Not so much at U.S. District Court in New York, however.

“I believe that the government will be able to show at trial direct evidence that Apple knowingly participated in and facilitated a conspiracy to raise prices of e-books, and that the circumstantial evidence in this case, including the terms of the agreements, will confirm that,” U.S. District Judge Denise Cote said on Thursday.

The trial features the U.S. v. Apple on a Department of Justice charge that Apple conspired to price-fix ebooks, limited ebook competition, and break Amazon’s hold on the market. And it’s an interesting example of a monopoly-style case being brought against a company with a tiny fraction of the ebook market (Apple), mostly to the benefit of a company with a massive wedge of the ebook market (Amazon).

Apple comprehensively denies the charges.

“Apple has not ‘conspired’ with anyone, was not aware of any alleged ‘conspiracy’ by others, and never fixed prices,” the company stated in a reply to the suit last year.

Tell it to the judge, I guess.

That’s precisely what Apple is attempting to do, but statements like the above must be more than a little worrisome for Apple legal representatives. Perhaps just as worrisome is that Judge Cote has already begun writing a draft of her decision — before the trial has begun.

Evidence has already been submitted to the court, however, and that — apparently — is enough for Cote to form an opinion on the case.

One of those pieces of evidence was a line in an email from then Apple CEO Steve Jobs to News Corp. CEO Rupert Murdoch, whose company owns the publisher HarperCollins. The line that the DOJ released was fairly damning, on the face of it:

Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.

That certainly looks like it could be price-fixing, right?

But here’s the line in the full context of Steve Jobs’ email:

Our proposal does set the upper limit for ebook retail pricing based on the hardcover price of each book. The reason we are doing this is that, with our experience selling a lot of content online, we simply don’t think the ebook market can be successful with pricing higher than $12.99 or $14.99. Heck, Amazon is selling these books at $9.99, and who knows, maybe they are right and we will fail even at $12.99. But we’re willing to try at the prices we’ve proposed. We are not willing to try at higher prices because we are pretty sure we’ll all fail.

As I see it, HC has the following choices:

1. Throw in with Apple and see if we can all make a go of this to create a real mainstream ebooks market at $12.99 and $14.99.

2. Keep going with Amazon at $9.99. You will make a bit more money in the short term, but in the medium term Amazon will tell you they will be paying you 70% of $9.99. They have shareholders too.

3. Hold back your books from Amazon. Without a way for customers to buy your ebooks, they will steal them. This will be the start of piracy and once started there will be no stopping it. Trust me, I’ve seen this happen with my own eyes.

Maybe I’m missing something, but I don’t see any other alternatives. Do you?

In that context, Job’s sentence appears to be simply an option that HarperCollins has. And it looks a lot less damning.

It’s not clear what other evidence Judge Cote has seen. And it’s not clear if she’s trying to urge the parties involved to come to a pre-trial settlement by pressuring Apple to make nice and roll over for the DOJ.

But let’s hope she maintains some level of objectivity in the case she’s judging — and that she at least waits until the case is heard in a court of law before making public statements about whether she believe the defendant is guilty or not.

photo credit: kalavinka via photopin cc

The bigger Google gets, the more often regulators are getting on its case.

The next probe into the company could from the Federal Trade Commission which is trying to figure out whether Google is leveraging its ad market dominance to push customers to its other services, as Bloomberg reports.

The criticism is a common one lobbed at Google by its critics, the most vocal of which is search engine rival Microsoft. Like much of the European Union, Microsoft isn’t crazy about Google’s ability to own, from top to bottom, peoples’ interactions with the web. While the FTC recently cleared Google of  similar charges, its counterparts in Europe are still on Google’s case.

Unlike Google’s search dominance, however, Google’s ad market share is far from locked down. The company controls roughly 18 percent of  digital display ad revenue — a slight bump over Facebook’s 15 percent, according to the latest numbers from eMarketer. That’s a far cry from a monopoly.

Still, at issue here isn’t Google’s dominance but rather the top-down integration of its many services. It’s one thing to control a market, but its something else to pursue anti-competitive tactics mean to make it impossible for any other company to challenge that control.  The FTC is trying to figure out whether that’s what Google is doing.

One thing to keep in mind is that the probe is still in its preliminary stages and might not officially happen. But don’t expect Google’s competitors to stop lobbying for regulator intervention anytime soon.

Photo: Devindra Hardawar/VentureBeat

The case, which was filed in April 2012, is finally coming to trial in June. And in new documents that the government filed, the attorney general paints Apple as the ringmaster. All of the other original codefendants, including Harper Collins, the Penguin Group, and Simon & Schuster, have already settled with the government, leaving Apple as the sole defendant.

As the saying goes, them’s fightin’ words. And Apple is fighting back.

“Apple has not ‘conspired’ with anyone, was not aware of any alleged ‘conspiracy’ by others, and never fixed prices,” the company stated in a reply to the suit last year.

The trial is set to begin on June 3.

Source: Dean Takahashi/VentureBeat

Apple CEO Tim Cook and iBooks

The DOJ is pointing to an email from Steve Jobs, in which he told Rupert Murdoch of News Corp to “throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99” as evidence to the contrary.

But Apple says that it was simply establishing the currently accepted agency model of pricing, in which publishers set the price and e-book stores simply sell at that price. That contrasts with the wholesale method of publishing, in which retailers buy books from publishers at whatever price they can negotiate and then sell the books to consumers at whatever price they wish. That is, of course, the model Amazon prefers.

Legal experts such as antitrust author and University of Hartford professor emeritus Dominick Armentano have said that Apple is likely to prevail, since the seller in an agency model market does not actual set any prices. In other words, if there was price-fixing in the agency model, it would have to be undertaken by the publishers themselves.

The bigger question here for Apple and its fans is how Apple used its power in mobile apps to strong-arm publishers such as Random House into agreeing with the deal. According to the DOJ filing, Apple blocked approval of an e-book app from Random House in 2010 until the publisher signed the agency deal.

That’s clearly dirty pool, and using power in what was then an almost all-powerful Apple smartphone ecosystem to influence — or compel — partner behavior in the ebook market.

Image credit (Tim Cook): Dean Takahashi/VentureBeat

This proposal is now up for “market testing,” which means that people can submit comments and the European Commission will decide whether the agreement puts the EC’s antitrust concerns to rest. It follows a three-year investigation by the European Commission that opened in 2010 after rival companies such as Microsoft, smaller European competitors, and consumer rights groups like the European Consumer Organization (BEUC) accused Google of wrong-doing.

“We are concerned that the dominant search engine, Google, may have abused its position in the search market to direct users to its own services and secondly to reduce the visibility of competing websites and services,” wrote head of the BEUC Monique Goyens in a letter to EU antitrust commissioner Joaquín Almunia. “Google continues to expand its areas of activities and develop its own services and products. Given its role as gatekeeper to the Internet, Google is in a unique position to restrict access to its competitors and direct traffic to its own services.”

According to the New York Times, Google’s proposed settlement does not involve changing the algorithm that produces search results and the changes will not be widely seen for at least a month. The biggest change will be in the area of “vertical search” on topics like shopping and travel, which yielded complaints from competitors like Expedia, Yelp, and TripAdvisor who felt Google was favoring its own results over theirs. The agreement will be legally binding for five years. If Google complies, it avoids fines of up to 10 percent of global annual sales, formal finding of “wrong-doing,” and expensive and drawn out antitrust battles.

“We are becoming increasingly concerned that effective and future-proof remedies might not emerge through settlement discussions alone,” said the letter signed by the group. “In addition to materially degrading the user experience and limiting consumer choice, Google’s search manipulation practices lay waste to entire classes of competitors in every sector where Google chooses to deploy them.”

However, this agreement may not appease the group of 11 complainants who recently banded together to send Almunia a letter asking for stronger measures than a settlement.

