department of justice
Latest
US Senator says DOJ should drop Apple ebook lawsuit
Senator Charles Schumer of New York (right) appealed to the U.S. Department of Justice yesterday in the Wall Street Journal to drop its lawsuit against Apple and a number of major publishers. The DOJ alleges that Apple and the publishers colluded to raise prices in the ebook market. Schumer states that "the suit will restore Amazon to the dominant position atop the e-books market it occupied for years before competition arrived in the form of Apple. If that happens, consumers will be forced to accept whatever prices Amazon sets." Schumer points out in his guest editorial that after Apple entered the market with iBooks, competition increased. Amazon's market share fell from 90 percent to 60 percent, and as a result the company had to "expand its catalog, invest in innovation, and reduce the prices of its Kindle reading devices" -- all things that are good for consumers. He notes that the average price for ebooks fell from US$9 to $7, while the DOJ looked at the fact that prices on a very few new releases have gone up. Whether Schumer's printed entreaty will make a difference to the Department of Justice is unknown, but it's interesting to see an influential member of the Senate come to the defense of Apple and the publishing industry in this case.
Senator Schumer calls on DOJ to drop e-book price-fixing suit
Believe it or not, but that whole e-book price fixing fiasco is still an ongoing issue for the Justice Department. New York's senior senator, Chuck Schumer wishes it wasn't however, he simply wants the DOJ to drop the case and walk away. In a lengthy (factually questionable) op-ed in the Wall Street Journal the distinguished gentleman from the great state of New York said that a successful suit against Apple (he didn't bother to call out the others involved) would set the e-book industry back several years and allow Amazon to dominate the market unchallenged. He also makes a broader call for the administration to develop more clear guidelines for deciding what non-merger cases to pursue. Unfortunately, we have to point out, that his argument is undercut by some questionable data referenced in the editorial. According to Schumer Amazon once owned 90 percent of the e-book market -- a number that, if true, most certainly predates the release of the Nook. This is followed by an insinuation that Apple all but single-handedly toppled the retail giant with the launch of iBooks, cutting Amazons market share to just 60 percent. While the latter number sounds about right we'd hesitate to lay responsibility for that 30 point drop entirely at Apple's feet. To dig into Schumers op-ed yourself hit up the source link.
DOJ looking into whether Comcast, other TV giants are unfairly (knee)capping Hulu, Netflix
The Department of Justice may have taken Netflix chief Reed Hastings' net neutrality complaints about Comcast as a lot more than just sour grapes. It's reportedly conducting an investigation into whether Comcast, AT&T and other TV providers are anti-competitive in their data restrictions. The Wall Street Journal cites primary concerns that Comcast's Xfinity TV cap exemption might unfairly punish competing services, but also claims that officials are worried the caps themselves steer viewers away from internet video, helping the incumbents cling to legacy TV for just a little while longer. On top of its cap anxiety, the DOJ may be looking into policies requiring traditional TV subscriptions just to watch online. None of the involved parties have commented on or confirmed the investigations, so there's no guarantee of any full-fledged lawsuit. Still, while TV operators insist they're being fair and need to keep data use in check, that might not deter legal action when the DOJ has supposedly questioned Hulu, Netflix and other relative newcomers who feel they're being squeezed. When Sony postpones its IPTV goals after fretting over US data caps, it's hard to imagine that there aren't at least a few raised eyebrows in Washington.
Alliance for Broadband Competition forms to sway opinion against Verizon's AWS acquisition
The effort to prevent Verizon Wireless from its purchase of AWS licenses from SpectrumCo and Cox just became a bit more intense, as several opponents to the deal have now banded together to form the Alliance for Broadband Competition. The coalition includes T-Mobile and Sprint, along with advocacy groups such as Public Knowledge, the American Antitrust Institute, the Rural Cellular Association and the Rural Telecommunications Group. Today, the newly formed alliance held a press conference in which it called on the FCC and Department of Justice to block the transfer, which it said would lead to an "excessive concentration of spectrum" held by Verizon Wireless. While it's not much of an olive branch, the group similarly suggested that it would support the deal if Verizon were to divest some of its spectrum holdings, establish roaming agreements and agree to a backhaul pricing structure. As you may recall, Verizon Wireless estimates that it'll exhaust its network capacity by 2014. Regardless of how this $3.9 billion proposal shakes out, it's rather clear that something's gotta give.
