Apple gets reprieve from e-book monitor's oversight

NEW YORK Tue Jan 21, 2014 11:00pm IST

People walk past an Apple store in San Francisco, California November 29, 2013. REUTERS/Stephen Lam/Files

People walk past an Apple store in San Francisco, California November 29, 2013.

Credit: Reuters/Stephen Lam/Files

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NEW YORK (Reuters) - A U.S. appeals court gave Apple Inc (AAPL.O) a reprieve from an external monitor appointed to oversee its compliance with antitrust laws after the company had been found liable last July for conspiring to raise e-book prices.

The 2nd U.S. Circuit Court of Appeals in New York on Tuesday granted Apple a hearing on whether to stop the monitor, Michael Bromwich, from doing his job while the company pursues a formal appeal, which could last several months.

In granting an "administrative stay," the 2nd Circuit said a three-judge panel would hear Apple's motion for a stay pending appeal as soon as possible.

The U.S. Department of Justice did not oppose the short stay but will fight Apple's effort to get rid of the monitor or else disqualify Bromwich. It has until January 24 to file opposition papers.

Apple has complained that Bromwich has been too intrusive, including by seeking interviews with top executives and board members, and has been charging an inflated $1,100 per hour for his services to rack up high fees.

The Cupertino, California-based maker of the iPad, iPod and iPhone has said Bromwich's activities could interfere with its ability to develop new products.

Courts often appoint monitors in litigation to ensure that companies comply with the law.

But Apple has said U.S. District Judge Denise Cote in Manhattan, who in a nonjury trial found the company liable for a price-fixing conspiracy with five major publishers, improperly granted Bromwich too much power.

"The monitorship should never have been imposed in the first place, and the burden and intrusion the monitor is imposing on Apple cannot be remedied after the fact if the company prevails on appeal," Apple said in a filing on Friday.

Bromwich, a former Justice Department inspector general, denied in a December 30 court filing that he was conducting a "broad and amorphous inquisition."

He said Apple had given him only "limited" access and that a senior antitrust executive had told him he would "see 'a lot of anger' about the case that still existed within the company."

In a decision on Thursday, Cote defended appointing a monitor, writing: "If anything, Apple's reaction to the existence of a monitorship underscores the wisdom of its imposition."

The cases are U.S. v. Apple Inc, 2nd U.S. Circuit Court of Appeals, No. 14-60; and U.S. v. Apple Inc, U.S. District Court, Southern District of New York, No. 12-02826.

(Reporting by Jonathan Stempel in New York; Editing by Stephen Powell and Lisa Von Ahn)

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