Apple moves to suspend 'inquisitorial' antitrust monitoring, DoJ comes to monitor's defense

Posted:
in General Discussion edited January 2014
In a series of court filings late last week, Apple officially moved to halt the 'unconstitutional' compliance monitoring imposed as part of the government's e-book antitrust lawsuit, while the Department of Justice defended the monitor's actions and urged that the oversight be upheld.

Bromwich
Antitrust monitor Michael Bromwich | Source: ZUMA Press via mnn.com


Michael Bromwich, the third-party monitor assigned to the case by presiding Judge Denise Cote, "is conducting a roving investigation that is interfering with Apple's business operations, risking the public disclosure of privileged and confidential information, and imposing substantial and rapidly escalating costs on Apple that it will never be able to recover," Apple's lead appeals counsel Theodore Boutrous argued in the company's motion. The documents were first noticed by Fortune's Roger Parloff.

Apple wants to immediately suspend the portion of the September judgement that authorizes Bromwich's hiring pending the outcome of the company's appeal of the case's guilty verdict. The judgement's other orders, such as the staggered renegotiation of Apple's contracts with publishers, are not included and many have already been implemented by Apple.
The injunction...is flatly unconstitutional, and will be reversed on appeal -- Apple
The motion largely mirrors a complaint filed by Apple just after Thanksgiving in which the Cupertino, Calif.-based company called into question Bromwich's fee structure as well as the manner in which he had begun to conduct the monitoring. The earlier complaint was also the first time Apple brought up the question of constitutionality on which the new motion hinges.

Apple "has a substantial possibility of success" in overturning the monitoring provisions on appeal, Boutrous argues, in part because the court overstepped their constitutional authority with the imposition of the compliance monitor by granting him investigative powers that are not given to the court under Article III of the Constitution and thus cannot be transferred to the monitor.

Boutrous also cites the "irreparable harm" being done to Apple due to the distraction caused by Bromwich's requests for wide-ranging interviews with senior Apple executives.

At a bare minimum, Apple officers, directors, and management are being harmed by the time-consuming distraction of Mr. Bromwich's roving investigation. These individuals are subjected to Mr. Bromwich's indiscriminate demands for interviews and information--even where, like director Al Gore, they are not directly involved in the company's antitrust compliance efforts. At worst, Mr. Bromwich's inquisitorial zeal for communication with Apple's employees "unfiltered through outside counsel" fosters an atmosphere of suspicion that is antithetical to the efficient operation of a major corporation. In either case, Mr. Bromwich's investigation significantly interferes with the ability of Apple's managers to lead the company.
For its part, the Department of Justice disagrees with Boutrous's assessment of the situation and, in a response to Apple's motion, comes to Bromwich's defense.

Federal antitrust lawyer Lawrence Buterman accuses Apple of engaging "in a systematic and untoward campaign to publicly malign the External Compliance Monitor and prevent him from carrying out his responsibilities." Bromwich's conduct, Buterman writes, has been "at all times appropriate and consistent with his impeccable reputation."

Buterman also dismissed Apple's constitutional claims outright, calling them a "misreading" of the original injunction that are "wholly without merit." Because "Apple has not presented any legitimate arguments as to why its motion will be successful on the merits," he argues, "Plaintiffs submit Apple's application for a stay can be denied summarily."

Judge Cote will hear oral arguments on the motion on Jan. 13.
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Comments

  • Reply 1 of 43
    I note that the fox is guarding the henhouse. That is, the same judge that created the situation is judging whether or not it is legal.

    IMHO, if the government is damaging Apple, then Apple should sue the government. Of course, it'll take centuries for the suit to finally be concluded....
  • Reply 2 of 43
    Apple aside, The DOJ (like the IRS) needs to be overhauled and all of those politically motivated, self-serving hypocrites need to be fired (WITHOUT THEIR OBSCENE PENSIONS). This is just another example of them "taking care of their own". These government bureaucracies need non-governmental oversight by the citizens of this country before they destroy our freedoms. This has little to do with Apple, it's a much bigger issue.
  • Reply 3 of 43
    ronboronbo Posts: 669member
    If a compliance monitor is necessary, why did the court appoint one who then had to hire someone else to make up for his lack of antitrust expertise?
  • Reply 4 of 43
    ronbo wrote: »
    If a compliance monitor is necessary, why did the court appoint one who then had to hire someone else to make up for his lack of antitrust expertise?

    There is NO HONOR in our judicial system. That's why.
  • Reply 5 of 43
    Why is the monitor being allowed to start charging for work nearly two months BEFORE he was scheduled to start work?

