Tag: justice department

Apple let off the antitrust hook

Apple blossom, Mike MageeThe US Justice Department has decided that Apple has behaved so well after it had its collar felt over driving up e-book prices that it doesn’t need to keep its beady eyes on the corporation any more.

Apple may well have introduced compliance programmes that mean it can never have its collar felt again for this misdemeanour but it has also emerged that it has acted really grumpily over the last two years.

The Justice Department appointed a man called Michael Bromwich to monitor Apple’s activities but it seems he wasn’t the bee’s knees as far as Apple was concerned. The department said Apple “never embraced a cooperative working relationship with the monitor”.

According to Reuters, this didn’t stop Bromwich from saying that it had put in place a “meaningful antitrust compliance programme”.

Apple told a US district judge that its relationship with Bromwich was “rocky” but vowed to comply with the obligations the court system had imposed on it.

Cote had ruled in 2013 that Apple conspired with five book publishers in a bid to kybosh competition from Amazon.

Apple is still appealing the verdict and is thinking about taking the case to the US Supreme Court, otherwise it will have to reach into its corporate coffers and shell out $450 million.

US spooks think Google Mail is public

google-logo-art-image-hdThe US government has been involved in a battle with the search engine Google over its email service. It wants the search engine to hand over the metadata related to a security researcher and journalist associated with WikiLeaks.

The Justice Department won an order forcing Google to turn over more than one year’s worth of data from the Gmail account of Jacob Appelbaum, a developer for the Tor online anonymity project who has worked with WikiLeaks as a volunteer. The order gagged Google, preventing it from notifying Appelbaum that his records had been provided to the government.

What is a little alarming for Google mail uses is that the Government won its court order based on an argument that if Appelbaum was using Gmail he had no right to expect privacy.

Rather than seeking a search warrant that would require it to show probable cause that he had committed a crime, the government instead sought and received an order to obtain the data under a lesser standard, requiring only “reasonable grounds” to believe that the records were “relevant and material” to an ongoing criminal investigation.

Google did its best to challenge the demand, and wanted to immediately notify Appelbaum that his records were being sought so he could have an opportunity to launch his own legal defence.

This was particularly true because Appelbaum was a hack and the spooks antics “may implicate journalistic and academic freedom” because they could “reveal confidential sources or information about WikiLeaks’ purported journalistic or academic activities.”

However according to the Justice Department asserted that “journalists have no special privilege to resist compelled disclosure of their records, absent evidence that the government is acting in bad faith,” and refused to concede Appelbaum was in fact a journalist.

Which is interesting because we don’t consider Paul Revere was a journalist but most of the US press laws are based around defending his anti-British magazines.

Google’s attempts to fight the surveillance gag order hacked off the government which expected compliance. The Justice Department stating that the company’s “resistance to providing the records” had “frustrated the government’s ability to efficiently conduct a lawful criminal investigation.”

But Google’s attempt to overturn the gagging order was denied by magistrate judge Ivan D. Davis in February 2011. The company launched an appeal against that decision, but this too was rebuffed, in March 2011, by District Court judge Thomas Selby Ellis.

Appelbaum, an American citizen who is based in Berlin, told The Intercept  that the case was “a travesty that continues at a slow pace” and said he felt it was important to highlight “the absolute madness in these documents.”

He commented: “After five years, receiving such legal documents is neither a shock nor a needed confirmation. … Will we ever see the full documents about our respective cases? Will we even learn the names of those signing so-called legal orders against us in secret sealed documents? Certainly not in a timely manner and certainly not in a transparent, just manner.”

Court rules Apple must obey in ebook antitrust case

A judge has told Apple that it can’t bully the legal system so that it is not punished for its anti-trust antics.

Apple, which has always denied that it is an evil monopolist, was doing its best to prevent it copping any form of punishment for running a cartel in the publishing industry.

One remedy which stuck in its craw was that it had to hire a policeman with the authority to kick its arse when it did anything that remotely stank of breaching anti-trust rules.

This is like appointing a Catholic priest to police Scientology, and Apple wants the demand dropped.

