Apple's Bid to Disqualify Antitrust Compliance Monitor Rejected

[MacRumors]

The U.S. Court of Appeals for the Second Circuit in New York today rejected Apple's bid to disqualify antitrust compliance monitor Michael Bromwich, who was appointed to watch the company since it was found liable of conspiring with publishers to fix e-book prices a few years ago, reports Reuters.

"The 2nd U.S. Circuit Court of Appeals in New York said a lower court judge did not abuse her discretion in rejecting Apple's bid to disqualify Michael Bromwich as monitor, even though some of the company's allegations against him 'give pause.'"

In July 2013, Apple lost a significant e-book antitrust case that found the company to have colluded with publishers to raise the price of e-books. As a result, Apple was forced to submit to an external antitrust compliance monitor and $450 million fine as part of a settlement with several class action lawyers and state district attorneys. Last December, the lawsuit entered appeals court as Apple's attempt to overturn the ruling.

Article Link: Apple's Bid to Disqualify Antitrust Compliance Monitor Rejected

 

[Rocketman]

I guess the appeals process is sufficiently opaque we will not see the result until a judge announces it. But to have Apple judged as "per se illegal" going in (of anti-trust), when Amazon had a 90% market share, and the book vendors were complaining about losing pricing rights to their own products, does not pass the smell test.

What Amazon did was akin to dumping.

That is per se illegal in this country.

Rocketman

 

[2457282]

What does "give pause" mean?

And why does it only pause, but not disqualify?

Is there a link to the ruling where this is clarified?

This article leaves more questions than answers.

Edit -- followed the Reuters link and that clarified thing a little.

 

[mazz0]

What does "give pause" mean?

And why does it only pause, but not disqualify?

Is there a link to the ruling where this is clarified?

This article leaves more questions than answers.

I assume it means that it gives pause for thought - meaning you have to stop and think about it a bit - but after thinking about it they decided it was OK.

 

[Rocketman]

The "allegations" give pause. They cannot be tried in appeals court, but requires an actual trial. I suspect Apple will pick their battles by first seeing what the appeals result is. They sought to get an early assignment to a different overseer, which failed. Why the court is focused on one personality is interesting since he is in effect a "special master".

Rocketman

 

[Benjamin Frost]

This whole case is a corrupt farce.

Apple should never have been charged in the first place. Amazon had a monopoly on books and Apple introduced much-needed competition.

As it is, digital books are far too expensive. The same goes for digital music, films, tv programmes, audiobooks, magazines and newspapers. Only when we have digital content that is substantially cheaper than physical will we reach Digital 3.0. Perhaps a 13" iPad would help spur that day on.

 

[realeric]

As a result, ebook price is going up. US government is protecting amazon, not consumers.

 

[CarlJ]

So, deciding guilt ahead of time (because "innocent until proven guilty" is so old-fashioned), then picking your unqualified friend as overseer, and allowing him to charge outrageous rates for himself, plus a subordinate he hired who has at least some grasp of the subject matter (that your "expert" friend needs explained to him), and letting them demand meetings with various high-up company employees who had no connection whatsoever to the matter at hand (because that'll make him feel important), poking his nose in everywhere and generally conducting a witch hunt trying to find *something* to complain about...

That "gives pause"? But isn't illegal? Their response feels a bit like, "well, look, he's a good boy, and at least he hasn't killed anyone." And yet it's Apple that has done wrong (by trying to help the publishers break Amazon's monopolistic stranglehold on the industry), and not the prejudging judge and her "expert" friend.

smh.

 

[springsup]

I assume it means that it gives pause for thought - meaning you have to stop and think about it a bit - but after thinking about it they decided it was OK.

Maybe not "OK", but certainly not enough to disqualify him.

 

[Waxhead138]

What I always end up wondering with judgements involving hefty fines....in this case just under half a billion....is just where the hell does that money go???

Does it go to benefit anyone, a process, or just does it end up in some government slush fund?

 

[question fear]

This whole case is a corrupt farce.

Apple should never have been charged in the first place. Amazon had a monopoly on books and Apple introduced much-needed competition.

As it is, digital books are far too expensive. The same goes for digital music, films, tv programmes, audiobooks, magazines and newspapers. Only when we have digital content that is substantially cheaper than physical will we reach Digital 3.0. Perhaps a 13" iPad would help spur that day on.

