Antitrust Law Daily Wrap Up, ANTITRUST—S.D.N.Y.: Monitorship of Apple’s antitrust compliance policies ends, (Oct 14, 2015)

By Greg Hammond, J.D.

The federal district court in New York City has decided not to extend the Monitorship of Apple Inc.’s internal antitrust compliance policies and procedures. The Monitorship was imposed two years ago to ensure compliance with a final judgment imposed on Apple after it was found to have orchestrated a conspiracy among publishers to fix retail prices for electronic books or e-books (U.S. v. Apple Inc., October 13, 2015, Cote, D.).

Over the course of the Monitorship, the Monitor submitted four reports. The assessment and recommendations set forth in the First Report were very preliminary due to substantial delays in efforts to obtain relevant documents and interview relevant personnel. In the Second Report, the Monitor noted that while Apple’s Antitrust Compliance Program was an improvement on what existed prior to the final judgment and reflected an investment of substantial time, effort, and resources, the program remained a work in progress. The Third Report noted that while progress was made in Apple developing and implementing its antitrust training program, Apple’s cooperation diminished substantially toward the end of the reporting period and some requests for information remained in dispute.

In his Fourth Report, the Monitor noted that Apple’s Antitrust Compliance Program is substantially stronger than it was when the Monitorship began, and stronger than when the other reports were issued. He observed that, despite Apple’s “lack of willing cooperation,” the company has created a set of procedures that the Monitor believes to be “reasonably designed to detect and prevent violations of the antitrust laws—at least on paper.” In addition, the Monitor observed that Apple has made “marked improvement in the engagement of Apple’s senior executives in the Antitrust Compliance Program,” and has—most notably—established the Antitrust Compliance Officer (ACO) position, created under Section V of the final judgment to supervise all of Apple’s antitrust compliance efforts.

The Department of Justice Antitrust Division, Connecticut, New York, Texas, and Apple Inc. jointly submitted a letter to the district court, recommending that the court not extend the Monitorship.

In reaching its decision not to extend the Monitorship, the court found that, despite the Monitor facing a “challenging relationship with Apple,” he “persevered and made numerous recommendations to Apple for the improvement of its antitrust compliance program” and Apple implemented a vast majority of those recommendations. “Apple has entirely revamped its antitrust compliance program,” the court said, noting that the company substantially revised its antitrust and compliance policy, distributed an interactive antitrust reference tool, created an antitrust compliance training program, and—most recently—hired a company to evaluate the compliance program. “It is to be hoped that this program will benefit not only the American public but Apple as well,” the court concluded.

The case number is 1:12-cv-02826-DLC-MHD.

Attorneys: Carrie Ann Syme for U.S. Department of Justice Antitrust Division. Andrew Jay Frackman (O'Melveny & Myers LLP) for Apple Inc.

Companies: Apple Inc.

Cases: Antitrust NewYorkNews AntitrustDivisionNews