Apple said that hiring a monitor would be “extremely costly and burdensome” we guess because it is such a small company and can’t afford it.

But US District Judge Denise Cote said a monitor would be necessary, after Apple had failed to show it learned its lesson from its “blatant” violations of antitrust law.

The monitor, she said, would likely be installed to review Apple’s internal antitrust compliance program and procedures and recommend changes, and also required annual antitrust training for employees in Apple’s e-books and content businesses.

So far the Judge has been fairly laid back about the injunction and allowed Apple to negotiate with the DoJ about a list of remedies, but she finally seems to have worked out that she is not dealing with a business but a religion which believes it can do no wrong.

Cote suggested a final injunction would be narrower than what the US Department of Justice has been seeking, and would not restrict Apple’s agreements with suppliers of other types of content such as movies, music and TV shows.

According to Bloomberg,  she said that she wanted an injunction to rest as lightly as possible on how Apple runs its business.

Cote is expected to issue an injunction next week.

The Justice Department, joined by 33 US states and territories, is now jostling with Apple over the scope of what Cote should do to prevent further antitrust violations.

Cote suggested that Apple hold staggered negotiations with publishers beginning in two years in an effort to avoid future collusion.

She said she would wait for the parties to hash out suggestions for final language for the injunction. 

Apple ebook ruling could spill over into iTunes

Since being found guilty of conspiring in an e-book price fixing cartel, Apple’s wider content biz is now being scrutinised by the US’ Justice Department.

The Department is concerned that Apple may have engaged in similarly anticompetitive behaviour in selling content through iTunes, such as films, music and TV programs.

Bill Baer, the assistant attorney in charge of the Department’s antitrust division, said a proposed order will stop “Apple’s illegal conduct” and both Apple and its senior executives “will be prevented from conspiring to thwart competition in the future”, the WSJ reports.

Funnily enough, it was Apple’s drive to selling content online that was, as the time, seen as a seismic shift while content companies were struggling with file sharing networks like Limewire. But the Department is worried that it may have, or may currently be conspiring with publishers in a similar way to its e-books division.

Apple may also have to cope with a proposed monitor that will keep a stern eye over Apple in the e-book market as well as preventing it from entering e-book contracts for five years, removing the company’s chief ability to keep prices competitive.

Last month, US district Judge Denise Cote said the evidence pointed to Apple leading an e-book price fixing conspiracy.

McKinnon to hear extradition verdict

Gary McKinnon is set to receive a verdict from the Home Office on his extradition to America on Tuesday afternoon, after a decade long wait.

McKinnon’s lawyer Karen Todner confirmed on Sunday via Twitter that a decision would finally be made over extraditing McKinnon to face charges for hacking into US government networks.

The mother of London resident McKinnon, Janis Sharp, has been fighting attempts to extradite her son for ten years since he was accused of breaking into military and NASA computers.

Sharp has repeatedly claimed that Asperger’s sufferer McKinnon would be at severe risk of suicide if he was subject to prison across the Atlantic.   It is thought that he could face a sentence of up to 60 years.  Sharp contends that McKinnon should indeed stand trial for his actions, but should face a judgement in the UK.

Sharp’s campaign has drawn the backing of prominent MPs in the UK, and has led to an appeal to the Prime Minister to resolve the problem directly with his US counterpart Barack Obama, she previously told TechEye.

McKinnon’s case has been at the forefront of discussion by MPs surrounding the existing extradition treaties between the UK and the US.  Many believe existing rules are one sided in favour of the US, with US residents considered highly unlikely to be extradited to the UK.

Successive Home Secretaries have had to deal with the thorny problem of McKinnon’s extradition. US authorities have been adamant he should stand trial and face imprisonment on American soil, and it now falls on Conservative Theresa May to make a final judgement over whether to acquiesce to those demands.

The Home Secretary has been under the spotlight for a number of extradition rulings in the past weeks. High profile case such as that of radical cleric Abu Hamza resulted in extradition, though another contentious case, that of Abu Qatada, recently ended with the Qatada being allowed to stay in the country.