Without getting into a debate about who was right or wrong, how is it that ebooks are too expensive but Amazon was wrong to discount them? Amazon WAS selling digital content significantly cheaper than their physical counterparts until agency pricing. So was Kobo, the canadian bookstore people. They were big fans of 10-20% off coupons for everything, and you could routinely find bestsellers for fairly cheap if you hooked up with their coupon emails.

As for the ebook monitor, I honestly think this entire case has hit a situation where the average person is simply too out of the loop to know exactly what's going on here. There's got to be more to it, but I suspect a lot of it is classified for business reasons on both sides, and that's making it really hard to decipher all the crazy back and forth.

 

[Rocketman]

What I always end up wondering with judgements involving hefty fines....in this case just under half a billion....is just where the hell does that money go???
Does it go to benefit anyone, a process, or just does it end up in some government slush fund?

As with any class-action suit, the lawyers get 25-40% as a collection fee. Up front, lump sum. The remainder is distributed to the effected class with those letters you get in the mail saying you won! Here's your chance to apply for $0.05-$5.00 but be sure to put a stamp on it and apply labor to it to get it. The funds that are not distributed at all probably goes to the state or something as abandoned assets.

 

[Oletros]

I guess the appeals process is sufficiently opaque we will not see the result until a judge announces it. But to have Apple judged as "per se illegal" going in (of anti-trust), when Amazon had a 90% market share, and the book vendors were complaining about losing pricing rights to their own products, does not pass the smell test.

What Amazon did was akin to dumping.

That is per se illegal in this country.

Rocketman

And after all if those years, the same debunked and wrong claims.

Amazon was not dumping prices, publishers were not losing their pricing rights and having less than 90% of marketshare is not illegal.

----------

So, deciding guilt ahead of time (because "innocent until proven guilty" is so old-fashioned), then picking your unqualified friend as overseer, and allowing him to charge outrageous rates for himself,

Then you will be glad to know that nothing of what you claim really happened.

----------

This whole case is a corrupt farce.

Apple should never have been charged in the first place. Amazon had a monopoly on books and Apple introduced much-needed competition.

As it is, digital books are far too expensive. The same goes for digital music, films, tv programmes, audiobooks, magazines and newspapers. Only when we have digital content that is substantially cheaper than physical will we reach Digital 3.0. Perhaps a 13" iPad would help spur that day on.

Amazon didn't have any monopoly and Apple finished competition between stores

 

[69Mustang]

As a result, ebook price is going up. US government is protecting amazon, not consumers.

This is pretty uninformed. E-Book pricing has increased because Amazon recently re-signed contracts with the major publishers. Those contracts allow the publishers to set the price; not Amazon. Amazon's preferred e-book pricing is still $9.99. Amazon has even provided incentives to the publishers for keeping the prices lower.

The page now reads: This price was set by the publisher.

http://www.amazon.com/Wright-Brothe...swatch_0?_encoding=UTF8&sr=1-1&qid=1432830787

This is what we wanted right? We were clamoring to pay the $13 for e-books from the iBooks store. Now we can pay $13 everywhere. That's what I call a win-win.

 

[BigInDallas]

What I always end up wondering with judgements involving hefty fines....in this case just under half a billion....is just where the hell does that money go???

Does it go to benefit anyone, a process, or just does it end up in some government slush fund?

it depends who wins the case. If Apple wins the case they quickly transfer it to off shore account in Ireland to avoid taxes

 

[tongxinshe]

Do the judges ever respect the most basic commonsense?!! Just because they have too much power so they can fully ignore the basic logics?

This guy says himself that he is not qualified on the specific area, so he has to hire a separate law firm with regarding expertise. The logic is then so clear that the regarding expert should be assigned this job directly, then.

The most astonishing part of this indirect-hiring process is, this guy Michael can ask for an extra $1100/hour for himself, for ALL OF THE HOURS the real experts have been doing the real work. I seriously suspect how much percentage of this extra $1100/hour goes to his judge friend who originally assigned him this easy-money position.

 

[H2SO4]

……... then picking your unqualified friend as overseer, and allowing him to charge outrageous rates for himself, plus a subordinate he hired who has at least some grasp of the subject matter (that your "expert" friend needs explained to him), and letting them demand meetings with various high-up company employees who had no connection whatsoever to the matter at hand

This is the most important part for me. It just screams 'conflict of interest'.

 

[Oletros]

I seriously suspect how much percentage of this extra $1100/hour goes to his judge friend who originally assigned him this easy-money position.

Apart that accusing of corruption without any proof is very funny, Judge Cote didn't assigned Bromwich

But why waste 20 second of searching when I can accuse of corruption and post any wrong claim without any consequence

 

[BaldiMac]

Judge Cote didn't assigned Bromwich

Source?

