Things Are Going Better For Apple’s Antitrust Monitor
Relations between Apple (NASDAQ:AAPL) and its court-appointed antitrust monitor Michael Bromwich seem to be improving since the company was denied a request to halt Bromwich’s work in February. According to a report from Bromwich seen by Reuters, Apple has finally made a “promising start” to improving its antitrust policies, though Bromwich still noted that he hasn’t had the opportunity to speak to many of the company’s top executives.
Judge Denise Cote found Apple guilty of engaging in an elaborate scheme with book publishers to fix the price of e-books to the disadvantage of Amazon (NASDAQ:AMZN) and its Kindle e-readers. The publishers — including Hachette, HarperCollins, Simon & Schuster, Macmillan, and Penguin — elected to settle outside of court, and Amazon recently issued a refund to those affected by the artificial pricing inflation.
Apple vigorously defended its actions, but was still found guilty of breaking antitrust law. Cote appointed an antitrust monitor against the company’s wishes since she believed that Apple was incapable of monitoring its own anticompetitive behavior.
Apple initially responded by dragging its feet on everything Bromwich requested, leading the monitor to file a report at the end of last year saying that Apple repeatedly blocked interviews between him and some of the company’s senior executives and refused to provide him with requested documents. Apple has been throwing a tantrum over the monitor since he was instated in October of last year and yet another request to have Bromwich’s investigation put on hold was denied by the U.S. Justice Department in February.
Apple has said that Bromwich oversteps his bounds in his investigation and abuses his payment structure for personal financial gain. Bromwich fired back by saying that executives’ bitterness over the ruling, which they saw as embarrassing and unfair, made Apple the most difficult company he has ever worked to monitor.
Things seem to be going more smoothly now. Since that request was turned down in February, Bromwich says that Apple has been more willing to cooperate with his efforts. According to Reuters, Bromwich’s seventy-seven-page report says his relations with Apple have “significantly improved,” though he still hasn’t been able to meet with enough of the company’s employees.
“Based on the information Apple has provided to date, our view is that Apple has made a promising start to enhancing its antitrust compliance program, but that Apple still has much work to do,” Bromwich wrote, per Reuters. Bromwich said that after February’s ruling, “there has been a shift of tone in our relationship with Apple,” and that the company is now showing “a greater commitment to resolving lingering disputes.”
Apple, meanwhile, is still fighting the case tooth and nail. At the end of February the company filed to overturn July’s ruling that found it guilty of conspiring with publishers to fix prices with the goal of boosting sales through its iBookStore, which is much less popular than Amazon’s Kindle Store. Apple argues that its entrance into the e-book scene and different pricing techniques actually stimulated competition in an arena that was completely dominated by Amazon. The Justice Department will file a response to the appeal in May.
The affected e-book customers have already received a refund based on the class action suit against the publishers, and they will be eligible to receive even more if Apple’s request to overturn the ruling is denied. Thus far Apple has faced $840 million in antitrust claims from consumers and state attorneys general, who say they can ask for triple the damages because the Department of Justice was able to prove that Apple had orchestrated the price fixing.
More From Wall St. Cheat Sheet:
- Apple Loses Another Round in E-Book Appeal
- Amazon Hands Out Refunds Over Apple E-Book Pricing Scandal
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