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Category: Legal
November 19th, 2009
AT&T launches Verizon counter-punch ad, keeps digging that hole
AT&T may have lost the legal battle with Verizon Wireless over a marketing campaign that compares the 3G coverage of both carriers. But that doesn’t mean AT&T is going away quietly.
The company is airing a commercial of its own, which features actor Luke Wilson inside what appears to be a warehouse, standing in front of an orange magnet board with a checklist that compares AT&T and Verizon. (Techmeme)
When it comes to the fastest 3G network, AT&T wins, Wilson says. If you want to talk and surf at the same time, AT&T wins. Who has the most popular smartphones? AT&T, of course, home of the iPhone. Who provides access to more than 100,000 apps? You guessed it. Then, in the category, he asks which has a name that starts with the letter V.
I’ll give AT&T credit for making the attempt to even the playing field but - and maybe this is just me - the commercial felt sort of low-budget, like something thrown together in haste. Cheap set. Cheap props. Marketing messages in place of statistics. What is it telling me that’s new? I’ve been hearing that “Nation’s fastest 3G network” for some time now. As far as that “talk and surf” feature, I’m assuming that refers to tethering - mostly because Mr. Wilson doesn’t elaborate - but last time I heard, AT&T still wasn’t offering that for the iPhone.
November 18th, 2009
AT&T loses lawsuit over Verizon's map commercial
It was almost a gimme. The lawsuit that AT&T filed over a Verizon commercial that compared the 3G coverage maps for the two providers in the U.S. was such a joke from the beginning, it was hard think that a judge would rule against Verizon. 
Today, a federal judge in Atlanta declined AT&T’s request for a temporary restraining order that would have forced Verizon to pull the ads, according to a CNET report.
AT&T had argued that timing was critical because the holiday season, which is a sales period for mobile devices, was approaching quickly and AT&T felt that the commercials were misleading consumers. At issue was the colors on the maps to represent 3G coverage - the AT&T map had a lot of “blank space’ to represent areas in the U.S. that didn’t have 3G coverage.
AT&T didn’t dispute the accuracy of the maps and, in a court filing earlier this week, Verizon argued that the restraining order be denied because the maps were not factually incorrect. In short, Verizon said the ads were true and that the truth hurts.
Related coverage: Memo to AT&T: When you’re in a hole, stop digging
November 17th, 2009
Microsoft, former employee settle over spying claims
Way back in January 2009, Microsoft sued a former employee for applying for his job under false pretenses and using his role at the company to gain access to confidential data related to patent litigation he was waging.
Ancora Technologies, the company for which the employee, Miki Mullor, is chairman, announced on Tuesday that a settlement has been reached between Ancora, Mullor, and Microsoft for both claims regarding patent infringement and falsifying information.
The terms of the settlement are confidential, but all parties denied any and all liability, according to a statement.
“I am pleased with this resolution and wish my friends at Microsoft’s Windows division nothing but success with Windows 7 launch,” Mullor said in prepared remarks.
Ancora originally accused several computer makers including Dell, HP and Toshiba of infringing on a patent by allowing customers to bypass the Windows activation process if Windows was preloaded on the computers.
Mullor said he pitched the activation bypass technology to Microsoft during several meetings before he worked there. The company said it wasn’t interested.
Microsoft alleged that Mullor didn’t disclose continued involvement with Ancora, a breach of contract. The company also said that it was entitled to a royalty-free license for Ancora’s patent because Mullor didn’t reveal that he knew about the patent. (Microsoft was working on similar technology.)
November 16th, 2009
Verizon to AT&T: "Our ads are true and the truth hurts"
Verizon Wireless responded today to a lawsuit filed by AT&T earlier this month that accused Verizon’s “There’s a map for that” marketing campaign of misleading consumers about AT&T’s 3G coverage in the United States.
In a nutshell, Verizon said AT&T’s request to have the ads pulled is without merit. From the court filing (PDF):
AT&T did not file this lawsuit because Verizon’s “There’s A Map For That” advertisements are untrue; AT&T sued because Verizon’s ads are true and the truth hurts… AT&T now is attempting to silence Verizon’s ads that include maps graphically depicting the geographic reach of AT&T’s 3G network as compared to Verizon’s own 3G network because AT&T does not like the truthful picture painted by that comparison.
