Apple continues fight to have antitrust monitor reined in, judges appear skeptical

Posted:
in General Discussion edited February 2014
A U.S. appeals court on Tuesday heard initial arguments from Apple regarding the stoppage of antitrust monitor Michael Bromwich's duties until while the court decides whether he should be removed altogether.

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


As part of its ongoing battle to have Bromwich removed, or at least restrained, from his monitorship, Apple stated its case to the U.S. Court of Appeals for the Second Circuit. Apple argues that the external compliance monitor's work should be halted until the court hands down a ruling on a requested removal, reports Reuters.

According to Apple, Bromwich is disrupting business operations and harming the company with his questionable monitoring methods. If the ECM were allowed to continue work, only to be removed when the court later finds his actions improper, Apple would have spent time and money it cannot get back.

"The court can't give us relief," said Apple counsel Theodore Boutrous, Jr. "We can't turn back the clock."

So far, however, the appellate court's three-judge panel seems unmoved by Apple advances.

"Maybe if they had spent some of their very valuable time keeping the company from violating antitrust laws, perhaps they wouldn't be in this position," Judge Gerard Lynch said.

The jurist suggested the court draw up an order specifying the limits of Bromwich's role, but Boutrous said Apple would still oppose such measures. Counsel noted that the Department of Justice is capable of monitoring Apple on its own without the aid of a private party with incentive to grow income based on the scope of his tenure, reports The Wall Street Journal.

"The government has other things to do," Judge Guido Calabresi said.

As for the DOJ, lawyer Finnuala K. Tessier argued Bromwich had to get back to work immediately to ensure Apple does not again engage in illicit activities.

"An ounce of prevention is worth a pound of cure," Tessier said.

Apple has complained accused the ECM of conducting a wide-roving and unconstitutional investigation of the company, making requests that go beyond the scope of his duties.

For example, Bromwich wanted to meet with Apple executives and board members like Jony Ive, many of whom do not have insight into the company's daily business operations. In addition, the ECM's pay structure of over $1,000 per hour was called excessive.

The debacle stems from the DOJ's successful e-books case against Apple. In September, Judge Denise Cote handed down an injunction against Apple after finding the tech giant guilty of colluding with book publishers to falsely inflate the price of e-books sold through the iBookstore.

While the appeals court debates the matter, Bromwich's work is being put on hold until a determination is made on Apple's request for an even longer suspension of duties.
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Comments

  • Reply 1 of 92
    cash907cash907 Posts: 893member
    Getting busted artificially manipulating market prices sucks. I'd say I hope Apple learned their lesson, but seeing how they seem more indignant about the public humiliation than embarrassed about cheating the consumer, I'm gonna guess they probably aren't.
  • Reply 2 of 92
    crowleycrowley Posts: 5,267member
    Getting pretty tedious now.
  • Reply 3 of 92
    jungmarkjungmark Posts: 6,488member
    cash907 wrote: »
    Getting busted artificially manipulating market prices sucks. I'd say I hope Apple learned their lesson, but seeing how they seem more indignant about the public humiliation than embarrassed about cheating the consumer, I'm gonna guess they probably aren't.

    When did the market decide Amazon's 9.99 is the market price? Didn't Amazon manipulate that too?

    I like this line: "The government has other things to do," Judge Guido Calabresi said.

    --Like continue justifying Amazon's monopoly.
  • Reply 4 of 92
    aaarrrggghaaarrrgggh Posts: 1,554member
    I still haven't seen a clear explanation of what it is that Apple did wrong with the e-book case. Apple did not have any monopoly power in their negotiations with the publishers nor was Apple proven to have facilitated negotiations between publishers. The opposite was quite clearly true; the publishers were colluding prior to Apple's involvement.

    I also fail to understand why the DOJ wanted to pursue Apple in the first place. Raising consumer prices does not make a monopoly or antitrust case.

    I do understand that Apple has smart lawyers, and structuring a deal so it has the plausible deniability built in seems believable. But ultimately the publishers (who do have a government-given monopoly) changed their licensing deals which forced the impact. Had they allowed Amazon to keep the wholesale model, Apple would have been happy to set their prices to match, and the publishers would just lose money selling to Apple. This might not have been a bad thing; Amazon loses on all the books they sell, and the publishers lose on the books they don't! It would have applied pressure to Amazon to change their ways, but without pushing their hand.

    ...but all this still comes down to publisher action and not Apple's.
  • Reply 5 of 92
    buzdotsbuzdots Posts: 418member

    Ive to Bromwich.."Mikey, come on up and let's have lunch on the roof... the view is great"

     

    Ive to police.. "shit, he just slipped"

  • Reply 6 of 92
    gtrgtr Posts: 3,229member
    cash907 wrote: »
    Getting busted artificially manipulating market prices sucks. I'd say I hope Apple learned their lesson, but seeing how they seem more indignant about the public humiliation than embarrassed about cheating the consumer, I'm gonna guess they probably aren't.

    These petty little comments are all you have left in life now, aren't they?