May is also to announce verdict on demands from the US Justice Department to extradite UK citizen Richard O’Dwyer for piracy offences.

A verdict on McKinnon’s case is expected to be made at noon tomorrow.

Hitachi-LG execs facing jail time over price-fixing

South Korean execs at a joint Hitachi and LG venture have pleaded guilty to charges of price fixing.

Park Young-Keun, Kim Sang-Hun and Sik Hur have agreed to serve prison sentences after price fixing optical disk drives such as CD-ROMs, with devices sold to Microsoft and Dell, according to AFP. The price fixing occurred at various times between 2005 and 2009.

The three men were working for Hitachi-LG Data Storage (HLDS), a joint business between Japan’s Hitachi Ltd. and South Korea’s LG Electronics, and have now been ordered to pay a $25,000 fine on top of their prison sentences.  These amount to eight months for Park and Kim, and seven months for Hur, and will be served in the US following a ruling by the Justice Department.

HLDS itself pleaded guilty to a San Francisco District Court to 14 counts of violating antitrust laws, and was told to cough up $21.1 million in fines.

South Korea has been seeing its fair share of price fixing claims debacles recently, with LG one of many panel makers being dragged across courts worldwide after the practice was found to be widespread.  This led to Samsung, LG and others recently paying a total of $175 million in fines to antitrust authorities after many secret meetings took place to fix prices.

Following the ruling at the HDLS case, acting assistant attorney general at the US Justice Department Sharis Pozen said that the Antitrust Division pledged a “continued commitment to protect competition in the high-tech industry”.  

The Department is also on the lookout for more executives in the optical disk drive business who have been up to no good with bid rigging and price fixing.

Google gets green light for ITA flight data buy

Google has got its way with an acquisition that it has been pushing for for a while. 

It was finally given the green light by the Justice Department to finish off its $700 million acquisition of flight-data company ITA Software. Its purchase means it’ll be able to cast its all dominant force in the online search industry, which is estimated to be worth around $80 billion.

The deal took a while to go through because rivals such as Microsoft, Expedia and Kayak – along with smaller companies – feared that Google could use its leadership in the search industry to direct traffic to its own offerings.

They argued that Google could essentially trample on competition because many web travel sites depend on ITA to power searches.

Despite the Justice Department giving the deal the ok, it’s well aware of the concerns. Under the terms of the go-ahead, and in a first for the company, it has had to agree to a range of government conditions which are hoped to prevent anticompetitive behaviour from happening.

An official told the WSJ that the department will monitor the company to ensure that there is nothing about the purchase which will harm competition in the flight search business.

Under the rules, the Justice Department wants Google to carry on  licensing ITA’s service to online airfare search sites for at least five years.

The company has also been ordered to continue to fund, research and make available a next-generation service. This was already something the ITA was working on. It has been ordered to put in place internal firewalls, which the Justice Department hopes will help prevent “unauthorised” use of personal and sensitive customer information.

So just in case Google thought it could sneak under the parapet, it’s been made to agree to a five year monitoring deal, which means that the Justice Department can keep a close eye on what the company is doing, which has somewhat appeased rivals.

Justice Department investigates MPEG LA in H.264 video probe

An unlikely suspect is shouting “anticompetitive!”, with Google, according to reports, having its knickers in a twist because top tech companies are trying to bury its free video technologies. 

It’s thought that the organisation, MPEG LA, has been harvesting video patents to keep Google, Youtube, Netflix, Blu-ray, and others submitting to its hefty payroll by way of royalties. Heavyweights such as Apple and Microsoft are members of the MPEG LA, effectively profiting from royalties on a vast range of the patents.

The Wall Street Journal believes that the probe could see which industry bigwigs will have the competitive edge for online video broadcasting, even including who will own the rights to creation and broadcasting over HTML 5. 

The Justice Department reckons that the group’s licensing deals, particularly with H.264, could be putting a premature stop to the emergence of any rival, non-proprietary technologies. Rather than admitting any sort of liability, MPEG LA’s chief exec, Larry Horn, said: “We are effectively a convenience store” for licensing patents. 