ComScore found that 86 percent of all online searches in Europe are conducted using Google. Large companies, like Microsoft, Expedia, and TripAdvisor, and smaller competitors such as Foundem and Streetmap EU in the U.K., French price comparison site Twenga, and three German companies, claim that Google’s promotion of its own content creates an unfair advantage. They are seeking to level the playing field.

This agreement lays out different requirements for various Google services, depending on how they make money. For services like Google Plus Local and Google News, Google just has to clearly label them as Google-owned properties. In areas that involve paid advertisements, Google has to show three links to competitors. In areas where all search results are paid ads, Google will auction links to rival sites.

Google’s only on-the-record statement at this time is “we continue to work cooperatively with the European Commission.”

Today, Microsoft announced that the Surface tablet is continuing its worldwide expansion, Yammer revealed its plans to add translation capabilities into conversations, and the Bing updated its Maps feature with a new collection of aerial satellite imagery. Also, European Union regulators announced today that it will fine Microsoft for antitrust violation in the coming months. Oh, and let’s not forget about Microsoft’s sale of Atlas Solutions to Facebook and the Bing Fund’s investment into Sonar. Whew.

Let’s start from the top.

Microsoft will roll out the Surface RT to Japan, Mexico, New Zealand, Russia, Singapore, and Taiwan, and the Surface Pro to Australia, China, France, Germany, Hong Kong, New Zealand, and the U.K. in the coming months. VentureBeat’s review found the RT to be a “disappointing compromise,” while the Pro is “full of possibility.” The Pros sold out online within hours of going on sale in early February. Now, these tablets-meet-PCs will be available in markets around the world.

Next is the Yammer news. Yammer is a social network for the enterprise that Microsoft purchased for $1.2 billion in July. The company is working on message translation capabilities that instantly translates Yammer conversations into a user’s native language to “ignite multilingual collaboration.”

“Removing language as a barrier to cross-company collaboration can be a competitive game changer for multinational organizations. It opens a world of possibilities,” said Yammer cofounder Adam Pisoni in a statement.

This feature is courtesy Microsoft’s Translator technology and is an example of Yammer’s “accelerated innovation” following the Microsoft acquisition. The Translator supports 39 languages. This translation is particularly useful for companies that work with international teams. Yammer said that 65 percent of its seven million users are located outside the United States, and this could drive greater international adoption of the service.     

On to lucky number three.

Bing Maps is released over 13 million square kilometers of updated satellite imagery today, which includes “bathymetry” data from the Scripps Institution of Oceanography. Bathymetry is not the study of taking baths, as I initially thought. Rather, it is the study of underwater depth of lake or ocean floors. Updates also include new base satellite imagery provided by TerraColor, with a resolution of 15 meters per pixel, and “cloud coverage” that makes it easier to see areas such as the Amazon basin and Tierra de Fuego. These updates “change the viewer experience within Bing Maps and the Windows 8 Map App.”

Microsoft was also in the news today for various wheelings, dealings, and run-ins with European regulators.

A report in Reuters this morning said that the European Commission is planning to fine Microsoft $2.1 billion (1.6 billion euros) for not providing data at fair prices to rivals, forcing developers to work with its products, and preventing consumers from choosing between rival web browsers from within the Windows operating system. Microsoft has apparently been embroiled in an antitrust battle in Europe for more than a decade, and the charges just kept racking up.  

On a more positive note, New York City startup Sonar announced today that it received a strategic investment from Microsoft’s Bing Fund, which offers early-stage companies between $50,000 and $100,000 to get off the ground. Sonar’s technology taps into social networks to tell smartphone users how they are connected to people nearby and in locations they’ve check into. It is the fifth company to join the Bing Fund portfolio.

Finally (I hope), Microsoft finally sold its ad server Atlas Solutions to Facebook today. Microsoft acquired Atlas Solutions as part of its 2007 acquisition of aQuantive. Facebook will use Atlas Solutions to build its own independent ad network and data analytics system.

That ought to do it for one day, Microsoft. Save something for March.

Photo Credit: someToast/Flickr

Apple’s Tim Cook will shortly be hearing a question something like that, as Justice Lucy Koh has ordered him to appear in court to give a deposition regarding alleged antitrust violations. Apple is one of a list of companies, including Intuit, Adobe, Google, and Pixar, that are being accused of agreeing not to recruit each other’s employees.

The case has been ongoing, believe it or not, since late 2010, when the Department of Justice required the tech companies to nix those agreements and reached a settlement with them.

According to the DOJ, the anti-poaching agreements reached back as far as 2005 for Apple and Adobe, 2006 for Apple and Google, and 2007 for Apple and Pixar. The settlement at the time prohibited the companies from “entering, maintaining or enforcing any agreement that in any way prevents any person from soliciting, cold calling, recruiting, or otherwise competing for employees.”

The current lawsuit is a follow-on action brought by employees who claim that the companies’ illegal agreements harmed their employment prospects. And while Cook was not Apple’s CEO at the time,  Bloomberg reports that Justice Koh told Apple lawyers that since Steve Jobs was copied on emails about the practice, she found it hard to believe that Cook would not have been consulted as well.

There’s currently no timetable for Cook’s deposition, but Google’s Eric Schmidt will be deposed on February 20, and Intel’s Paul Otellini will be grilled in the next few weeks.

If Apple and the other tech companies lose the lawsuit, which is being brought employees as varied as engineers and chefs, they would be liable for additional salary and compensation for the affected staff.

Justice Koh is the same judge who is presiding over many of the Apple-Samsung legal battles. You’d think she’d be getting a little tired of seeing the Cupertino company in her courtroom.

photo credit: igrec via photopin cc

The Federal Trade Commission announced the results of its investigation into whether Google violated antitrust laws with its current business practices today.

In a 4-1 decision, the FTC found that Google wasn’t guilty of violating antitrust laws related to how it displays search engine results. At the same time, Google offered to change many of its business practices to appease the commission. For instance, Google can no longer scrape data from competing services (like review sites) within its search results. It also must offer local and privately owned businesses an option to opt out from its location-based services (like Google Places) and prevent outsiders from manipulating search results to gain an advantage.

The FTC first started investigating Google’s search practices 19 months ago, prompted by competitors that claimed that Google was making its own services more prominent and hindering true competition. For example, last year review site Yelp pointed out that Google was unfairly scraping Yelp’s user-generated reviews without giving proper attribution.

During a press conference announcing results of the probe, FTC Chairman Jon Leibowitz said all of the changes that Google agreed to make to its search practices are legally enforceable — meaning that if Google fails to uphold its end of the bargain, the FTC can take action against them in the form of hefty fines. That said, there were questions about how the FTC was able to monitor search manipulation since Google isn’t making its search data available to the commission.

The commission, however, did find that Google was misusing patents that it got as a result of its purchase of its sale to Motorola. The FTC’s decision will force Google to license the patents, many of which are crucial to mobile devices, to other companies.

We were expecting the Federal Trade Commission to announce its final decision on its antitrust investigation into Google this week, but now it looks like that won’t happen until next year, reports Bloomberg.

The FTC has been looking into Google’s search business for the past 20 months for anti-competitive behavior. Earlier this week, we also heard that Google was planning to change its business practices, including no longer copying data from “rivals” like Yelp, and allowing customers to compare Google ad campaign data with other sites.

Additionally, the FTC was also readying a consent decree that would make it more difficult for Google to ban competitor products over patents that it already decided to license on reasonable terms, Bloomberg reports.

The moves by Google and the FTC could resolve the antitrust investigation without an actual settlement — something that’s obviously sparking concern among search competitors. Fairsearch.org, a consortium of Google competitors, including Microsoft, sent the following statement to Bloomberg:

Questions about Google’s search bias and other anti- competitive practices will not end if the FTC fails to take legally binding action to protect consumers and innovators in the U.S., where the market conditions and law are different than the EU.

