January 14, 2014

Apple and the DOJ are still having a spat and it is hilarious


It doesn't matter whether who wins or loses, so long as everyone looks dumb in the process.

It doesn’t matter whether who wins or loses, so long as everyone looks dumb in the process.

The feud between Apple and the Department of Justice in the aftermath of the ebook suit is still ongoing, with both of these massively funded Heathers essentially throwing cash at each other screaming “What’s your damage?”

As we discussed in December, Apple has been complaining about Michael Bromwich, the former DOJ investigator appointed to enforce Apple’s compliance with the antitrust ruling handed down by Judge Denise Cote last year. Apple has taken issue with what they see as Bromwich’s overreach, has complained that his fees are extraordinary, and most seriously, has questioned the legality of his communication with Judge Cote, calling him a “quasi-institutional” offshoot of the court.

We also discussed The Wall Street Journal‘s vituperative editorial against Bromwich in December, in which they wrote “While he has great political connections, Mr. Bromwich has no experience in antitrust law.” How connected is he? One example: The New York Times‘ coverage of Bromwich always includes the disclaimer that his son works at their news desk.

Apple’s dagger-eyed, harumphing rage about Bromwich has shown no signs of easing up—Dealbook’s Matthew Goldstein has a good recap—and in a hearing on Monday, after Judge Cote reaffirmed her role and that of Bromwich, Apple vowed to continue their fight in appellate court. To get that straight, Apple will be appealing the decision to maintain Bromwich in his role as independent monitor—entirely separately from their planned appeal of the decision that instituted the monitorship in the first place. If anyone can afford to blow some cash on lawyers and hurt feelings, it’s these guys.

Which is what makes Apple’s objections to Bromwich so puzzling in the first place. Much of what Bromwich has done would seem to be excessive when viewed from the outside—he’s been requesting multiple meetings with Apple board members like Al Gore who have no clear connection to anything touching ebook pricing matters. But Apple has also made a stink about Bromwich’s billing, which they are forced to pay. Bromwich charges an $1,100 hourly fee, and a 15% administrative fee on top of that. As Goldstein writes “the company points to the $138,432 legal bill Mr. Bromwich submitted for his first two weeks of work as evidence he is using his appointment to run an unwieldy and unfair investigation.

Judge Cote’s answer on Monday? “Lawyers make a lot of money.” That right there exemplifies this whole issue. Yes, lawyers do make a lot of money. Even, some might argue, way way way too much money. And Cote’s attitude, considering she is the one who chose a friend to make all of that money, is a bit cavalier. But the exact last organization on the planet who can cry wolf about what is or is not too expensive is Apple.

What we are left with is a big ugly public squabble in which nobody—not Apple, not Bromwich, not the overly vindictive DoJ and not even the judge, come out looking good.

In its own way it’s all hilarious and even instructive: when you are big enough that nobody can restrain you—as is Apple, a company that, were it a nation, would be the 28th richest country on earth (to say nothing about anyone who makes $1,100 an hour)—your crises play out at the level, basically, of a wheedling ten year old.



Dustin Kurtz is the marketing manager of Melville House, and a former bookseller.