Tags United States Department of Justice

Chapter finally closing in Apple’s ebook antitrust case as U.S. Justice Dept says court monitoring can end

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The U.S. Justice Department has said that is now satisfied with Apple’s measures to guard against any repetition of the type of anti-competitive behaviour ruled illegal in the long-running ebooks trialBloomberg reports that the department has recommended that the court-appointed monitor is no longer necessary.

In a letter to the Manhattan federal judge who found in 2013 that Apple illegally conspired with publishers to set e-book prices, the U.S. said Apple has “now implemented meaningful antitrust policies, procedures, and training programs that were obviously lacking at the time Apple participated in and facilitated the horizontal price-fixing conspiracy found by this court.”

The letter did, however, note that Apple “never embraced a cooperative working relationship with the monitor” … 

Apple denied this, but did agree that the relationship had been “rocky.” Apple had previously complained that it was being overcharged by the lawyer appointed by the court to monitor its compliance with the ebook ruling, after it received a bill for $138,432 for a fortnight’s work by Michael Bromwich.

Apple later called for Bromwich to be removed from the role, stating that he was attempting to extend his remit beyond that specified by the court, and demanding interviews with senior Apple execs who’d had no involvement in any of the ebook negotiations. Apple’s motion was denied.

While this chapter of the ebook saga appears to be at end end, it may not be the end of the story: Apple is appealing the case to the U.S. Supreme Court. Apple’s argument is that it needed to act aggressively in pricing negotiations to break Amazon’s near-monopoly in the ebook market at the time. Some judges from Apple’s previous appeal have expressed sympathy with this view.


Filed under: AAPL Company Tagged: antitrust, Apple ebooks trial, E-book, ebooks, ebooks trial, IBooks, Michael Bromwich, United States Department of Justice

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Ben Lovejoy

October 13th

Apple

Mac

Federal judge asks Apple to explain why decrypting iPhones would be “unduly burdensome” as tactic to open debate

encryption

A New York federal judge has indicated that he is likely to refuse a government request to compel Apple to unlock a customer’s iPhone, but will first ask Apple to explain why decrypting iPhones would be “unduly burdensome.” The iPhone concerned is apparently not running iOS 8 or 9, and so Apple would have the technical ability to decrypt it.

The Washington Post reports that Magistrate Judge James Orenstein of the U.S. District Court for the Eastern District of New York is an activist judge who is believed to be attempting to open up public debate on the issue of privacy versus law enforcement … 

“He’s clearly a judge who is interested in opening topics to discussion in the judiciary, but he also thinks the larger public should know about the debate,” said Brian Owsley, a former magistrate judge in Texas who issued rulings that heightened privacy protections for the government’s use of cellphone-tracking devices.

Other colleagues and analysts have made similar comments, reports the paper.

Apple came under strong fire from law enforcement agencies after it boosted iPhone security in iOS 8 so that Apple has no access to the encryption key needed to access customer data.

If the government laid a subpoena on us to get your iMessages, we can’t provide it. It’s encrypted and we don’t have the key.

FBI Director James Comey said that this was a step too far.

The notion that we would market devices that would allow someone to place themselves beyond the law, troubles me a lot. As a country, I don’t know why we would want to put people beyond the law.2

U.S. Attorney General said that there needed to be a balance between privacy and law enforcement needs.

It is fully possible to permit law enforcement to do its job while still adequately protecting personal privacy.

Arguments have grown increasingly dramatic, the DOJ argued that iPhone encryption could eventually lead to the death of a child” and Manhattan district attorney Cyrus Vance, Jr, suggesting that the iPhone would be “the terrorists’ communication device of choice.”

The opposing argument is, of course, that if Apple builds in a backdoor for use by law enforcement, it is only a matter of time before it is discovered and used by hackers.

FBI Director Comey told Congress on Thursday that the administration would not be seeking a change in the law yet, but would continue to try to persuade companies to cooperate voluntarily.


Filed under: AAPL Company, iOS Devices Tagged: Apple Inc, Barack Obama, Encryption, Federal Bureau of Investigation, iPhone encryption, James B. Comey, Law enforcement agency, privacy, Security, United States Attorney General, United States Department of Justice

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Ben Lovejoy

October 12th

Apple

Mac

Federal judge asks Apple to explain why decrypting iPhones would be “unduly burdensome” as tactic to open debate

encryption

A New York federal judge has indicated that he is likely to refuse a government request to compel Apple to unlock a customer’s iPhone, but will first ask Apple to explain why decrypting iPhones would be “unduly burdensome.” The iPhone concerned is apparently not running iOS 8 or 9, and so Apple would have the technical ability to decrypt it.

