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Apple will appeal ruling allowing external compliance monitor to continue in e-books case

post #1 of 28
Thread Starter 
Apple has officially notified the court that it will appeal this week's ruling denying the company's request for the external compliance monitor imposed as part of the government's e-book antitrust suit to be disqualified.

Appeal


The notice states that Apple intends to fight "all of the Court's rulings adverse to Apple in its January 16, 2014 Order, and the Court's modifications to the Plaintiff United States' Final Judgment." Theodore Boutrous of Gibson, Dunn & Crutcher, Apple's lead counsel in the case, submitted the notice on Apple's behalf.

Apple's filing comes on the heels of a Monday hearing in which Judge Denise Cote rejected the company's motion to remove the court-appointed monitor, Michael Bromwich, from that post. Apple has taken issue with Bromwich's handling of the monitorship seemingly since the moment he was appointed, accusing him of conducting what the company feels is an overly-expansive, "roving" investigation and charging exorbitant fees.

Judge Cote expanded on her reasoning in a lengthy, 64-page opinion on Thursday in which she said that Apple failed to show "that the Monitor should be disqualified or that Apple will suffer irreparable harm." She also expressed hope that Apple and Bromwich could come to a mutually beneficial arrangement:

The deterioration of the relationship between Apple and the Monitor is unfortunate and disappointing. Hopefully, that relationship can be "reset" and placed on a productive course. But it is strongly in the public's interest for the Monitor to remain in place. A monitorship which succeeds in confirming the existence of a genuine and effective antitrust compliance program within Apple, is in the interest of not only the American public, but also Apple.

post #2 of 28
"She also expressed hope that Apple and Bromwich could come to a mutually beneficial arrangement:..." Fat chance since Apple knows Bromwich is totally incompetent (he admitted it by needing to hire someone who does) and has no business monitoring anything Apple is doing. Of course, the whole issue is a blatant which-hunt against Apple by the DOJ showing how out of touch they are with the whole e-book industry. If they actually knew anything, they would have gone against Amazon years ago with their predatory pricing instead of going against Apple and the book publishers. The US government has a responsibility to defend publishers as much as customers, something they aren't doing with this case.
post #3 of 28
Bring it to SCOTUS. Cote will never admit her mistake.
post #4 of 28
I frankly *still* don't get why Apple's approach was found to be in violation in the first place. If anyone can point me to a clear and cogent interpretation of why Apple's original approach was a violation and Amazon's is OK, please post a link. Thanks.
post #5 of 28
Quote:
Originally Posted by rob53 View Post

"She also expressed hope that Apple and Bromwich could come to a mutually beneficial arrangement:..." Fat chance since Apple knows Bromwich is totally incompetent (he admitted it by needing to hire someone who does) and has no business monitoring anything Apple is doing. Of course, the whole issue is a blatant which-hunt against Apple by the DOJ showing how out of touch they are with the whole e-book industry. If they actually knew anything, they would have gone against Amazon years ago with their predatory pricing instead of going against Apple and the book publishers. The US government has a responsibility to defend publishers as much as customers, something they aren't doing with this case.

Although I seem to be on the same side as you, just not as virulently:

"Someone who does" what?

And what's a "which-hunt?"

[OK I'm Knit picking you. But maybe take a second or two to read your post before you submit?  ;-)  ]

post #6 of 28
Quote:
Originally Posted by rob53 View Post

 The US government has a responsibility to defend publishers as much as customers, something they aren't doing with this case.