Justice Department clears Google of WiFi wiretapping violations
Two years ago, Google drove its way into a fair amount of hot water when it accidentally (as was claimed) scooped up private data over WiFi while collecting Street View and location data. Now, the Justice Department has cleared the prolific mapsters of the wiretapping violations. The DOJ made its decision not to push for prosecution based on reports from employees and investigating key documents reports Wired. The Wiretap Act (which is the relevant one here) was argued to only pertain to "traditional radio services," by US District Judge James Ware, but neither the DOJ or FCC said they could find any evidence that Google accessed the date it snared. In an extra move of openness, the search giant has also released the entire FCC report on the Street View investigation (redacted to protect identities) which can be found in the more coverage link. So, next time you see the famous camera-topped wagons roll around, you can leave your tin hat in the closet.
Antitrust suit carries on against Intel, Apple, Google and others
They can hope and pray all that they want, but Google, Intel, Apple, Adobe, Intuit, Pixar and Lucasfilm will soon be facing some serious accusations in a courtroom under the Sherman Antitrust Act and California's Cartwright Act. After years of trying to dodge legal action over an "informal agreement" to not pinch each others employees, and an effort to have the case dismissed, the seven defendants will have to stand trial as ordered by District Judge Lucy Koh in San Jose, California. In her decision Koh said, not only was there evidence that these agreements were made at the highest levels of the company but, that six such deals were struck in secret in such a short time frame "suggests that these agreements resulted from collusion." There's still time for yet another deal to be struck, however, this time between the defendants and the DOJ. Otherwise it looks like all seven will have to stand trial in June of 2013.
Apple says e-book price fixing charges 'simply not true,' Macmillan also responds
Not that we were expecting Apple and Macmillan to simply fess up and say, "you're right, totally tried to circumvent the free market," but both companies have come out swinging pretty hard against the allegations of price fixing. Apple has rejected the charges, calling them "simply not true." A company spokesman, Tom Neumayr, went so far as to tell Reuters that Cupertino was actually fostering competition by "breaking Amazon's monopolistic grip on the publishing industry." John Sargent, the CEO of Macmillan, defended his company's behavior in blog post, saying the publisher had done nothing illegal and that the concessions sought by the DOJ in settlement negotiations were "too onerous." It looks like the next step for both is to face off with the US government in court -- a daunting task, no matter how large your war chest.
Australia pondering joining e-book lawsuit bandwagon
If Apple and the Big Five thought they only had to contend with a federal e-book lawsuit in the US, they'd better think again. Australia's Competition and Consumer Commission is inviting local businesses to raise formal concerns as it weighs up launching its own judicial broadside against the alleged cartel. The Commission refused to comment publicly on its plans beyond saying that it was "aware of the latest developments" and would listen to local resellers who had concerns about the Australian market. While Simon & Schuster, Hachette and HarperCollins made back-room deals with the DoJ yesterday, they'd still be involved (at least initially) with the second front of this conflict. Meanwhile, the threat remains of the European Union joining in: turning it from a spot of local trouble into a global courtroom battle for the future of e-book pricing.
US DOJ sues AT&T for improper IP Relay billing, alleges millions in false claims to FCC
AT&T has violated the United States False Claims Act to the tune of "millions of dollars," according to a Department of Justice lawsuit filed this week. The DOJ alleges that the carrier intentionally neglected to authenticate users of the IP Relay service -- a tool utilized by hearing-impaired persons to type messages that communications assistants then read to callers. The service is also abused by individuals overseas to defraud U.S. businesses (think infamous Nigerian scams), which prompted the FCC to establish a law requiring telecom providers, including AT&T, to confirm the identity of registered users, which it apparently failed to do. This resulted in thousands of fraudulent users, representing some 95 percent of all calls, which AT&T received FCC payments for to the tune of $1.30 per minute. An AT&T spokesman was somewhat dismissive when speaking to the Associated Press, saying "as the FCC is aware, it is always possible for an individual to misuse IP Relay services, just as someone can misuse the postal system or an email account, but FCC rules require that we complete all calls by customers who identify themselves as disabled." But if the allegations are proven, there could be some pretty serious repercussions for Big Blue. DOJ PR is just past the break.
