Court Appointed Monitor Complains About Apple in Latest Report

Posted on April 17, 2015

Remember Michael Bromwich, the external auditor appointed by Judge Denise Cote in the ebook price fixing case? It is Bromwich's job to oversee Apple's efforts to ensure it doesn't violate any antitrust laws going forward. Well, he's still wandering the halls at Apple, driving management nuts.

Bromwich just submitted his third report on Apple to the court and he's not very happy. On the bright side, he says Apple has made progress coming up with a plan to make sure no one violates antitrust laws. The company now has a huge manual with rules that must be followed, which presumably includes the advice not to huddle in secret meetings with the heads of the major book publishers and coordinate pricing on ebooks. You know, the activity that got Apple in this mess in the first place.

Apple also now requires certain employees to attend seminars about antitrust issues and some even have to get a certification to prove they attended the course. The company's antitrust counsel now is much more involved with day to day activities of Apple and keeps a close eye on what it is doing. But the legal advice, the regulations and the seminars and the memos aren't enough for Bromwich. He wants Apple to conduct "periodic, formal risk assessments" with deep analysis of pretty much everything the company is doing and assign some kind of risk level to each activity and/or transaction. He apparently also wants a formal, written backwards-looking report about everything Apple has done with specific risk assessment of all projects and activities. We can't imagine how any company would have time to comply with this request and still get any work done.

Apple is furious at these demands and says it is being asked to completely restructure the way the company is run. It says that this would result in [REDACTED.] Yes, unfortunately, we have no idea what grim future Apple envisions if Bromwich's wishes are granted. The good parts are redacted.

Apple has provided Bromwich access to employees, Board members and senior executives. But since January, the interviews have stopped as Apple says the interviews are burdensome and serve no purpose other than to fish for some kind of unknown wrongdoing. Bromwich is also irritated that he doesn't get to go to all the seminars on antitrust laws.

Meanwhile, Apple is hoping it will win its appeal of the ruling against it in the case. If that happens, Bromwich will be swiftly escorted out the front door by security guards. If Apple loses the appeal, Bromwich is here to stay. As for the formal written Risk Assessment Reports he wants, it's unclear what the judge will say about that.