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San Francisco, Calif — Feb 03, `08 — Yahoo! would consider a business alliance with Google as one way to rebuff a $44.6 billion takeover proposal by Microsoft, Reuters reported citing a source familiar with Yahoo’s strategy said on Sunday.

The report further said, “a second source close to Yahoo said it had received a procession of preliminary contacts by media, technology, telephone and financial companies. But the source said they were unaware whether any alternative bid was in the offing.

Few natural bidders exist beside Google that could engage in a bidding war, and Google would be unlikely to win approval from antitrust regulators, some Wall Street analysts said on Friday.

Yahoo!’s efforts to find an alternative bidder could simply be a measure to pressure Microsoft to boost its bid, which valued Yahoo at $44.6 billion when first announced on Friday.” More at Reuters.

In response to Google’s foul cry over Microsoft’s Yahoo! bid, Microsoft has released a statement from Bard Smith, General Counsel:

REDMOND, Wash — Feb 03, `08 — The combination of Microsoft and Yahoo! will create a more competitive marketplace by establishing a compelling number two competitor for Internet search and online advertising. The alternative scenarios only lead to less competition on the Internet.

Today, Google is the dominant search engine and advertising company on the Web. Google has amassed about 75 percent of paid search revenues worldwide and its share continues to grow. According to published reports, Google currently has more than 65 percent search query share in the U.S. and more than 85 percent in Europe. Microsoft and Yahoo! on the other hand have roughly 30 percent combined in the U.S. and approximately 10 percent combined in Europe.

Microsoft is committed to openness, innovation, and the protection of privacy on the Internet. We believe that the combination of Microsoft and Yahoo! will advance these goals. More at Microsoft.

Feb 03, `08 — In a statement released today on Google’s press center, Mr. David Drummond, Google’s Senior Vice President, Corporate Development and Chief Legal Officer cries foul over Microsoft’s Yahoo! bid.

Mr. David Drummond in his rude and venomous language falsely accuses Microsoft of making ” hostile bid ”. He says, “So Microsoft’s hostile bid for Yahoo! raises troubling questions. This is about more than simply a financial transaction, one company taking over another.”

Now Mr. Drummond do you even know or have any remote idea how many take overs Google have made in last five years or so ??

He also says, “Users benefit from constant innovation. It’s what makes the Internet such an exciting place.”

Mr. Drummond do you actually mean supporting rampant piracy through YouTube, when you say “Users benefit from constant innovation” ??

Do you even have any remote idea of how many pirated videos of Movies, TV Shows, Dramas, Music Videos, etc are being hosted at any given moment ??

Mr. Drummond further goes on to say, “This hostile bid was announced on Friday so there is plenty of time for these questions to be thoroughly addressed.”

Mr. Drummond when even Yahoo! in its official response refers to Microsoft’s proposal as “an unsolicited proposal”, who are you in the world to refer that proposal as “hostile” ??

And Mr. Drummond when you say, “It’s about preserving the underlying principles of the Internet: openness and innovation”, do you actually mean that buying DoubleClick despite the immense privacy concerns from within the US and from Europe ??

If Google were to believe in its well publicized but never implemented ideology of ” Do NO Evil ” then Mr. Drummond why in the world Google needed to buy YouTube or DoubleClick? Google was already making tons of millions anyway… Google could have let YouTube / DoubleClick make money for themselves or let some one else buy ‘em (of course you would have stopped Microsoft from buying any of ‘em either, right?)

So Mr. Drummond before making entirely false claims using rude and venomous language, it would have been better if you have just took a little look at Google’s own past 10 years.

Or may be fear of loosing monopoly and loosing world dominance makes you speak highly rude & venomous language along with highly exaggerated claims and false acquisitions ??

Google’s statement on Microsoft’s bid for Yahoo!

Feb 03, `08 — Nicki Dugan on Yahoo’s Corporate Blog ( Yodel Anecdotal ) said that, “process like this is fluid and can take quite a bit of time” to weigh its strategic options, including keeping the company independent, following Microsoft’s $44.6 billion offer to buy the company.