Apple begins defense against possible ebook antitrust case
Apple is wasting no time beginning to defend itself against the possibility of a U.S. Department of Justice (DOJ) antitrust action alleging that the company conspired with publishers to fix ebook prices. Last week, Apple requested that a class action suit alleging price-fixing on ebooks be thrown out. Part of the suit hinges on a comment that Steve Jobs made to the Wall Street Journal's Walt Mossberg in January of 2010, saying that unhappy publishers might decide to withhold ebooks from Amazon. Lawyers in the class action suit think that Jobs's comment meant that Apple and publishers were conspiring to force Amazon to raise ebook prices. Apple's retort last week says that the lawyers "mischaracterized" the exchange, and that Jobs only meant that Apple had a different strategy in the ebook business than Amazon. Apple says that it wants to sell as many ebooks as possible, which is totally believable since the company is still a relative bit player in the ebook market. As a result, the company would not have an incentive to raise prices on ebooks. But Apple's argument fails to address accusations that Jobs schemed with publishers to slow Amazon's eventual move into the tablet market with the Kindle Fire. Apple's lawyers responded in their court filing last week by downplaying the threat of the Kindle Fire: But this allegation just strings together antitrust buzzwords.. Nor does this "Kindle theory" make sense on its own terms. For example, if Amazon was a "threat" that needed to be squelched by means of an illegal conspiracy, why would Apple offer Amazon's Kindle app on the iPad? Why would Apple conclude that conspiring to force Amazon to no longer lose money on eBooks would cripple Amazon's competitive fortunes? And why would Apple perceive the need for an illegal solution to the "Kindle threat" when it had an obvious and lawful one which it implemented – namely, introducing a multipurpose device (the iPad) whose marketing and sales success was not centered on eBook sales? There are rumors that some publishers are currently in settlement talks with the DOJ. These publishers might be exchanging damning information for a lesser settlement, which could spell trouble for both Apple and other publishers.
Justice Department preparing Apple iBooks antitrust lawsuit
The Justice Department is reportedly preparing to go after Apple, Simon & Schuster, Hachette, Penguin, Macmillan and HarperCollins following its investigation into alleged e-book price-rigging. The case centers around a deal to switch to agency pricing, where the vendor takes a 30 percent cut of each sale, rather than the wholesale model that gives publishers more flexibility to reduce prices or even sell e-books at a loss. Some publishers are now trying to agree on a new policy in an effort to stave off the kind of federal suit that nobody wants to wear.
Daily Update for February 14, 2012
It's the TUAW Daily Update, your source for Apple news in a convenient audio format. You'll get all the top Apple stories of the day in three to five minutes for a quick review of what's happening in the Apple world. You can listen to today's Apple stories by clicking the inline player (requires Flash) or the non-Flash link below. To subscribe to the podcast for daily listening through iTunes, click here. No Flash? Click here to listen.
US Dept. of Justice approves Apple's purchases of Nortel, Novell patents
Yesterday, the U.S. Department of Justice Antitrust Division closed its investigations into three major acquisitions that were pending, opening the door to completion of these acquisitions by the companies involved. For Apple, the acquisition of patents from Nortel Networks Corporation and Novell Inc has been green lighted, clearing the way for the company to finalize the purchase of intellectual property. Apple, Microsoft, RIM and some other players had joined together as "Rockstar Bidco" to acquire patents at the June 2011 Nortel bankruptcy auction. Nortel had a portfolio of approximately 6,000 patents and patent applications, including many "standard essential patents" that the new owners will be able to license to other "industry participants." What makes standard essential patents so valuable is that they become part of industry standards (e.g., 3G, 4G, Wi-Fi) and must be licensed by manufacturers who wish to create compatible devices. Apple is also acquiring patents that were formerly owned by Novell and were acquired on behalf of Apple, Oracle, and EMC Corporation in April of 2011. It doesn't appear that Apple will be able to pull in license fees for these patents, as Novell had committed to cross-license the patents on a royalty-free basis for use in the "Linux system." A third part of the DOJ announcement could affect Apple indirectly. The DOJ has now cleared the way for Google to acquire Motorola Mobility, which not only manufactures smartphones and tablets but also holds a portfolio of "approximately 17,000 issued patents and 6,800 (patent) applications." Once again, there are hundreds of "standard essential patents" that Google will be able to license to other companies.