The NYTimes reported that Cote appointed Bromwich.

 

[PJL500]

Apple has stated that, in principle it is against paying Bromwich's exorbitant fees: ($1,100 per hour for Mr Bromwich and $1,025 per hour for Barry Nigro’s assistance (the chair of the antitrust department at law firm Fried Frank,) plus a 15 percent administrative fee) - total works out to be more than $20,000 per normal 8hr working day... and... these guys never quit, long days and weekends! (That very last bit I'm not sure of... but if it was me... .)

 

[bgillander]

Really?

Apart that accusing of corruption without any proof is very funny, Judge Cote didn't assigned Bromwich

But why waste 20 second of searching when I can accuse of corruption and post any wrong claim without any consequence

Actually, it took less than twenty seconds to click on the link to the original Reuters story that states "U.S. District Judge Denise Cote installed Bromwich through a permanent injunction in October 2013"

Even if you think Amazon didn't abuse their monopoly, you have to admit that Bromwich is abusing his by charging $1000 per hour (although I guess he lowered it from his original $1100 per hour request, so maybe he can use that to say he isn't.)

 

[Oletros]

Actually, it took less than twenty seconds to click on the link to the original Reuters story that states "U.S. District Judge Denise Cote installed Bromwich through a permanent injunction in October 2013"

Actually it took less than 30 second to find the ACTUAL court ruling and read in the page 7:

The injunction specified that the plaintiffs (the U.S. Department of Justice, 31 states, the District of Columbia, and the Commonwealth of Puerto Rico) would recommend monitor candidates to the district court. Apple, meanwhile, was not permitted to recommend a candidate without the agreement of the plaintiffs (though Apple had an opportunity to object to the plaintiffs’ recommendations). The plaintiffs recommended Michael Bromwich as monitor, and the district court appointed him on October 16, 2013.

https://www.scribd.com/document_downloads/266922774?extension=pdf&from=embed&source=embed

Judge Cote stated a permanent injunction but she didn't choose Bromwich

 

[BaldiMac]

Actually it took less than 30 second to find the ACTUAL court ruling and read in the page 7:



https://www.scribd.com/document_downloads/266922774?extension=pdf&from=embed&source=embed

Judge Cote stated a permanent injunction but she didn't choose Bromwich

What part of "the district court appointed him" doesn't mean that he was chosen by District Judge Cote?

Judge Cote interviewed two candidates from among those recommended by the DOJ and selected Bromwich. I'm not sure what else you could be trying to get across here.

 

[bsolar]

But to have Apple judged as "per se illegal" going in (of anti-trust), when Amazon had a 90% market share, and the book vendors were complaining about losing pricing rights to their own products, does not pass the smell test.

Amazon having a very large market share doesn't give any right to its competitors to engage in unlawful anticompetitive practices. The large market share does not imply any unlawful practice per se either, nor vendors complaining that their old business model was getting obsoleted.

What Amazon did was akin to dumping.

That is per se illegal in this country.

Accusing Amazon of predatory pricing when its ebooks division was actually profitable "does not pass the smell test".

 

[BaldiMac]

Amazon having a very large market share doesn't give any right to its competitors to engage in unlawful anticompetitive practices. The large market share does not imply any unlawful practice per se either, nor vendors complaining that their old business model was getting obsoleted.

Your begging the question here. Of course unlawful anti-competitive practices are unlawful and anti-competitive.

However, some practices are legal in response unlawful monopolistic practices but not legal for a monopolist. In this case, should it even be illegal to raise prices from the below marginal pricing of a monopolist?

The pricing of most eBooks, the ones that presumably led to Amazon's alleged eBook profits, did not change significantly. The price increase that was the basis of this price fixing claim was about the books that Amazon was selling at a loss.

The DOJ wants to have it's cake and eat it to. It claims that the best sellers and new releases that actually increased in price are a significant enough to pursue a price fixing case. But when it comes to a predatory pricing case, they decide to throw in a bunch of other products to offset the losses. As if books are a commodity.

The goal of antitrust law is healthy competition, not lower pricing. I think the DOJ was distracted from that. Amazon's strategy left no room for significant new competitors.

Accusing Amazon of predatory pricing when its ebooks division was actually profitable "does not pass the smell test".

Do you have a proof that Amazon's eBook division was actually profitable other than the DOJ's claim that has no numbers or methodology? Do you have any precedent that says the predatory pricing claims are based on the profitability of a whole division?