    ;)
  • Reply 7 of 92
    tzeshantzeshan Posts: 1,594member
    Quote:

    Originally Posted by Cash907 View Post



    Getting busted artificially manipulating market prices sucks. I'd say I hope Apple learned their lesson, but seeing how they seem more indignant about the public humiliation than embarrassed about cheating the consumer, I'm gonna guess they probably aren't.



    How did Apple manipulate market prices?  Apple simply let the publishers set the prices they like.  Apple did not do anything.  So not doing anything is manipulating prices?

  • Reply 8 of 92

    The thing is that prices went down after the Apple agreement.  Apple broke the Amazon monopoly and provided real competition, that not only helped Apple, but also Barnes and Noble, etc.  Most notably it lowered prices for consumers till this day.  

  • Reply 9 of 92
    Originally Posted by tzeshan View Post

    How did Apple manipulate market prices?

     

    That’s manipulating them. You see, when you have a monopoly, like Amazon, and set one price for everyone, there’s no manipulation because that’s the only price. But when anyone can set any price they want, they can manipulate those numbers all up and down. It’s chaos!

  • Reply 10 of 92
    tzeshantzeshan Posts: 1,594member

    What harm does the monitor hurt Apple?  I think the simple answer is Apple management is invloved in a lot of trade secret works.  Allowing any outsider or even lower level employee to inquire the exectives of course will cause unforeseen harm. 

     

    Could the Court protect Apple on trade secrets?  Of course not!  A case in pint is the release by Samsung counsel of Apple licensing agreement with Nokia.  Even after Apple filed complaint.  The Court choose not to publish Samsung.  The Court has failed once.  How could Apple trust the Court again?

  • Reply 11 of 92
    PED's take on this somewhat different: he focuses on the fact that court is leaning in the direction of putting in constraints on Bromwich, and that the odds might be in Apple's favor. http://tech.fortune.cnn.com/2014/02/04/apple-cote-bromwich-appeal/

    In any event, Apple would be better served by just jettisoning this trivial business. It is a complete distraction. After all, it contributes very little to the bottom line, takes too much of the top management's time, impacts Apple's reputation adversely, and apparently, the morons -- I mean, our rulers -- in DC are convinced that competition will be enhanced. Just make the link to the Amazon bookstore the main link to books via iOS, leave them to this low-margin business, and move along, Apple.
  • Reply 12 of 92
    rob53rob53 Posts: 1,765member
    Quote:

    Originally Posted by Tallest Skil View Post

     

     

    That’s manipulating them. You see, when you have a monopoly, like Amazon, and set one price for everyone, there’s no manipulation because that’s the only price. But when anyone can set any price they want, they can manipulate those numbers all up and down. It’s chaos!


    Since when? Amazon doesn't sell every e-book for the same price and neither does the iBookstore. Every book isn't worth the same price the same way every other item people buy isn't worth the same and doesn't sell for the same. A publisher and the books author have every right to set a price for their work. Amazon pays the publishers some amount but sells them for less, thereby forcing other vendors out of the market. Apple allowed publishers to set a price, like in any other business, and they took 30%. What's wrong with that. Gas prices aren't the same at every gas station and they go up and down for no apparent reason yet I'm not seeing the DOJ going after the oil companies for obvious price fixing. 

  • Reply 13 of 92
    tzeshantzeshan Posts: 1,594member
    Quote:

    Originally Posted by anantksundaram View Post



    PED's take on this somewhat different: he focuses on the fact that court is leaning in the direction of putting in constraints on Bromwich, and that the odds might be in Apple's favor. http://tech.fortune.cnn.com/2014/02/04/apple-cote-bromwich-appeal/



    In any event, Apple would be better served by just jettisoning this trivial business. It is a complete distraction. After all, it contributes very little to the bottom line, takes too much of the top management's time, impacts Apple's reputation adversely, and apparently, the morons -- I mean, our rulers -- in DC are convinced that competition will be enhanced. Just make the link to the Amazon bookstore the main link to books via iOS, leave them to this low-margin business, and move along, Apple.



    I disagree.  Apple should make no compromise to truths and facts.  This is what separates Apple from its competitors.  If Apple gives up, it loses the trust of its customers. 

  • Reply 14 of 92
    rob53rob53 Posts: 1,765member

    "Maybe if they had spent some of their very valuable time keeping the company from violating antitrust laws, perhaps they wouldn't be in this position," Judge Gerard Lynch said.

     

    "The government has other things to do," Judge Guido Calabresi said.

     

    These statements are definitely prejudicial. These judges have already sided with Judge Cote without even waiting for anything to be presented. The DOJ is upset because an American company is making money. Go figure. I guess court cases take too much time away from their golf games.

  • Reply 15 of 92
    just_mejust_me Posts: 591member

    http://tidbits.com/article/13912

     

    Quote:

    Originally Posted by aaarrrgggh View Post



    I still haven't seen a clear explanation of what it is that Apple did wrong with the e-book case. Apple did not have any monopoly power in their negotiations with the publishers nor was Apple proven to have facilitated negotiations between publishers. The opposite was quite clearly true; the publishers were colluding prior to Apple's involvement.