In the court filing, Verizon outlines the reasons that AT&T’s arguments are without merit. They include:
- Because the ads are truthful, AT&T is attacking them under faulty theories, including a claim that they are misleading. But Verizon says there’s no real evidence - aside from an AT&T commissioned survey - that proves that consumers are misled by the ad.
- There is no emergency that would require the court to issue an immediate restraining order - as AT&T has requested - without giving Verizon the opportunity to conduct its own research and present evidence to prove that consumers are not being misled.
- The harm to Verizon and the public, in general, caused by pulling the ads is greater than any alleged harm being inflicted on AT&T.
Those are all fine-and-dandy arguments about why the courts should deny AT&T’s motion but the main reason comes back to the headline statement: The ads are true. Period. But regular readers already know my thoughts on this AT&T-Verizon back-and-forth. Instead, I offer one more excerpt from Verizon’s filing that I think sums it up best:
AT&T seeks emergency relief because Verizon’s side-by-side, apples-to-apples comparison of its own 3G coverage with AT&T’s confirms what the marketplace has been saying for months: AT&T failed to invest adequately in the necessary infrastructure to expand its 3G coverage to support its growth in smartphone business, and the usefulness of its service to smartphone users has suffered accordingly. AT&T may not like the message that the ads send, but this Court should reject its efforts to silence the messenger.
I couldn’t have said it better myself.
Related coverage: Memo to AT&T: When you’re in a hole, stop digging
November 6th, 2009
Skype's legal drama finally ends; Time to start innovating
The on-going legal drama that has left a dark cloud over online voice and video communications company Skype has finally been settled. In the end, the co-founders get a 14 percent ownership of a new Skype, eBay maintains a 30 percent stake in the new company and consortium of private investors score the remaining 56 percent.
More importantly, though, the new company will finally be in a position to innovate and prosper - instead of being scrutinized under the quarterly earnings microscope of eBay to generate quarterly revenue growth. All of the previous disputes over core technologies and so on has been settled. The parties expect the deal to close by the end of the year.
Marc Andreessen, partner of Andreessen Horowitz, which is one of the investors, told VentureBeat that the company can now focus on building for the future. The company does have a lot of potential to become a powerhouse in markets that are just starting to realize their potential. Consider these forces that are changing the market for Skype:
- Smartphones, which have the ability to run Skype, are growing in popularity among consumers and businesses, opening a market for people interested in low-rate international calling from a device, instead of just a PC.
- Google Voice has hit the stage as a competitor in this space, notably on the international calling front, and has generated a number of headlines - and grabbed a lot of attention - because of Apple’s supposed rejection of the Google Voice app for the iPhone and AT&T asking the FCC to regulate Google Voice as a telecommunications service, instead of a Web service.
- Video conferencing is grabbing the attention of the cost-concerned enterprise. Cisco, for example, has made a big splash into enterprise-grade telepresence video conferencing, highlighting the money - and time - that can be saved by holding meetings by telepresence, instead of putting executives on airplanes.
I’ve long been a Skype user but must admit that my interaction with it has pretty much been limited to the occasional (more like rare) video chat. I’ve also been a long-time fan of innovation (what can I say? I’m a Silicon Valley native) so I’m happy to see the company fall back into the hands of the founders and investors who want to see the service grow and prosper.
Now, Skype execs can quit worrying about how they’re going to appear on eBay’s financial statements and can get back to work on making the service better, landing new partners and holding on to its brand cachet before a newcomer (Google?) comes along and unseats a pioneer.
Also see:
November 4th, 2009
EU showdown over Oracle-Sun; Objections seem imminent
Oracle is reportedly gearing up for a formal rejection by European regulators of its bid to acquire Sun Microsystems, according to a report in the Financial Times. An official statement of objection, the first step in blocking the $7.4 billion deal, could come as early as this week - but Oracle seems to be taking a wait-and-see approach before it makes another move.
A source tells the Financial Times that Oracle has refused to offer any concessions to regulators in Europe. Following the official statement, however, Oracle would have the chance to offer concessions or even wage a legal battle, a process that would extend a delay that’s already costing both money and jobs.
