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Google's potential $500M fine linked to illegal online pharmaceuticals
When Google revealed it would take $500 million first-quarter charge ahead of "potential resolution of an investigation" by the United States Department of Justice, the company offered few details. A three-line non-explanation pointed the finger at "advertising by certain advertisers." Now The Wall Street Journal reports that the mysterious half-billion-dollar hit may stem from advertisements placed by "rogue online pharmacies" that break US laws. The DOJ investigation has focused on whether the search behemoth knowingly accepted ads from shady pharma sites, but it's unclear whether those sites sold counterfeit or expired drugs, failed to require doctor's prescriptions, or both. Obviously, if the company profited from illegal activity, it can be held liable -- a fact Google knows all too well after a 2007 settlement over ads for online gambling. The impending fine would rank among the highest paid to the US government; this news, by the way, did not come from Facebook.
US DoJ approves Google's acquisition of ITA, but not without stipulations
The United States government may be dissolved tomorrow, but it's certainly taking care of one final piece of business before going into shutdown: this. If you'll recall, Google announced its intentions to acquire ITA for $700 million in July of last year, and as we cruise into the start of America's summer travel season, all signals are go. Today, the US Department of Justice approved Google's request to move forward with the buy, but rather than having the entire travel search market under its wing, El Goog's going to have to make a smattering of concessions in order to get the right signatures. For starters, the search monolith will allow ITA's existing client contracts to extend into 2016, and it'll let both current and new customers license ITA's QPX software on "fair, reasonable and non-discriminatory terms." No one's saying when the integration will be complete (or start, for that matter), but we're desperately anxious to see just how Kayak and Bing Travel react after this launches in earnest. Power to the searchers, as it were.
Senator asks DOJ and FCC to do their jobs, provide friction for AT&T / T-Mobile tie-up
There's always one. Back in the winter of 2009, Senator Kerry made public his request for Fox and Time Warner to keep the Bowl Games online, and one Chuck Schumer took to writing an open letter to Steve Jobs regarding the iPhone reception woes that eventually led to a dedicated press event (mostly) disputing the matter. Now, Minnesota Senator Amy Klobuchar is urging the FCC and DOJ to "take a close look at the proposed AT&T and T-Mobile merger," noting that the outcome would undoubtedly have a huge impact on consumer choice, price and service in the wireless industry. Of course, it's not like these two wouldn't be doing just that in the coming months, but it's good to see a fire starting early in Congress to make sure due diligence is done. Having a carrier that provides service to 42 percent of all US wireless subscribers has the potential to seriously shift the economics of things, and potentially more interesting are the implications of a rejection. In fact, many are suggesting that AT&T will likely have to sell off major assets and promise expansion to rural / poor areas in order to gain approval, which ties in nicely to Verizon Wireless CEO Dan Mead's own comments regarding concessions. We're also hearing that regulators could take as long as 18 months to fully investigate, and you can bet we'll be following the play-by-play as it all unfolds.
Former Apple employee admits he sold confidential info, cost the company in excess of $2 million
Paul Devine, the man who last August collected a pretty lengthy list of charges against his name from the FBI and IRS -- which collectively amounted to an accusation of "screwing Apple" -- has now admitted his guilt. Specifically, Devine has fessed up to wire fraud, conspiracy and money laundering, in which he engaged while exchanging confidential information about upcoming Apple products for cold hard cash from interested parts suppliers. He's now having to forfeit $2.28 million in money and property that resulted from his nefarious exploits, with sentencing scheduled for June 6th. Devine's lawyer is quoted as saying he's a "good man who made a mistake, and now he's trying to make amends." Indeed, the mistake of getting caught and the amends of trying not to go to prison. Jump past the break for a full statement on the matter from the US Department of Justice.
FTC and DOJ monitoring Apple's new subscription policy
Both the Justice Department and the Federal Trade Commission are aware of the new policy Apple implemented for media companies with applications in the App Store. The new terms state "that if an app offers customers the ability to purchase books outside of the app, the same option is also available to customers from within the app with in-app purchase." A prime example is the Sony Reader app which was reportedly rejected from the App Store because its iOS app linked to its own digital store and did not use Apple's in-app purchase system to sell its eBooks. This new policy takes effect June 30 and will drive many purchases through the App Store, giving Apple a 30% cut. U.S. regulators are taking a closer look at this policy to determine if it runs afoul of any federal antitrust laws. This interest is preliminary and may not turn into a formal investigation or sanctions against the company. The European Union is also closely monitoring this situation, but is currently not taking any action either. Apple was under the microscope last year following its decision to ban iOS applications developed using third-party tools such as Adobe Flash. Both the FTC and the European Commission launched an investigation, but Apple reversed this policy before a decision could be made by either regulatory body.
