In the last years of his life, two avoidable controversies distracted Jobs from what he really wanted to be doing: working with this group on great new products. The two events played out, even after his death, in ways that made Apple, and Steve, seem arrogant, willful, and above the law. Starting in the mid-2000s, Steve was the informal leader of a group of Silicon Valley CEOs who agreed not to poach senior employees from one another. In 2010, the Justice Department filed a complaint in 2010 against Apple, along with Adobe, Google, Intel, Intuit, and Pixar, alleging that the companies had entered a series of agreements, recorded formally and informally, to not hire from one another. A class-action lawsuit followed in 2011, filed by an engineer at Lucasfilm on behalf of 64,000 employees of these companies, and others in Silicon Valley. (This lawsuit added Lucasfilm, which like Pixar is now owned by Disney, to the list of companies.) The plaintiffs alleged that the anticompetitive scheme cost workers billions of dollars in unrealized wage gains they might have enjoyed with unrestricted job mobility.
Emails subpoenaed during the investigation show that Steve was clearly involved. They also show him taking mordant pleasure at the fact that a Google recruiter was fired for poaching an Apple employee, after Steve had complained to Eric Schmidt, who was then CEO of the giant search engine company. When Jobs heard the news, his email reply was a smiley-face icon. Steve was hardly the only CEO to be caught with incriminating emails, but he was the only one shown making light of the personal impact of the collusion. Other chief executives seemed motivated primarily by a desire to not piss off Steve, who had become the most powerful employer in the technology business.
Tim Cook doesn’t see anything egregious in Steve’s thinking—even though he has since tried to settle the lawsuit by offering to pay hundreds of million of dollars to participants in the class-action suit. “I know where Steve’s head was,” he says. “He wasn’t doing anything to hold down salaries. It never came up. He had a simple objective. If we were working together on something—like with Intel, where we threw everything in the middle of the table and said let’s convert the Mac to the Intel processor—well, when we did that we didn’t want them poaching our employees that they were meeting, and they didn’t want us poaching theirs. Doesn’t it make sense that you wouldn’t, that it’s an okay thing? I don’t think for a minute he thought he was doing anything bad, and I don’t think he was thinking about saving any money. He was just very protective of his employees.” It’s a rational argument, insofar as it goes. All CEOs want to keep their best employees at their company. But it ignores the simple fact that making such an agreement with other companies, explicitly or otherwise, is illegal, according to the U.S. government and most antitrust lawyers. Steve, apparently, couldn’t be bothered even with acknowledging those rules.
That same attitude hurt Apple in another case it had to settle, in which the government alleged that Apple conspired with book publishers to raise the price of ebooks. As Steve prepared to launch the iPad, he was sure that reading books on the device would be seen as an attractive feature, one that he hoped would create profits for Apple while stealing customers from Amazon. He and Eddy Cue strongly encouraged book publishers to adopt the agency model Apple used on its app and iTunes stores—publishers could set the price of their ebooks, as long as Apple got 30 percent of the sale. Furthermore, they wouldn’t allow their titles to be sold at lower prices elsewhere. In this scenario, prices of ebooks would have risen uniformly from the low, $9.99 price Amazon often charged for new releases. The publishers would have enjoyed smaller profits but would have been able to set higher prices and avoid permitting Amazon to drive book prices down. Here, too, Steve’s emails did nothing to help Apple. His aggressive negotiating notes show that he was fully aware of the impact of getting all the publishers on the same page. Writing to James Murdoch, the son of News Corp CEO Rupert Murdoch, Jobs said that News Corp’s best option, he believed, was to “Throw in with Apple, and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.”
It’s possible that Steve really didn’t see anything wrong with trying to build solidarity among publishers, because he had done the same thing with record company executives when setting up the iTunes Music Store. Nobody accused him of collusion then, even though he had insisted on setting a price of 99 cents a track. It’s also possible that a variety of assorted corporate safeguards—better legal counsel, better compliance efforts, and so on—could have kept Apple on the right side of the law in both the ebooks case and the labor collusion. But Steve had molded Apple into a tool for turning what unfolded in his imagination into real products, not an organization that conservatively guarded against the downside of his impulses. So the safeguards that did exist weren’t powerful enough to prevent the troubles that arose.
“Steve created a management approach that worked for the type of product that he had been thinking about,” Bill Gates told me after Steve’s death. “You know, if you were going to do hardware and software together, and you’re going to do a few super, super nice designs, and you’re going to do it end-to-end where partnerships aren’t the key thing, where you control that experience totally. He managed a great organization that was purpose-fit to that.” We had been chatting about why so many books had been written promising to reveal how to do business “the Apple way,” or “the Steve Jobs way.” Bill was describing why Steve is a unique managerial case, someone whose model has limited applications. “Maybe you should call your book Don’t Try This at Home,” he said, only half joking. “So many of the people who want to be like Steve have the asshole side down. What they’re missing is the genius part.” One downside to the Steve Jobs way of running a company, he opined, is that “This is not an organization with checks and controls.”
ALL HIS LIFE, Steve had tried to control the narrative about Apple by being the sole employee to tell its story to the public. There was a cost to this choice that didn’t really become apparent until the last years of Steve’s life, when his notoriety and Apple’s success drew attention to Cupertino as never before. Apple became the lightning rod for everything from criticism of the tech industry’s sustainability problems to corporate governance controversies that affected many other companies as well. And its spokesman was a mortally unhealthy man with a desperate impatience to deal with things that really mattered to him, not this broad array of nagging distractions.
Ever since getting sick in 2004, Steve had kept goals in his head of things he wanted to be alive for. Some were personal, like the school graduations of his kids. Some were corporate, like his desire to live long enough to introduce the iPad tablet computer. Dealing with the media circus that erupted in 2010 when a technology blog came into possession of an iPhone 4 prototype that a young Apple engineer left in a bar was nowhere on Steve’s list. Nor was flying back from a Hawaii vacation to manage an uproar that became known as “Antennagate,” the result of the discovery that the iPhone 4, if held at certain angles, would drop calls more frequently than past iPhones. And he had only passing sensitivity to corporate governance issues. Yet all these incidents, and more, added to the already immense task he faced of managing a sprawling international company with nearly fifty thousand employees during these years when he was quite truly dying.