This report (“Report”) is the first in a series by the External Compliance Monitor(“Monitor”), appointed by this Court in
United States v. Apple, Inc., et al.
, No. 12-cv-2826,and
State of Texas et al. v. Penguin Group (USA) Inc., et al.
, No. 12-cv-3394 (“e-booksLitigation”). In the September 5, 2013 Final Judgment and Order Entering PermanentInjunction (the “Final Judgment”), this Court ordered the Monitor, within 180 days ofappointment, to “provide a written report to Apple, the United States, theRepresentative Plaintiff States, and the Court setting forth his . . . assessment of Apple’sinternal antitrust compliance policies, procedures, and training and, if appropriate,making recommendations reasonably designed to improve Apple’s policies,procedures, and training for ensuring antitrust compliance.”
Specifically, the Final Judgment requires the Monitor to evaluate whether Apple’s policies and procedures are“reasonably designed to detect and prevent violations of the antitrust laws” andwhether Apple’s antitrust training program is “sufficiently comprehensive andeffective.”
To be comprehensive and effective, an antitrust compliance program must betailored to the structure, functions, and operations of the company for which it has beendesigned. This is because these characteristics will make the company vulnerable toparticular antitrust risks, and it is these risks that an effective compliance program mustaccount for and address. This principle—that an effective compliance program must betailored to a company’s specific needs—echoes this Court’s findings in the e-booksLitigation, where the Court noted that compliance programs are not “one size fits all.”
Apple has also acknowledged the importance of adapting a compliance program tomatch the company’s specific characteristics, and recognized the value of designing acompliance program specifically fit for Apple.The Court has also addressed particular issues Apple must confront in designingan enhanced antitrust compliance program. For example, the Court found that Appleneeded to make a “sincere commitment to reform its culture . . . to one that includes acommitment to understand and abide by the requirements of the law.”
The Court alsosingled out Apple’s senior leadership, stating that the conduct underlying the e-booksLitigation “demonstrated a blatant and aggressive disregard at Apple for therequirements of the law,” including among “Apple lawyers and its highest levelexecutives.”
Final Judgment § VI.C.
1/13/14 Tr. 45-46.
8/27/13 Tr. 17.
Case 1:12-cv-02826-DLC-MHD Document 462 Filed 04/14/14 Page 2 of 77