After all, Santa knows who’s naughty and who’s nice.

Google, which makes over $100 million each and every day, has added so much advertising and sponsored results in the past year that some have called its actions a “war on free clicks.” Most troubling of all are the prominent positioning of Google’s own services — especially for local search and shopping results — at the top of Google search engine result pages (SERPs).

Now, however, Google is planning to change its business practices in at least two ways, according to a Bloomberg story. The search giant will apparently promise to stop copying data from “rival websites” and will give advertisers the ability to compare data on Google ad campaigns with data on marketing efforts on other sites and search engines.

It’s not clear, however, whether those two actions would address a key issue: Google favoring its own solutions in its search results — such as content featured in Google+, its social network.

For example, Yelp has been one of the most prominent opponents of Google, with Yelp CEO Jeremy Stoppelman saying last year that “Google has acted anti-competitively in at least two key ways: by misusing Yelp review content in their competing Places product and by favoring their own competing Places product in search results.”

That’s also a concern of the European Union, which has investigated similar issues in the travel space, where Expedia and TripAdvisor have complained about anti-competitive behavior by Google in flight and travel search results.

When I contacted Google for a statement, a representative emailed me with this:

“We continue to work cooperatively with the Federal Trade Commission and are happy to answer any questions they may have.”

photo credit: Thomas Hawk via photopin cc

Turns out that domestic and Asian suppliers are fair targets as well, as the EU imposed a total of $1.9 billion in fines on Netherlands-based Philips, Korea-based LG and Samsung, Japan’s Panasonic and Toshiba, and France’s Technicolor for price-fixing and under-the-table market allocation deals.

The anticompetitive behavior that actually prompted the fines is ancient history in the fast-paced consumer electronics industry. Focused on yesterday’s fat TVs — yes, the CRT ones that actually aimed electron guns at viewers — the price-fixing actually ended six years ago. But while the wheels of justice may move slowly, they do move, according to EU Competition Commissioner Joaquin Almunia.

“These cartels for cathode-ray tubes are ‘textbook cartels’: they feature all the worst kinds of anti-competitive behavior that are strictly forbidden to companies doing business in Europe,” Almunia said in a statement.

Philips earned the biggest fine, €313 million, as one of the ringleaders, while LG was fined €295 million. Panasonic’s penalty was smaller but still very substantial, at €157 million, and Samsung will be forced to pay €151 million.

Samsung and LG are repeat offenders, having recently been involved in an LCD TV price-fixing cartel.

A very real question for some of the companies is whether they can afford to pay.

While Samsung is flush with cash from the smartphone business, other companies — particularly Japanese ones — have failed to make as successful a transition to newer, higher-margin electronics. Panasonic’s stocks is at a three-year low right now and is fresh off a $10 billion annual loss. Toshiba is also in difficult circumstances, and near a five-year stock low.

photo credit: alles-schlumpf via photopin cc

Google could end the year with a celebratory bang: a slew of dropped antitrust allegations about its core business.

Federal investigators have been on Google’s case for a long time about its allegedly illegal business practices when it comes to search results, but some insiders say the FTC might have less antitrust evidence than it had hoped for.

Anonymous sources told Reuters today FTC investigators are not certain they’ve got enough dirt on the search giant to seal a conviction.

Google has been under fire for more than a year for how it treats Yelp reviews and similar content from other sites. The search engine and its corresponding Places product will simultaneously pull in content from Yelp to flesh out review sections on Google Places. However, Yelp results may be artificially downgraded on search results pages, upstaged by less relevant results from Google’s own web properties.

“We believe Google has acted anti-competitively in at least two key ways: by misusing Yelp review content in their competing Places product and by favoring their own competing Places product in search results,” wrote Yelp CEO Jeremy Stoppelman in a blog post last year.

As anonymous FTC sources noted to Reuters, search rankings and Google’s famous search algorithm are the core of Google’s business and have been since its inception. If the FTC probe yields enough damning evidence, the case could have serious ramifications for the company — and if not, the company’s executives and shareholders will be breathing much easier come 2013.

The Federal Trade Commission is finishing up a more than year-long investigation of Google’s search practices, and the agency may be leaning toward suing the search giant for violating antitrust laws.

Four out of the five FTC commissioners believe Google illegally abused its power in search at the expense of competitors, Reuters reported Friday. Investigators issued a 100-page draft memo recommending a lawsuit, according to Bloomberg.

The commission will make a decision on how to proceed before the end of the year, chairman Jon Leibowitz’s said last month. A government lawsuit against Google would require a vote in favor by three of the five FTC commissioners.

A decision to sue would bring to head a investigation that included interviews with rivals such as Nextag and Yelp, which both testified before the commission.

“We believe Google has acted anti-competitively in at least two key ways: by misusing Yelp review content in their competing Places product and by favoring their own competing Places product in search results,” Yelp CEO Jeremy Stoppelman said last year.

“We are happy to answer any questions that regulators have about our business,” a Google spokesperson told VentureBeat.

In a separate run in with the FTC, Google agreed to pay a $22.5 million fine for misrepresenting how it collected user data in Apple’s Safari browser.

Photo credit: niallkennedy/Flickr

In a counterclaim against Electronic Arts’ copyright infringement lawsuit, Zynga has made an allegation that could vastly raise the legal stakes. Zynga alleged in a legal filing today that Electronic Arts chief executive John Riccitiello proposed an anti-competitive “no hire” pact with Zynga’s then-chief operating officer, John Schappert.

Citing emails allegedy written by Riccitiello, Zynga said that Riccitiello took the departures of EA executives for Zynga very personally.

The claim is part of a response that Zynga filed related to EA’s lawsuit alleging that Zynga’s The Ville social game copied EA’s The Sims Social title. During the discovery process, Zynga claims it found damning emails sent by Riccitiello (pictured at top).

“The counterclaim sheds light on what this legal battle is really about,” said one source who asked not to be identified.

Zynga says that in recent years it has received more than 3,000 unsolicited resumes from EA employees. Among those who joined Zynga were John Schappert, the former chief operating officer at EA; Jeff Karp, the former marketer of The Sims at EA; and Barry Cottle, the former head of EA Mobile. Of those, Schappert and Karp have both left Zynga.

Riccitiello was reportedly so incensed at the departure of EA executives for Zynga that he asked the EA legal team to pursue Zynga. In turn, Zynga says EA trumped up baseless claims to slow its competitor and make EA look better to its board of directors.

Zynga alleges that Riccitiello wrote an email to Schappert, saying that if an EA person approached him for a job, Schappert was to turn around and refer them right back to Riccitiello. Zynga says that it declined to participate in the no-hire pact, which it said is anti-competitive and violates antitrust laws. When Zynga refused to go along, EA allegedly became furious.

In the filing, Zynga said that Riccitiello wrote to Schappert, “Some of our people will always leave. But they are leaving for one place — Zynga. … I get that they can reach out. The question is what happens when they do. Listen and send them back to me, or their boss at EA. Or, listen, nod and lend a hand. … We are crossing into a place I don’t think we want to be. … But I believe you can and should find more talent outside of EA.”

As background, the Justice Department is probing whether the top executives of Silicon Valley companies colluded to keep hiring costs and salaries down by agreeing to stop poaching employees from each other. In a twist, Zynga’s own weak earnings report has prompted the departure of executives and employees who are leaving for other companies.

EA alleged in its suit against Zynga that its former executives likely gave confidential EA information to help Zynga make its alleged copycat game. Zynga says that EA knows that is not the case because EA formally released those executives from those claims before they began at Zynga.

Zynga alleged, “The truth is that despite years of trying to compete, and spending more than a billion dollars on acquisitions, EA has not been able to successfully compete in the social gaming space and was losing talent, particularly to social gaming leader Zynga. Desperate to stem this exodus, EA undertook an anti-competitive and unlawful scheme to stop Zynga from hiring its employees and to restrain the mobility of EA employees in violation of the spirit of the antitrust laws and California public policy. EA sought, by threat of objectively and subjectively baseless sham litigation, what it could never lawfully obtain from Zynga – a no-hire agreement that would bar Zynga’s hiring of EA employees.”

