming they conspired to raise prices for electronic books in violation of U.S. antitrust law.

E-Books Strategy

Cook was Apple’s chief operating officer responsible for running the company day-to-day because of the poor health of former Apple co-founder and late CEO Steve Jobs, Buterman said.

“Mr. Cook is likely to have highly relevant information regarding Apple’s decision to enter the e-books market and its related strategies that are at issue in this case,” Buterman said.

He also had “private exchanges” with Jobs, who died in October 2011, and other company officials, Buterman said.

“It is also likely that, given their relationship, Mr. Jobs sought Mr. Cook’s counsel on matters relating to e-books, and that, as a result, the two engaged in private e-books conversations that cannot be discovered other than through Mr. Cook’s deposition,” he said.

Buterman said that while Apple told judge Cote that Jobs played no meaningful role in the alleged price fixing, the company’s assertion “is plainly contradicted by Apple’s own documents and testimony which demonstrates that Mr. Jobs had personal knowledge of and involvement in Apple’s decision to enter an illicit agreement with publishers to raise e-book prices.”

Mainstream Market

In the letter, Buterman cited the deposition under oath of Kevin Saul, an Apple associate general counsel, and an e-mail sent by Jobs suggesting to a publisher’s corporate parent that it should “throw in with Apple” and “create a real mainstream e-books market” rather than “going with Amazon.”

Apple is the only defendant remaining in the case. Verlagsgruppe Georg von Holtzbrinck GmbH’s Macmillan unit, CBS Corp. (CBS)’s Simon & Schuster, Lagardere SCA (MMB)’s Hachette Book Group, Pearson Plc (PSON)’s Penguin unit and News Corp.’s HarperCollins settled with the government.

Tom Neumayr, a spokesman for Apple, declined to comment on the deposition order for Cook.

Orin Snyder, a lawyer at Gibson Dunn & Crutcher LLP who is representing Apple, said in a March 11 letter that questioning Cook would “threaten disruption of Apple’s business” and “serve as a potent tool for harassment.” He also said the government’s assertions about Cook’s knowledge and role in the matter were “speculative.”

Cue’s Deposition

Snyder said Cook’s testimony wasn’t necessary because U.S. lawyers were questioning Apple Senior Vice President Eddy Cue March 12 and yesterday. According to a transcript of a court conference yesterday, Butterman said Cue told lawyers that Cook had information about e-book prices and the company’s strategy.

Jeff Friedman, a partner at Hagens Berman Sobol Shapiro LLP in San Francisco, who is co-lead plaintiff’s counsel on a related civil lawsuit brought on behalf of e-book customers, said he welcomed the taking of Cook’s testimony under oath.

“The class agrees with the Justice Department’s position and Mr. Buterman did an excellent job before Judge Cote in articulating all the plaintiffs’ position,” Friedman said. “We were very satisfied with the judge’s reasoning in granting the four-hour deposition of Mr. Cook.”

The case is U.S. v. Apple Inc. (AAPL), 12-cv-02826, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporters on this story: Patricia Hurtado in New York at pathurtado@bloomberg.net; Bob Van Voris in New York at rvanvoris@bloomberg.net; David McLaughlin in New York at dmclaughlin9@bloomberg.net

To contact the editors responsible for this story: Michael Hytha at mhytha@bloomberg.net; John Pickering at jpickering@bloomberg.net

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