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From Antitrust Law Daily, February 10, 2014

Apple not entitled to stay of order imposing external compliance monitor

By Jeffrey May, J.D.

The U.S. Court of Appeals in New York City today denied Apple Inc.’s request for a stay of a provision in a final judgment issued in the federal/state e-books price fixing case imposing an external compliance monitor. Apple failed to demonstrate that it was entitled to a stay pending appeal (U.S. v. Apple Inc., February 10, 2014, per curiam).

In the federal/state antitrust enforcement action, Apple was found to have orchestrated a conspiracy among the publishers to fix retail prices for e-books. A final judgment was issued in September 2013. In addition to providing injunctive relief sought by the U.S. Department of Justice and the state attorney generals, the final judgment created the disputed monitor position.

Apple had objected to the conduct of Monitor Michael Bromwich. Apple requested a stay from the district court, asserting that the stay was appropriate because Bromwich should be disqualified. The district court denied the stay, and Apple moved for relief from the appellate court.

Until the appellate court hears the merits of the appeal, the monitor has been instructed to conduct his activities within the bounds of the order, as interpreted by the government. The government’s narrow interpretation of the monitor provision has been accepted by the appellate court.

According to the Department of Justice, “the injunction allowed the monitor to assess the appropriateness of the compliance programs adopted by Apple and the means used to communicate those programs to its personnel.” The injunction ensures Apple employees are being instructed on compliance but does not allow the monitor to investigate whether such personnel were in fact complying with the antitrust or other laws. The appellate court agreed with this interpretation that the monitor was empowered to demand only documents relevant to his authorized responsibility as so defined, and to interview Apple directors, officers, and employees only on subjects relevant to that responsibility.

The case is: 14-60.

Attorneys: Finnuala K. Tessier for Department of Justice. Theodore J. Boutrous, Jr. (Gibson, Dunn & Crutcher LLP) for Apple Inc.

Companies: Apple Inc.

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