Zynga further said, “EA explicitly communicated to Zynga that, although Zynga’s past hiring was lawful, EA’s Chief Executive Officer John Riccitiello was ‘on the war path,’ ‘incensed’ and ‘heated’ and intent on stopping Zynga’s future hiring of EA employees. Mr. Riccitiello lamented the fact that Zynga was able to attract his talent with better compensation packages that EA just can’t match and feared losing additional executives and looking bad to his Board and shareholders. Zynga was told by EA’s legal team that Mr. Riccitiello had instructed them to obtain a no-hire agreement from Zynga that prohibited Zynga’s future hiring of EA employees. Absent such agreement, Mr. Riccitiello would direct a lawsuit to be filed against Zynga ‘knowing there was no basis and even though he loses.’ Zynga was explicitly told that Mr. Riccitiello aimed (a) to stop altogether or at least slow Zynga down from hiring “his people”; (b) to make Zynga spend resources and money on meritless litigation; and (c) to intimidate remaining EA employees and scare them from leaving.”

Zynga said that after years of trying, EA was unable to challenge it in the social game market, and Riccitiello had himself expressed admiration for Zynga, saying, “When it comes to Facebook, while we’re number two, I’d say we’re a distant number two. I mean, the other guys have lapped us three times,” referencing major social player Zynga. Zynga pointed out that EA’s daily active users on Facebook have fallen to 9 million across 51 titles, compared with Zynga’s 72 million daily active users.

Regarding Schappert, Zynga said he contacted them for a job in early 2011 and that Riccitiello “unsuccessfully applied enormous pressure” on Schappert to get him to stay at EA. Zynga said it was confident that it had done nothing wrong in hiring Schappert, but as a precaution, it took exhaustive measures to ensure that Schappert brought no confidential information to Zynga. In April 2011, Zynga entered into a settlement agreement with EA that reportedly cleared Schappert to work for Zynga. Zynga said it took the same measures to clear Karp to work at Zynga. During the Karp matter, EA’s general counsel reportedly said, “I have to get Zynga’s agreement not to hire any more EA employees or John is going to make me sue you.”

Zynga further said, Riccitiello’s goal was “to stop or dramatically slow Zynga down from hiring ‘his people’ by ‘putting friction in your hiring system’; to ‘make Zynga spend money’ responding to objectively baseless sham litigation if it tried to recruit and hire; ‘to scare’ remaining EA employees into remaining with EA.”

When Cottle left EA in January, 2012, Riccitiello reportedly said, “If Mr. Cottle reported back to work at EA, he would ‘pretend none of this ever happened,’ but if not, he would ‘rain hell’ on Mr. Cottle for the next several weeks even though Mr. Cottle had not engaged in any unlawful activity.”

After Cottle was hired, Zynga said, “Mr. Riccitiello was aware there was widespread dissatisfaction among his key talent, and that many of his executives were likely looking around and particularly interested in exploring opportunities with Zynga. Mr. Riccitiello was adamant about shutting down Zynga’s ability to hire any more of his employees. Mr. Riccitiello was placing ‘extraordinary pressure’ on the EA legal team to finally obtain a go-forward no-hire agreement – unrelated to Zynga’s hiring of Mr. Cottle – that would prohibit Zynga’s future ability to hire EA employees. If Zynga refused to agree to the no-hire, then Mr. Riccitiello wanted Zynga to know he would file an objectively and subjectively baseless sham lawsuit against Zynga for the express purpose of chilling Zynga’s future hiring of EA employees and discouraging EA employees from seeking out or accepting employment with Zynga.”

EA spokesman John Reseburg said, “This is a predictable subterfuge aimed at diverting attention from Zynga’s persistent plagiarism of other artists and studios. Zynga would be better served trying to hold on to the shrinking number of employees they’ve got, rather than suing to acquire more.”

Here’s the filings. The Riccitiello allegations are in the third filing.

[Photo credits: Dean Takahashi]

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But not according to the European Union. And, not according to Mozilla or Google.

At issue, according to an article posted by ComputerWorld, is secret APIs.

APIs, or application programming interfaces, are used by applications to plug in functionalities on a computing device or service. In an operating system, that might mean access to the file system, graphical outputs to a screen, or the ability to create and manage windows in an application.

Secret APIs are APIs that the owner of a system creates but does not share with partners or developers, giving the ecosystem creator potential advantages in application development. That’s exactly what Microsoft stands accused of doing.

“Internet Explorer 10 on Metro has special access to some very powerful APIs from over in Win32 land,” Asa Dotzler, a Mozilla spokesperson, writes in a personal blog post. Those APIs enable Microsoft’s browser to run quickly and efficiently on Javascript-intensive websites.

Unfortunately, however, non-Microsoft browsers on ARM processors are not getting the same treatment, Dotzler alleges. “Microsoft is giving its own Internet Explorer special privileges that no other Metro app, including other Metro browsers, are allowed.”

The upshot, according to Dotzler:

If we built Firefox for Windows ARM Metro, we would not have access to those powerful Win32 APIs and so we would be at an extreme disadvantage when compared to IE 10 for Metro. We could build a beautiful Firefox that looked really nice on Metro, but Firefox would be so crippled in terms of power and speed that it’s probably not worth it to even bother. No sane user would want to surf today’s web and use today’s modern websites with that kind of crippled browser.

Google will, of course, have similar concerns with its Chrome browser.

The EU will be investigating this claim, according to Reuters, and will be adding this new claim to the already-announced investigation into Microsoft’s alleged failure to provide a browser choice screen in a Windows 7 service page issued in 2011.

Image credit: Bjorn Hogland/ShutterStock

In an effort to avoid hefty fines from the European Union, Google has issued a proposal today to satisfy accusations that the search giant’s business practices are anti-competitive.

The EU first opened up an investigation on Google’s business practices in November 2010 after rival companies like Microsoft accused it of abusing its dominant position in the search market to boost its own advertising services. The EU sent Google a final warning to resolve the matter back in May.

Today Google Chairman Eric Schmidt sent a proposal letter to EU Antitrust commissioner Joaquín Almunia that addresses four main concerns regarding Google’s search business. Specifically, the things that Google is under fire for include: giving preferential treatment to its search engine within results, using reviews/ratings of competitors without explicit attribution, and making it difficult for its AdWords advertising partners to transfer their ads to advertising competitors.

Some of these antitrust claims are rather weak (and others not so much), but Google has a hefty incentive to hammer out an agreement with the EU. If it doesn’t reach a deal that’s favorable with the European body, it could face a fine of up to 10 percent of its global financial turnover.

We’ve reached out to Google for further comment and will update this post with any new information.

via Reuters; Photo via Vepar5 /Shutterstock

Europe’s second-highest court has upheld a massive antitrust fine against Microsoft for hindering competition, but it lowered the fine slightly by €39 million to €860 million ($1.1 billion), according to the Associated Press.

“The General Court essentially upholds the Commission’s decision imposing a periodic penalty payment on Microsoft for failing to allow its competitors access to interoperability information on reasonable terms,” the court said in a statement.

Microsoft initially was ordered in 2004 to share product information and code about its server software with smaller rival companies, but in 2008 the EU said Microsoft had not complied with the order and fined it €899 million. Micosoft appealed the decision and has been fighting since that time to have the fine thrown out or reduced. Apparently, it didn’t convince the court well enough to throw out the case, and the company will now end up spending a total of €1.64 billion on the case.

“Although the General Court slightly reduced the fine, we are disappointed with the Court’s ruling,” Microsoft said in a statement.

