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Apple loses latest bid to block e-books antitrust monitor

Boxes of iPad Air tablets are seen at the Apple store in San Francisco, California November 1, 2013. REUTERS/Stephen Lam
Boxes of iPad Air tablets are seen at the Apple store in San Francisco, California November 1, 2013. REUTERS/Stephen Lam

By Nate Raymond and Joseph Ax

NEW YORK (Reuters) - Apple Inc on Monday lost its latest bid to put a court-appointed antitrust monitor on hold, after a federal appeals court rejected its argument that the monitor's work was causing it irreparable harm.

In a brief order, the 2nd U.S. Circuit Court of Appeals in New York said that monitor Michael Bromwich may continue to examine Apple's antitrust compliance policies while the company pursues a broader appeal seeking to remove him altogether.

However, the court's order addressed some of Apple's concerns, making it clear that there are limits to the monitor's powers.

An Apple spokesman declined to comment.

In a statement, a Department of Justice spokeswoman said the government was pleased with the decision.

"Today's ruling makes abundantly clear that Apple must now cooperate with the court-appointed monitor," said the spokeswoman, Gina Talamona.

U.S. District Judge Denise Cote installed Bromwich in October, three months after she found Apple liable for conspiring with five publishers to raise e-book prices.

Since then, Apple has fought a losing battle to put Bromwich on ice, complaining that he has aggressively and improperly sought interviews with key executives and broad access to company documents beyond the scope of his duties.

Cote rejected Apple's protests in January, saying that the company's reaction only underscored the necessity of an external monitor.

During oral arguments before a three-judge panel of the 2nd Circuit last week, lawyers for the Department of Justice agreed that Bromwich's duties were limited to assessing Apple's compliance policies and its efforts to disseminate those policies to its workers effectively.

Bromwich, the government said, would not be permitted to investigate whether Apple employees are actually complying with antitrust laws; if he comes across any evidence of violations, he must turn it over to Cote.

At the time, U.S. Circuit Judge Gerald Lynch seized on that concession as a potential compromise to assuage Apple's concerns that Bromwich had overreached. On Monday, the court took up that suggestion, denying Apple's request for a stay with the understanding that "the monitor will conduct his activities within the bounds" the government had described.

In the meantime, Apple will pursue its appeal of Cote's liability funding and her decision to install a monitor, a process that will likely last for months.

Bromwich declined to comment through a spokeswoman.

A trial is scheduled for May before Cote to determine how much Apple will have to pay in damages over e-book claims brought by 33 state attorneys general and class action attorneys representing consumers from 16 states. The plaintiffs are seeking $840 million, according to court documents.

The case is U.S. v. Apple, 2nd U.S. Circuit Court of Appeals, No. 14-60.

(Reporting by Nate Raymond and Joseph Ax. Editing by Andre Grenon and Leslie Adler)

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