Court Denies Apple's Request to Remove Compliance Monitor in E-Book Antitrust Case

iBooksU.S. District Judge Denise Cote today denied Apple's attempts to thwart its antitrust monitorship, reports Reuters. Apple had asked the court for both a stay on the original order requiring an external compliance monitor (due to a pending appeal) and the removal of Michael Bromwich, the attorney appointed to serve as the company's monitor. Both requests were denied.
Apple Inc lost a bid on Monday to block an antitrust monitor appointed after a judge's finding that the company conspired to fix e-book prices. At a hearing, U.S. District Judge Denise Cote in Manhattan denied Apple's request to stay an order requiring an external compliance monitor pending the company's appeal.

Apple also sought to have the judge disqualify the lawyer chosen to serve as monitor, Michael Bromwich.
Apple and appointed antitrust compliance monitor Bromwich have ongoing disagreements since November, when Apple filed a formal complaint over Bromwich's fees in the case, which amounted to $138,432 over a two week period. The company also complained that Bromwich was overstepping his bounds by demanding lawyer-less meetings with key Apple executives and board members.

Bromwich, for his part, claimed that he experienced "a surprising and disappointing lack of cooperation from Apple and its executives", filing a complaint against the company in late December. Apple responded by requesting his removal last week, stating that Bromwich had a personal bias against the company.

Earlier today, the Department of Justice condemned Apple's actions, stating Apple had "chosen a campaign of character assassination over a culture of compliance" and suggested that Bromwich was open to negotiating with Apple on the original fee dispute.

Judge Cote plans to issue a decision explaining her reasoning on the denial in the near future, at which point Apple will have 48 hours to request an emergency stay from the federal appeals court in New York.

Apple was originally found guilty of conspiring with publishers to raise the retail price of e-books in July. As part of its punishment, the company was forced to hire an external compliance monitor to ensure that it complies with antitrust requirements in the future.

Top Rated Comments

(View all)
Avatar
12 months ago

Apple suggested that he speak with its employees who actually have something to do with antitrust, such as its general counsel or chief compliance officer, whereupon Mr. Bromwich had a tantrum. He made blanket requests for proprietary documents well beyond his mandate and bypassed Apple's in-house counsel by sending letters directly to board members and executives ordering them to meet with him without their lawyers present, accusing the company of "a surprising and disappointing lack of cooperation."

Then, shortly before Thanksgiving and out of the blue, Judge Cote proposed to amend her injunction to grant Mr. Bromwich even greater powers than he already claimed and also to make monthly briefings to her on what he finds—without Apple present. She denied any previous ex parte contact, but Apple's lawyers say Mr. Bromwich told them that he doesn't need to wait for the January deadline because Judge Cote privately instructed him during the interview process for the position to get off to a "fast start."


He worked for Iran-Contra independent counsel Lawrence Walsh in the Reagan era and as inspector general for the Justice Department in the Clinton years.

He was confirmed for the latter job despite conflicts of interest; his mentor Philip Heymann was Deputy Attorney General and inspectors general are supposed to be impartial watchdogs. In 1994, Judge Cote wrote Mr. Bromwich an effusive endorsement letter to help push him over the Senate hump.

While he has great political connections, Mr. Bromwich has no experience in antitrust law. The greenhorn is billing Apple at an $1,100 hourly rate and he was forced to hire the law firm Fried Frank to make up for his lack of expertise, at $1,025 a hour. He racked up $138,432.40 in charges for his first two weeks. A spokesman for Mr. Bromwich's firm, the Bromwich Group, declined to comment on matters currently before the court.


From the WSJ (http://online.wsj.com/news/articles/SB10001424052702304355104579236261045331876).

Must have been a different Judge Denise Cote :rolleyes:
Rating: 15 Votes
Avatar
12 months ago
The judge shouldn't be allowed to pick her friends. It should be a reputable party who has no relation to the judge at all.
Rating: 15 Votes
Avatar
12 months ago
I can understand denying the request to get rid of the monitor entirely, given that they were found guilty, but the simple fact that this monitor had to bring in an outside expert who gets paid as much as he does to do the job he was expressly hired to do should have disqualified him from being appointed in the first place, and I can't honestly see how it's anything but a favor by the judge.

I mean, really, if you were sent to a repair guy to get your car fixed, and the repair guy handed it off to an "expert in repairing cars" because he was actually an appliance repairman, then billed for both his and the expert's time, you'd say that the repair guy was incompetent and should never have been given the work in the first place.

How is this any different? Because lawyers are special flowers who get to take work they don't know how to do and bill fabulous amounts of money for hiring outside help to do the work?
Rating: 13 Votes
Avatar
12 months ago
I don't even begin to understand why the court would be unwilling to assign a new monitor. Why does it matter who the monitor is, if there isn't something shady going on.

