• Sprint is urging the FCC to quickly hold hearings to rule on whether the transfer of spectrum licenses from T-Mobile to AT&T serves the public interest. AT&T’s proposed $39 billion acquisition of T-Mobile is currently under review by the FCC after the US Justice Department sued to block the proposal.

• Senators Blumenthal (CT) and Franken (MN) introduced a bill on Tuesday that would prohibit wireless companies from having contract clauses that require consumers to use binding arbitration rather than suing in the case of a contract dispute.

• On Wednesday, members of the House reviewed the FTC’s recommendations to the Children’s Online Private Protection. The proposed changes would require greater permission from parents of children under the age of 13 before information could be collected from them on the Web.

• Also on Wednesday, Senator Coons (DE) and Kohl (WI) proposed amendments to the pending Currency Exchange Rate Oversight Reform Act of 2011. The amendments would allow private federal civil actions for trade secret infringement and would allow Customs & Border Patrol to share information on suspected counterfeiters with US rights holders.

• Samsung wants courts in France and Italy to prohibit Apple’s iPhone 4S, claiming that the iPhone infringed two of its patents. Samsung and Apple are currently in around 20 patent infringement legal disputes.

• AstraZeneca returned to court this week to defend its US patent on Crestor, a multibillion-dollar cholesterol drug, against generic drug makers who are appealing a decision from the US District Court in Delaware. In June 2010, the court ruled that generic firms failed to prove the patent was invalid because it was obvious.

Google and ITA merger: for better or worse?
On the heels of AdMob was Google’s merger with ITA Software in July of this year. ITA Software is the innovator of the QPX technology, travel search giants such as Kayak, Orbitz, and Expedia all utilize integrated QPX platforms in their air travel search and pricing services.  ITA’s dominance in GDS, or global distribution systems, which serve to link ticket bookers such as airline passengers and travel agencies to the booking systems of travel suppliers such as airlines, will prove to be a valuable asset as Google decides how it will use the software to develop and implement its own flight search tools, which is exactly what has travel search giants and not-so-giants alike up in arms.

While some industry analysts are applauding Google’s entrée into the market, anticipating that it will stimulate the otherwise stagnating field of travel search technology, many more are skeptical, and increasingly alarmed, about the impending deterioration in competition and the threat it poses to other GDS’s.  Robert Birge, chief marketing officer of Kayak, commented: “There are legitimate concerns…about what that deal could mean to competition in the market and how it could affect consumer choice.”  He echoes the sentiments of a growing number of travel site competitors and consumers, and it seems that the U.S. Department of Justice is picking up on the concerns.

The DOJ steps in
Google is alleged to be in violation of the Sherman and Clayton Acts, which make many monopolies or attempts to monopolize a market illegal. The essential premise of the allegations is that Google is attempting to monopolize varying related markets- by acquiring ITA’s specialized technology, it has the potential to use its dominance in web search to become dominant in travel search.

Google announced in late August that they had received a “second request” for information from the DOJ as part of the regulatory review of the acquisition.

The DOJ’s process of review for deals such as the acquisition in question consists of a preliminary “waiting period” review, lasting approximately a month.  During this time the DOJ can ask for voluntary divulgence of information and hold discussions with the companies. At the conclusion of this phase, the DOJ decides whether to give the deal the green light or look into it further during a “second request” stage.

Violating vertical boundaries
So what’s the big deal?  Should we be concerned that Google is leveraging its cutting edge engineering capabilities to enter different but related markets?  That might depend on how you define separate markets. If you contemplate that video-sharing technology, digitized book-scanning and indexing, and travel data aggregation to be related enough to online search, then Google is arguably just doing variations on a theme of its specialty.  But, if you’re beginning to think that Google is getting into a lot of things it doesn’t normally do, you might think it is merging with complements; that is, it’s not buying up competitors so much as it’s absorbing entities further upstream or downstream in the supply chain.