Here is the complete posting:

Our response to Microsoft’s proposal

Posted February 1st, 2008 at 1:11 pm by Nicki Dugan, Blog Editor

Number of Comments 17 Comments / Filed in: Trends & News

As I’m sure you’ve heard by now, Microsoft made an unsolicited proposal to acquire Yahoo! yesterday evening. Since then, we’ve gotten quite a number of questions about what this means for Yahoo!. Right now our board of directors is evaluating the proposal and looking at all of our strategic alternatives, including maintaining Yahoo! as an independent company.

A review process like this is fluid and can take quite a bit of time, so while there’s not much we can say right now, we did want to refer you to this brief FAQ for more information.

Nicki Dugan
Blog Editor

Tagged: microsoft, news

In a media response to a frequently asked question about whether Yahoo would seek proposals from other companies, Yahoo! press room said it was going to evaluate all options.

Yahoo!’s Media Response:

FAQ: Unsolicited Proposal From Microsoft

Q1. How is Yahoo! responding to Microsoft’s proposal?
The Yahoo! Board is undertaking a deliberate review process. They’re going to take time to thoroughly evaluate the proposal in the context of Yahoo!’s strategic plans. This will include evaluating all of the Company’s strategic alternatives – including maintaining Yahoo! as an independent company. That process will take some time, but the Board will ultimately pursue the option that it believes can best maximize value for our shareholders.

Q2. How long will the Board’s review process take?
A review process like this is fluid, and it can take quite a bit of time.

Q3. Will the Board seek proposals from any other companies?
The Board is going to evaluate all of Yahoo!’s strategic alternatives and pursue the option that it believes can best maximize value for our shareholders.

Q4. What would a deal like this mean for Yahoo!’s users, advertisers, publishers, partners and people?
Yahoo!’s Board is going to evaluate all aspects of this proposal carefully and promptly in the context of the company’s strategic plans and alternatives. So it wouldn’t be appropriate to speculate about the potential benefits or challenges of a deal. But the review process that’s underway won’t have any impact on our efforts to deliver value to all of our users, advertisers, publishers and partners – as well as new and exciting opportunities to our employees.

Citing analysts, Reuters reported that, “Comcast Corp, Viacom Inc and General Electric Co among possible bidders, although they also said few companies had the balance sheet to compete with Microsoft or were as natural a fit for Yahoo.”

More at Yahoo! here and here.

WASHINGTON — Feb 01, `08 — US and European antitrust regulators aren’t likely to prevent Microsoft from buying Yahoo, analysts said Friday, though scrutiny of the deal could drag on for months, the AP reported.

A major factor weighing in Microsoft’s favor, analysts said, is Google’s dominance in the online search and advertising businesses — the two areas regulators are likely to focus on when weighing market power issues raised by the nearly $45 billion unsolicited bid.

The Justice Department said it is “interested” in reviewing competition issues raised by Microsoft’s surprise offer. The Federal Trade Commission and European Union officials declined to comment. If the deal goes through, analysts expect Congress and European regulators to review the combined company’s increased competitive edge.

“I don’t see this just sailing through, regulators will look at it,” Ted Henneberry of the London law firm Heller Ehrman said. But even after a review that could take up to six months, he said a Microsoft-Yahoo combination isn’t likely to be stopped because the new entity’s share of the online ad space would still be dwarfed by Google, which already controls nearly 60 percent of the U.S. search market.

“The fact that Google dominates this business will be a big factor in (Microsoft’s) favor in trying to get this approved by the regulators,” said Keith Hylton, a professor of antitrust law at Boston University. More at AP.

Dec 25, `07 — BBC News is reporting on British Airways being accused of colluding in setting prices of fuel surcharges and other levies in the provision of air freight services.

“BA confirmed it received a letter of complaint from European Union regulators, alleging that it was part of a suspected air freight cartel. The complaints were also sent to Germany’s Lufthansa, Air France-KLM and Scandinavia’s SAS. The airlines have the right to respond, but if found guilty, they face fines.

The European Commission that it had sent official letters, known as statements of objection, to a number of air freight firms, concerning “violation of EU rules on restrictive business practices”.

Officials did not name the specific airlines involved, but BA, Air France-KLM and SAS confirmed they had each received the European Commission letter.” More at BBCNews.

