In his third report, filed this week, Apple’s court-appointed external compliance monitor Michael Bromwich told Judge Denise Cote that Apple has made some progress on implementing a “robust” antitrust compliance program, but he also reported “significant setbacks.”
The report comes as the Second Circuit Court of Appeals is considering the legality of Bromwich’s work, as well as a separate appeal of Judge Denise Cote's July 2013 verdict finding Apple liable for its role in a scheme with five publishers to fix the price of e-books.
Apple has long objected to Bromwich's work, and has claimed he is conducting a “roving investigation.” In his report to Judge Cote for the six-month period ending February 2015, Bromwich hinted at the tension that has marked his role.
Since October of last year, “Apple’s cooperation diminished substantially,” Bromwich reports, with “longstanding requests for information” remaining in dispute. “Apple’s communications with us reverted to the more adversarial tone" taken in the first few months of the monitorship, he added, including "attempts to prescribe and limit how the Monitor should conduct his reviews and write his reports.” And there have been no interviews with Apple personnel since January, he added, as Apple has rejected all requests.
However, Bromwich also told the court that Apple has made progress in implementing an antitrust compliance program. He reported that his team has in fact interviewed all the members of Apple’s board and all members of its executive team, and has received some “materials from the company that are important to our assessments.” But, Bromwich said, he remains unable to “fully evaluate” the effectiveness of Apple’s compliance and training program at this time.
Under Judge Cote’s September 4, 2013 final order, Apple is required to implement an antitrust training and compliance program, and an external monitor was appointed to evaluate whether those new policies and procedures are “reasonably designed to detect and prevent violations of the antitrust laws” as well as whether Apple’s antitrust training program is “sufficiently comprehensive and effective.” The order requires the monitor to submit reports every six month over a two-year appointment.
Apple has bristled over Bromwich’s work from the beginning, however, and has sought to have him disqualified. Apple claims Bromwich is acting as “an independent investigator" whose role is "to ferret out any wrongdoing, all at Apple’s expense."
DoJ attorneys, however, have accused Apple of openly obstructing Bromwich's work, and of waging a "campaign of character assassination" against him. "Apple simply does not want any monitor whatsoever," DoJ attorneys concluded, "and manufacturing these baseless objections is the only way it apparently believes it can achieve that result."
It is unclear when the appeals court will rule on Apple’s objection to Bromwich’s work, which is now entering its final stages, unless extended by the court.