With this case coming to a close, Microsoft will now be in the clear (for now) with European regulators. In 2009, Microsoft entered into an agreement with governing bodies that resolved almost all of the EU’s competition concerns, minus this pending case. Notably, the bodies had been concerned about Internet Explorer being bundled with Windows was creating an unfair advantage. Microsoft agreed to give customers a range of browsers to pick from to end the scrutiny.

Steve Ballmer photo: Sean Ludwig/VentureBeat

The European Union’s antitrust chief has given Google a final chance to settle matter related to anti-competitiveness with its main search engine, according to a Reuters report.

The EU first opened up an investigation in November 2010 after rival companies like Microsoft accused Google of abusing its dominant position in the search market to boost up its own advertising services. If Google is found guilty, it could face a fine of up to 10 percent of its global financial turnover.

EU antitrust chief Joaquin Almunia said both regulators and Google are eager to reach a settlement, thus avoiding lengthy proceedings that risk becoming obsolete due to the rapid growth of technology, according to the report.

“I believe that these fast-moving markets would particularly benefit from a quick resolution of the competition issues identified. Restoring competition swiftly to the benefit of users at an early stage is always better than lengthy proceedings,” Almunia said. “Google has repeatedly expressed to me its willingness to discuss any concerns that the Commission might have without having to engage in adversarial proceedings, this is why today I’m giving Google an opportunity to offer remedies to address concerns that we have identified.”

In a letter to Google, Almunia is said to have given the search giant a matter of weeks to come up with a first proposal that would satisfy all the EU’s issues regarding anti-competitiveness.

EU flags photo via jorisvo/ShutterStock

Experts are saying Apple is likely to emerge victorious from a Department of Justice case regarding price fixing on e-books.

Apple was accused of conspiring to fix and raise prices on e-books along with five major publishers. The DOJ has been investigating the issue since last year and officially filed its lawsuit yesterday. The entire filing is included below, and since its filing, sixteen U.S. states have joined the suit.

Last year, Apple switched its pricing structure with publishers to an agency model, allowing those publishers to set their own prices on e-books while giving Apple a standard cut of the revenue. However, the deal also stipulates that e-books sold through the iTunes store cannot be sold at a lower price anywhere else on the Internet.

A cadre of law professors has explained to Cnet reporters that precedents for the DOJ’s case may actually give Apple the upper hand.

In fact, a few of the J.D.s think the DOJ has a better case against the publishers than against Apple. Precedents include a 1982 case pitting the DOJ against IBM (the case was abandoned as being “without merit”) and the DOJ’s 2001 attempt to split up Microsoft à la the disassembling of the Ma Bell conglomerate.

“If the CEOs of the various publishers got together in hotel rooms to discuss prices, they are sunk,” said antitrust author and University of Hartford professor emeritus Dominick Armentano. As far as e-book economics are concerned, the DOJ would have a much easier time proving the publishers’ antitrust behavior and wrongdoing than Apple’s.

However, this doesn’t mean Apple is guaranteed a win in court. “I’m not saying that Apple can smile and walk away from this,” said Notre Dame law prof Joseph Bauer. “It’s just that the government will have to show that Apple had some kind of involvement in the original arrangement.”

Image courtesy of NADIIA IEROKHINA, Shutterstock

Sixteen states have piled lawsuits on top of Apple, Macmillan, Penguin, and Simon and Schuster, four companies which were served with an antitrust lawsuit this morning by the Department of Justice.

The suit is led by Texas and Connecticut, which, unlike the DOJ, are demanding financial damages be paid. Other states include Alaska, Arizona, Colorado, Illinois, Iowa, Maryland, Missouri, Ohio, Oregon, Pennsylvania, South Dakota, Tennessee, Vermont and West Virginia and the Commonwealth of Puerto Rico.

The Department of Justice sued Apple and publishers Hachette, HarperCollins, Macmillan, Simon and Schuster, and Penguin this morning for its new “agency pricing” model. Apple previously had a flat rate for e-books in iTunes, similar to how it charges a flat $1.29 for most songs in the marketplace. With this new model, publishers are allowed to set their own prices on e-books in iTunes, and give Apple a 30 percent cut of the revenue. In general, this is actually positive for the publishers, but it went a step further. The publishers have been accused of conspiring with Apple to agree to not sell their e-books at a lower price anywhere else. That is to say, if the e-book is listed on iTunes as $13, it can’t be sold on Amazon for $10.

This lowers competition between online marketplaces, and it’s competition that drives prices down for consumers.

Thus far Hachette, Harper Collins and Simon and Schuster are said to have agreed to settle the case with the Department of Justice. Hachette and Harper Collins are the only two to have settled with the states thus far, offering a restitution to consumers. Macmillian, however, says it will follow the cases to court.

“The terms the DOJ demanded were too onerous. After careful consideration, we came to the conclusion that the terms could have allowed Amazon to recover the monopoly position it had been building before our switch to the agency model,” said Macmillan chief executive John Sargent in a letter today, “We made the change to support an open and competitive market for the future, and it worked.”

Court Documents from the Department of Justice

hat tip PaidContent; Justice image via Shutterstock

The U.S. Department of Justice has officially filed an antitrust lawsuit against Apple and a handful of major book publishers, including Hachette, HarperCollins, Macmillan and Penguin.

The DOJ is charging the companies for anti-competitive practices regarding the pricing and sales of e-books, as VentureBeat previously reported. Last year Apple switched its prices structure with publishers to an “agency model,” which allowed those publishers to set their own prices on e-books while giving Apple a standard cut of the revenue.

The portion of the deal in question states that e-books sold through the iTunes store cannot be sold at a lower price anywhere else on the Internet. That’s pretty good move for Apple, because it means that e-books listed in iTunes cannot be undersold. However, it also creates higher prices for consumers and stifles competition.

The DOJ is said to have reached an accord with Simon & Schuster, Hachette, and HarperCollins to settle allegations that they conspired with Apple Inc. to set prices of digital books, according to a Bloomberg report that cites unnamed people familiar with the matter.

The Justice Department has been investigating the matter since last year. Last month, the DOJ warned all the companies involved that an antitrust suit would happen if things didn’t change.

The outcome of the DOJ lawsuit could mean cheaper prices on e-books for consumers from the publishers involved. It could also mean lower revenues for publishers as well as book authors.

We’ve embedded the Justice Department’s full antitrust case document below for further inspection.

In an effort to protect consumers from heightened e-book prices, the Department of Justice could sue Apple Wednesday morning.

The DOJ is concerned with a deal between Apple and five other publishers — Simon & Schuster, Hachette Book Group, Penguin Group, Macmillan, and HarperCollins. The deal states that e-books sold through the iTunes store cannot be sold at a lower price anywhere else on the Internet, according to the Wall Street Journal. The deal is a good one for Apple, in that e-books listed in iTunes cannot be undersold. However, it also creates higher prices for consumers and stifles competition.

The Department of Justice launched an investigation into the e-book pricing last year, and eventually threatened the group of six with a lawsuit in March. Reuters is now reporting that, while three of the group agreed to settle the issue, the remaining three — including Apple — could face a lawsuit. The three publishers in favor of a settlement are Simon & Schuster, HarperCollins, and Hachette Book Group, according to another report by the Wall Street Journal.

Apple, which hit a market cap of $600 billion today, can certainly afford the legal fees, but it might not be worth the antitrust battle. Whether Penguin and Macmillan will be involved in the suit remains to be seen.

via Reuters

Expedia and TripAdvisor have just filed complaints about Google’s travel search features as part of a larger antitrust probe the search giant is facing in the European Union.

Altogether the European Commission has received 13 formal complaints, including the new complaints brought by the online travel companies, EC spokesman Antoine Colombani told press today. The commission’s probe of Google began in November 2010.

Sources for Agence France-Presse said the Expedia and TripAdvisor complaints centered around Google Flight, a new service that launched in September 2011 and didn’t include destinations outside the U.S. until just two weeks ago, when Google Flight opened trips to Europe and other regions.