 

Agree with you, but the problem isn't so much defending customers (historically people have always gotten short shrift from the government.) It seems to me that in the past they have always tilted toward publishers (as they are corporate and big business.) Problem is the courts are following their traditional instinct and favoring Amazon as the biggest business with the greatest influence over Apple, Publishers, and last of all, the lowly citizens. 

post #7 of 28
Quote:
Originally Posted by DESuserIGN View Post

[OK I'm Knit picking you. But maybe take a second or two to read your post before you submit?  ;-)  ]

Pardon?
post #8 of 28
Quote:
Originally Posted by DESuserIGN View Post

I frankly *still* don't get why Apple's approach was found to be in violation in the first place. If anyone can point me to a clear and cogent interpretation of why Apple's original approach was a violation and Amazon's is OK, please post a link. Thanks.

http://tidbits.com/article/13912

post #9 of 28
Quote:
Originally Posted by JupiterOne View Post
Pardon?

I was thinking I might have got that spelling wrong.  :-)

Understandable though, as I've had no experience with nits.

post #10 of 28
Quote:
Originally Posted by Just_Me View Post
 

http://tidbits.com/article/13912

Thanks. Very helpful.

post #11 of 28
Quote:
Originally Posted by jungmark View Post

Bring it to SCOTUS. Cote will never admit her mistake.

This is all too true, I have always said and now research is coming up to back this up, when someone is professional, Like Lawyers, Doctors and Judges along with other professions, when they make a mistake or are found to be wrong they will never admit it, whether they know it or not. There is a reason, if they say they are wrong it calls into question everything they ever done and will do going forward. They can not afford to admit they made a mistake it shows a sign of weakness.

 

If Apple wins on appeal, she will claim the higher court was wrong before she ever admits she was wrong.

post #12 of 28
Quote:
Originally Posted by Just_Me View Post
 

http://tidbits.com/article/13912

This person did a very good job of summarizing what happen. The real question is whether Apple realize during the negotiations where this was all heading. From the looks of it, they were taking advantage of a situation, but the fact that Steve wanted all the book sellers on board at the beginning may have put the nail in this. If this was done over a period of time then it may have been different.

 

However, I have always argued, book are not a commodity and they are not something they you need to buy. The Anti-trust act was done to protect consumer against someone price fixing things like food, or things you need which you can buy the exact same product from any number of sources. In the case of books you can only buy a book from one publisher it is not like you can buy same book from the multiply companies, plus you do not need to buy a book if you want it not a requirement of life and as the article pointed out, prices went up and sell when down so the consumer spoke and the publisher made less money. The market would have correct this issue on its own.

 

But again it another example of our government trying to make people thing they are helping them. It was all smoke and mirror and dog and pony show for the public.

post #13 of 28
There is a great deal of confusion about the business of selling eBooks. While a great deal is known about the business of selling paper books (publisher wholesales to book sellers who then sell to readers), those understandings simply do not apply to digital books. For example, there are no excess eBooks that have to be sold at discount to minimize losses. There is also no secondary (used) eBook market as there is with paper books.
The Tidbits article cited above errs in this manner when it talks about Apple's negotiated pricing for "hardcover" books. There is no such thing as a hardcover eBook nor is there a digital analog of that status.
For this to make any sense, we have to forget about paper books and the market that evolved to promulgate them. The eBook is a very different critter and has to be thought of in very different terms. We cannot use paper book concepts to understand digital books and the markets that are evolving to handle them. To ignore this is to equate apples with oranges.
post #14 of 28
Quote:
Originally Posted by DESuserIGN View Post
 

Although I seem to be on the same side as you, just not as virulently:

"Someone who does" what?

And what's a "which-hunt?"

[OK I'm Knit picking you. But maybe take a second or two to read your post before you submit?  ;-)  ]

Shouldn't it be nit picking? Unless you really mean you're choosing some kind of woolen material for him, in which case I sit corrected.

post #15 of 28
Originally Posted by tdknox View Post
Shouldn't it be nit picking?

 

No, he’s talking about when your grandmother gets a particularly stubborn booger right in the middle of her needlepoint.

Originally posted by Marvin

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Originally posted by Marvin

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post #16 of 28
Quote:
Originally Posted by DESuserIGN View Post
 

Although I seem to be on the same side as you, just not as virulently:

"Someone who does" what?

And what's a "which-hunt?"