DOJ greenlights bid by Apple, Microsoft and RIM to buy Nortel patents
The US Department of Justice didn't just give the go-ahead to Google's acquisition of Motorola today, it also gave the greenlight to a $4.5 billion bid on Nortel's patents from a consortium of companies including Apple, Microsoft and RIM (who have dubbed themselves Rockstar Bidco). Nortel's portfolio includes some 6,000 patents, and the DOJ says the approval comes after it received clear commitments from Apple and Microsoft to license so-called standard essential patents on "fair, reasonable and non-discriminatory terms, as well as their commitments not to seek injunctions in disputes involving SEPs." To round things out for the day, the Justice Department has also given its clearance to Apple's acquisition of certain Novell patents, which have been held by CPTN Holdings pending approval. Its full statement can be found after the break.
Report: Google hires Apple exec to work on 'secret project'
Google appears to have scored another coup in its ongoing rivalry with Apple, having reportedly lured one of the company's senior directors to its Mountain View headquarters. Simon Prakash, pictured above, has worked at Apple for more than eight years, most recently serving as the firm's senior director of product integrity. According to VentureBeat, however, that tenure has come to a close, now that Google has hired Prakesh to work on a "secret project." The report speculates that this project could be helmed by co-founder Sergey Brin, and that it may be mobile-related, though declarative statements were few and far between. Prior to arriving at Apple, Prakash served as director of engineering design validation at Cielo Communications, and held managerial positions at 3Com. VentureBeat claims he'll be starting work at Google today, though the company has yet to issue any statement on the matter. Once finalized, though, the hiring could help dispel some of those "no poach" accusations flying around federal courts.
DOJ investigation yields fresh evidence against Google, Apple in antitrust lawsuit
Back in 2009, a small controversy began swirling around Google and Apple, amid allegations that the two companies had struck an informal agreement to not poach each other's employees. The Department of Justice launched an investigation into the matter in 2010, but details of the case were only made public for the first time yesterday. TechCrunch was the first to sift through the documents, and has uncovered some ostensibly incriminating evidence against not only Google and Apple, but Pixar, Lucasfilm, Adobe, Intel, and Intuit, as well. According to filings from the US District Court for the Northern District of California, these companies did indeed enter "no poach" agreements with each other, and agreed to refrain from engaging in bidding wars. The documents also suggest that they collectively sought to limit their employees' power to negotiate for higher salaries. Some of the most apparently damning evidence derives from archived e-mails, including one that Adobe CEO Bruce Chizen penned to Steve Jobs in May 2005. In the message, sent under the subject "Recruitment of Apple Employees," Adobe's SVP of human resources explains that "Bruce and Steve Jobs have an agreement that we are not to solicit ANY Apple employees, and vice versa." Pixar's Lori McAdams expressed similar sentiments in an internal e-mail from 2007, writing: "I just got off the phone with Danielle Lambert [of Apple], and we agreed that effective now, we'll follow a Gentleman's agreement with Apple that is similar to our Lucasfilm agreement." This would suggest, as the DOJ writes, that there's "strong evidence that the companies knew about the other express agreements, patterned their own agreements off of them, and operated them concurrently with the others to accomplish the same objective." The DOJ announced in September that it had reached settlements with the six implicated firms, but a class-action lawsuit is scheduled to get underway next week in San Jose.
Justice Department antitrust division probing Verizon cable spectrum deals
Looks like AT&T isn't the only major carrier having issues with the guv'ment lately. Remember that 20MHz AWS spectrum that Verizon got from Cox Communications for a cool $315 million this month? How's about that juicy spectrum Big Red scored from Comcast, Time Warner and Bright House for $3.6 billion? Well, it turns out those deals are raising an eyebrow or two over at the Justice Department, which just launched an investigation into the matter. A spokesperson for the department confirmed the probe with Bloomberg News but declined to provide further details. A source familiar with the investigation, however, says the antitrust division is involved. Apparently, there's concern that the deal puts too much control of the airwaves in the hands of Verizon. For its part, Verizon declined to comment, saying it has yet to receive information about the investigation.
