How Steve Jobs, Rupert Murdoch and Stephen King Worked To Fix Ebook Prices

Simon & SchusterA detail from the cover of Steve Jobs' biography.The federal court ruling describing how Apple fixed prices in the ebook market reads like a thriller: Steve Jobs was seriously ill in 2009, and his SVP in charge of books, Eddy Cue, raced all over New York to sign up five major publishers into a pricing agreement before he died.

At the same time, Apple was about to launch the iPad in 2010, and Cue and Jobs wanted all the publishers on board with the iPad's iBookstore before the launch event.

Cue played hardball with the publishers, and they got their wish — Hachette, HarperCollins, MacMillan, Penguin, and Simon & Schuster all signed on with Apple,and book prices went up by as much as 50% virtually overnight, even though Amazon controlled 90% of the market.

What is startling about the ruling is how overt the cooperation was between the publishers and Apple. The publishing CEOs literally held regular dinners to discuss how they could rid themselves of Amazon's dominance of the market, and CEO Jeff Bezos' insistence that all ebook be sold at a mere $9.99.

And then there's the star power. In addition to Apple's Jobs and Cue, Rupert and James Murdoch, and authors Stephen King and Sarah Palin all had cameo roles.

Here's how it happened, according to today's ruling.