[OK I'm Knit picking you. But maybe take a second or two to read your post before you submit?  ;-)  ]

Sorry, I was doing something constructive instead of explaining my comments.

 

"Fat chance since Apple knows Bromwich is totally incompetent (he admitted it by needing to hire someone who does)..."

 

"someone who does" refers to Bromwich and the extra people he hired to do the actual monitoring since Bromwich admitted he knows nothings about antitrust activities. This isn't stated in this article but if you've kept up on the subject, you would have heard it before.

 

As for the second comment, the spell checker in my fingers wasn't working, just like in yours. Yes, I meant a witch-hunt. I assume you know what that is. As for making comments about my obvious boo-boos, I'm sure just about everyone knew what I meant. At least I didn't capitalize a  non-proper word in the middle of a sentence.

post #17 of 28
Quote:
Originally Posted by Just_Me View Post

http://tidbits.com/article/13912

From reading the article it would seem the publishers should be held more at fault than anyone since they are the ones that determine prices. Why not let the laws of supply and demand work this. If you raise prices, demand falls. Once demand is so low they start losing money, prices should drop. I can't blame Amazon either, let them run their business at a loss if they want, it still benefits the consumer. Definitely an interesting case
post #18 of 28
Quote:
Originally Posted by Just_Me View Post
 

http://tidbits.com/article/13912

 

From your link:-

 

"Although trade ebooks were only $100 million or so at that time,.."

 

So the entire eBook market was worth $100 million, of that only a certain percentage were "best sellers" and based on the price of those "best sellers" only anything above $9.99 was apparently "ripped off" from consumers.

 

Of that Apple made 30%.

 

How the f*ck can a civil suit by 33 states seek a cool $Billion in damages?

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Better than my Bose, better than my Skullcandy's, listening to Mozart through my LeBron James limited edition PowerBeats by Dre is almost as good as my Sennheisers.
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post #19 of 28

So they're appealing the appeal? If they lose this appeal, will they appeal the appeal of the appeal?

 

Maybe they should just suck it up, accept they got busted, and just fly straight for awhile until a monitor is deemed no longer necessary.

post #20 of 28
I don't think what Apple did was wrong in their negotiated agreements - but whatever - they lost the case and the court ordered a compliance monitor. Fair enough I guess.

The real injustices are that;
1. The judge appointed a friend as the monitor.
2. The friend is completely unqualified to do the job he was appointed to do
3. The friend is investigating things which are completely irrelevant to the issues he was appointed to monitor
4. The friend is allowed to bill any amount he wants and has chosen to bill an exorbitant amount of money for himself
5. Due to the friend's vast incompetence, he has had to hire a team of professionals who apparently *do* have experience and competence in this area of law and instead of paying them out of his salary, he is submitting their fees to Apple for additional reimbursement.

I don't think that Apple is completely against their punishment of having a monitor - but the monitor should:
1. Be someone who does not have a personal relationship with the judge who is presiding over the case and ordering the monitoring.
2. Be someone who has the necessary experience, skillset and competence to do the job they are being appointed to do
3. Be compensated at fair market value for the type of work they are doing and the time it takes them to do that work
4. Have a very clear and limited scope for their investigation

How is something that is so obviously crooked allowed to happen in the first place? Incompetence aside, Bromwich should have been automatically excluded as a candidate simply because of his relationship with Cote.

Such an obvious abuse of power should be investigated thoroughly and this particular judge should be removed from her position and probably thrown in jail herself.
post #21 of 28
Great summary, tenly.

I'm glad that Apple is appealing. Fight the good Fight, Apple, and may you beat the devil.
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post #22 of 28
Quote:
Originally Posted by hill60 View Post

From your link:-

"Although trade ebooks were only $100 million or so at that time,.."

So the entire eBook market was worth $100 million, of that only a certain percentage were "best sellers" and based on the price of those "best sellers" only anything above $9.99 was apparently "ripped off" from consumers.

