US Government Will Continue Interfering With Apple Pricing DecisionsBy Hunter Lewis
The Circle Bastiat
Mar. 05, 2014
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A federal court has ruled that a US Department of Justice "monitor" will remain inside Apple Computer to supervise all the company's pricing decisions.
The "monitor," Michael Bromwich, was appointed when Apple lost an anti-trust case involving E-books. He bills for his time at $1,100 an hour and charged $138,432 for his first two weeks of "work."
Apple has filed an appeal which labels Bromwich's appointment "unprecedented and unconstitutional." This “monitor” is a particularly dangerous precedent because court appointed. But by now "monitors" established through "settlements" are common.
Joseph Covington, who headed the Justice Department's Foreign Corrupt Practices Act Division in the 1980's, told Forbes, in reference to monitors appointed to enforce settlements under that act: "This is good business for Justice Department lawyers who create the marketplace [for monitors] and then get...a job there [after they leave government]."
Nor is it limited to the Justice department. If a company gets into the sights of the Federal Trade Commission (FTC) or even the Food and Drug Administration (FDA), the terms of settlement increasingly include "monitoring" by highly paid lawyers, who are typically former FTC or FDA employees.
This is not just the small time corruption it might seem. The collapse of the Soviet Union should have demonstrated once and for all how important free and unimpeded prices are for an economy. Can Apple really be expected to continue its past success if it cannot even control its own pricing?
How did Apple get into this mess? Didn't Apple give enough money to the Obama administration? Apple employees gave 93 percent of their contributions to Obama in 2012 and only 7% to Romney. Wasn't that good enough? Perhaps not. Google employees gave 98 percent of their money to Obama and it was a whole lot more money ($727,702 versus $338,752). Apple CEO Tim Cook failed to max out (give to the legal limit) in his own contribution.
Politico mocked Apple during the election year for being "naive" in failing to hire enough Washington lobbyists to protect its interests. And, importantly, Jeff Bezos, owner of Amazon and de facto”winner” of the anti-trust case against Apple, bought the Washington Post. Owning the Post makes him a key Washington player and provides his company a great deal of political protection.
Lack of campaign contributions may not be the only factor driving the politicized Justice Department in its pursuit of Apple. There is also the Patriot Act. Apple announced that it would both reveal any government request to gain access to people's private information and oppose it. That would not have been well received by the administration.