The Washington Post reports that Magistrate Judge James Orenstein of the U.S. District Court for the Eastern District of New York is an activist judge who is believed to be attempting to open up public debate on the issue of privacy versus law enforcement … 

“He’s clearly a judge who is interested in opening topics to discussion in the judiciary, but he also thinks the larger public should know about the debate,” said Brian Owsley, a former magistrate judge in Texas who issued rulings that heightened privacy protections for the government’s use of cellphone-tracking devices.

Other colleagues and analysts have made similar comments, reports the paper.

Apple came under strong fire from law enforcement agencies after it boosted iPhone security in iOS 8 so that Apple has no access to the encryption key needed to access customer data.

If the government laid a subpoena on us to get your iMessages, we can’t provide it. It’s encrypted and we don’t have the key.

FBI Director James Comey said that this was a step too far.

The notion that we would market devices that would allow someone to place themselves beyond the law, troubles me a lot. As a country, I don’t know why we would want to put people beyond the law.2

U.S. Attorney General said that there needed to be a balance between privacy and law enforcement needs.

It is fully possible to permit law enforcement to do its job while still adequately protecting personal privacy.

Arguments have grown increasingly dramatic, the DOJ argued that iPhone encryption could eventually lead to the death of a child” and Manhattan district attorney Cyrus Vance, Jr, suggesting that the iPhone would be “the terrorists’ communication device of choice.”

The opposing argument is, of course, that if Apple builds in a backdoor for use by law enforcement, it is only a matter of time before it is discovered and used by hackers.

FBI Director Comey told Congress on Thursday that the administration would not be seeking a change in the law yet, but would continue to try to persuade companies to cooperate voluntarily.


Filed under: AAPL Company, iOS Devices Tagged: Apple Inc, Barack Obama, Encryption, Federal Bureau of Investigation, iPhone encryption, James B. Comey, Law enforcement agency, privacy, Security, United States Attorney General, United States Department of Justice

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Ben Lovejoy

October 12th

Apple

Mac

DOJ and FBI officials say Apple & other tech companies ‘winning PR battle’ over data privacy

fbi-doj-apple

Some law enforcement officials are frustrated that Apple and other tech companies appear to be winning the PR battle over data privacy, reports the NYT.

Some Justice and F.B.I. officials have been frustrated that the White House has not moved more quickly or been more outspoken in the public relations fight that the tech companies appear to be winning, the law enforcement officials said, speaking on the condition of anonymity because they were not authorized to discuss the private conversations.

The comments came in the wake of a DOJ drugs and guns investigation where the agency obtained a court order to obtain iMessages between suspects, and Apple responded that it was unable to comply as end-to-end encryption is used, meaning that Apple has no way to decrypt the communications. Tim Cook said of iMessages a year ago that the content is “encrypted and we don’t have the key.”

There has long been tension between Apple and law enforcement agencies over encryption, Apple arguing that its customers right to privacy outweighs the right of law enforcement agencies to intercept communications – a stance strengthened by the Snowden revelations into large-scale electronic surveillance by governments. Law enforcement officials have become increasingly strident and hyperbolic in their statements on the subject.

United States Attorney General Eric Holder said last year that less stringent protection would still “adequately protect personal privacy,” FBI Director James Comey claimed that Apple’s encryption was “putting people beyond the law,” the DOJ suggested that iPhone encryption could eventually lead to the death of a child” and Manhattan district attorney Cyrus Vance, Jr, said that the iPhone would be “the terrorists’ communication device of choice.”


Filed under: AAPL Company Tagged: Department of Justice, Director of the Federal Bureau of Investigation, DOJ, Encryption, FaceTime, FBI, Federal Bureau of Investigation, iMessage, iPhone, James B. Comey, law enforcement, PRISM, Snowden, Tim Cook, United States Department of Justice

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Ben Lovejoy

September 8th

Apple

Mac

Apple’s ebook settlement may not be quite so settled as judge expresses concern

ibooks-textbooks

Just as we thought Apple’s long-running ebooks suit might finally be settled, the out-of-court agreement has been thrown into doubt. The judge required to approve the settlement terms has expressed concern that they may be unfair to consumers, reports Business Insider.

U.S. District Judge Denise Cote in Manhattan said she found “most troubling” a clause requiring Apple to pay only $70 million if an appeals court reversed her finding that the company is liable for antitrust violations and sent it back to her for further proceedings.

Apple was found guilty of price-fixing, an allegation it always denied and is currently appealing. To speed things up, lawyers on both sides agreed what would happen for each of the three possible outcomes of the appeal.

