Apple requests removal of external antitrust compliance monitor

Posted:
in General Discussion edited January 2014
In a letter submitted to U.S. District Court Judge Denise Cote on Tuesday, Apple asks for the removal of court-appointed antitrust compliance monitor Michael Bromwich from his post, citing the monitor's recent declaration chastising Apple's supposed lack of cooperation.

Bromwich


The letter, filed on behalf of Apple by lawfirm Gibson Dunn, calls out Bromwich over his late-December declaration to the court in which he rebuked Apple's actions up to this point and denied claims of an unconstitutional, wide-roving inspection.

Apple asserts that by filing the declaration, Bromwich raised red flags as to his impartiality in the ongoing monitorship, possibly suggesting personal bias against the company.
His wholly inappropriate declaration in an adversarial proceeding is compounded by his conduct and the circumstances surrounding his appointment and activities, including his reliance on preappointment conversations with the Court and plaintiffs as grounds for expanding his mandate beyond the terms of the Final Judgment, his active collaboration with plaintiffs to broaden the scope of his mandate in this manner and oppose Apple's motion for stay, his financial demands, and his adversarial, inquisitorial, and prosecutorial communications and activities toward Apple since his appointment.
Apple goes on to restate that Bromwich overstepped his bounds on multiple occasions, saying the ECM views himself as "unconstrained by the federal rules governing discovery and other matters, and acting like an independent prosecutor not a judge."

Here, the company cites multiple requests to interview senior executives and board members who have no role in day-to-day operations, let alone the iBookstore, which was targeted in the Department of Justice's e-book price-fixing case.

The third point raised by Apple again points to Bromwich's direct contact with company employees, which is contrary to the Final Judgment's stipulation against interviews without legal counsel. Finally, Apple takes issue with the monitor's fee structure, which it considers to be excessive and outside the bounds of Judge Cote's ruling. It came to light in November that Bromwich was requiring $138,000 for what was then two-weeks' worth of work.

Apple and Bromwich have been feuding almost since the former Justice Department Inspector General was assigned to his monitorship. Today's letter just adds to the already substantial number of court filings illustrating the back-and-forth between Apple and its court-assigned ECM.

The next scheduled court appearance for Apple will be oral arguments of the company's motion to stay the investigation pending its appeal of Judge Cote's Final Judgment. The DoJ will argue against, citing the public interest lies in keeping Apple from entering further illegal deals. Both parties are slated to meet in court on Jan. 13.

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Comments

  • Reply 1 of 68
    dnd0psdnd0ps Posts: 253member
    Hell hath no fury like Apple scorned
  • Reply 2 of 68
    mubailimubaili Posts: 387member
    Oh well, Apple doesn't want to pay to play. So happy that Apple says NO to the government. As a share holder I hate it though.
  • Reply 3 of 68

    LOL

     

    Only frothing-at-the-mouth Apple fanatics defend a multi-billion company's right to overcharge its customers. 

     

    Do you actually want to pay more for ebooks?

     

    from http://business.time.com/2013/07/10/apple-found-guilty-in-e-book-price-fixing-conspiracy-trial/

    "Asked by the reporter why consumers would pay $14.99 to Apple to purchase an e-book that was selling at Amazon for $9.99, Jobs replied, “Well, that won’t be the case.” The reporter then asked, “You mean you won’t be 14.99 or they won’t be 9.99?” Jobs paused, and “with a knowing nod” responded, “The price will be the same.”"

  • Reply 5 of 68
    dalshabet wrote: »
    LOL

    Only frothing-at-the-mouth Apple fanatics defend a multi-billion company's right to overcharge its customers. 

    Do you actually want to pay more for ebooks?

    from http://business.time.com/2013/07/10/apple-found-guilty-in-e-book-price-fixing-conspiracy-trial/
    "Asked by the reporter why consumers would pay $14.99 to Apple to purchase an e-book that was selling at Amazon for $9.99, Jobs replied, “Well, that won’t be the case.” The reporter then asked, “You mean you won’t be 14.99 or they won’t be 9.99?” Jobs paused, and “with a knowing nod” responded, “The price will be the same.”"

    The point that keeps getting missed is in what Steve said in your quote. It was not guaranteed that the prices would go up, only that Apple would get the same sell through price as the competitors. It could have driven prices down, but the publishers pushed them up and that is why they settled. The publishers had pricing control and raised the prices.
  • Reply 6 of 68
    Quote:
    Originally Posted by Phone-UI-Guy View Post





    The point that keeps getting missed is in what Steve said in your quote. It was not guaranteed that the prices would go up, only that Apple would get the same sell through price as the competitors. It could have driven prices down, but the publishers pushed them up and that is why they settled. The publishers had pricing control and raised the prices.

