After losing an antitrust trial, Apple has been facing off with Michael Bromwich. Could the fight change how we keep tech giants under control?

Michael Bromwich was in court with the most powerful company and the top government law agency in the country when he seemed to get antsy. Apple and the United States Department of Justice had, after all, been exchanging jabs about him. “I'd like to be heard, your Honor, if I can,” he told the judge, who said they’d need to “exhaust the arguments of the main combatants” first.

Wanting to interject would be understandable, considering how long Bromwich and Apple had been putting up their dukes inside and outside of court in a bloody fight over cash and corporate power. In July 2013, Apple was found guilty of conspiring to fix market prices for ebooks. The judge in the case, Denise Cote, said there was "a clear portrait of a conscious commitment to cross a line and engage in illegal behavior." The prosecution’s case was so clear-cut, and Apple showed such little contrition, according to Cote, that it wasn’t enough to take the company’s word that it would change. To make sure Apple fell in line, she called in help. That would turn out to be Bromwich, a bearded, bespectacled attorney appointed by the court to be Apple’s corporate monitor for two years, a job made to ensure Apple complied with court rulings. Apple says Bromwich stands to make millions Almost two years later, no one in the arrangement is pleased. Apple has accused the court of abusing its judicial power, and Bromwich in particular of malfeasance, arguing that he stands to make millions in exorbitant fees for the monitorship, with Apple footing the bill. That was the reason, after more banter between Apple and the Justice Department, that Bromwich addressed the judge, who was there to mediate the problems. "Thank you, your Honor," he said. "It’s good to see you, but truthfully it’s not good to be here. We shouldn’t be here. We really shouldn’t." According to Bromwich, Apple was pulling a shakedown. He’d filed a report on the company with the court, as had been required, and said Apple was furious with the results. The company, he argued, had been refusing to pay him as punishment. Bromwich's first report said the monitoring "remains preliminary." "The monitoring team still lacks a significant amount of the information it needs to fulfill its monitoring obligations," Bromwich wrote in the report. "For these reasons, and others described in this report, the Monitor’s assessment of Apple’s antitrust compliance policies, procedures, and training remains preliminary." "We're here in large part not because Apple objects to the fact that we wrote the report," Bromwich said. "We're commanded specifically to write that report and subsequent reports by the final judgment. They're objecting to our discretionary decisions about what to put in the report. There can be nothing more chilling to someone in my position to have the contents of a report challenged and for payment to be declined because the monitored entity isn't happy with what's in the report." That court appearance happened last May, and the relationship between Bromwich and Apple has only intermittently improved since then. Millions of dollars and a test of Apple’s power hinge on how the fight plays out, but the stakes could be much higher, setting a standard for how — or how willing we are — to deal with business titans who break the law.

When I tried to set up a talk with Bromwich, I was briefly intercepted by another employee at his firm, the Bromwich Group, who said Bromwich couldn’t answer any specific questions about Apple while the case was still happening. "It’s ongoing and contentious… to say the least," the employee told me. The key, there, is "to say the least." At one point, when we later spoke, Bromwich said, while answering a broader question, that he "didn’t want to even inadvertently" say something about Apple. "It’s ongoing and contentious… to say the least." Here’s one example of how that plays out. Both Bromwich and Apple submitted emails as evidence during the trial, and they’re a rare look into how a secretive company treats interlopers — and how an interloper, vested with power, might respond. Kyle Andeer, a former Federal Trade Commission and Department of Justice litigator hired by Apple two years before the trial to strengthen its antitrust team, wrote an introduction to Bromwich and an assistant also appointed by the court, Barry Nigro. "I don’t believe I have met either of you before, but I am looking forward to it," Andeer wrote. "The circumstances (at least from my perspective) could be better, but I am committed to working with both of you and developing a best of class antitrust compliance program for iTunes."

Bromwich responded with a draft letter outlining how he planned to carry out his job, with information on what he needed from Apple (interviews with top personnel, reviews of company records) and how he planned to be reimbursed ($1,100 per hour for himself and $1,025 per hour for Nigro’s assistance, plus a 15 percent administrative fee). The judge on the case provided for Bromwich to set the fees "at the cost and expense of Apple," as long they were of "reasonable and customary terms" and approved by the Justice Department. If Apple objected, they could come back to the judge. Andeer wrote back: "Thank you for the draft; it raises a number of issues, and we will respond as quickly as we can." "I have attached a signed copy of the monitoring letter. The only change is the date." The next day, Bromwich wrote again, saying he hoped to interview Apple’s board when it met the next week. Andeer told him there had been a mistake: "There is no board meeting next week." When Andeer responded to Bromwich’s letter, the tone was much less jovial, subtly mentioning how it would be "highly unlikely" that Bromwich would have access to confidential information, and saying his fees "do not reflect the competitive realities of the marketplace." He said, "like all of Apple’s legal service providers," Bromwich and company would be bound by Apple’s rules. Apple would pay $800 per hour to Bromwich and $700 per hour to Nigro. There’s palpable anger in the next email from Bromwich. "Thanks very much for your response to my cover note and our draft letter," he wrote. "Unfortunately, I think you may have misconceived its purpose." If Apple wanted to modify the confidentiality provision, they could suggest changes, but there was not to be a negotiation in the fees. "I have attached a signed copy of the monitoring letter," he wrote. "The only change is the date." *** That didn’t seem to be the Bromwich I spoke with last month. He was chatty about everything except Apple and another one of the 10 largest companies in the United States he monitors, which he declined to name. Bromwich has held some of the most coveted jobs a professional monitor could ask for Bromwich has held some of the most coveted jobs a professional monitor could ask for, overseeing internal investigations of the FBI, CIA, and the offshore drilling industry — work that occasionally made others less than pleased. He kept the lead forensic scientist at the FBI from testifying at the Oklahoma City Bombing trial after, he says, it became clear he "didn’t know what he was talking about." He tells a story about being courted to monitor the offshore drilling industry after the Deepwater Horizon disaster, when he got a call from a blocked number, who called again, and then again. When he finally picked up, it was the White House. That afternoon, he was speaking to a familiar voice: "Michael, it’s Barack." Bromwich took the job and, at a point in history when the drilling industry was cowed by public opinion, was able to make some reforms. Later, he worked as a monitor at the Washington, DC Police Department and, at least relative to his current situation, is effusive in his praise. "I never had a dispute with them about anything," he told me. Mostly, his responses were markedly measured compared to his emails. "It doesn’t need to be an adversarial relationship, and shouldn’t be an adversarial relationship at any point," he says about the corporate monitor’s role. The company and monitor should "work together" to improve the company’s behavior. "It doesn’t need to be an adversarial relationship, and shouldn’t be an adversarial relationship at any point." Yet, whether borne of frustration or something else, neither Bromwich nor Apple have shown much interest in collaboration. In court, Bromwich accused Apple of withholding payment to grind the investigation to a halt. He had a recommendation to get things moving again: "So if Apple wants the bills to go down and stay down, my advice is that they cooperate with us a little more, fight with us a little less, and challenge us a little less. Not to take away their right to object, but I think things would go far more smoothly and things would be handled far more inexpensively if they were a little bit more careful about the challenges they made." *** It should be said, the arrangement between Apple and Bromwich isn’t typical. Corporate monitors are generally placed with a company under mutual agreement — after an investigation, a government agency like the Justice Department will place the monitor, whom the company will welcome as part of the agreement. ("Welcome" really is the word; it’s better than losing a case and having changes foisted on you.)