At the end of 2011, Google chairman Eric Schmidt paid a visit to Brussels to meet with European Commissioner Joaquín Almunia in person. At that time, a Google spokesperson told VentureBeat the company had already turned over thousands of documents as part of the investigation and did not expect any formal censure from the EC.

The probe kicked off when several parties brought complaints against Google for taking unfair advantage of its domination in the world of web search. These parties claimed Google was decreasing the search ranking of unpaid search results. For example, the claims stated that Google might lower the ranking of a shopping and product search website while increasing the ranking of Google Shopping results.

Another allegation is that Google set a lower Quality Score for its competitors’ sponsored links (Quality Scores help the company to set its ad prices; a lower score would mean a lower ad price). Finally, the search company is accused of setting up “exclusivity obligations on advertising partners, preventing them from placing certain types of competing ads on their web sites, as well as on computer and software vendors, with the aim of shutting out competing search tools.”

The EC’s office should be ready to make public its findings as soon as this month. Saying a preliminary report may be completed after Easter, Alumnia told press last week, “We want to advance in our investigation, but we want to advance on a solid basis, not because of a letter or some pressures.”

The European Union’s antitrust Commission has opened up two new investigations that will explore whether Motorola Mobility is unfairly licensing some of its patents, the organization announced today.

The investigations follow complaints from two of the biggest technology companies in the world. Back in February, Apple filed an official complaint against Motorola Mobility for violating agreements to fairly license standards-essential patents. Specifically, Apple focused on the 17,000 patents Google will get its hands on when its purchase of Motorola Mobility is complete. Weeks later, Microsoft  filed an official complaint with the EU against Motorola, focusing on its patents related to web videos.

All the Motorola Mobility patents in question are to be licensed on fair, reasonable, and non-discriminatory (FRAND) terms. The FRAND classification means the owner of a patent must license it to other companies for a fee because the technology is considered essential to an industry. Both Apple and Microsoft claim Motorola isn’t abiding by these terms.

The antitrust commission explained:

“Following complaints by Apple and Microsoft, the Commission will investigate, in particular, whether by seeking and enforcing injunctions against Apple’s and Microsoft’s flagship products such as iPhone, iPad, Windows and Xbox on the basis of patents it had declared essential to produce standard-compliant products, Motorola has failed to honour its irrevocable commitments made to standard setting organisations.”

It looks sort of like both Microsoft and Apple are taking advantage of Motorola Mobility changing hands to one of their biggest rivals. U.S. and E.U. regulators approved Google’s purchase of the company for $12.5 billion in February.

Euro sign photo via Yurchyks/Shutterstock

Back in November 2010, the European Commission first opened up an investigation about the matter after rival companies like Microsoft accused Google of abusing its dominant position in the search market. If Google is found culpable, it could face a fine of up to 10 percent of its global financial turnover.

“We are concerned that the dominant search engine, Google, may have abused its position in the search market to direct users to its own services and secondly to reduce the visibility of competing websites and services,” wrote head of the BEUC Monique Goyens in a letter to EU antitrust commissioner Joaquín Almunia. “Google continues to expand its areas of activities and develop its own services and products. Given its role as gatekeeper to the internet, Google is in a unique position to restrict access to its competitors and direct traffic to its own services.

The BEUC is one of many groups pressuring the EU to submit its findings sooner rather than later, in order to minimize damages to other European businesses if Google is found guilty.

The findings from the commission will essentially be a list of objections it has to Google’s practices. The search giant will then have a chance to respond to those objections prior to any official ruling.

But despite pressure from outside groups, EU chief Almunia said a decision won’t be reached until after the Easter holiday on April 8.

“Maybe after Easter we will have some more clear consideration,” Almunia said in a statement reported by Reuters. “We want to advance in our investigation but we want to advance on a solid basis, not because of a letter or some pressures.”

EU flags photo via jorisvo/ShutterStock; Via TechCrunch

July 9-10, 2013
San Francisco, CA

Early Bird Tickets on Sale

Updated (1:12pm PT) with Apple’s decline to comment.

Apple is being subpoenaed by the U.S. Federal Trade Commission in its antitrust investigation of Google.

Apple declined VentureBeat’s request for comment.

According to Bloomberg, the FTC has requested documents related to Apple’s primary use of Google’s search function on its mobile devices: the iPhone, iPod, and iPad. Subpoenas have also been delivered to other handset makers with a Google relationship, according to the news site’s sources.

The focus seems to be on mobile advertising and whether Google is using its position of leadership to grab deals with mobile handset makers. These deals make Google the default search setting on mobile phones. With these deals in place, Google would ultimately have the most eyes on its mobile advertising, and thereby get the most revenue. This would leave competitors, such as Microsoft’s Bing, scrambling for scraps.

Recently, Google caused some antitrust rumblings outside of the mobile scene when it launched Search Plus Your World. This new search integration pushes results from its social network Google+ to the top of a person’s search query. For instance, search users will now see keyword-relevant photos, profiles, and posts from Google+ in their regular stream of results. Social competitor Twitter called the change “bad for the Internet,” complaining that Google did not include tweets into its search results. These social results can be turned off, however.

This is far from the only time Google has been investigated by the U.S. government. Prior to launching its newest privacy policy, members of Congress reached out to Google, concerned about what the new policy might mean for consumers. Google explained that it was trying to simplify its privacy policies, which at the time numbered in the 70s. It also meant being able to share customer data from one Google product to the next for advertising purposes. The company was not barred from making these changes, which it did on March 1st.

Despite the antitrust concern, the U.S. Department of Justice as well as the European Union both approved Google’s acquisition of mobile handset maker Motorola Mobility. The executed deal makes Google more vertical in its mobile arm, a cause for concern among Android smartphone creators who are now in competition with the mobile, social and search giant.

The FTC began its antitrust investigation against Google last year.

This story is developing. We have reached out to Google and the FTC and will update upon hearing back.

via Bloomberg News, Image courtesy of laihui

The company has been involved in an ongoing antitrust probe from the FTC since at least June 2011. This inquiry was intended to “examine fundamental issues relating to Google’s core search advertising business.”

Now, companies like Twitter have raised concerns that Google’s new search results, which integrate and highlight content from Google+, may give the company an unfair advantage that hurts consumers.

Twitter, which has its general counsel looking into the issue, says that Twitter-specific search terms are no longer giving users Twitter-specific search results because of the Google+ integration.

A Twitter representative wrote to VentureBeat in an email, “For years, people have relied on Google to deliver the most relevant results anytime they wanted to find something on the Internet… News breaks first on Twitter; as a result, Twitter accounts and Tweets are often the most relevant results.

“We’re concerned that as a result of Google’s changes, finding this information will be much harder for everyone. We think that’s bad for people, publishers, news organizations and Twitter users.”

Bloomberg reports today that two anonymous sources confirm the FTC probe has broadened beyond search ads to include Google+.

Google is also under an ongoing antitrust investigation in Europe. Google chairman Eric Schmidt recently visited Brussels to meet with European Commissioner Joaquín Almunia about the inquiry.

“We frequently meet with policy makers and regulators around the world. We’re always happy to discuss issues affecting our industry and explain how our business works,” the company said in an official statement at that time.

With Google’s new mode of searching, social media results powered by Google+ show up among regularly ranked links and images.

However, searching for a Twitter handle with these Google+ results included won’t necessarily get you to a Twitter page. Instead, you might be shown Google+ profiles instead — a move that doesn’t seem fair or competitive to the Twitter team.

Twitter general counsel Alex Macgillivray tweeted today, “Folks asked for examples. Here’s what a user searching for ‘@wwe’ will be shown on the new @Google.” He included the screenshot below:

While Twitter couldn’t provide any additional comment, a company spokesperson said these search results speak for themselves — and as you can see, searching for this particular Twitter handle doesn’t seem to yield much in the way of Twitter.com results.