     

    Odd though, now that the government is keeping an eye on Apple's ebook shenanigans, the ebook prices on Amazon have come down again (they are still too high though, no ebook ought to cost more than $4).

     

    What really needs to happen though is the world's governments looking into Apple's iTunes (music) business -- if that is not a monopoly then I don't know what is...

  • Reply 7 of 68

    Not how it works, Apple. You don't get to remove the monitor because you don't like what he's saying.

  • Reply 8 of 68
    emig647emig647 Posts: 2,406member
    Really? An ebook should not cost more than $4?? The author, editor, publisher, legal, advertisement can not possibly be compensated or recovered off of $4 depending the content.
  • Reply 9 of 68
    malaxmalax Posts: 1,598member
    Quote:

    Originally Posted by DalShabet View Post

     

    What really needs to happen though is the world's governments looking into Apple's iTunes (music) business -- if that is not a monopoly then I don't know what is...


    I think it's the latter (you don't know what a monopoly is).  There is very little on the iTunes music store that I can't purchase from dozens (hundreds?) of other outlets.

  • Reply 10 of 68
    malaxmalax Posts: 1,598member
    Quote:

    Originally Posted by emig647 View Post



    Really? An ebook should not cost more than $4?? The author, editor, publisher, legal, advertisement can not possibly be compensated or recovered off of $4 depending the content.

    Maybe in his world view no one is supposed to be compensated.  Authors should write for the joy of it, and everyone else should do their part at minimum expense to make those works available to everyone.  

  • Reply 11 of 68
    malaxmalax Posts: 1,598member
    Quote:

    Originally Posted by Satorical View Post

     

    Not how it works, Apple. You don't get to remove the monitor because you don't like what he's saying.


    Fortunately in a system of laws, you do get to ask for relief when you believe someone is acting inappropriately.  I expect Apple will lose this (trivial) battle, but I can't blame them for not putting up with his crap.

  • Reply 12 of 68
    Quote:

    Originally Posted by emig647 View Post



    Really? An ebook should not cost more than $4?? The author, editor, publisher, legal, advertisement can not possibly be compensated or recovered off of $4 depending the content.

     

    If most paperbacks cost $8 to $10 on Amazon, then $4 would be a reasonable ebook price (and a ebook version should come for free with every hardcover or paperback purchase).

     

    Thank you Apple! Not.

  • Reply 13 of 68
    emig647emig647 Posts: 2,406member
    First off, amazon prices are not real world prices. The price on the back of the book is. You'll find that amazon sells for a loss or razor thin margins to obtain market share. It's actually poisonous to the economy and can hurt thriving businesses that well books and other goods.

    With that being said, it is ultimately up to the publisher how much the prices should be and whether you get a free ebook with a tangible book. Many don't want physical books anymore and only want ebooks. The ebook is still work done by someone. Work that must recoup costs or pay for the time spent producing the work. Authors need to be able to get paid for their time invested.

    Educational books, non-fiction, etc all need a lot of verification and take quite a bit of time to not charge for the ebooks.
  • Reply 14 of 68
    Quote:

    Originally Posted by malax View Post

     

    I think it's the latter (you don't know what a monopoly is).  There is very little on the iTunes music store that I can't purchase from dozens (hundreds?) of other outlets.


     

    When various governments punished Microsoft for including IE with Windows, other browsers were available...

     

    Isn't this the same as with iPhone (the number one selling smartphone in the US) and iTunes (the application) and iTunes songs?

     

    Actually it is worse, Microsoft "bundled" OS + browser, but Apple "bundles" hardware + OS + iTunes + iTunes songs.

  • Reply 15 of 68
    Quote:
    Originally Posted by emig647 View Post



    First off, amazon prices are not real world prices. The price on the back of the book is. You'll find that amazon sells for a loss or razor thin margins to obtain market share. It's actually poisonous to the economy and can hurt thriving businesses that well books and other goods.



    With that being said, it is ultimately up to the publisher how much the prices should be and whether you get a free ebook with a tangible book. Many don't want physical books anymore and only want ebooks. The ebook is still work done by someone. Work that must recoup costs or pay for the time spent producing the work. Authors need to be able to get paid for their time invested.



    Educational books, non-fiction, etc all need a lot of verification and take quite a bit of time to not charge for the ebooks.

     

     

    Selling for a loss or razor thing margin sounds like something which ought to be applauded by us consumers! Why would I care if this causes Amazon to go bankrupt eventually?