Brussels — On Thursday, Dec 20, the Protocol Freedom Information Foundation (PFIF), a non-profit organization created by the Software Freedom Law Center, signed an agreement with Microsoft to receive the protocol documentation needed to fully interoperate with the Microsoft Windows workgroup server products and to make them available to Free Software projects such as Samba.

Microsoft was required to make this information available to competitors as part of the European Commission March 24th 2004 Decision in the antitrust lawsuit, after losing their appeal against that decision on September 17th 2007.

After paying Microsoft a one-time sum of 10,000 Euros, the PFIF will make available to the Samba Team under non-disclosure terms the documentation needed for implementation of all of the workgroup server protocols covered by the EU decision.

Although the documentation itself will be held in confidence by the PFIF and Samba Team engineers, the agreement allows the publication of the source code of the implementation of these protocols without any further restrictions. This is fully compatible with versions two and three of the GNU General Public License (GPL). Samba is published under the GNU GPL which is the most widely used of all Free Software licenses. In addition it allows discussion of the protocol information amongst implementers which will aid technical cooperation between engineers.

Under the agreement, Microsoft is required to make available and keep current a list of patent numbers it believes are related to the Microsoft implementation of the workgroup server protocols, without granting an implicit patent license to any Free Software implementation.

No per-copy royalties are required from the PFIF, Samba developers, third party vendors or users and no acknowledgement of any patent infringement by Free Software implementations is expressed or implied in the agreement. More at Samba.

Brussels — Dec 21, `07 — The European Commission said on Friday it has contacted a number of companies regarding their alleged participation in an air freight cartel.

The European Commission can confirm that a Statement of Objections has been sent to a number of companies, concerning their alleged participation in a cartel in the provision of airfreight services, in violation of EU rules on restrictive business practices (Article 81 of the EC Treaty and Article 53 of the Agreement on the European Economic Area).

Procedural background

A Statement of Objections is a formal step in Commission antitrust investigations in which the Commission informs the parties concerned in writing of the objections raised against them. The addressee of a Statement of Objections can reply in writing to the Statement of Objections, setting out all facts known to it which are relevant to its defense against the objections raised by the Commission. The party may also request an oral hearing to present its comments on the case.

The Commission may then take a decision on whether conduct addressed in the Statement of Objections is compatible or not with the EC Treaty’s antitrust rules. Sending a Statement of Objections does not prejudge the final outcome of the procedure. More at European Commission.

It named no companies in the statement but Scandinavian airline SAS said earlier on Friday it had received a statement of objections accusing the airline’s cargo unit of breaking competition rules.

“SAS Group confirms that it has received a Statement of Objections from the European Commission within the framework of an industry-wide investigation of the air cargo sector, involving a large number of cargo companies and air carriers, including SAS Cargo.

In the Statement of Objections the EU Commission alleges that certain investigated practices in the air cargo sector constitute infringements of EC competition rules. SAS Group intends to review the Statement of Objections immediately and will also have to review the underlying documentation as soon as it has received access to the Commission’s comprehensive investigation file. Therefore SAS cannot comment on the alleged irregularities until this review has been completed.” More at SAS.

WASHINGTON — Dec 20, `07 — The Federal Trade Commission on Thursday approved Google’s $3.1 billion purchase of advertising rival DoubleClick, saying the deal would not substantially lessen competition.

The deal, which combines Google’s dominance in pay-per-click Internet advertising with DoubleClick’s market-leading position in flashier display ads, is also being scrutinized by European antitrust officials.

In a 4-1 vote, the FTC decided to end its eight-month investigation of the transaction.

Commissioner Pamela Jones Harbour dissented and issued a separate statement expressing reservations, arguing that the deal “may substantially lessen competition.”

She said the takeover “will affect the evolution of the entire online advertising market” as this evolves and have wide-ranging implications for consumers. “The transaction will combine not only the two firms’ products and services, but also their vast troves of data about consumer behavior on the Internet,” she said.

European antitrust authorities are expected to rule on the deal sometime next year. The European Commission last month launched a probe and said the merger “would raise competition concerns.” The European Commission declined to comment on the FTC’s decision, spokesman Jonathan Todd said.

Microsoft and other critics argue the deal would enable Google to dominate two aspects of the Internet advertising market — ad sales and ad-serving tools.