We thought we might see non-Google+ social results by turning off Google+-powered search altogether. However, this wasn’t the case. Searching for “@wwe” in a non-Google+ search session yielded the same results. Whereas a day or two ago, we could easily find Twitter profiles in Google search, these results from Twitter.com are now shoved down on the page and designed to be ignored by users.

Granted, you can find Twitter-specific results easily if you search for a name or handle and add “Twitter” to the query (for example, searching for “wwe twitter” will take you directly to the brand’s Twitter profile). But as Twitter pretty much owns the “@” symbol and its place in online handles, it seems odd to show Google+ results for an intentionally Twitter-focused query.

Yesterday, a Twitter rep sent us the following statement in an email:

For years, people have relied on Google to deliver the most relevant results anytime they wanted to find something on the Internet.

Often, they want to know more about world events and breaking news. Twitter has emerged as a vital source of this real-time information, with more than 100 million users sending 250 million Tweets every day on virtually every topic. As we’ve seen time and time again, news breaks first on Twitter; as a result, Twitter accounts and Tweets are often the most relevant results.

We’re concerned that as a result of Google’s changes, finding this information will be much harder for everyone. We think that’s bad for people, publishers, news organizations and Twitter users.

The statement struck us as uncharacteristically pointed, and we wondered what would come of it. Apparently, those were fighting words from the startup to the search incumbent, and having legal counsel look into the matter is only a first step.

Google launched these social search features just yesterday. In addition to the usual assortment of links, pictures, news items and shopping results you’d see in a typical Google search results page, logged-in Google+ users can now also find several kinds of Google+ content sprinkled in among the normal search results. There are even promoted Google+ profiles and pages — an attempt to compete with Facebook’s highly successful social ads, we’re betting.

Even as Twitter sends out its examples, some commentators are already murmuring about possible antitrust violations.

“Google has had a form of social search in its main results for a while, but this is a significant redesign that gives a lot more prominence to social and to Google’s own social product, Google+,” wrote analyst Rocky Agrawal on VentureBeat yesterday.

“The biggest losers are Twitter, Facebook, Yelp and TripAdvisor. Twitter and Facebook stand to lose if brands choose to move some of their efforts to Google+ to benefit from enhanced Web search rankings.”

In a conversation with VentureBeat, a Google spokesperson said, “As always, our goal is to provide you with the most relevant and comprehensive search results possible. That’s why for years now we’ve been working with our social search features to help you find the most relevant information from your friends and social connections, no matter what site that content is on.

“However, Google does not have ready access to incorporate all the information from some sites, so it’s not possible for us to surface all that content in real time.”

In other words, if Twitter wanted to see its pages appearing in Google’s social search results, it shouldn’t have revoked access to the Twitter firehose back in July 2011 or started using nofollow tags for links shared on Twitter — but that’s another story altogether.

The course of real-time search never did run smooth, and we’ll be following this testy war of words to its conclusion. Stay tuned.

Google has had a form of social search in its main results for a while, but this is a significant redesign that gives a lot more prominence to social and to Google’s own social product, Google+.

So is SPYW part of an evil attempt by the “Don’t-be-evil” company to rig search so that it always points back to Google? Or is it a legitimate response to a market need?

I’d argue, it’s a bit of both.

Social search has been the Holy Grail of the search business — people have been looking for it since the early days of search.

(Disclosure: I worked on social search when I was at AOL. I’m also an inventor on an AOL patent that may cover parts of social search.)

The premise of social search is simple: Content shared by your friends is more relevant than content shared by random people you don’t know. It also fits the mental model that many use in the real world: When you’re looking for a referral for a plumber or a dentist, you start by asking your friends. If that doesn’t work, you turn to search.

People have been doing a form of social search in a very inefficient way by using Facebook status updates to pose questions to friends. When I’m about to go on a trip, I’ll post a status message asking friends for advice on things to do and places to eat. For each post, I usually get 5-10 responses.

This annoys a friend who works at Yelp, who almost always responds that I should check Yelp instead. But one thumbs up from someone I know is worth a hundred positive reviews from random strangers. I can quickly evaluate the result based on what I know about the responder. If my friend Dariusz recommends a restaurant, I know I can go there without thinking twice because he’s a foodie and our tastes overlap. But I also know to discard the recommendations of another friend whose favorite place is Chick-fil-A.

With SPYW, Google automates this process and makes it instantaneous. Instead of relying on users to actively respond to my request, I get access to all of the previous activity they’ve shared. If a second- or third-degree friend shares content about a topic, I instantly have access to it.

Think of it as word-of-mouth on steroids. In the real world, I might remember the travel histories of 5 to 7 of my close friends. With SPYW, I have access to the travel-related content of hundreds of friends. There’s an ancillary benefit: It helps to strengthen my relationships with those friends because I can discover shared interests.

So SPYW is a great product and represents a very important milestone in search. But a lot of people aren’t happy about it. Luther Lowe, Yelp’s director of business outreach and government affairs, expressed a concern many share when he tweeted:

A quality [review] losing prominence in search for not being published on GOOG’s [Places]  is absurd.

Lowe’s tweet was retweeted by Yelp CEO Jeremy Stoppelman, who was a star witness in September’s hearings about Google and antitrust before the Senate Judiciary Subcommittee on Antitrust, Competition Policy and Consumer Rights.

Google faced that hearing because of antitrust concerns that the secret algorithms it uses to rank search results were manipulating those results to fit the interests of the company. In defending Google at that hearing, Google executive chairman Eric Schmidt told Congress that the algorithmic results are untainted. That is true. But it’s also not a meaningful statement, because no one sees algorithmic results.

Atop and alongside the algorithmic results, you’ll see special content that favors Google products. Queries for stock quotes, maps, products and others highlight this content.

Consider the following search result screen shot, for example.

Yelp, which is a top-ranked site for this result and has some of the best local content, gets a fairly standard treatment. Google gets nearly the entire right side of the screen, with a map and pictures.

Schmidt made the argument at the hearings that Google is delivering what consumers want. That’s a fair point — a consumer doing this search would likely want a map, hours of operations and pictures. (In this case, 4 of the 5 pictures that are used are actually from urbanspoon.com, but clicking on the thumbnails takes you to the Flour + Water Google Places page.)

Does Yelp just suck and not have pictures from flour + water? Nope. Pictures are one of Yelp’s greatest assets. For flour + water, Yelp has 232 pictures; that’s 231 more pictures than Google. But you wouldn’t know it from Google’s Web search results.

How do you tell other results from an algorithmic result as a consumer? They’re not labeled. Even experts can have trouble figuring it out. But consumers consider them to be algorithmic results. More accurately, consumers don’t care — they trust Google to be impartial and bring them the best of the Web.

But Google treats its own content with special presentation that other sites don’t get. It  blends in to its algorithmic results content from maps, news and social search. A result from Google Places can take the screen real estate of 6 or 7 algorithmic results.

If you happen to follow an account on Google+ and that person posts content that matches your search term, it will move up in the rankings for you. In the following example, I did a search for “Rick Santorum” and the eighth result is a story by search guru Danny Sullivan. It showed up there because I follow Danny on Google+.

As you can see, Google+ gets preferential treatment here. 7 of the 8 links in this result go to Google+, including the most prominent links. Only one of the links goes to the site that Danny shared. The entire block gets as much real estate as about four standard Google results. The display alone will significantly increase the likelihood of a click.

When I do that search while logged out, that same result doesn’t appear in the first 5 pages of results. That’s a significant disadvantage as many searchers don’t go past the first page.

This creates an incentive for a) people to create an account on Google+ and b) people to share articles on Google+.

These incentives are especially critical right now when Google+ is struggling to gain meaningful adoption. On its own merits, I would not currently recommend to my clients that they spend time on Google+. But because of the potential effect on Google Web search results, I think it now makes sense for many businesses.

