) e-book pricing case has taken a new turn, with the company
objecting to the exorbitant fees charged by the court appointed
Michael Bromwich, a former U.S. Justice Department inspector
general, is charging a 15% administrative fee on top of his
hourly rate. Moreover, he is also said to include the cost of
hiring other lawyers who assist him.
Management recently stated that Bromwich's proposed hourly fee
of $1,100 is the highest ever a lawyer has charged them.
Bromwich, on his part, justified the amount by stating that he
has been handling the case through his consultancy, the Bromwich
Group instead of his law firm Goodwin Procter LLP.
For the first two weeks post his appointment, Bromwich charged
$138,432, which is almost three-fourth of a federal judge's
The whole problem started in July 2013, when subject to some
complaints regarding e-book pricing. The District Judge found
Apple guilty of conspiring with five U.S. publishers that raised
e-book prices by millions in total.
The accused publishers included companies such as Hachette
) HarperCollins, Holtzbrinck Publishers, Penguin Group and
) Simon & Schuster Inc. Using this strategy, Apple's thought
) in the e-book market
In this connection, the federal government and 33 states asked
the court to appoint an antitrust monitoring authority, which
will look after Apple's compliance matters for a period of 10
During this process, Judge Cote proposed that Apple should be
forced to enter into separate contracts with each publisher and
there should be a time gap of at least six to eight months
between each contract. The court believed that this plan could
restrict such pricing conspiracies in the future.
It remains to be seen how Apple deals with the whole issue
going forward. Although Apple intends to carry on its fight, we
believe that the company is running out of options. Nevetheless,
since the e-book segment does not form a major part of Apple's
business, its impact on the stock will be limited.
Currently, Apple has a Zacks Rank #3 (Hold).
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