The U.S. Department of Justice has already given its blessings to the deal but the EU has expressed concerns over the future of MySQL. Opponents see the open source software as an eventual competitor to Oracle’s core business. But the company has said that it will continue to invest in MySQL.
Sun, which was already a financially-troubled company when Oracle made its acquisition bid, recently laid off 3,000 employees as part of a restructuring plans that stems from delays in regulatory approval. Oracle CEO Larry Ellison recently said that delays are costing about $100 million per month.
Also see:
November 4th, 2009
New York AG files antitrust charges against Intel; alleges bribery, coercion
The New York Attorney General’s office today accused chip maker Intel of engaging in “a worldwide, systematic campaign of illegal conduct,” including paying kickbacks and threatening computer makers, and filed federal antitrust charges against it. (PDF of Complaint)
In a statement, New York Attorney General Andrew Cuomo said that e-mails revealed that Intel has scored exclusive agreements with computer makers to use its microprocessors by resorting to “rebates” and threats, such as cutting off payments, funding a competitor or ending joint development ventures. In a press release, Cuomo said:
Rather than compete fairly, Intel used bribery and coercion to maintain a stranglehold on the market. Intel’s actions not only unfairly restricted potential competitors, but also hurt average consumers who were robbed of better products and lower prices. These illegal tactics must stop and competition must be restored to this vital marketplace.
Intel spokesman Chuck Mulloy told the Wall Street Journal that the company will defend itself against the charges and that “Neither consumers who have consistently benefited from lower prices and increased innovation, nor Justice, are being served by the decision to file a case now.”
Cuomo’s office said the company also tried to erase traces of its practices by “eliminating crucial but flagrantly objectionable provisions from written agreements or by camouflaging language about illegal guaranteed market shares with terms like ‘volume targets.’ ”
The AG’s office noted specific instances of the illegal practices involving Intel and Dell, HP and IBM. Among the allegations:
- From 2001 to 2006, Intel granted Dell a privileged position vis-à-vis other computer makers in return for Dell’s agreement not to market any products from Advanced Micro Devices, Intel’s major competitor
- Intel threatened HP that it would derail development of a server technology on which HP’s future business depended if HP promoted products from AMD
- Intel paid HP hundreds of millions of dollars in rebates in return for HP’s agreement to cap HP’s sales of AMD-based products at 5% of its business desktop PCs
- Intel paid IBM $130 million not to launch an AMD-based server product
- Intel threatened to pull funding for joint projects that benefited IBM if IBM marketed AMD-based server products
The AG’s office also offered examples of instances where PC makers agreed to go along with Intel’s practices, specifically a 2006 deal between HP and Intel that involved payment of $925 million to HP to increase Intel’s shares of HP’s sales at AMD’s expense and a collaboration between Intel and Dell to market microprocessors and servers at prices below cost to “deprive AMD of strategically important competitive successes.”
However, the AG positions the PC makers as victims here, not collaborators. For example, the AG’s office offers these examples, unveiled as part of its 20-month investigation:
- Internal e-mail from IBM executive in January 2005: “I understand the point about the accounts wanting a full AMD portfolio. The question is, can we afford to accept the wrath of Intel…?”
- Internal e-mail from HP executive in June 2004 after HP defied Intel and launched an AMD product: “Intel has told us that HP’s announcement on Opteron [AMD’s server chip] has cost them several $B [Billions] and they plan to ‘punish’ HP for doing this.”
- Internal Dell e-mail in February 2004 regarding the possibility of Dell ending its exclusive relationship with Intel: “PSO/CRB [Intel CEO Paul Ottelini and Intel Chairman Craig Barrett] are prepared for jihad if Dell joins the AMD exodus.
- Internal e-mail from Intel executive in April 2006: “Let’s talk more on the phone as it’s so difficult for me to write or explain without considering anti-trust issue.”
November 3rd, 2009
Spring Design sues Barnes & Noble over Alex, Nook
Spring Design, which released its Alex e-reader last month, has filed a lawsuit against Barnes & Noble for misappropriating trade secrets and violating a non-disclosure agreement surrounding Alex technologies that were used to create the Nook, which was offered by Barnes and Noble days later.