EU plans to end Apple antitrust investigation in light of relaxed iPhone rules
It seems like Apple's legal team is constantly embroiled in a pitched battle of some sort, but this weekend they might get to relax -- citing recent iPhone policy changes, the European Commission's decided to stop breathing down their necks. Though the EU originally joined the US Department of Justice and Federal Trade Commission in investigating why Cupertino chose to block third-party dev tools and ads earlier this year, the fact that Apple recently relaxed both restrictions (and created a repair program for iPhones purchased abroad) satisfied European regulators. "The Commission intends to close the investigations into these matters," it wrote earlier today. There's no guarantee that the US powers-that-be will exercise similar leniency, of course, but we wouldn't be surprised -- even inside Apple, the DoJ's got other fish to fry.
Apple, Adobe, Google, Intel Intuit and Pixar: now free to cold call each other's employees
Attaboy, DoJ! Out of (almost) nowhere, the United States Department of Justice announced today that it was requiring six well-known technology outfits to stop entering into "anticompetitive employee solicitation agreements," and we're guessing you will have heard just a few of these names: Adobe, Apple, Google, Intel, Intuit and Pixar. As the story goes, these six companies were all mixed up (but not all together, mind you) in agreements that forbid each other from cold calling employees from a rival firm in order to offer them a different job. According to the DoJ, those arrangements acted as a "significant form of competition to attract highly skilled employees," and it has now filed a civil antitrust complaint today along with a proposed settlement that, "if approved by the court, would resolve the lawsuit." We're also told that some of the agreements were put into place as early as 2005, and they were "formed and actively managed by senior executives of these companies." Yikes. Hit the source link for the full report, and feel free to call back that "Unknown" caller that keeps hitting you up on your Adobe line -- it's probably Pixar with a seven-figure offer.
HP agrees to pay $55 million to settle investigation into illegal kickbacks
The company that kicked Mark Hurd to the curb for financial impropriety has today reported it'll pay $55 million in a settlement with the US Department of Justice relating to some fiscal delinquency of its own. HP was accused of greasing up the wheels of business, as it were, by throwing cash around to companies who would recommend its services to state procurement agencies. This particular set of allegations related to a federal contract obtained by HP in 2002, and the settlement also extinguishes investigation into whether or not the computer vendor had provided incomplete information to the US government. That's all well and good, but we have to question the size of these levies. Today's also the day that HP's announced a new $800 million supply contract with the US Air Force -- would a fine that's less than a tenth of the contract's value really deter HP's entrepreneurial spirit?
HannStar Display shells out $30m to settle LCD price fixing case
Another day, another company pleading guilty to their role in a massive global price-fixing conspiracy surrounding the MSRP of LCDs. The Taiwan-based HannStar Display agreed (grudgingly, we surmise) this week to cough up a whopping $30 million for its role in the scheme, marking the seventh company to "plead or agree to plead guilty as a result of the department's investigation into the LCD industry." All told, the US Department of Justice has seen some $890 million paid out and 17 executives charged, with HannStar in particular being pegged for violating the Sherman Act during its participation in the conspiracy from September 2001 to January 2006. So, anyone up for being lucky number eight?