    Capitalism >> Monopolism

     

    (I am not arguing about textbooks, of course those are more expensive than the latest Steven King book.)

  • Reply 16 of 68
    emig647emig647 Posts: 2,406member
    The problem isn't amazon going bankrupt, it's all the other businesses and book companies that can't afford to do that. Walmart did the same tactics to local economies. In the end fewer choices because prices were artificially dropped gives fewer choices at a later date because they can afford to do it.

    When fewer books are produced because the margins are too thin to put risk in an upcoming author, we all lose
  • Reply 17 of 68
    foadfoad Posts: 697member
    Quote:

    Originally Posted by DalShabet View Post

     

     

    Odd though, now that the government is keeping an eye on Apple's ebook shenanigans, the ebook prices on Amazon have come down again (they are still too high though, no ebook ought to cost more than $4).

     

    What really needs to happen though is the world's governments looking into Apple's iTunes (music) business -- if that is not a monopoly then I don't know what is...


     

    Amazon has always operated on the premise that they are willing to lose money because they have the latitude from the market to do so. They buy the e-books at wholesale like everyone else and then lose money on each transaction because they can. Most businesses don't have that freedom (smaller retailers) or aren't willing to lose money (Apple). Jeff Bezos has go so far as to say "The Internet is disrupting every media industry, Charlie, you know, people can complain about that, but complaining is not a strategy. And Amazon is not happening to book selling, the future is happening to book selling." Amazon popularized e-books and their kindle readers are great products but on the retail side of it, they don't care about what ramifications there are to anyone. Whether it is devaluing creative work or stomping on smaller retailers. They take the freedom that shareholders give them and undercut everyone in a way that most can't compete on. I deal with retail almost daily, including dealing with selling product into retail channels, and it's a tough business. When a competitor is willing to operate on razor thin margins or at a loss, it's hard, if not impossible, to compete. We haven't even talked about the numerous complaints about how they operate their warehouses.

     

    Amazon is no saint and by the tone of your comments, they didn't do anything wrong. The prices went down because Amazon is back to their old tactics of losing money. Apple's gross margins dip a few percentage points and the market loses its damn mind. Amazon loses money in a quarter and their stock goes up. It is a weird dynamic that no matter how much I know about the world, it still doesn't make sense to me. With regards to this case, the publishers are inherently the ones to blame. The whole case still seems whacky to me. Beyond that, this compliance monitor over-stepped with his requests but due to well publicized ties to the judge, he felt he could do whatever he wanted. At one point the judge even backed down from certain requests because they started to gain unwanted scrutiny. The judge started distancing herself a bit from the monitor.

     

    Do I think Apple always does right, no, but I also don't think that they were in the wrong.  Ultimately, I don't even think the monitoring should even start until the case has been put in front of the appellant court. We will see how this turns out but to think that this isn't on some level a bit shady is weird to me.

     

    As a side note, I think Amazon does a lot of cool stuff, including AWS. I just think we have to try and look at things realistically.

  • Reply 18 of 68
    charlitunacharlituna Posts: 7,205member
    dalshabet wrote: »

    What really needs to happen though is the world's governments looking into Apple's iTunes (music) business -- if that is not a monopoly then I don't know what is...

    It's not.

    That said, there are some ridiculous moves with. All media. Exclusive deals, insane pricing on movies etc.

    But they need to be industry wide, not targeting one company. What's good for the goose is good for Amazon. I mean the gander
  • Reply 19 of 68
    mac95mac95 Posts: 26member

    - Ah so. 'that's not how it works'. yadda yadda.

    Then, as one omniscient in these matters, would you care to come down below and enlighten us poor common folk here as to 'how exactly it does work', then?...

     

    Detailed, please.

     

    I reserve my right to yawn at what you may come up with though.

     

    well...?

  • Reply 20 of 68
    foadfoad Posts: 697member
    Quote:

    Originally Posted by charlituna View Post





    It's not.



    That said, there are some ridiculous moves with. All media. Exclusive deals, insane pricing on movies etc.



    But they need to be industry wide, not targeting one company. What's good for the goose is good for Amazon. I mean the gander

     

    It is a slippery slope. After working in the entertainment industry for what felt like an eternity, I can tell you that content deals are black holes. There are so many layers to them and everyone wants a piece of the pie. There needs to be some oversight but unfortunately a lot of the issues that are at play are political in nature. Who's willing to stroke which ego can dictate policy, even if it is an unfair outcome.

     

    Looking at the Apple case, Amazon came out gangbusters, and I wouldn't be surprised if it was primarily politically motivated.

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