Whereas Google currently scans and indexes travel search information that it acquires from Kayak or Orbitz and display it as a one-box result, with the new ITA software Google can feasibly create its own travel data aggregation platform and be able to offer the same services as Kayak or Orbitz but as a Google product.  This can be a troubling prospect to say, a small travel search site which sees this deal as Google invading and dominating their niche industry.  But proponents of Google, and certain lines of antitrust theories, contend that Google shouldn’t be punished for its well-earned successes—if not for its technological savvy leading to the creation of such services as Google Books, we may not have the many sophisticated products Google offers (mostly free of charge) and continues to create.

What does this mean for consumers?
The purpose of antitrust law is not to impede competitive efficiency, which typically benefits consumers by producing better products and lower prices.  Having previously worked in-house at a technology company, I observe a certain cognitive dissonance: when a company does too well or becomes dominant in its field, we are quick to suspect that bad intentions and certain misconduct are the culprits for such success.  But in my personal experience, it’s common, if not the norm, that companies which fare well do so because they are giving users better choices, higher quality, and lower prices.  It’s difficult for a private company to convince consumers that it has their welfare and best interests in mind—but that is exactly how a company gains respect and earns loyalty from discriminating customers.  Why is it exactly that we use Gmail, Chrome, and Scholar?  Because they’re useful and easy to use.  If Google can develop a better way to aggregate and disseminate travel data, that would be useful, too.  So why should we stop them?

• Ephemeral Law takes a look at the court documents in Microsoft’s challenge to the Waledac botnet, which it describes as on the “cutting edge of legal efforts to shut down hacking operations.”

• The Wall Street Journal reports that the US Department of Justice is stepping up its antitrust investigation into technology firms’ “no-poach” policy and salary fixing.

• Eric Goldman reports on a decision of the California Court of Appeals rejecting an argument that a California statute prohibiting eavesdropping precluded admitting Yahoo! chat logs in evidence.

• Why the anti-commons aren’t so tragic, from Patent Docs.

• The MTTLR Blog writes about falsely-convicted victims of DNA forensics errors.

• Wired: a new malware scam threatens BitTorrent with copyright infringement suits.

• Spicy-IP blogs about BioPiracy – the practice of mining the traditional knowledge of indigenous communities for biological and medicinal patents – in Africa.

• Feature from The Register: the Russian Association of Electronic Communications promises to crack down on spam and cybercrime.

• British Election special: the mother of British hacker Gary McKinnon, who was at the heart of a recent UK-US extradition battle, has announced that she will run against Chancellor Jack Straw in the upcoming parliamentary elections, from bbc.co.uk.

• The Southern District of New York‘s decision in Association for Molecular Pathology and ACLU v. USPTO and Myriad (the “gene patents case”) handed down last Monday, has generated a lot of commentary this week. Here’s a selection: reports from Wired and On the Edges of Science and Law; IP Watchdog describes the ruling as “inane”; Patent Docs gives more detail on the patents at issue; Patently O thinks the Federal Circuit is likely to reverse the decision; and Holman’s Biotech IP Blog takes the investor’s perspective.

• British science writer Simon Singh (of Fermat’s Last Theorem, The Code Book and Big Bang fame) wins libel case brought against him by the British Chiropractic Association, from The Guardian.

• Jonathan Zittrain’s The Future of the Internet and How to Stop It comments on the iPhone developer license agreement, disclosed through a Freedom of Information Act request.

• From OutLaw, Google, Microsoft, eBay et al call for U.S. privacy law update.

• Salt Lake City jury rejects “copyright troll’s” claim to Unix - Wired reports.

• The European and FCC antitrust complaints against Google are not about Microsoft, opines The Register.

• US criticizes Australian internet filtering plan, from E-Commerce Times.

• As it launches its cloud computing platform, Azure, Microsoft calls for federal regulation to clarify many of the open legal questions surrounding cloud computing, says the MTTLR Blog.

• Ten years after it applies, TiVo is granted patent for season pass subscriptions, writes Gizmodo (see our recent post on TiVo’s patent battle with Microsoft here).