DOJ reportedly expands Apple probe
The New York Post is reporting this week that the US Department of Justice (DOJ) is expanding its investigation of Apple in regards to iTunes and changes to the beta iPhone OS 4 SDK. As for iTunes, Apple is accused of allegedly threatening to withhold their typical promotional activities from labels who continued to offer exclusives to Amazon via their Daily Deals campaign. Additionally, the DOJ and Federal Trade Commission (FTC) are negotiating which of them will launch an inquiry into a clause in the iPhone OS 4 SDK that bans the porting of software originally written for Adobe's Flash, Sun's Java or Microsoft's Silverlight/Mono to the iPhone OS. The Post cites "one Hollywood industry source" in their article, so you're free to guess who that might be. In the meantime, we'll follow this story as it develops. Here's hoping justice -- and not sour grapes -- is served. [Via Edible Apple]
DoJ's inquiry at Apple purportedly expanding beyond iTunes practices
Take this for whatever it's worth (which isn't a whole heck of a lot without any official confirmation from any of the parties involved), but the New York Post has it that the Justice Department's inquiry into Apple's iTunes practices may in fact be growing. 'Course, it's not exactly surprising to hear that authorities are now investigating every nook and cranny of Apple's tactics thanks to Steve Jobs' public thrashing of Flash and his sly insistence that the world shun Adobe while hugging HTML5, but we've still yet to hear from the DoJ and Apple about what exactly is going on within Cupertino. At any rate, the Post notes that a number of "sources" have confirmed that the inquiry is growing, most notably to include "how the iPhone and iPad maker does business with media outfits in areas beyond music." We'd heard whispers that things may be getting just a bit too dictator-ish in the developers Ts and Cs, and now it seems that the DoJ is "asking questions about the terms that Apple lays out for computer programmers who want to develop apps for the iPad." It'll be interesting to see how all of this plays out, but we can bet devs (and end-users, frankly) are hoping and praying for less restrictions in the future.
US Department of Justice to investigate Apple over iTunes
The New York Times is reporting that an "early stage" investigation at the US Department of Justice (DoJ) is looking at whether Apple is using its considerable position in the online music sales business to hinder Amazon's efforts. Specifically, the probe will focus on whether Apple unfairly leveraged iTunes to deny Amazon's MP3 store exclusive access to songs. It's been alleged that Apple threatened to withhold their typical promotional activities from labels who continued to offer exclusives to Amazon. Those songs would still see sales in iTunes, of course, but significantly less without Apple's promotional efforts behind them. Back in March, Billboard reported that Apple's iTunes team had tried to talk publishers out of participating in Amazon's low-priced, exclusive "Daily Deals" promotions, which often motivated labels to offer Amazon first dibs on major releases at a significant discount. This allegedly prompted Apple to threaten to pull advertising if participation continued. Several labels supposedly relented and abandoned the Amazon deal as a result. You'll remember that the DoJ also recently began an inquiry into a clause in the iPhone OS 4 SDK that bans the porting of software originally written for Adobe's Flash, Sun's Java or Microsoft's Silverlight/Mono to the iPhone OS. What a mess! [Hat tip to Ars & Electronista]
If you throw away your console, the terrorists have won
In one of those fun, yet uncomfortable, instances where real life and video games interact, Fox News has uncovered a dusty (and old, very old) PlayStation controller during a raid of an Afghanistani farmhouse, which doubled up as a munitions depository. Lying there, in among rockets, grenades, plastic explosives and tank shells, was this humble blue-hued PlayStation appendage, which we're told can be rewired to act as a remote detonator. Should you question just how seriously the US government is taking this growing tide of console-aided terrorism, below you'll find a press release (seriously, a state-issued press release) detailing the detainment of four men in connection with the illegal transportation of digital cameras and PlayStation 2s to a "terrorist entity" in Paraguay. If convicted of the most egregious charge, they face 20 years in prison... for contraband consoles. Face, meet palm.
Sony Optiarc garners unwanted attention from DOJ for possible Blu-ray or DVD price fixing
In a filing with the Tokyo Stock Exchange this morning, Sony has revealed a request for information from the US Department of Justice regarding its optical drive production arm, Sony Optiarc. While the same filing indicates the Japanese giant's belief that this information gathering is part of a wider investigation into competition in the optical drive market, we've yet to hear of any other companies facing the same request. If you were feeling disgruntled with the pace of Blu-ray price drops, this might just be your moment of vindication... or it could be a storm in a teacup. There's really not enough information to tell either way right now, but if we know anything about the DOJ, it's that it loves shaking down naughty corporations. We'll keep a careful eye on this as it develops.
Amazon, Microsoft and Yahoo unite against Google Books
Microsoft, its new pet dog Yahoo, and Amazon have decided to join together in the soon to be formed Open Book Alliance. You might expect this to be a revolutionary new collaborative effort at delivering the written word in a way that makes Google Books pale into insignificance, but you would, of course, be wrong. Far from trying to compete with Google, The OBA is set to act as the collective mouthpiece for all those opposed to Google's recent $125 million settlement deal with book publishers and authors. With the US Department of Justice already investigating antitrust concerns relating to the case, the other big dogs just couldn't restrain themselves from coming together for a united whinge. Should the settlement be cleared, it will permit Google non-exclusive rights to orphan works (those without an established writer) and will give it a 30 per cent cut of books sold via Google Books, both things that authors have agreed to. So what's there to moan about, fellas -- we all trust Google to do the right thing, right?