If Apple wins the appeal, it will pay nothing. If it loses the appeal, it will pay $50M in legal costs and $400M to a compensation fund for consumers. The contentious part is what happens if the appeals court overturns the original verdict but sends the case back for new proceedings. In this event, the proposal is that Apple would pay just $70M, of which the compensation fund would receive $50M.

Cote questioned if that would be fair and what might happen if the appeals court reversed her ruling on a minor issue.

This is not the first example of post-trial arguments, Apple having earlier called for the removal of the court-appointed antitrust monitor, a request rejected by the court.


Filed under: AAPL Company Tagged: appeal, Apple, Denise Cote, e-books, ebooks, ebooks trial, Manhattan, price-fixing, United States Department of Justice, United States federal judge, US District Judge Denise Cote

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Ben Lovejoy

July 25th

Apple

Mac

DOJ responds to Apple’s request to replace attorney in ebooks case (Update: Court denies Apple’s request, too)

Following Apple’s formal request last week that Michael Bromwich be removed from his role in ensuring the Cupertino company meets compliances set by the anti-trust ruling in last year’s ebooks trial, the Department of Justice has pushed back (via GigaOm) with a denial letter accusing Apple of ‘character assassination’.

Regrettably, it is now clear that Apple has chosen a campaign of character assassination over a culture of compliance. Apple could have been spending the past months working with the External Compliance Monitor with the ultimate goal of reforming its policies and training, and in the process change its corporate tone to one that reflects a commitment to abiding by the requirements of the antitrust laws. Instead, Apple has focused on personally attacking Mr. Bromwich, and thwarting him from performing even the most basic of his court-ordered functions.

Apple originally expressed its unhappiness with its working relationship with the attorney appointed to monitor its compliances citing what they believed to be exuberant expenses charged by the attorney and over widening the investigation by interviewing Apple execs not related to the trial.

If Apple was unsatisfied with language and behavior expressed by Mr. Bromwich, it surely won’t be pleased with the DOJ’s expression that Apple’s complaint was ”littered with factual inaccuracies and gross exaggerations.” The DOJ concluded in its response that the attorney appointed to monitor Apple’s compliance expressed no bias and presumably will remain assigned to his duty.

Update: Reuters reports that the court has responded to the DOJ’s letter by denying Apple’s request to remove Mr. Bromwich. 


Filed under: AAPL Company Tagged: anti-trust, Apple, Apple anti-trust, Bromwich, Competition law, Cupertino California, Denise Cote, ebooks, ebooks trial, IBooks, iBooks trial, lawyer, Manhattan, Michael Bromwich, Michael R. Bromwich, Reuters, United States Department of Justice, United States federal judge

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Zac Hall

January 13th

Apple

Mac

Apple CEO Tim Cook ordered to give deposition in anti-poaching lawsuit

Tim-Cook-apologyApple CEO Tim Cook has been ordered by U.S. District Judge Lucy Koh in San Jose to give a deposition related to an ongoing private lawsuit that claims Apple, Google, and others entered “no-poach” agreements, as reported by Bloomberg. Cook isn’t the only executive named in yesterday’s order. Google Chairman Eric Schmidt will also be deposed on Feb. 20, as well as Intel Chief Executive Officer Paul Otellini later this month.

Koh told lawyers yesterday that Apple founder Steve Jobs was copied on e-mails at issue in the case, and that she found it “hard to believe” that Cook, as Apple’s chief operating officer at the time in question, wouldn’t have been consulted about such agreements.

The judge said she was disappointed that senior executives at the companies involved hadn’t been deposed before yesterday’s hearing over whether she should certify the case as a group lawsuit. The class would include different categories of employees whose incomes, their lawyers argue, were artificially reduced because of the collusion. Koh didn’t rule on class certification.

Employees brought on the private lawsuit, but it mirrors complaints settled with the U.S. Justice Department following an initial antitrust probe in 2010. In the settlement that resulted from the 2010 probe, the Justice Department claimed the companies kept “do-not-call” lists to avoid issues of poaching, but it also said the agreements could hurt competition and employees. According to the Department, Apple and Adobe executives entered an agreement in 2005 to not  ”cold-call” each other’s employees. The report also claimed Apple and Google created a do-not-call list in 2006, while Apple and Pixar, as well as Google, all entered similar agreements with Intuit and Intel in 2007.