Of that Apple made 30%.

How the f*ck can a civil suit by 33 states seek a cool $Billion in damages?

I kinda agree Hill, tho I don't recall anything about the states wanting a $Billion in damages. Even if the 33 States were successful in convincing the court trebling of the damages was appropriate it wouldn't reach half that figure according to what I've read. Nevertheless the eBook market was and is growing pretty darn fast which is why Apple wanted in on it,.

But with that put aside the Tidbits write-up explained things much more clearly for you didn't it? I recall discussions on some of the same points in earlier threads. I thought it was quite well done, with no obvious bias or factual errors. All in all probably the best summation I've read. Thanks for the link Just Me.

For those that don't read back more than a post or two here it is again.
http://tidbits.com/article/13912
Edited by Gatorguy - 1/18/14 at 5:59am
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post #23 of 28

Ok so I managed to post this without finishing it thanks to ctrl + enter, please ignore. I'll finish it and re-post shortly.

post #24 of 28
Quote:
I don't think what Apple did was wrong in their negotiated agreements - but whatever - they lost the case and the court ordered a compliance monitor. Fair enough I guess.

The real injustices are that;

Here goes a second attempt at replying to this post with inline quotes. I'm very new to this editor so I made stupid mistakes like not realising ctrl + enter will submit my post without warning. It's a shame this can't be a little more intuitive, it seems impossible to delete quote blocks so I have to copy and paste all your text to reply to it instead of interjecting mine. Ah well. My point in replying is that I think you get a few things wrong here and I'd like to start a discussion on them.

 

Quote:

1. The judge appointed a friend as the monitor.

The only evidence I've seen for this is that the Judge may have written him an endorsement 19 years ago. I don't really think that's any evidence of a conflict of interest. In fact a Judge would surely be more likely to appoint someone if they had previously endorsed them for excellent work or skill.

 

Quote:

2. The friend is completely unqualified to do the job he was appointed to do

Bromwich may not be an antitrust expert, but from his biog it seems that he has completed several monitorships at extremely high levels and so seems actually to be well qualified. Apple doesn't seem to have raised much in the way of objections pre-assignment so I'm not sure what option was available here.

 

Quote:

3. The friend is investigating things which are completely irrelevant to the issues he was appointed to monitor

Is he? He has only requested materials related to Apple's antitrust compliance and I've seen absolutely no evidence of him doing anything but investigating this. Apple may claim he has made voluminous requests but his requests have been submitted in evidence and they are perfectly reasonable.

 

Quote:

4. The friend is allowed to bill any amount he wants and has chosen to bill an exorbitant amount of money for himself
5. Due to the friend's vast incompetence, he has had to hire a team of professionals who apparently *do* have experience and competence in this area of law and instead of paying them out of his salary, he is submitting their fees to Apple for additional reimbursement.

  The difference between Apple's proposed rate and Bromwich's proposed rate is $300/hour. This is really not a massive concern for Apple who already retain a massive legal team. Apple has been found guilty and so the costs involved with the judicial decision are not something they can reasonably complain about when it's such a drop in the ocean.

 

Quote:
I don't think that Apple is completely against their punishment of having a monitor - but the monitor should:
1. Be someone who does not have a personal relationship with the judge who is presiding over the case and ordering the monitoring. 

This seems rather silly. It is the Prosecutor he should not have a relationship with. The Judge is perfectly fine. You would hardly expect her to appoint someone she's never met and doesn't know from Adam for reasons of impartiality.

 

Quote:

 2. Be someone who has the necessary experience, skillset and competence to do the job they are being appointed to do

In this case it appears Bromwich does. It's not unusual to hire assistants and when investigating one of the most powerful companies in the western world it seems reasonable enough to me.

