John Sargent, CEO of publishing giant Macmillan, was a busy man on January 20, 2010. One week before Apple released the iPad, Sargent had lunch with Amazon Kindle chief Russ Grandinetti, and he dined with Apple's Cue in Manhattan at night.
According to the Department of Justice, it was at that Manhattan dinner -- which included three Apple executives and two Macmillan honchos -- that the alleged conspiracy was born.
Grandinetti testified that Sargent told him at lunch that Macmillan would change its e-book sales model: It would continue selling to Amazon on a wholesale basis, but for another unnamed retailer, Macmillan would set its own price in an agency model. Grandinetti assumed the "other retailer" was Apple, he said.
But the next day, after the dinner in Manhattan, Grandinetti said Sargent called him with a change of plans. Macmillan was about to sign a contract that required it to have only agency contracts, he said.
The DOJ co-counsel pressed Sargent on the switch, accusing him of telling Cue at dinner about his lunch conversation with Grandinetti. He also accused Cue of telling Sargent that any Apple contract would require Macmillan to make its Amazon deal an agency model.
Both Sargent and Cue denied the accusations, despite sharp questioning from the DOJ.
Questioned repeatedly by the judge, he does not dispute that they engaged in a conspiracy.