• INFO/LAW recommends a Paul Ohm paper arguing that statistical techniques are eroding the effectiveness of anonymization of data, with great implications for privacy law.

• The Third Circuit revives the hopes of Mr. and Mrs. Boring, who sued Google in trespass after a Google Street View car drove down their private driveway, writes Eric Goldman.

• Ephemerallaw reports on the looming compliance deadline for the Massachusetts Data Security Law.

• Rob Tiller of Red Hat argues for calling a troll a troll at Opensource.com’s law channel.

• Mashable reports that the U.S. Department of Justice and the European Commission have given the go-ahead to the Microsoft-Yahoo deal that will see Yahoo’s search engine powered by Bing technology.

• The controversy surrounding Google’s Buzz is not confined to the U.S. (see our post): the Canadian Office of the Privacy Commissioner is also taking a look, says CBC News.

• Further afield, Indian IP blog Spicy IP considers whether the Indian Reprographic Rights Organisation (IRRO) might challenge the Google Books settlement, on the basis on India’s stricter “fair use” standard.

• It’s not just China: European security and rights watchdog, the Organization for Security and Co-Operation in Europe, calls on Turkey to reform or abolish its restrictive internet law.

• And also in Europe, Out-Law gives a round-up of just-decided and upcoming litigation involving trademarks and keywords.

• The New York Times discusses the increasingly complex battle over e-book publishing rights.

• True/Slant reports on Facebook CEO Mark Zuckerberg’s glitch with his social network’s new privacy settings, and asks whether the changes might violate FTC regulations.

• Misbehaving in the jury box: jurors researching on Wikipedia led to an overturned murder conviction, and jurors friending each other on Facebook is the subject of mistrial challenge, reports the ABA Journal.

• Former state representative and convicted pederast Ted Klaudt claims his name is covered by “common law copyright” and says news organizations that use it in coverage have to pay him $500,000 in licensing fees, blogs The Legal Satyricon.  That’s TED KLAUDT making the claim.  TED KLAUDT.

• Wired’s Threat Level reports on a new hacker application that deletes traces of illegal computer activity when it detects a commonly used suite of police forensic tools beginning to run.  If it doesn’t work perfectly, this could be a godsend for prosecutors looking to indict on obstruction of justice charges.

• Microsoft dips its toes a little deeper into open-source waters with Moonlight 2, the Linux version of its web application framework Silverlight.  With the new version, Microsoft extends its Patent Covenant to End Users of Moonlight to users who get the framework from any third-party, including distributors like Red Hat or Ubuntu.

• Apple-Psystar, the final chapter, on Gizmodo.

• Fake Steve Jobs rallies iPhone users to DoS attack AT&T today, reports Gizmodo.

• The FTC sues chipmaker Intel for antitrust violations, everyone reports.

• Europe drops its antitrust case against Microsoft after the software giant agreed to offer consumers a choice of web browsers installed with copies of Windows, says the New York Times.

• Video sharing site Vimeo is sued by Capitol Records over user-posted lip dubs, reports NewTeeVee.

• The Supreme Court will review employers’ access to employees’ text messages on company-owned mobile devices, reports the Wall Street Journal.

• Judges and Facebook – Is it ok to be FB friends with lawyers?  The Florida Judicial Ethics Advisory Committee says no, reports the New York Times.

• Michael Arrington and Crunchpad sues JooJoo for the joint tablet venture that so publicly went wrong, says Gizmodo.

• The Environmental Protection Agency announces that greenhouse gases pose a danger to human health and environment.  New federal and possibly international regulation are expected to follow, according to the New York Times.

• Who will protect us from the robot invasion?  Maybe lawyers will, a pair of scholars at Stanford University tells the San Francisco Chronicle.

• The legal implications of new technology aren’t all covered in intellectual property classes – Andrew Breitbart’s Big Government blog looks at the possible use of eminent domain to take the “wind rights” of farmers and build green-friendly windmills.