It is very apparent that there most likely is a conflict of personality between the current monitor and Apple and that both parties feel like it is impeding their ability to get work accomplished. Seems simple, change out the monitor. If the monitor is doing what they are assigned to do why does it matter who the monitor is.

This seems to be a very odd response especially in light of the fact that the monitor (Bromwich) is an old friend of the judge on the case (Cote).
Rating: 8 Votes
Avatar
12 months ago
I laughed very hard at the whole line about "fostering a culture of compliance".

Let's face it, that's what this is all about. Apple has never played by the same 'rules' that other big business play by. Minimal lobbying, no massive corporate PAC money, not rolling over and playing dead about the whole tax scheme thing a few months back, etc.

This is about forcing Apple to conform and demonstrating the government's ability to force it's will on anyone--even the most successful company in the US.

If I were in Tim Cook's shoes, I would kick the guy out of the building and dare the court to take further action. They've done nothing wrong. Their actions were not criminal, and even if they were (by some imaginative stretch) the 'ebooks market' is not large or vital enough for antitrust law to really even be a consideration.

I'm proud of them for standing up to this and I hope they continue.
Rating: 8 Votes
Avatar
12 months ago
The ridiculousness of this whole suit is that the Department of Justice is effectively helping Amazon to destroy competition through predatory pricing.

Last time I checked, the goal of antitrust regulations was to promote competition and support consumers' long term interests. I guess Amazon spends a whole lot more lobbying money in Washington.
Rating: 8 Votes
Avatar
12 months ago

Wow, a convicted felon shown his place, yet again. Really hard to imagine, very unpredictable. LOL

BTW, all these regurgitation of old friend of judge is just "Apple" propaganda. If you smart you would see this lie through...


You are pretty naive to think a lot of government assigned contracts aren't awarded as favours or to help out colleagues.

Same thing happens in Australia. New construction contracts, or planning and architecture etc from government is usually assigned to people with no more than 1 or 2 degrees of separation from the person signing off on the deal.
Rating: 6 Votes
Avatar
12 months ago

From the WSJ (http://online.wsj.com/news/articles/SB10001424052702304355104579236261045331876).

Must have been a different Judge Denise Cote :rolleyes:


Cote should be removed from the bench. Some day, for some reason she will be. Just not here. :apple:
Rating: 6 Votes
Avatar
12 months ago
Lets see what she writes in her explanation. And then lets see how long it takes for Apple to file for an emergency stay. My guess is that it is all ready to go and just waiting for her to file her explanation. Apple will fight hard to keep anyone who doesn't belong out of their secrets.
Rating: 5 Votes
Avatar
12 months ago

I laughed very hard at the whole line about "fostering a culture of compliance".

Let's face it, that's what this is all about. Apple has never played by the same 'rules' that other big business play by. Minimal lobbying, no massive corporate PAC money, not rolling over and playing dead about the whole tax scheme thing a few months back, etc.

This is about forcing Apple to conform and demonstrating the government's ability to force it's will on anyone--even the most successful company in the US.

If I were in Tim Cook's shoes, I would kick the guy out of the building and dare the court to take further action. They've done nothing wrong. Their actions were not criminal, and even if they were (by some imaginative stretch) the 'ebooks market' is not large or vital enough for antitrust law to really even be a consideration.

I'm proud of them for standing up to this and I hope they continue.


Some sense at last.

This is all politics. Amazon gets the the only seat at the table, for playing the game - taking control of the Washington Post, massive and growing CIA data contracts, not to mention lobbying like there's no tomorrow.

Apple does not play this game, and the powers that be, see a Jobs-less Apple as ripe for the pickings:
[LIST]
[*]Wall St, Ican etc - siphoning cash out of the company
[*]NSA only got Apple to sign up for Prism after Steve passed away
[*] with the departure of Bob Mansfield, deep control over Apple Technologies is now in the hands of former Adobe CTO and Flash evangelist, Kevin Lynch who brought you, Adobe Insight intelligence monitoring using Omniture "Ad Tracking" from their data centre, right next to the NSA data centre in Utah… and Flash, the most 'accidentally' insecure software on the planet
[/LIST]

and clearly the White House is looking for more "lobbying" from Apple, as confirmed by The Justice Department's conduct of this "legal action":
[LIST]
[*]not replacing a Judge who declared Apple guilty before the case commenced
[*]not replacing a compliance monitor with insufficient qualifications for the job
[*]not replacing the compliance monitor when he commenced his action prior to commencement of the monitoring
[*]not replacing the compliance monitor when he stepped outside the declared role, on the basis of (illegal) private discussions with the judge, no less
[/LIST]

What this under qualified compliance monitor is known for is:
[LIST]
[*]issuing permits to drill, despite in his own words, the disturbing attitude of some oil companies, after a bad oil spill (which occurred less than a month after the president expanded off-shore drilling) and
[*]making a Lieutenant Colonel take the fall for a President's and the security services' drug running operations
[/LIST]

The whole thing stinks.
Rating: 5 Votes
[ Read All Comments ]