    Also, IF the government and judge were correct in their initial actions against Apple, why did the judge retreat from allowing secret, unmonitored discussions between herself and the monitor?
  • Reply 6 of 43
    tzeshantzeshan Posts: 1,855member
    Quote:

    Originally Posted by Sacto Joe View Post



    I note that the fox is guarding the henhouse. That is, the same judge that created the situation is judging whether or not it is legal.



    IMHO, if the government is damaging Apple, then Apple should sue the government. Of course, it'll take centuries for the suit to finally be concluded....



    +1

  • Reply 7 of 43
    Another DOJ extortion scam, if Apple donates to the Democrats the case will go away
  • Reply 8 of 43
    jungmarkjungmark Posts: 6,629member
    DOJ has crossed the line.
  • Reply 9 of 43
    ceek74ceek74 Posts: 323member

    This is what happens when you don't have enough lobbyists in DC.  Sorry Apple.

  • Reply 10 of 43
    You know how Cote will rule. She's on Team Bromwich.
  • Reply 11 of 43
    You know how Cote will rule. She's on Team Bromwich.

    She might as well pre-announce her upcoming verdict just to be consistent.
  • Reply 12 of 43
    Throw him out on his ass, close up shop, and move to Canada.
  • Reply 13 of 43

    And here's a link to the actual legal documents: http://www.scribd.com/doc/191635288/USA-v-Apple-AAPL-motion-to-stay-monitorship

     

    (only crashed twice trying to post this information...yay)

  • Reply 14 of 43
    Quote:
    Originally Posted by adhir View Post



    Throw him out on his ass, close up shop, and move to Canada.

    They should offshore only the iBooks business. Relocate it to Syria.

  • Reply 15 of 43
    MacProMacPro Posts: 17,875member
    Another DOJ extortion scam, if Apple donates to the Democrats the case will go away

    Not wanting to get political for one second but it's a fact Apple as a company, and it's CEOs in particular, have always been firmly in the democratic / liberal mind set if not camp, you know, believing in science, supporting the arts, caring about the planet ... and all that good stuff. This seems to be a really weird situation and I suspect individuals not governments are behind the seemingly anti Apple attitude here.
  • Reply 16 of 43
    Quote:
    Originally Posted by digitalclips View Post





    Not wanting to get political for one second but it's a fact Apple as a company, and it's CEOs in particular, have always been firmly in the democratic / liberal mind set if not camp, you know, believing in science, supporting the arts, caring about the planet ... and all that good stuff. This seems to be a really weird situation and I suspect individuals not governments are behind the seemingly anti Apple attitude here.

    It seems they support causes that work at cross-purposes with the goal of running not only a successful business, but a quality business.

  • Reply 17 of 43

    Yes, it's completely inappropriate for DOJ to go after Apple.  Going after big companies like Microsoft is fine, but not Apple!

    </sarcasm>

     

    While Apple is a great innovator, I do think the evidence points to Apple colluding with the book publishers to raise ebook prices.  So, unless you disagree with anti-trust laws in general I think you should agree that Apple deserved at least a slap on the wrist.  In principle I think the prices of ebooks should be much less expensive than what they actually are today.  At the post-Apple collusion rates the ebooks were within spitting distance to buying the same book in dead-tree format at Amazon or Wal-Mart.  I think prices should be able to be much lower because distribution of bytes is almost free compared to paper.

     

    You may think that it's a publisher's right to charge whatever they want for their products, and it is.  It's just not their right for them to collude together and agree on a artificially set price, which is what obviously happened.  If the publishers felt they were right and price collusion never happened, I doubt they would have settled with the DOJ right from the start.  Their lawyers probably looked at the evidence and told the respective CEOs "dude, you broke the law - if this goes to trial you're going to get spanked".

  • Reply 18 of 43
    gtrgtr Posts: 3,231member
    Yes, it's completely inappropriate for DOJ to go after Apple.  Going after big companies like Microsoft is fine, but not Apple!

    < /stupidity >

    Fixed that for you.

    You were trying to make a stupid statement, right?
  • Reply 19 of 43
    MacProMacPro Posts: 17,875member
    It seems they support causes that work at cross-purposes with the goal of running not only a successful business, but a quality business.

    I have to admit to not understanding your post.
  • Reply 20 of 43
    hill60hill60 Posts: 6,989member
    Quote:

    Originally Posted by SpamSandwich View Post

     

    They should offshore only the iBooks business. Relocate it to Syria.


     

    I was thinking Antarctica.

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