    I also fail to understand why the DOJ wanted to pursue Apple in the first place. Raising consumer prices does not make a monopoly or antitrust case.



    I do understand that Apple has smart lawyers, and structuring a deal so it has the plausible deniability built in seems believable. But ultimately the publishers (who do have a government-given monopoly) changed their licensing deals which forced the impact. Had they allowed Amazon to keep the wholesale model, Apple would have been happy to set their prices to match, and the publishers would just lose money selling to Apple. This might not have been a bad thing; Amazon loses on all the books they sell, and the publishers lose on the books they don't! It would have applied pressure to Amazon to change their ways, but without pushing their hand.



    ...but all this still comes down to publisher action and not Apple's.

     

     

    Quote:

    Originally Posted by tzeshan View Post

     



    How did Apple manipulate market prices?  Apple simply let the publishers set the prices they like.  Apple did not do anything.  So not doing anything is manipulating prices?


     

     

    Quote:

    Originally Posted by Jack Zahran View Post

     

    The thing is that prices went down after the Apple agreement.  Apple broke the Amazon monopoly and provided real competition, that not only helped Apple, but also Barnes and Noble, etc.  Most notably it lowered prices for consumers till this day.  


     

     

    http://tidbits.com/article/13912

  • Reply 16 of 92
    tzeshan wrote: »

    I disagree.  Apple should make no compromise to truths and facts.  This is what separates Apple from its competitors.  If Apple gives up, it loses the trust of its customers. 

    Were it so simple. At the end of the day, the only way to run a value-creating business is to do smart cost-benefit analysis. Anything else is irresponsible. It doesn't take long before a significant chunk of the same consumers to start viewing you as a crook. (Arguably, Microsoft suffered from some of that after their adverse antitrust ruling in the 1990s.)

    Apple has no business in social activism.
  • Reply 17 of 92
    jkichlinejkichline Posts: 1,259member
    Ho
    cash907 wrote: »
    Getting busted artificially manipulating market prices sucks. I'd say I hope Apple learned their lesson, but seeing how they seem more indignant about the public humiliation than embarrassed about cheating the consumer, I'm gonna guess they probably aren't.
    How did they cheat customers? The books were a certain price and the customer could decide if they wanted to pay the price or not. If you didn't like the price, buy elsewhere. All Apple had in their contract was a most favored nation clause which said if you sell your book to someone else for a lower cost, you need to sell to us at the lower cost and they would do that through an agency model instead of a wholesale model. Amazon got pissy because the publishers finally could stand up to Amazon and demand a retail price instead of Amazon's monopoly-building prices.

    The government is interfering with normal market dynamics and I have yet to see how Apple did something wrong. If any one colluded with the publishers, it was Steve Jobs and well, this dude would need to cease living to have a chat with him.
  • Reply 18 of 92
    aaarrrggghaaarrrgggh Posts: 1,554member
    just_me wrote: »
    Again, there is nothing inherently illegal with the agency model, price tiers, or an MFN clause. And there isn’t even anything wrong with combining them in negotiation with a single company. The problem comes when they’re combined in negotiation with six publishers that between them control nearly 50 percent of the book market, and over 90 percent of the New York Times bestsellers.

    After five of the Big Six publishers signed Apple’s deal, they immediately went to Amazon to switch their wholesale pricing agreements to the agency model. Amazon was understandably upset about this, due to the loss of pricing control, but had no choice but to accept in the end. Subsequently, the publishers also negotiated an agency model with Google, which was similarly unhappy.
    ...
    In Judge Cote’s opinion, the combination of Apple working with all the publishers simultaneously to fix ebook prices in such a way as to cause them to rise was where Apple violated the Sherman Antitrust Act.

    ...and I still don't understand how she loops Apple into "collusion" when it is quite clear that negotiations were separate. The publishers were aware of the negotiations among their peers, and Apple was not hiding the fact, although there is no proof that they disclosed the exact terms they were negotiating between the various players. The OPPOSITE was actually disclosed, that the publishers were talking among each other, which in my simple mind would seem to prove that Apple was not the "ring leader".
  • Reply 19 of 92
    tzeshantzeshan Posts: 1,594member
    Quote:

    Originally Posted by anantksundaram View Post





    Were it so simple. At the end of the day, the only way to run a value-creating business is to do smart cost-benefit analysis. Anything else is irresponsible. It doesn't take long before a significant chunk of the same consumers to start viewing you as a crook. (Arguably, Microsoft suffered from some of that after their adverse antitrust ruling in the 1990s.)



    Apple has no business in social activism.



    This is not social activism.  This is whether Apple broke the law.  There is a lot of distrust of DOJ and DOJ appointed judge in this case.  Apple should fight all the way to the Supreme Court!  Do you know there is a reason for the existence of the Supreme Court?

     

    If Apple don't fight for the rightness how could it fight for the patents?  For a true leader consistency is utterly important. 

  • Reply 20 of 92
    chris_cachris_ca Posts: 2,541member
    Quote:
    Originally Posted by Cash907 View Post

    Getting busted artificially manipulating market prices sucks.

    Sure it would.
    But what does that have to do with Apple or this article?
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