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Jordan Kahn

January 18th

Apple

Mac

Apple CEO Tim Cook ordered to give deposition in anti-poaching lawsuit

Tim-Cook-apologyAs reported by Bloomberg, Apple CEO Tim Cook has been ordered by U.S. District Judge Lucy Koh in San Jose to give a deposition related to an ongoing private lawsuit that claims Apple, Google, and others entered “no-poach” agreements. Cook isn’t the only executive named in yesterday’s order. Google Chairman Eric Schmidt will also be deposed on Feb. 20th, as well as Intel Chief Executive Officer Paul Otellini later this month.

Koh told lawyers yesterday that Apple founder Steve Jobs was copied on e-mails at issue in the case, and that she found it “hard to believe” that Cook, as Apple’s chief operating officer at the time in question, wouldn’t have been consulted about such agreements.

The judge said she was disappointed that senior executives at the companies involved hadn’t been deposed before yesterday’s hearing over whether she should certify the case as a group lawsuit. The class would include different categories of employees whose incomes, their lawyers argue, were artificially reduced because of the collusion. Koh didn’t rule on class certification.

The private lawsuit was brought on by employees, but mirrors complaints settled with the U.S. Justice Department following an initial antitrust probe in 2010. In the settlement that resulted from the 2010 probe, the Justice Department claimed the companies kept “do-not-call” lists to avoid issues of poaching, but also said the agreements could hurt competition and employees. According to the Department, Apple and Adobe executives entered an agreement in 2005 agreeing “not to cold-call each other’s employees.” The report also claimed Apple and Google created a do-not-call list in 2006, while Apple and Pixar, as well as Google, all entered similar agreements with Intuit and Intel in 2007.


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Jordan Kahn

January 18th

Apple

Mac

Federal judge approves settlement with three publishers in Apple/Amazon ebook price fixing case

We noted last month that Apple filed a document with the Southern District of New York attempting to have settlements with the U.S. Department of Justice and three publishers delayed until after the high profile eBook price-fixing case goes to trial in June 2013. The Wall Street Journal reported today that a federal judge approved the settlements, which would allow Amazon and other retailers to return to its previous model and freely set eBook prices. Not surprisingly, Apple is expected to appeal the decision:

In a move that could reshape the publishing industry, a federal judge has approved a settlement with three of the nation’s largest book publishers over alleged collusion in the pricing of e-books… Apple has previously indicated in court papers that it would seek to appeal any decision approving the settlement. As a result, it could take some time before consumers see lower prices on e-books… “It’s devastating to bookstores,” said Paul Aiken, executive director of the Authors Guild. “For two years the settling publishers must allow vendors to discount e-books at any price they want. The court acknowledges that this restores the status quo conditions before 2010, when Amazon was able capture 90% of the e-book market. The Justice Department is reshaping the literary marketplace without submitting a single economic study to the court to justify its actions.”



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Jordan Kahn

September 6th

Apple

Mac

Apple calls DOJ settlement with publishers unlawful, says trial is necessary

The U.S. Department of Justice announced a settlement in April with three of the publishers involved in the eBook price-fixing antitrust suit against Apple. Hachette, HarperCollins, and Simon & Schuster were part of the settlement, which would allow Amazon to return to its previous wholesale model and the publishers to set and reduce prices for eBook titles freely. PaidContent provided an update today on the case by reporting Apple has filed a document with the Southern District of New York. It called the proposed settlements with the three publishers “fundamentally unfair, unlawful, and unprecedented.” Apple argued that since it is not settling, the settlement would unlawfully end contracts those publishers have with Apple.

The proposed settlement would require the three settling publishers — HarperCollins, Hachette and Simon & Schuster — to terminate their existing agency pricing contracts with Apple. Apple says that isn’t fair: “The Government is seeking to impose a remedy on Apple before there has been any finding of an antitrust violation.” This case, the company states, revolves around “an alleged conspiracy to force Amazon to adopt agency.” So a settlement “enjoining collusion or precluding publishers from forcing agency on Amazon would be appropriate,” but Apple is entitled to defend its contracts in court.

Apple is hoping the courts decide to reject the settlements or delay a ruling until after the June 2013 trial. Apple also discussed Amazon’ role in the case. It claimed the government has “unwittingly placed a thumb on the scales in favor of Amazon”:

expressed concerns about the possibility that the Government has unwittingly placed a thumb on the scales in favor of Amazon, the industry monopolist. Amazon was the driving force behind the Government’s investigation, and it told a story to the Government that has yet to be scrutinized. Amazon talked with the Government repeatedly throughout the investigation, even hosting a two-day meeting at its Seattle headquarters. In all, the Government met with at least fourteen Amazon employees—yet not once under oath. The Government required that Amazon turn over a mere 4,500 documents, a fraction of what was required of others.



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Jordan Kahn

August 16th

Apple

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