Judge Cote Agrees to Pull Antitrust Monitor from Apple

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Apple's dysfunctional relationship with court appointed monitor Michael Bromwich is coming to an end. The U.S. Department of Justice urged Denise Cote, the Judge who placed him inside the company following her ruling that Apple was part of a conspiracy to artificially raise the price of ebooks, to end his position and she agreed.

Apple's antitrust monitor is out this FridayApple's antitrust monitor is out this Friday

The DOJ filed a letter requesting Judge Cote let Mr. Bromwich's two-year position end without any extension. He had been charged with monitoring Apple's activities to ensure the company didn't engage in anticompetitive practices, and that it set up training programs to teach employees how to avoid anticompetitive activities.

Apple and several publishers were accused of colluding to artificially raise the price of books, leading the DOJ to file its case against them. The publishers all settled out of court to avoid legal expenses and possible fines, but Apple maintained it did nothing wrong and was simply trying to compete in a market dominated by Amazon.

In the end, Judge Cote sided with the DOJ and found Apple guilty of antitrust violations. She ordered a court appointed monitor to ensure that the company doesn't engage in further antitrust activities. The order was something of a surprise because court monitors are typically used in cases of ongoing antitrust violations, and in agreement with the company—neither of which where the case with Apple.

Apple described its relationship with Mr. Bromwich as "rocky at times," which is spot-on. Apple said Mr. Bromwich was overstepping his bounds and demanding to interview executives who fell outside the scope of his duties, and that he was acting as an investigator instead of a monitor.

The company's legal team described Mr. Bromwich's activities as an "overzealous romp through Apple's executive suite."

The iPhone and iPad maker also balked at the fees they were charged for his time, which started off with a US$138,432 bill for two weeks of work. Apple asked the Court to remove Mr. Bromwich, but Judge Cote refused.

Apple has been appealing Judge Cote's ruling in the case, most recently in the U.S. Court of Appeals. The panel of Judges reviewing the case were torn, but ultimately upheld Judge Cote's verdict and sentencing. Apple is now considering taking its case to the U.S. Supreme Court.

Regardless of what happens with the case, Apple will finally be rid of Mr. Bromwich. His two-year term ends on Friday, and it's pretty clear he won't be welcome back once he's gone.

[Thanks to Reuters for the heads up]

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Judge Cote has been full of surprises throughout Apple's antitrust case. She found the company guilty even when analysts and legal experts felt she shouldn't, then took the unprecedented move of placing a monitor in the company. Now she's agreeing to release the monitor, which is exactly what she should do.

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Thank God. What a nightmare.


Meanwhile, Amazon with it’s massive 80% monopoly on the eBook market continues to abuse it’s position penalising publishers who don’t toe it’s line.



Has the DOJ come to realize it was going after the wrong evil-doer?


Amazon may be using monopoly power, but it does so to LOWER prices for consumers. So it doesn’t LOOK like a monopoly (yet). Instead it looks like publishers are squealing about their profits being squeezed but they obviously can continue to sell their books to Amazon because they haven’t flat out refused. And when they have it hurt so they came back to Amazon, proving that the profits are enough to keep the company alive even if not thriving quite as well.

Apple made agreements to RAISE prices, so even though they did not have a monopoly position they appeared to be colluding.

Why would the DOJ go after a monopoly that lowers prices? They want to appear to be the good guy to consumers who like those lower prices.

(Does anybody have a different take on this?)


Large companies frequently become monopolies by lowering prices until they drive the competition out of business.  IMO there’s more to a healthy marketplace than low prices for consumers. There has to be a reasonable profit for producers to continue their businesses, and in this case that includes both publishers and authors. Amazon’s low prices squeeze the publishers, whose numbers have diminished over time. Of course, I’m referring to publishers that provide much-needed high quality editing, marketing, and so on. The DOJ seemed very short-sighted in their actions, harming the industry as a whole, while ignoring the near-monopoly of one company.

What exactly was the DOJ thinking? Do we know?

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