As an author, I have long avoided meaningful use of Google+ because it didn’t solve a problem for me. (See my Bloomberg West debate with Robert Scoble about Google+.) But with the launch of SPYW, I’m reconsidering that because I want to be where my audience is — and that’s on Google search.

Google provides enhanced treatment for some links shared on Twitter, but this seems to be reduced now that Google is no longer licensing Twitter’s firehose.

In addition to the explicit incentives that Google creates, there are the implicit incentives created by Google’s black-box ranking algorithms. Legions of SEOs with no inside knowledge Make Shit Up. They advise clients how they can please Google’s algorithm Gods, often by making more use of other Google properties. (Which, of course, said SEOs can assist them with.)

The way Google packages its ad products also means that SPYW will likely let the company help itself to a bigger portion of available ad dollars.

Google bundles several discrete ad products together. In some cases, it is impossible for advertisers to opt out of certain properties that they might not want to buy.

In other cases, Google offers a wide range of other ad products that can be easily purchased with the primary Web search advertising buy. Advertisers can easily buy into the contextual ad network, mobile ads, etc. From an efficiency standpoint, this makes things much easier for advertisers. But the net effect is that Google can take more share of limited advertising dollars.

Ben Edelman, an assistant professor at Harvard Business School, wrote a great analysis of how Google’s practices affect advertisers. That was a topic that didn’t get much consideration in the Senate’s hearings.

So who wins and who loses with the launch of  SPYW?

The clear winner in SPYW is Google+. This level of integration illustrates a commitment to Google+ that many questioned with the failures of Google Buzz and Wave.

The biggest losers are Twitter, Facebook, Yelp and TripAdvisor. Twitter and Facebook stand to lose if brands choose to move some of their efforts to Google+ to benefit from enhanced Web search rankings.

Facebook has presented a special challenge to Google. Because much of the content in Facebook is private, Google’s crawlers can’t access it. That’s an important loss of signal. While real people have been sharing quality content on Facebook, spammers have been gaming Google’s results on the Web. SPYW significantly dampens the effects of spammers and has the potential to force Facebook to open some of its content to crawlers.

Yelp, which recently filed to go public, and TripAdvisor, which was spun out of Expedia in December, are both heavily dependent on Google for Web traffic.

On the potential plus side, consumers stand to win if Google’s move finally forces Twitter to build a usable search product for tweets, something it has long neglected.

This post was adapted from a series on Google and antitrust published on Rocky Agrawal’s blog, reDesign.

Rocky Agrawal is an analyst focused on the intersection of local, social and mobile. He is a principal analyst at reDesign mobile. Previously, he launched local and mobile products for Microsoft and AOL. He blogs at http://blog.agrawals.org and tweets at @rakeshlobster.

Twitter is not happy with Google‘s new social search features. So unhappy, in fact, that the company is calling it a “bad day for the Internet” and media overall.

“We’re concerned that as a result of Google’s changes, finding this information will be much harder for everyone,” the company said in a statement. “We think that’s bad for people, publishers, news organizations and Twitter users.”

Google introduced its new “personalized,” Google+-enhanced search today. Instead of providing regular Internet results such as photos, videos, news and shopping results that have been the norm for Google’s web search, now the company is pushing Google+ content to the first page of your search queries. A search for photos will push photos from your Google+ friends to the top of the results. Looking for a person? Their Google+ profile will show as a suggested result.

Larry Page, Google’s chief executive officer, recently blogged on the social network that Google had delivered the “+” and was now injecting more “Google.” Now it seems Google+ is starting to push a little of the “+” into the company’s other products.

Twitter, which once had related tweets show up in Google search results, though it does not anymore, is not happy with the change. Many would argue that the short length of tweets, 140 characters, isn’t enough content to act as a “result,” though Twitter adamantly disagrees.

“As we’ve seen time and time again, news breaks first on Twitter; as a result, Twitter accounts and Tweets are often the most relevant results,” statement continued.

Perhaps it is because of its brevity that news is broken so frequently on the site, and can be valuable with the addition of multimedia such as video, photos, and links. Alex Macgillivray, Twitter’s general counsel, tweeted this was a “bad day for the internet” and having worked for Google said, “I can imagine the dissension at Google to search being warped this way.”

Google has not sat idly by, however. The company responded to Twitter on its official Google+ page. The statement reads, “We are a bit surprised by Twitter’s comments about Search plus Your World, because they chose not to renew their agreement with us last summer, and since then we have observed their rel=nofollow instructions.”

Twitter blocked Google from being able to access its data feed of public tweets in July, causing Google to take its real-time search offline completely. The company blames this as one of the reasons why other social results do not show up in searches. One Google spokesperson told VentureBeat:

“For years now we’ve been working with our social search features to help you find the most relevant information from your friends and social connections, no matter what site that content is on. However, Google does not have access to crawl all the information on some sites, so it’s not possible for us to surface all that content. Google also doesn’t have access to the social graph information from some sites, so it’s not possible to help you find information from those people you’re connected to.”

Google has faced antitrust opposition for months now. In July, the company sent chairman Eric Schmidt to testify in front of the Senate Judiciary antitrust committee about claims that the company was not being fair in its web-based search and other products. Shortly before that, the company admitted to a probe by the Federal Trade Commission (FTC). Why target Google? Well, the company has obvious dominance over the search market and is gaining much popularity in the mobile phone industry. Having this kind of influence requires a level playing field for other companies, less Google become a monopoly.

Recently the company released a new flight search tool, which raised eyebrows among air travel aggregators such as Orbitz, Kayak and even newcomer Hipmunk. Google introduced the tool, which allows you to search for tickets without leaving the Google search website, in September and starting pushing the tool to the top of search results in December. With Google accounting for a good amount of traffic to other travel sites, taking the top search result spells antitrust issues.

Facebook declined to comment in an e-mail to VentureBeat.

via All Things D, Image via VGramatikov/Shutterstock

EU investigators have been reviewing the deal for some time, but they are suspending that review to gather more information about the proposal and determine whether or not such an acquisition would harm competition between manufacturers of Android smartphones and other devices.

“The European Commission has asked for more information, which is routine, while they review our Motorola Mobility acquisition,” a Google spokesperson told VentureBeat in an email. “We’re confident the Commission will conclude that this acquisition is good for competition and we’ll be working closely and cooperatively with them as they continue their review.”

The EU officials reviewing the deal had set a provisional deadline of January 10 for their decision. It is now uncertain whether that deadline will be met.

The acquisition is also being reviewed by U.S. authorities. The U.S. Department of Justice has not offered any preliminary indications of whether or not the deal passes muster.

Google first announced the deal (and its $12.5 billion price tag) back in August 2011.

While some people, including a few VentureBeat staffers, have doubted whether Google can be fair to other equipment manufacturers while maintaining ownership of Motorola, Google says the survival of Android depends on that kind of fairness.

In its arguments in favor of the merger, Google says anti-trust behaviors are impossible if the company plans to keep the Android ecosystem alive and competitive. As the deal is currently structured, Motorola Mobility would operate as a completely separate entity from Google and would only receive the same access to Android OS builds that other manufacturers, such as Samsung and HTC, currently have.

The main motivation for the acquisition is related to patents: Android and Android-using cell phone manufacturers are currently under a sustained volley of lawsuits over the operating system itself. At the start of these lawsuits, Google held fewer than 1,000 patents. For contrast, Apple, Microsoft and other companies suing Google and its partners have somewhere in the range of 20,000 to 40,000 patents each.

Motorola Mobility holds roughly 17,000 patents, many of them pertaining to very early cell phone technology. The company also has an additional 7,500 patents pending approval. Having access to such a treasure trove of legal gold would certainly help Google sustain its mobile operating system through these trying times.

Image courtesy of laihui.