 

Quote:

 3. Be compensated at fair market value for the type of work they are doing and the time it takes them to do that work

  Agreed, but if you read Judge Cote's filing you'll find out that Apple decided to completely ignore the dispute resolution process put in place by her original ruling. They tried to bypass it all and go straight to the Court to settle their matters. This forms part of her reasoning. Apple has a method to dispute these fees already, but refuses to use it.

 

Quote:
 4. Have a very clear and limited scope for their investigation

  This is the case, and Apple have provided no evidence he's stepped outside this. In fact they've resorted to significant hyperbole, saying that 1 hour meetings with senior staff would irreparably harm Apple and prevent them from manufacturing new and innovative products. The Judge gave that argument basically 0 weight and that seems reasonable to me.

 

You go on to call this arrangement crooked but I have read as much as possible on both sides and to me it seems like Apple is throwing their toys out of their pram. They didn't get their way and so they have immediately filed the most ridiculous hyperbolic requests they have had to immediately abandon.

 

For example. If you read only the opinions on this site, you'll believe that Bromwich was allowed to have secret communications with the Judge to make a plan to ruin Apple, wheras in reality

  1. That order was never passed
  2. Apple's lawyers did not understand what ex-parte meant
  3. Apple thoroughly abandoned that line of argument (along with almost all others) as soon as they understood it

 

I believe your opinions are held in earnest, but the facts underlying them appear to be wrong. Still I don't want to come across as demanding I am right and you are wrong, but I would encourage you to read over the actual filings in the case rather than media reporting as every site seems to be applying their own bias to the story.

post #25 of 28

This may be a teachable moment for apple.  Maybe Apple will start to realize that the USA is not a place friendly to business, and possibly consider moving more and more of its operations overseas.  I'm sure there's a jurisdiction that's more beneficial to have one's headquarters in than california. 

 

Thy will always be subject to the rule of US tyrants (cause "rule of law" is a dishonest phrase these days) but they should support them less and less.

 

Plus, Apple should endow some organization maybe a pac or lobbying organization with $1B to get anti-trust laws overturned. 

post #26 of 28
Quote:
Originally Posted by Jessi View Post
 

This may be a teachable moment for apple.  Maybe Apple will start to realize that the USA is not a place friendly to business, and possibly consider moving more and more of its operations overseas.  I'm sure there's a jurisdiction that's more beneficial to have one's headquarters in than california. 

 

Thy will always be subject to the rule of US tyrants (cause "rule of law" is a dishonest phrase these days) but they should support them less and less.

 

Plus, Apple should endow some organization maybe a pac or lobbying organization with $1B to get anti-trust laws overturned. 

 

Anti-trust laws should certainly not be overturned. Just because a ruling goes against a company you like doesn't mean the laws are bad.

 

Besides. Apple was literally protected from international rulings by the President of the USA. That's a pretty high up position that's protecting Apple. They've been able to make themselves one of the richest companies in the world so I think saying the USA is bad for business is hyperbole to a pretty large degree.

 

Just my opinion of course, but how can you say something is bad for business when Apple is doing so amazingly well?

post #27 of 28
Quote:
Originally Posted by ItsTheInternet View Post
 

I believe your opinions are held in earnest, but the facts underlying them appear to be wrong. Still I don't want to come across as demanding I am right and you are wrong, but I would encourage you to read over the actual filings in the case rather than media reporting as every site seems to be applying their own bias to the story.

 

Thank you for your polite reply and for all of the corrections.  You nailed it when you implied that I may not have read any of the actual filings.  I arrived at my conclusions based on what was described (consistently) in several articles and their comment threads.
But, if I arrived at all of those conclusions, I expect that many others did as well - so I'm glad that you took the time to publicly counter each point that I made and to correct not only my misunderstanding but possibly a broader misunderstanding held by many.
I still can't shake the feeling that there is something improper going on here, but it no longer seems to be as blatant or clear cut as I had initially thought.
post #28 of 28
I like the "Knit picking" comment with the jibe about not checking one's post before posting it. I've never heard a version that pertains to knitting.
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