AT&T abandons T-Mobile merger plans (updated)
AT&T has officially given up on its plans to buy out T-Mobile. In a statement, the company said it had agreed with Deutsche Telekom to cease pursuing a merger, which has come under increasing scrutiny from both the government and advocacy groups. The failed attempt to snatch up its smaller, German-owned competitor will ultimately cost Ma Bell $4 billion and it's not paying those dues without some grumbling. In the release the FCC and DOJ bear the brunt of AT&T's ire, which are accused of harming customers and exasperating the already looming spectrum shortage. Of course, this also hurts the carrier's ability to compete with Verizon which has been on a spectrum buying spree as of late. As a consolation prize Deutsche Telekom and AT&T have entered a roaming agreement, though the structure of that deal and whether it's purely international or domestic roaming remains to be seen. The complete press release from AT&T can be found after the break.
Judge to reconsider DoJ's AT&T antitrust suit
Late last month AT&T withdrew its application with the FCC to acquire T-Mobile, in an attempt, it said, to focus on winning approval from the Department of Justice, first. Now a district court judge is considering dismissing the US' antitrust suit against ole Ma Bell. According to Bloomberg, the DoJ is looking to either "withdraw without prejudice" or "stay" the suit, as a result of AT&T pulling its application from the FCC. Judge Ellen Segal Huvelle scheduled a hearing for December 15th to decide whether the deal is still possible in the proposed timeframe and the suit still worth pursuing. She had this to say: We don't have any confidence that we are spending all this time and effort and the taxpayers money and that we're not being spun. The landscape has changed. AT&T's lawyers remained steadfast, however, demanding the company's "day in court," and reiterating that approval from the DoJ would improve its chances of getting the thumbs-up from the FCC. For more sordid details on this legal ping-pong match, hit the source link below.
John Opel, IBM CEO during onset of the PC era, dies at 86
John Roberts Opel, the former IBM CEO who helped usher in the PC era, died last week at the age of 86. A native of Kansas City, MO, Opel received his MBA from the University of Chicago in 1949, after fighting in the Philippines and Okinawa during World War II. Upon graduating, he was presented with two job offers -- he could either re-write economics textbooks, or assume control of his father's hardware business in Missouri. Not particularly enthralled with either opportunity, Opel decided to think things over during a fishing trip with his father and a family friend. As fate would have it, that friend turned out to be Harry Strait, an IBM sales manager. Strait offered Opel a sales position at the company, fortuitously setting the young grad on a career path that would span 36 years. Opel's career, in fact, began and peaked at two inflection points that would come to define not only IBM, but the computing industry as a whole. When he came aboard, IBM was still producing typewriters and other accounting devices; but that would soon change, with the dawn of the computing era. In 1959, he became assistant to then-chief executive Thomas J. Watson Jr. Just five years later, he oversaw the introduction of IBM's System 360 mainframe computer. He was appointed vice president in 1966, president in 1974 and, on January 1st, 1981, took over as IBM's fifth CEO, replacing Frank T. Cary. During his four-year tenure, Opel led IBM's push into the burgeoning PC market, overseeing the launch of IBM's first PC, the 5150, just seven months after taking the reins. He was also at the helm in 1982, when the Department of Justice dropped its 13-year antitrust suit against IBM, allowing the firm to expand its operations. Opel took full advantage. Under his stewardship, IBM's revenue nearly doubled and its corporate stature grew accordingly. In 1983, Opel made the cover of Time magazine, under a headline that read, "The Colossus That Works." He stepped down as CEO in 1985, served as chairman until 1986 and would remain on IBM's board until 1993. On Thursday, he passed away in Ft. Myers, FL, due to undisclosed causes. John Roberts Opel is survived by his wife of 56 years, five children, 15 grandchildren and a legacy that extends far beyond these 400 words.