The FTC said in a report on its investigation that both the online ad sales and ad-serving markets have numerous competitors, several of which have been bolstered by recent acquisitions.

Those include Microsoft’s $6 billion purchase of DoubleClick rival aQuantive, the acquisition of online advertising provider Tacoda by Time Warner’s AOL, and Yahoo’s purchase of Internet advertising exchange Right Media for $680 million.

Other competitors include ValueClick and 24/7 Real Media, which was purchased by London-based advertising giant WPP Group PLC for $649 million in May, the FTC said.

Privacy advocates say the combined company will have access to a huge amount of data on individual Web-surfing habits. The FTC said it lacked the legal authority to block the deal on any grounds except on antitrust matters.

However, in an apparent nod to these concerns, the FTC on Thursday proposed a set of privacy guidelines for the online advertising industry, describing them as something that “clearly transcend” the Google-DoubleClick deal. It remains to be seen how such guidelines would be enforced.

Google has a dominant position in pay-per-click ads, which are based on a computer user’s searches. Its ads are usually in the form of text and are shown on the right-hand side of the screen.

DoubleClick is a market leader in the display ads preferred by many corporate advertisers. More at FTC.

Waterloo, Belgium and Purchase, NY — Dec 19, `07 — MasterCard Europe said that it will appeal to the European Court of First Instance today’s decision by the European Commission regarding MasterCard Europe’s default cross-border interchange fees.

The Commission’s Order requires the company, among other things, to “repeal [its] Intra-EEA fallback interchange fees, as well as [its] SEPA/Intra-Eurozone interchange fees” within six months. The Order applies only to “interchange fees for MasterCard branded consumer credit and charge cards and for MasterCard or Maestro branded debit cards”.

MasterCard Europe believes that it has strong grounds for its appeal. While it will comply with the Commission’s Order, the company said that it is prepared to take action so that its payment products remain competitive and continue to benefit the millions of European cardholders who use and merchants that accept MasterCard and Maestro cards.

MasterCard Europe said its decision to appeal is based on its firm conviction that market forces, not regulation, should drive key decisions such as the setting of interchange fees and retailers’ choices over which forms of payment to accept. More at MasterCard.

Brussels — Dec 19, `07 –The European Commission has decided that MasterCard’s Multilateral Interchange Fees (MIF) for cross-border payment card transactions with MasterCard and Maestro branded debit and consumer credit cards in the European Economic Area (EEA) violate EC Treaty rules on restrictive business practices (Article 81).

The Commission concluded that MasterCard’s MIF, a charge levied on each payment at a retail outlet when the payment is processed, inflated the cost of card acceptance by retailers without leading to proven efficiencies.

MasterCard has six months to comply with the Commission’s order to withdraw the fees. If MasterCard fails to comply, the Commission may impose daily penalty payments of 3.5% of its daily global turnover in the preceding business year.

MIF are not illegal as such. However, a MIF in an open payment card scheme such as MasterCard’s is only compatible with EU competition rules if it contributes to technical and economic progress and benefits consumers. In the EU, over 23 billion payments, exceeding a value of €1350 billion, are made every year with payment cards.

Why does MasterCard’s MIF restrict competition under EC Treaty rules on restrictive business practices (Article 81 (1))?
MasterCard’s MIF is a mechanism that restricts price competition between acquiring banks by artificially inflating the basis on which these banks set their charges to merchants. A MIF effectively determines a floor under the merchant service charge and merchants are unable to negotiate a price below it. This can considerably inflate the costs of payment card usage at merchant outlets to the detriment of merchants and their customers. For instance, the Commission estimates that MasterCard’s MIF accounted for more than 70% of the merchant service charges for credit cards in Belgium (2002) and for approximately 60% of these charges in Italy (2003).

If MasterCard operated without a MIF, merchants would pay lower prices for accepting cards and, as a consequence, their customers should also incur lower costs for shopping at a merchant’s.

Competition Commissioner Neelie Kroes said: “Multilateral interchange fee agreements such as MasterCard’s inflate the cost of card acceptance by retailers. Consumers foot the bill, as they risk paying twice for payment cards: once through annual fees to their bank and a second time through inflated retail prices paid not only by card users but also by customers paying cash. The Commission will accept these fees only where they are clearly fostering innovation to the benefit of all users.”

