Apple Its 'Own Worst Enemy': US Antitrust Monitor's Report

By Joseph Ax

NEW YORK (Reuters) -- Apple Inc's antitrust compliance program has improved, but the company continues to impede a court-appointed monitor overseeing the program, acting as "its own worst enemy," the monitor told a federal judge in a report made public on Tuesday.

Michael Bromwich, who was assigned to monitor Apple’s internal antitrust policies after U.S. District Judge Denise Cote found the company liable for conspiring to raise e-book prices, said Apple persisted in raising objections to his requests for information.

"In this respect, Apple has been its own worst enemy," he said. "This lack of cooperation has cast an unnecessary shadow over meaningful progress in developing a comprehensive and effective antitrust compliance program."

Nevertheless, Bromwich said Apple's program has become "substantially stronger," commenting in what could be his final assessment unless Cote chooses to extend his two-year appointment.

An Apple spokeswoman did not immediately respond to a request for comment.

Bromwich, a former U.S. Justice Department inspector general whose relationship with Apple has been strained from the outset, was named in October 2013 by Cote after she found Apple liable in a civil antitrust case brought by the Justice Department.

Cote found Apple schemed with five book publishers from 2009 to 2010 to raise e-book prices in an effort to slow competitors such as Amazon.com Inc.

The publishers – Lagardere SCA's Hachette Book Group Inc, News Corp's HarperCollins Publishers LLC, Penguin Group Inc, CBS Corp's Simon & Schuster Inc and Verlagsgruppe Georg von Holtzbrinck GmbH's Macmillan – settled the allegations.

In June, a divided U.S. appeals court in New York upheld Cote's finding, rejecting Apple's argument that it had engaged in pro-competitive behavior.

Apple is considering whether to appeal that decision to the U.S. Supreme Court, according to court filings.

If it stands, the appellate ruling would require Apple to pay consumers $450 million in damages under a 2014 class action settlement that included nearly three dozen state attorneys general.

In his report, Bromwich said Apple had for the first time created a set of antitrust procedures, implemented training and improved engagement among its senior executives.

However, the company still rejected many of Bromwich’s requests for information "for no good reason," he wrote.

Apple had tried to disqualify Bromwich as monitor, complaining he was too aggressive in demanding interviews with executives and collaborated improperly with the Justice Department. But the 2nd Circuit rejected that attempt in May.

The case is U.S. v. Apple et al, U.S. District Court for the Southern District of New York, No. 12-2826.

(Reporting by Joseph Ax; Editing by Jonathan Stempel and Frances Kerry)