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Summary:

Apple lost its attempt to remove a monitor who is charged with ensuring compliance with an order of ebook prices, but who Apple accused of conducting a roving investigation.

A federal appeals court has refused to stay an order that imposes an antitrust monitor on Apple, despite the company’s complaints that the monitor has been conducting an illegal roving investigation.

In a ruling published on Monday, the Second Circuit Court of Appeals wrote that the dispute came down to a disagreement over what the monitor was empowered to do, and adopted the Justice Department’s position that the monitor was limited to verifying whether Apple was informing its employees about their duty to comply with an anti-trust order from last year.

The original order imposing the monitor came as part of a larger decision last year in which a New York federal judge concluded that Apple had violated antitrust laws by brokering an illegal conspiracy with publishers to fix the price of ebooks.

Apple, which is appealing the overall decision, has accused the monitor, Michael Bromwich, of starting his duties prematurely, and of over-stepping his authority by demanding multiple interviews with senior Apple executives and board members — including designer Jony Ive and Al Gore, neither of whom have any apparent role in ebook pricing. The company also argued that Bromwich, who is billing Apple $1,100 per hour to investigate it, has an incentive to run up his bill as a high as possible. Bromwich has already billed over $130,000, in part because he had to hire another lawyer to help him since he lacks a background in antitrust law.

Monday’s ruling amounts to a face-saving measure for U.S. District Judge Denise Cote, who has been criticized harshly in the Wall Street Journal for appointing Bromwich, who is reportedly her friend and political ally. The appeals court decision serves to remind Bromwich of the limits of his investigation, even as it sides entirely with Cote and the Justice Department.

Meanwhile, Apple and the Department of Justice are still preparing to make arguments in the appeal of Judge Cote’s decision. The appeal is expected to take place sometime this spring.

Here’s the ruling:

Order Denying Stay

  1. Neither side won or lost – It went right down the center…
    The judge got to keep her appointed monitor
    Apple got his focus greatly narrowed

    They basically didn’t want to criticize a fellow judge but aged with Apple that he isn’t there to go on a fishing expedition.

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    1. Thanks for the comment, PXLated. That’s well put. While Apple technically lost – and the panel emphatically endorsed the position of the Justice Department — the panel clearly made a point of telling the monitor to limit his activities. It was a shrewd political ruling (though I think they should have come down harder on Cote and Bromwich).

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  2. Christian Gray Monday, February 10, 2014

    In what universe does it make sense to appoint someone that doesn’t even have the expertise need for the job. If he doesn’t have the ability and has to hire someone else that should come out of his pocket not Apple’s, and there should be a rate limit to a forced appointment.

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