More at the European Commission here and here.

BRUSSELS, Belgium — Dec 18, `07 — Software maker Platform Solutions has filed a complaint with the European Commission alleging that IBM abused its market dominance by refusing to share information related to its high- performance mainframe computers.

The complaint, filed on Oct 19, according to a European Commission spokesman Jonathan Todd, is the latest in an ongoing intellectual property dispute between privately held Platform Solutions and IBM Corp.

Platform Solutions alleges that IBM abused EU antitrust rules “by refusing to supply interface information relating to mainframe computers and refusing to license third parties,” Todd said.

IBM and Platform Solutions have sued each other in the US over related intellectual-property and antitrust issues. The EU filing follows a European court ruling in September upholding a decision against Microsoft that it abused its dominant position by failing to help competitors connect to the Windows operating system.

In December 2006, IBM sued Platform Solutions charging that the company, which manufactures software that can run on IBM’s high-end systems, violated patents IBM holds on some of its operating systems.

In January Platform Solutions filed its own US suit accusing IBM of refusing to supply its operating systems to customers who buy Platform Solutions’s IBM- compatible mainframe computer. Platform Solutions also accused IBM of “unreasonably discontinuing” its licensing of intellectual-property rights.

WASHINGTON — Dec 14, ‘07 — The head of the Federal Trade Commission said Friday she won’t remove herself from an antitrust review of Google’s purchase of online advertising company DoubleClick, rebuffing requests from privacy groups opposed to the transaction.

Deborah Platt Majoras, chairwoman of the FTC, said she has reviewed a petition from the groups with the agency’s ethics official and other staff, and determined that “the relevant laws and rules…neither require nor support recusal.”

The Electronic Privacy Information Center and the Center for Digital Democracy said in a petition Wednesday that Majoras’ husband, John M. Majoras, is a partner at the Jones Day law firm. The groups alleged that DoubleClick hired Jones Day to represent the company before the FTC on its acquisition by Google, the leading Internet search company.

The Majoras’ relationship “calls into question the ability of the commission to render decisions that are fair and just,” the groups said.

Deborah Majoras said Friday that Jones Day hasn’t appeared before the FTC on the transaction, and is only representing DoubleClick before the European Commission, which is also scrutinizing the deal. John Majoras said Wednesday that he has not been involved in any aspect of the transaction.

In a statement, Deborah Majoras said that her husband was no longer an equity partner in the firm.

“Any decisions that I may make in any case in which Jones Day represent a party cannot be said to directly and predictably affect my husband’s interest in Jones Day. Hence, I do not have a financial conflict in this matter,” Majoras said in a statement.

Marc Rotenberg, of the Electronic Privacy Information Center, and Jeff Chester, of the Center for Digital Democracy, said in a statement that “we do not believe that the chairman has made a persuasive case against recusal.” The two groups requested the recusal on Wednesday.

They argued that, contrary to what Majoras said, Jones Day had advertised on its Web site that it represented DoubleClick at the FTC. But, they said, that information was pulled off the site after their recusal request.

Statement of Chairman Deborah Platt Majoras

More at FTC.

Related:

Senators Urge FTC to Review Google-DoubleClick Deal Closely

EU Opens In-Depth Investigation of Google’s DoubleClick Purchase

Oslo, Norway and Brussels, Belgium — Dec 13, ‘07 — Opera Software ASA filed a complaint with the European Commission yesterday against Microsoft.

The complaint alleges how Microsoft is abusing its dominant position by tying its browser, Internet Explorer, to the Windows operating system and by hindering interoperability by not following accepted Web standards.

Opera has requested the Commission to take the necessary actions to compel Microsoft to give consumers a real choice and to support open Web standards in Internet Explorer.

Opera requests the Commission to implement two remedies to Microsoft’s abusive actions. First, it requests the Commission to obligate Microsoft to unbundle Internet Explorer from Windows and/or carry alternative browsers pre-installed on the desktop.

Second, it asks the European Commission to require Microsoft to follow fundamental and open Web standards accepted by the Web-authoring communities. The complaint calls on Microsoft to adhere to its own public pronouncements to support these standards, instead of stifling them with its notorious “Embrace, Extend and Extinguish” strategy. More at Opera.