In a press release issued by Spring Design, the company said that it began filing patents for Alex as early as 2006 and began holding meetings, conference calls and e-mails with B&N executives in early 2009. Under a non-disclosure agreement, the two companies discussed confidential information, including Alex’s “innovative features” the company said. In a statement, Eric Kmeic, VP of Sales and Marketing, said:
Spring Design unfortunately had to take the appropriate action to protect its intellectual property rights. We showed the Alex e-book design to Barnes & Noble in good faith with the intention of working together to provide a superior dual screen e-book to the market.
CNET reported that Barnes & Noble officials were not immediately available for comment. Spring Design said in its release that it wants to resolve the matter so that “we can move forward to together” to grow the e-book market.
The company’s press release made no mention of damages sought in the suit.
November 2nd, 2009
Moffat no longer with IBM as fallout from insider trading scandal continues
Robert Moffat, a senior IBM executive who was arrested in an FBI insider trading sting this morning, is no longer employed by the company, a company official has confirmed. 
Moffat, who spent 31 years with the company, was most recently a senior VP responsible for “all IBM hardware offerings as well as the microelectronics division.” In that position, Moffat reported directly to company chairman, president and CEO Sam Palmisano. In a statement, the company said:
Rod Adkins, who was named acting head of IBM’s Systems and Technology Group on October 19, has been appointed senior vice president, STG. Bob Moffat, who had been placed on a leave of absence as a result of a U.S. federal investigation into his personal activities, is no longer an employee of IBM.
The company did not specify whether Moffat resigned or was terminated. It provided no other details, citing a policy of not commenting about personnel issues involving current or former employees.
Adkins, who has been with the company since 1981, has held a variety of product development, business operations and general management positions with the company, including general manager of desktop systems for the old PC division and head of the UNIX business from 1998 to 2001. In 2002, he was on Fortune’s list of the 50 Most Powerful Black Executives in America.
Moffat surrendered to FBI officials as part of the sting on Oct. 16 and was placed on temporary leave of absence days later.
This morning, GlobalFoundries issued a press release announcing that chairman and former AMD CEO Hector Ruiz, who reportedly leaked confidential information about AMD’s reorganization as part of the Galleon Group insider trading operation, will resign his position as chairman of the board, effective Jan. 4. Ruiz is currently on a voluntary leave of absence.
GlobalFoundries did not cite a reason for Ruiz’s resignation.
November 2nd, 2009
Ruiz resigns as GlobalFoundries chairman; no mention of insider trading scandal
Former AMD CEO Hector Ruiz, who reportedly leaked confidential information as part of the Galleon Group insider trading scandal, will step down as chairman of GlobalFoundries, a manufacturing unit of AMD that was spun off into its own company.
According to a press release issued today by GlobalFoundries, Ruiz will take a voluntary leave of absence from the board, effective immediately. His resignation will become effective January 4.
Board member Alan E. “Lanny” Ross, who was the former CEO of Broadcom, will become interim chairman, effective immediately, until a permanent chairman has been appointed by the board.
The board did not give a specific reason for the resignation, nor did it make any reference to Ruiz’ reported role in the Galleon insider trading scandal. Last month, the FBI arrested six people in a sting - including senior IBM executive Robert Moffat - for their roles in the Galleon scandal, calling it “the largest hedge fund insider trading case in history.”
The ring leader, Raj Rajaratnam, co-founder of the hedge fund firm Galleon Group, allegedly got inside dirt from a bevy of tech executives. The Wall Street Journal reported last week that Ruiz tipped Galleon off to the 2008 reorganization of AMD.
October 23rd, 2009
Facebook settlement: Kill Beacon, pay $9.5 million into fund to promote online privacy
A class action suit over Facebook’s controversial Beacon program today received preliminary approval (PDF) by a U.S. District Court, bringing an end to the Beacon service and giving the company an option of clearing the matter without long - and expensive - court proceedings.
The proposal calls for Facebook to discontinue the Beacon program and cough up $9.5 million to set-up a non-profit foundation that “will fund projects and initiatives that promote the cause of online privacy, safety and security.”
Beacon, you may recall, was launched back in November 2007 and was designed to allow users to share information with their Facebook friends about the things they were doing on third-party, affiliated sites, including Blockbuster, Fandango, Hotwire, Overstock and Zappos.