• Text messages are the new “digital lipstick on the collar” and are increasingly showing up as critical evidence in divorce cases, writes the New York Times.

• The EU drops its antitrust case against memory-maker Rambus in exchange for concessions, according to the Associated Press.

• A federal judge finalizes a $675,000 verdict against a Boston University student for sharing 30 copyrighted songs online, Wired’s Threat Level reports.

• Apple countersues Nokia for patent infringement – this is getting ugly, says All Things Digital’s Digital Daily.

• A payroll and credit card payment processing company’s failure to protect itself from massive data breach was not grounds for a securities fraud case by shareholders.  Law.com discusses the New Jersey District Court ruling.

• U.S. says butt out: U.S. Senators criticize EU Commission over delay of Oracle-Sun deal.  (See our deal cheat sheet here.)

• Verizon stakes its claim as the nation’s most ironic network: A week after a court called its “There’s a Map For That” advertisements “sneaky,” but not misleading (catch up here), Verizon has pushed the National Advertising Division of the Council of Better Business to ask Sprint to drop its claim that it is the “most dependable 3G network.”

• Not to be outdone by Verizon, AT&T, and Sprint, Canadian telcos are suing each other over false advertising too.

• A boutique Texas IP firm is reaching out to owners of Xbox 360 owners whose consoles have been banned from Microsoft’s Xbox Live service with hopes of filing a class action suit against the tech giant.

• News Corp’s Ruport Murdoch may make a deal to make the media conglomerate’s content exclusively searchable by Microsoft’s Bing search engine, but antitrust concerns loom.

• The new Google-TiVo deal probably won’t violate your privacy, says PC World.

• The “Godfather of Spam” has been sentenced to 51 months in prison.

• A Kentucky man’s claim that the government has been spying on his every living moment is “patently unsubstantial,” according to the D.C. Circuit.  Wired’s Threat Level reports and links the full decision, in which the court likens “the particular combination of sloth, fanaticism, inanity and technical genius alleged” to stories of “little green men.”

Oracle Corp.’s $7.4 billion acquisition of Sun Microsystems Inc. has hit the IT headlines again this week with the issue of the European Commission’s formal statement of objections, presaging an uphill battle for Oracle to secure antitrust clearance in the EU. STLR brings you this cheat sheet on the issues, explaining what’s at stake, the latest ins and outs of the deal, and the reactions of various commentators.

• Following a failed bid by IBM, on April 20, 2009, Sun Microsystems and Oracle announced that agreement had been reached on Oracle acquiring Sun.

• On August 20, Oracle announced that the US Department of Justice had approved the acquisition without conditions and terminated the waiting period under the Hart-Scott-Rodino Act (during which regulatory authorities may request further information).

• On September 3, the European Commission announced that it was opening an in-depth investigation into the proposed takeover, which would last until January 19, 2010. European Commissioner for Competition Neelie Kroes stated that “[t]he Commission has to examine very carefully the effects on competition in Europe when the world’s leading proprietary database company proposes to take over the world’s leading open source database company. In particular, the Commission has an obligation to ensure that customers would not face reduced choice or higher prices as a result of this takeover.” She further noted that “[t]he proposed transaction would bring together two major competitors in the market for databases. The database market is highly concentrated with the three main competitors of proprietary databases – Oracle, IBM and Microsoft – controlling approximately 85% of the market in terms of revenue.”

• During a meeting on October 21 between Commissioner Neelie Kroes and Oracle President Safra Catz, Ms. Kroes expressed “her disappointment that Oracle had failed to produce, despite repeated requests, either hard evidence that there were no competition problems or a proposal for a remedy to the competition problems identified by the commission.”

• On November 9, Sun disclosed in a regulatory filing with the SEC that European Commission had issued its formal statement of objections, which “sets out the Commission’s preliminary assessment regarding, and is limited to, the combination of Sun’s open source MySQL database product with Oracle’s enterprise database products and its potential negative effects on competition in the market for database products.” The text of the statement of objections has not been made available to the public.