Palm's Colligan rebuffs Steve Jobs' 'likely illegal' plea to stop hiring from Apple
Imagine the scene two years ago, August 2007 to be precise. Palm was busy preparing to launch its Foleo and the OS that would save Palm was still expected to be coming from ACCESS. In fact, things were looking so bad for Palm in August that we penned an intervention letter that then CEO Ed Colligan responded to. Apple, for its part, was still enjoying the glow of the golden halo rising above its iPhone launched just over a month prior with the help of 2% of Palm's hired workforce, according to Bloomberg. Oh, and Apple had just lost Jon Rubinstein, the man leading its iPod division, to Palm.Now Bloomberg is reporting that Steve Jobs approached Palm's Ed Colligan in August 2007 with a proposal to refrain from hiring each other's staff (read: quit poaching our employees, Ed!). Colligan refused, saying,Your proposal that we agree that neither company will hire the other's employees, regardless of the individual's desires, is not only wrong, it is likely illegal.Meeeow.
Department of Justice casually looking into abuses of power by big carriers?
Word on the street has it that the US Department of Justice has started informally looking into whether top carriers have gotten all antitrust-y on us, specifically investigating hardware exclusives and restrictions on the services third parties can offer on the network (open access, anyone?). The carriers potentially being called into question here -- most likely Verizon and AT&T, seeing how they're the largest by a long shot and have both made recent acquisitions to beef up their footprints and positions -- say that they've received no notices of investigation, so if this is really happening, it's still in the earliest stages. Beefs over handset locking and exclusivity are nothing new and have come from governments and competitors alike -- but considering the price flexibility they ultimately give carriers on the front end, they've still got a place in the hearts and minds of consumers who put a premium on (perceived) value and instant gratification. It remains to be seen what'll happen to pricing when you can't promise your carrier you won't run off with its subsidized gear the next day, but we can't imagine it'll be good.
Hitachi also admits to LCD price fixing, will pay $31m fine
Funding that stimulus package just got ever-so-slightly easier -- Hitachi is the latest company to fess up to LCD price fixing, and as part of its deal with the US Department of Justice, it's paying a $31m fine. The company has specifically admitted to fixing the prices on panels sold to Dell from 2001 to 2004, and while no Hitachi execs are due to join their comrades from LG and Chungwha Picture Tubes just yet, we'd encourage them to book their vacations now, since the DOJ seems like it's staying on the warpath.
AT&T reportedly eyeing post-merger Verizon Wireless assets
As you may recall, one of the requirements that Verizon had to agree with in order to complete its little acquisition of Alltel was that it must offload some $3 billion in wireless assets to avoid becoming too monolithic, and it looks like there's already a number of bidders angling for a piece of the action. The biggest of those, by far, is AT&T, which is apparently looking to pick up as big a chunk of the assets as it is able to and, according to The Wall Street Journal, it's in a good position to do just that. Other interested parties reportedly include a joint bid from the Carlyle Group and Kohlberg Kravis & Roberts & Co, a separate bid from Providence Equity Partners LLC, and at least one unnamed cable provider. Any of those bids, however, would still be subject to approval by the Department of Justice, with AT&T sure to draw the most scrutiny of the lot.[Via The Wall Street Journal]
Microsoft calls Google out on Windows search integration claim
As the two giants edge closer onto each of their respective core markets, the tension gets more pronounced: just last week Google pointed to the integration of search into Windows Vista, claiming to the Dept. of Justice that it discourages people from using other solutions (like Google's Desktop Search) and violates the company's agreement with the Government. This week, Steve Ballmer called the complaint "baseless," and said that the company is in complete compliance with the agreements it has with the U.S. Government. In any case, Microsoft is fighting a losing battle, with Google able to use the DOJ as a router for its claims, and Microsoft then forced to defend itself on two fronts. Maybe it might be a good time for Microsoft to consider a policy of opening its platforms a little bit: it's not like the opponent (this time around) is going to go away anytime soon.