At issue was the way Facebook rolled out the service as one that automatically included everyone, instead of an opt-in route where people could enroll if they wanted to. For weeks, users grumbled and eventually the service was switched to an opt-in - and Facebook CEO Mark Zuckerberg apologized for the way Beacon was handled.
The class action settlement affects people who were Facebook members between November 7, 2007 and September 2009 and visited a “Facebook-affiliated website that was participating in Facebook’s Beacon program.” Parties can choose to do nothing, which means they give up their rights to sue Facebook and the others over this matter later. Parties can also opt-out of the settlement, object to it or attend the settlement hearing.
The settlement is not one where class action members will receive compensation. The legal notice of the proposed settlement will be published in newspapers, as required, but also through Facebook updates, according to court documents.
October 22nd, 2009
Nokia sues Apple, alleges patent infringement by iPhone
The world’s biggest cell phone maker is dragging the maker of one of the most popular cell phones to court over patent infringement. Nokia said today that it has filed suit against Apple, alleging that the iPhone infringes on Nokia’s patents for GSM, UMTS and wireless LAN (WLAN) standards.
The suit surrounds ten patents that cover wireless data, speech coding, security and encryption. Nokia alleges that all infringement has occured since Apple shipped the first iPhone in 2007. In a press release, Ilkka Rahnasto, Vice President, Legal & Intellectual Property at Nokia, said:
The basic principle in the mobile industry is that those companies who contribute in technology development to establish standards create intellectual property, which others then need to compensate for. Apple is also expected to follow this principle. By refusing to agree appropriate terms for Nokia’s intellectual property, Apple is attempting to get a free ride on the back of Nokia’s innovation.
October 16th, 2009
Senior IBM exec among those charged in Wall Street insider trading sting
Greed on Wall Street has landed six people - including a long-time, high-level IBM executive - in handcuffs after the FBI charged them with being involved with “the largest hedge fund insider trading case in history.”
In all, the six netted illegal profits of more than $20 million by using insider information about a number of companies, including IBM, AMD, Sun Microsystems, Akamai, Clearwire and Google. The information sharing that led to illegal trading goes back as far as January 2006 and the case itself represents the first time that court-authorized wiretaps have been used to target significant insider trading on Wall Street. Those arrested were:
- Raj Rajaratnam, managing member of Galleon Management, LLC and a portfolio manager for Galleon Technology Offshore, Ltd.
- Danielle Chiesi, an employee of New Castle Funds, LLC and formerly the equity hedge fund group of Bear Stearns Asset Management, Inc.
- Mark Kurland, a top executive at New Castle
- Rajiv Goel, a Director in Strategic Investments at Intel Capital, the investment arm of Intel Corp.
- Anil Kumar, a Director at McKinsey & Company, Inc., a global management consulting firm
- Robert Moffat, Senior Vice President and Group Executive at IBM
Moffat, who surrendered to FBI officials this morning in White Plains, NY, has been with IBM for more than 31 years and has held a number of executive positions.
Moffat, who has been in his most recent position since July 2008, is responsible for “all IBM hardware offerings as well as the microelectronics division,” according to his bio on the company’s Web site. (PDF) The company’s integrated supply chain operations, which include global manufacturing, procurement and customer fulfillment, also report to him. In his position, Moffat reported directly to company chairman, president and CEO Sam Palmisano.
Moffat is also listed as a member of the IBM Performance Team and the IBM Corporate Operations Team, a member of the Board of Trustees for The Manufacturing Institute, an educational and research affiliate of the National Association of Manufacturers, and a non-voting observer on the Board of Directors of Lenovo Group Limited.