Horn goes on to dismiss the idea that Google’s alternative, VP8, will sit open-source or without royalties. At the moment money is not charged for using VPM, but Horn called out:”I can tell you, VP8 is not patent-free. It’s simply nonsense.”

DoJ, FTC investigate Apple's subscription service

Apple is being investigated by the US Justice Department and Federal Trade Commission over concerns with its subscription services.

Although a formal investigation is not yet decided on, the WSJ reported that the two organisations will be looking hawk-eyed at how Apple is dealing with companies that intend to ply their wares via the App Store or iTunes.

The news will serve as a further reminder to Apple that it will want to be on its best behaviour, following an EU spokesperson declaring that the European Commission was similarly wary of the subscription service, stating that it would be “carefully monitoring the situation”.

The main antitrust matters that are being highlighted surround the 30 percent cut of any sales that Apple is demanding from publishers supplying content such as online news or music on Apple’s range of devices.

This large slice of the action that Apple is demanding has unsurprisingly riled many in the publishing business.

Apple’s rules do not state that companies cannot continue to sell subscriptions separately, however the fact that Apple demands that it is able to sell at the lowest possible cost means that firms will find it very difficult to attract customers to their own sites when Apple is able to sell at a lower price.


Furthermore Apple would prohibit any linking to any external sale sites from the App Store, a rule which could over step the mark with antitrust laws according to legal experts. But in order to prove that Apple are actually contravening antitrust laws it would be necessary to prove that Apple has strong market power, and is wilfully abusing it.

While proving that Apple has a strong market position may sound like a rather pointless task in stating the bleedin’ obvious, it is actually harder to prove than it appears at first glance.

For example, while the certain areas of advertising and media may have you believe that every single earthling has an iPhone clasped to the side of their head at all times, the market share of smartphones is apparently 16 percent, with mobile phones in general subsequently significantly less.

Of course on the tablet front Apple’s iPad is currently all conquering, but with the influx of rival tablets either having arrived or on their way this unassailable position is likely to change in the near future.

Furthermore, with Google having released its own subscription service recently, allowing publishers to hold on to the princely sum of 90 percent of revenues, Apple may be wise to rethink the cut that it is offering.

Justice Department gears up for Google court battle

The US Justice Department is gearing up for a potential court battle with Google over the acquisition of travel software.

It is said that the Justice Department is busy preparing legal papers which could be used in a court challenge should it decide to go ahead with opposing a $700 million deal which would see the search engine giant take over ITA Software.

ITA’s software powers flight comparison sites such as Kayak, SideStep and Hotwire as well as Microsoft-owned search engine Bing, giving rise to accusations of anti-competitiveness, according to the WSJ.

It has not yet been decided whether the challenge will go ahead, though the Justice Department has up thirty days from when Google passed over all information pertaining to the deal. It is said by sources that it is expected a decision will be made either at the end of this month or the start of February.

While Google has only ever been knocked back for one deal, it is believed that the Justice Department is beginning to take a more aggressive stance. 

If the department does decide to push on with its challenge then it will add to Google’s woes, as it is currently facing an antitrust investigation by European regulators, as well as scrutiny from other federal and state regulators in the US.

“While we continue to cooperate with the Justice Department’s review, we are ultimately confident that this acquisition will increase competition,” said a Google statement.

However, critics are worried that the deal could mean Google gains an unfair advantage in the $80 billion online travel market by withholding access to important ITA technology, leading to government lawyers querying executives in the industry as to what the effects may be.

It is also feared that Google could direct search engine traffic away from rival firms, and towards a travel search service it plans to build with ITA’s software.

Google maintains that antitrust issues are not raised as it doesn’t compete with ITA, while the three most popular travel sites, Expedia, Priceline and Travelocity, use data provided by ITA competitors.

Furthermore Google states that many in the industry actually support the deal.

But critics of Google are likely to be suspicious of the deal, as it has been suggested it has a history of directing users to its own, bringing up links to its own business listings above other results, though Google of course denies this is the case.