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Bromwich says 'new relationship' with Apple more productive
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Apr 15, 2014, 12:05 AM
Michael Bromwich, the court-appointed monitor for Apple's anti-trust compliance policies, demonstrated a marked change in attitude towards the company in his latest report, the first since a Court of Appeals and the DOJ significantly scaled back his powers of investigation and range of allowable duties following Apple complaints in February. A change of "point of contact" with the company has resulted in Apple being "more cooperative" than previously, Bromwich said.

Apple spent much of the second half of 2013 trying to remove Bromwich from the post and suspend any third-party monitoring until after its appeal of Judge Cote's decision in the so-called "e-book price fixing case" last summer. The company has objected both to Bromwich specifically and to the idea of an external compliance monitor (ECM) entirely, saying that a monitor amounts to an unjust punishment, is unnecessary in that Apple's revised antitrust policies will also be reviewed by the court and the DOJ, and that the imposition of an external monitor is a very unusual penalty to impose on a company with no record of antitrust violations.

The iPhone maker's list of grievances against Bromwich was a long one, but beyond its contention that no ECM was required in the first place, the company focused on a handful of specific complaints: that Bromwich was unqualified for the position, being a friend of Judge Cote but having no antitrust compliance experience (requiring the services of an equally-well-paid assistant); that he was overreaching his mission and conducting an invasive, wide-ranging investigation; that Bromwich was overpaid for the work he was meant to be doing ($1,250 per hour, with an assistant getting $1,125 per hour, plus a 15 percent administrative fee to Bromwich's firm), and -- until Judge Cote reversed her own ruling on the matter -- a plan for secret, ex-parte meetings between Bromwich and Cote, even though Judge Cote is still ruling on related matters in the e-book case.

During the Court of Appeals hearing, the Department of Justice offered to rein in Bromwich's duties to a more limited scope of simply assessing Apple's antitrust compliance policies, and ensuring that the company communicates those policies to its employees and executives effectively. Bromwich would no longer be permitted to investigate any potential antitrust activity, or interview employees beyond communications required in the course of his duties. Should Bromwich discover or suspect any evidence of violations with the court's order, he must report it to Judge Cote, not investigate it. The court accepted the DOJ offer and ruled against suspended Bromwich's work while Apple makes its appeal, but while something of a loss for Apple the Appeals Court ruled actually repudiated much of what Bromwich and Cote had intended in their order.

Bromwich has opted to put a good face on the redefined duties, and has said there has been "a shift in tone in our relationship" since mid-February "largely attributable to Apple's designation of a new in-house principal point of contact and to changes Apple has made in the outside counsel with whom we deal," he said. In his report (seen below), Bromwich spends much of it noting the previous friction, but has that his new "point of contact," Apple Vice President and Associate General Counsel Doug Vetter, has supplied requested documents and fulfilled other requests as needed in Bromwich's new, reduced duties, and is generally easier to work with in the ECM's view.

Bromwich now says he is "optimistic" that his team will be able to complete their work, and notes various initiatives by Apple designed to comply with the court's mandate on actively avoiding antitrust conflicts in future. "Our judgment is that Apple has made a promising start in enhancing its Antitrust Compliance Program since issuance of the Final Judgment," he wrote. Apple's appeal of the DOJ e-book case will be heard by the same Court of Appeals later this year.

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