The complaints are complex and contain multiple instances of information sharing for the purpose of insider trading. Excerpts of the FBI’s press release, as it relates to Moffat, read:
KURLAND, MOFFAT, and CHIESI engaged in overlapping schemes to commit insider trading. Specifically, CHIESI obtained inside information from MOFFAT, RAJARATNAM, and an executive at Akamai on several publicly traded companies, including IBM, Sun Microsystems, AMD, and Akamai. CHIESI in turn shared that information with KURLAND, and both CHIESI and KURLAND then traded on that information in the accounts of their hedge fund, New Castle…
During other calls intercepted by the FBI, CHIESI obtained non-public information concerning AMD from MOFFAT and RAJARATNAM, and shared that information with KURLAND. For example, in August 2008, CHIESI and MOFFAT were discussing a confidential business transaction that AMD was then negotiating with investors from Abu Dhabi. MOFFAT had access to inside information concerning this deal because as part of the transaction, IBM would be granting a license to an entity to be spun off by AMD. Toward the end of the call, CHIESI asked about the timing of the deal involving AMD, and MOFFAT replied, “six to eight weeks from my meeting.” When asked the chances that the deal would fall through, MOFFAT replied, “Zero…, I see no way that it doesn’t get done.” MOFFAT also said that IBM had “already signed” the agreement.
The FBI and U.S. Attorney’s Office say that the investigation is continuing and issued a warning to those engaging in corrupt and illegal activities on Wall Street. In a statement, Preet Bharara, the United States Attorney for the Southern District of New York, said:
Today, we take decisive action against fraud on Wall Street. This case should be a wake up call for Wall Street. It should be a wake up call for every hedge fund manager and every Wall Street trader and every corporate executive who is even thinking about engaging in insider trading. As the defendants in this case have now learned the hard way, they may have been privy to a lot of confidential corporate information, but there was one secret they did not know: we were listening. Today, tomorrow, next week, the week after, privileged Wall Street insiders who are considering breaking the law will have to ask themselves one important question: Is law enforcement listening?
Moffat, along with several other defendants, were expected to appear in Manhattan Federal Court in New York today. Goel is expected to appear in federal court in San Jose today.
October 13th, 2009
Ruling: Fighting RIAA by blog is OK
Lawsuits have long been tried in the news media, with lawyers putting their spins on the case in front of news cameras and microphones. So what’s wrong with a lawyer using a blog to post court documents and otherwise discredit his legal opponents?
Apparently, nothing.
New York Magistrate Judge Robert M. Levy ruled that attorney Ray Beckerman may have been “less thank forthcoming at times” but did not cross ethical bounds by posting his motions on a blog devoted to criticizing the defendant: the Recording Industry Association of America. According to a post on Wired’s Threat Level blog, the music industry’s concerns over the blog were “largely overstated.” (PDF of ruling)
Why not use a blog to help advance a legal case? In most cases, courts are open places and legal filings are made publicly available. Unless the judge has ruled otherwise, by way of a gag order, there’s nothing to stop a lawyer from talking to a news reporter or providing copies of the legal filings. Is it a conflict of interest that the lawyer and the “reporter” are the same person? Absolutely. But clearly, just in the name of the blog - called Recording Industry vs The People - there’s bound to be a spin every now and then.
You almost have to expect it
Also see:
October 5th, 2009
The Apple-Palm cat-and-mouse game: How long can it last? [poll]
I’m usually the last one to suggest that lawyers get involved in business disputes, largely because the only ones who win are the lawyers. I can’t help but wonder if it’s time for Apple’s legal team to step in and ask a judge to bring to an end - once and for all - this cat-and-mouse game between Palm and Apple over synchronization between iTunes and the Palm Pre.
Over the weekend, the Digital Daily blog reported that Palm’s latest smartphone software upgrade re-enabled (again) the iTunes sync feature, which has been repeatedly disabled by Apple with its own software updates to iTunes. And now, adding insult to injury, Palm has also included photo synchronization, too.
What makes this move by Palm especially bold is that USB Implementers Forum, an industry group that oversees the USB standard, recently sided with Apple after Palm turned to it to accuse Apple of “hampering competition” by blocking the sync feature. When Palm informed the USB-IF that it intended to use Apple’s USB vendor ID number to trick the software into thinking that the Pre is an Apple device, the group warned Palm that it could be in violation of the agency’s policy for unauthorized usage of a vendor ID number.
Also see: Palm, not Apple, deserves black eye for iTunes sync confusion
USB-IF. Vendor numbers. Blah blah blah. I think Palm wants to get this issue into the courts - either a court of law or the courts of public opinion. There have long been critics who’ve accused Apple of being monopolistic because of the closed relationship between hardware (iPods and iPhones in this instance) and the software (iTunes). Trying to get the court of public fired up should be no problem. The blogosphere - and its readers - are just waiting for a debate like this so they can slam/defend the beloved/despised Apple.