• In its statement of the same day, Oracle stated that “[t]he Commission’s Statement of Objections reveals a profound misunderstanding of both database competition and open source dynamics. It is well understood by those knowledgeable about open source software that because MySQL is open source, it cannot be controlled by anyone. That is the whole point of open source.”

• On the same day, the US Department of Justice issued a statement responding to the news of the European Commission’s statement of objections, noting that: “[a]fter conducting a careful investigation of the proposed transaction between Oracle and Sun, the Department’s Antitrust Division concluded that the merger is unlikely to be anticompetitive.” There were many open source and proprietary database competitors safeguarding customer choice, as well as a community of developers and users of Sun’s open source database who could support a derivative version of it. The Department of Justice expressed the hope that “the parties and the EC will reach a speedy resolution that benefits consumers in the Commission’s jurisdiction.”

• On Tuesday, November 10, Neelie Kroes was reported to have responded to Oracle’s statement, dismissing its arguments as “facile and superficial.”

• Steve Lohr and James Kanter of the New York Times argue that Oracle’s battle with the European Commission “boils down to a conflict about the importance of free software and the government’s role in protecting it” and notes that the “sharp exchanges fit a familiar pattern in antitrust disputes between Brussels and American technology companies” such as Microsoft and Intel. They quote Prof. Michael A. Cusumano’s opinion that “[i]t makes sense that the Europeans come to the defense of open-source companies because the big proprietary companies are nearly all American” (though blogger Dennis Byron notes that the big open sources companies are all American too).

• In a Reuters analysis piece, Jim Finkle ponders Oracle’s reasons for fighting for MySQL. He notes that MySQL’s customer base is made up of mostly small- and medium-sized companies who use it to run websites and store business data, whereas Oracle has traditionally focused on larger corporations. MySQL is available for free, but Sun has generated revenue by charging for enhanced versions. Acquiring MySQL would enable Oracle to offer a “one-stop-shop for data customers”, with MySQL competing with Microsoft’s SQL Server at the low end of the market, while Oracle’s existing products would continue to compete in the mid-to-high range.

• The Economist opines that few observers believe that MySQL and Oracle really compete, though there are merits to the argument that Oracle would acquire control over commercial use of MySQL. Though MySQL is available for free, the open source license requires any code built around the product to also be made open source. For this reason, most firms prefer to obtain a commercial license which does not impose this obligation. After the acquisition, the licensor would be Oracle. This “dual-licensing” may help prevent the emergence of a strong alternative to MySQL.

• Steven Davidoff, the NYT’s Deal Professor, believes that Sun should have pushed the negotiation on regulatory covenants much harder: the relevant clause in the acquisition agreement clause amounts to a “flat-out bar on Sun being able to force Oracle to dispose of, or run differently, MySQL or any other asset that might offend the European Union antitrust authority.” Furthermore, Oracle is under no obligation to complete the transaction if EU antitrust approval is not granted.

• In October, free software activist Richard Stallman was reported to have addressed a letter to Neelie Kroes urging the Commission to demand the divestment of MySQL in return for approval of the acquisition, stating that the acquisition “will predictably limit the development of the functionality and performance of the MySQL software platform, leading to profound harm to those who use MySQL software to power applications.”  He was unconvinced by Oracle’s contention that if it did not act as a good host for MySQL, the software could easily be “forked” to create a new platform, because MySQL is  provided subject to the open source GNU General Public License (GPL). Stallman countered that the current migration from version 2 of the GPL to version 3 raised a number of “fundamental and unavoidable legal obstacles” to combining code under the different versions to achieve this “forking”.

Oracle’s acquisition of Sun Microsystems raises important issues regarding the different approaches to antitrust on either side of the Atlantic, in particular in the IT sector, and regarding the future of open source software. All of the indicators point to a tough battle ahead for Oracle.

As Oracle fights to consummate its deal, follow us for updates.

By Brian Harley and Jane Wu