Apple's E-Book Monitor In Bureaucratic Court Fight Over Tim Cook And Al Gore Interviews

Posted: Dec 31 2013, 9:16am CST | by


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I will admit to finding this little story quite amusing. As we all know after Apple was found guilty of conspiring with the major publishers over the price of e-books the court insisted that there should be a monitor to make sure that Apple didn’t violate any other anti-trust rules and regulations. So far so good: but Apple has already protested bitterly over what said monitor is actually charging them: $1,100 an hour just for his own time and including his team some $138,000 for just the first two weeks of work. That is, I think we’d all agree, a pretty good gig if you can get one like that.

Now the monitor is complaining to the court that Apple doesn’t seem very interested in playing ball. The reason I find this all amusing is that I think it gives us a good insight into two very different aspects of American business life. There’s those who do the regulating and that sector of American business that is used to being regulated. Then there’s the rather freer sector of the economy that is generally free of bureaucratic and regulatory interference. And the two sides really aren’t quite understanding each other.

For example, here’s one exchange between the court appointed monitor and Apple:

According to the emails filed by Mr. Bromwich, his relationship with Apple was rocky from the start. After Mr. Bromwich sent Kyle Andeer, Apple’s director of competition law, an email detailing his rates and the contours of his oversight, the wide gaps between the two party’s expectations came into focus.

“Thanks very much for your response to my cover note and our draft letter,” Mr. Bromwich wrote to Mr. Andeer on Oct. 26. “Unfortunately, I think you may have misconceived its purpose. It was not to begin a negotiation about fees, rates, and expenses, nor was it meant to provide you with an opportunity to provide us with guidelines…”

“I am disappointed by your position on rates and other fees,” Mr. Andeer responded on Oct. 28. “They do not reflect market realities.”

I’ll admit that there’s the possibility here of a bit of projection by myself. But I read that as the private sector corporation saying, look, we’re the people who have to pay the bill so of course we’re going to have a negotiation over how much the bill will be. And we’ve got the court appointed bureaucrat insisting that since he’s the bureaucrat then everyone is going to just as he dang well told them to do with no negotiation allowed or even warranted. There’s an interesting commentary on that attitude too:

On Monday, Mr. Bromwich said he routinely met with top management at the three organizations he previously monitored and had “never before had a request for a meeting or interview in a monitoring assignment rejected or even deferred.”

“This is far less access than I have ever received during a comparable period of time in the three other monitorships I have conducted,” Mr. Bromwich said.

That might well be true: but I would take that as a commentary on the way in which the bureaucracy scares all too many American firms rather than as proof of anything else. For it is true that for many firms, say electrical utilities, or banks perhaps, the regulatory climate is exactly what allows them to stay open. Thus when a bureaucrat says “Jump” they all ask “How High?”. Apple, and I have already admitted to the possibility of projection here on my part here, is asking “Why?”. This isn’t something a bureaucrat is happy to hear. In the tech world such obeisance to the Federal Government is much less evident: everyone’s too focused on creating a product that people actually want to buy rather than concerning themselves over what the penpushers in Washington want.

This is, to me at least, another indication of the same difference in attitudes:

In a separate filing yesterday, Bromwich said that the company has provided him only with limited access to personnel during his investigation. When he made initial inquiries about interviewing senior leaders, one board member told him that the executives and directors were “very busy, and that we would see a ’lot of anger,’ about the case still existed within the company,” Bromwich said in his filing.

During the two months since his appointment, Bromwich said he has been permitted to interview only 11 people at the company, seven of whom were lawyers rather than business people. The monitor said he was given access to only one member of the board of directors and one executive.

Interviews took place at an off-site location rather than at the company’s headquarters, he said.

Well, yes, the company’s executives probably are quite busy. They are, after all, running one of the world’s most valuable and most profitable companies. Do note that he’s thinking about interviewing Tim Cook and Al Gore here as well. They’re probably thinking of other things than whatever it is that some paperclip hoarder would like to speak to them about. It is also a legal matter and so of course businessmen used to delegating tasks would ask the lawyers to handle such legal matters. That’s just what you do in management, engineers engineer, accountants account and legals legal.

This isn’t, obviously, how the bureaucrat sees it.

Now too much can be made of this and yes, it’s true that the monitor is indeed court appointed and he should indeed have the access that his task requires. But I do think that at least part of what we’re seeing here is a clash of cultures. At Apple they’ve really not had much to do with the Federal or any other bureaucracy: they’ve been free to get along with designing and selling their products. It’s something of a culture shock therefore to be confronted with someone from said bureaucratic side of the fence demanding access to all and sundry as he demands and also insisting that Apple pays his sky high fees without complaint or even negotiation. Similarly it’s a shock to the bureaucrat to find that there are parts of the US economy where firms are not used to rolling over and playing dead at the whim of the bureaucracy.

And I will admit that my favourite part is that complaint that they wouldn’t invite him into One Infinite Loop, that he was kept offsite. Aww, what a blow to the ego that must have been. And it rather neatly makes my point for me too. To some extent there are two American economies, one where the bureaucrats are important and one where they are not. And it’s a shock to the free part of the economy when they meet the attitudes of the bureaucrats just as much as it is a shock to the bureaucrat when they meet said free companies.

Source: Forbes

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