When it comes to the legal courts, Mac clone maker Psystar has a legal jumpstart of more than a year with its own battle about the closed relationship between Macs and Apple’s computer operating system, OS X. Despite the back and forths in the Apple-Psystar case, Psystar continues to offer a good fight.
Can the Palm-Apple cat-and-mouse game go until the Psystar case is settled? Apple can surely hold out. But can Palm? At some point, either Apple or Palm has to come out on the losing end. But in the meantime, the only ones who lose are the owners of Palm devices. Syncing their devices with iTunes has become a crap shoot - and that can’t make them very happy with the device or the experience.
Loading ...September 21st, 2009
EC ramps up PR war with Intel (by publishing 518 page decision)
The European Commission has an answer to Intel’s contention that it made a bevy of errors in fining it $1.45 billion for anti-competitive behavior against rival AMD: It published all of its evidence.
The EC, the regulatory watchdog of the European Union (EU), published its entire ruling (statement, Techmeme, ZDNet UK). Intel obviously still has problems with the EC’s ruling, but the European regulators figured it was best to throw the decision to the public and let folks decide for themselves. The game: The EC wants to win in the court of public opinion too.
Among the key highlights:
- Intel rebates to Dell from December 2002 to 2005 were based on Dell buying Intel chips exclusively.
- HP had to buy 95 percent of its CPUs from Intel to get rebates from November 2002 to May 2005.
- NEC had to buy 80 percent of its CPUs from Intel if it wanted rebates between October 2002 and November 2005.
- And there’s a lot more deals in the EC’s filing that regulators argue Intel concealed.
ZDNet UK: EC reveals details of Intel antitrust breaches
But here’s the problem. There’s no way to make heads or tails of the EC’s filing. For starters, it’s massive. And if you scan a few pages you quickly get to a situation of “EC said, Intel said.”
What is clear is that the EC and Intel are taking their legal fight public in a big way. The key snippets revolve around Dell’s rebate deal with Intel. Intel argues that Dell’s documents show Intel exerted no pressure on the PC maker. The EC argues otherwise and released the following snippets (page 66 starts a bevy of footnotes about the Intel-Dell relationship):
Dell, which until September 2006 was an Intel-exclusive x86 CPU purchaser, explicitly pointed out to Intel how AMD was a growing threat to their own products: “AMD is a great threat to our business. Intel is increasingly uncompetitive to AMD which results in Dell being uncompetitive to [Dell competitors]. We have slower, hotter products that cost more across the board in the enterprise with no hope of closing the performance gap for 1-2 years”.
In an internal Dell e-mail of 26 February 2004, it is stated: “Boss, here’s an outline of the framework we discussed with Intel. (…) Intel is ready to send [Intel senior executive]/[Intel executive] /[Intel executive] to meet with [Dell Senior Executive]/[Dell Senior Executive]/[Dell Executive] . (…) Background: *[Intel senior executive]/[Intel senior executive] are prepared for [all-out war] if Dell joins the AMD exodus. We get ZERO MCP for at least one quarter while Intel ‘investigates the details’ (…) We’ll also have to bite and scratch to even hold 50%, including a commitment to NOT ship in Corporate. If we go in Opti, they cut it to <20% and use the added MCP to compete against us.”
Dell submitted to the Commission that “during the 2003-2005 time-frame”, the “MCP arrangement was not explicitly conditioned on exclusivity or minimum volume commitments. At the same time, it was negotiated against the historical backdrop of Dell products being based solely on Intel processors.” Dell has further specified that it “believed that, as Intel’s largest customer, it was able to
obtain a higher level of discounts than its competitors (although this could not be objectively verified).”
Those comments, which are really just an appetizer, either illustrate some mass conspiracy or a great deal for Dell since it distributed millions of Intel chips. The best move to handle this huge filing is to search the PDF based by PC vendor name—Acer, Lenovo, HP etc.—and read some juicy nuggets.
Happy reading.
September 21st, 2009
Google's book settlement: Here comes the DOJ and likely deal tweaks
The Department of Justice became the latest party to file its concerns about Google’s book settlement and it appears the search giant will have to either make tweaks or allow the feds—and maybe even Congress—to poke around. Bet on the tweaks.
When we last checked in on the Google Book Settlement it was all about the sniping between the various parties. The headliners are Amazon vs. Google. Google was sued in 2005 by authors and publishers for infringing on copyrights as the search giant moved to digitize books. Google settled in October 2008 with authors and publishers for $125 million and agreed to set up a registry to ensure copyright owners would be compensated. Now many parties are freaked out that Google could garner such control.
September 17th, 2009
Music execs crying about royalties again; Time for a start-over
There’s an interesting piece by CNET’s Greg Sandoval today about royalty fees in the music industry and how the songwriters, composers and music publishers aren’t getting their fair share from iTunes, based on today’s royalty rules. It’s gotten so extreme that those folks even want a cut of the free 30-second samples of songs that are played on iTunes. Here’s one of the best lines in Sandoval’s article:
This would also undoubtedly confirm the perception held by many that those overseeing the music industry are greedy.
Ya think?
I’ll spare you all of the technical details about how royalties are paid in the music industry. Sandoval offers a very thorough explanation about the difference between music sales and music performances - such as songs played at sporting events, in movies and TV shows and so on. And I would encourage interested readers to click the link and read his post. (Techmeme)
I understand that there are some important players in the music industry who may be getting shafted. But how is that the fault of Apple or consumers. We didn’t make the rules. Apparently, changing the rules about the fees takes an act of Congress - literally. And the groups representing the publishers, songwriters and composers have already started to lobby Congress for changes that would include fees for music downloads.
Allow me to say it again, if you will. (I know I’m starting to sound like a broken record - no pun intended.) The music industry cannot turn back the clock on technology. You’d think they would have figured that out already. But here comes another group of music executives who want to somehow morph old rules into new ways. Why on Earth would anyone lobby Congress to modify rules that were established under different market conditions and ask that they be applied to the new way?
Start all over. Take the old rules. Figure out what works and what doesn’t and then come up with suggestions for a new set of rules and guidelines. Come to the table with a solution on how to address the problem.
Hey music executives: We’ve heard your it’s-not-fair cries from the halls of Capitol Hill before. This time, why not be useful and instead come to the table with some new ideas for legislators to ponder.
And be sure to leave the lawyers at home.
Previous coverage:
September 16th, 2009
Report: Skype founders sue eBay; could complicate Skype sale
eBay’s $2 billion sale of Skype to a group of investors could be complicated by a lawsuit filed by a company owned by Skype’s founders. According to a Wall Street Journal report, a company named Joltid, which is owned by Skype founders Janus Friis and Niklas Zennstrom, filed suit in U.S. District Court in northern California seeking an injunction against Skype, as well as damages for copyright infringements.
The dispute stems from a peer-to-peer technology owned by Joltid and is used in Skype’s software. Joltid reportedly terminated a license for the software in March and the two sides have been battling in a UK court since, according to the report.
The suit seeks profits earned while the technology was being used in breach of its license and estimated daily damages of more than $75 million daily.
Earlier this month, eBay announced that it would unload 65 percent of Skype for $1.9 billion to an investor group led by Silver Lake and including Index Ventures, Andreessen Horowitz and the Canada Pension Plan (CPP) Investment Board.
Joltid’s suit includes the investors as defendants.
August 20th, 2009
Defamation or free speech? U.S. court orders Google to hand over identity of blogger
Should your Internet anonymity be pulled back if you call someone a “psychotic, lying, whoring…skank” online?
That’s what Liskula Cohen, a 37-year-old fashion model, was called by an anonymous blogger.
To sue the blogger for defamation, Cohen needed the blogger’s identity. So she demanded it, and a U.S. court has ruled that Google must hand that identity over.
“I’m a human being. I bleed. I have feelings. When I saw that blog, it was awful. All I can say for this person is, I really truly hope that they have more in their life than this,” Liskula said in the New York Post.
Andrew J. Nusca is an associate editor for ZDNet and SmartPlanet.
See his full profile and disclosure of his industry affiliations.
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