Los Angeles, Calif — Dec 03, ‘07 — A federal judge on Monday threw out an antitrust lawsuit brought by the operator of the LimeWire online file-sharing service against a coalition of major record labels, concluding the firm failed to make its case that it has been harmed by the recording companies’ business practices, Alex Veiga of the Associated Press reported.

U.S. District Judge Gerard E. Lynch in New York ruled that Lime Group LLC failed to make its case that it has been harmed by the recording companies’ business practices, and he granted the companies’ motion to dismiss the claims.

Lynch also dismissed several claims brought under state laws “without prejudice,” which gives New York-based Lime Group the option to pursue the claims in state court.

Lime Group’s lawsuit was a counterclaim to a copyright infringement lawsuit brought last year against by record labels owned by the four major recording companies: Vivendi’s Universal Music Group, Warner Music Group Corp., Britain’s EMI Group PLC, and Sony BMG Music Entertainment, a joint venture of Sony Corp. and Bertelsmann AG.

That case, which is still pending, was the first piracy lawsuit brought against a distributor of file-sharing software after the U.S. Supreme Court ruled in 2005 that technology companies could be sued for copyright infringement on the grounds they encouraged customers to steal music and movies over the Internet. More at Google/AP.

TAMPA, Fla — Dec 03, ‘07 /PRNewswire/ — T3 Technologies announced today that it has filed an anti-trust claim against IBM in the United States District Court for the Southern District of New York alleging anti-trust violations and unfair competition. The filing seeks to join Platform Solutions’ existing anti-trust litigation against IBM due to the similarities in the company’s allegations.

T3’s claims are based on a history of efforts by IBM to maintain and extend its monopoly power in the mainframe hardware industry. T3 alleges that since the expiration of the U.S. Justice Department’s Consent Decree in 2001, and contrary to historical practices that resulted from that decree, IBM has prevented the sales of competing mainframe hardware products by withholding the licensing of IBM’s mainframe operating systems to any hardware systems except their own. T3 is seeking undisclosed damages.

“Imagine if Microsoft decided to manufacture PC’s and then refused to sell Windows for any computers except their own. The world would be without Dell, HP, and all other PC and server vendors– even IBM!” said Steven Friedman, President of T3 Technologies. “That’s exactly what IBM is doing in the mainframe world.”

T3 championed the cause of smaller mainframe users when they began marketing their tServer line of mainframe-compatible systems in 2000. Developed specifically for small-mid sized users that IBM offerings no longer suited, the tServer became the leading small mainframe in the world, with over 600 units installed in 28 countries.

In 2006, T3 released their Liberty family of mainframes, which accommodates larger users than the tServer does and added extended functionality. The Liberty technology is based on firmware developed by and licensed from Platform Solutions, Inc. Contrary to the tServer, Liberty systems compete directly with much of IBM’s z9 BC product line.

Within weeks of shipping the first few Liberty systems, IBM notified T3 Liberty customers that they would not license any IBM mainframe operating systems for Liberty hardware. At the same time, IBM also refused to license new operating systems for the tServer line as well.

“The tServer was a great success because it perfectly matched the function and value needs of smaller mainframe users, something IBM still isn’t providing. Liberty was similarly designed to meet the specific needs of the market space above tServer, up to 350 MIPS.

The initial success of Liberty showed we were on target again until IBM pulled the rug out from us.” Friedman said. “It’s not only T3 that’s been damaged by IBM’s actions. As in any monopoly situation, all end-users suffer when there’s a lack of choice. Simply stated, the result of IBM’s actions has been the elimination of every alternative in the marketplace.”

More at T3T.

Antitrust: European Commission Fines Professional Videotape Producers Over €74 Million for Price Fixing Cartel

Brussels – November 20, 2007 –The European Commission has imposed a total of $109 Million (€ 74,790,000)  fines on Sony, Fuji and Maxell for fixing prices for professional videotapes sold to customers in Europe, in violation of the EC Treaty’s ban on cartels and restrictive business practices (Article 81).

Between 1999 and 2002, Sony, Fuji and Maxell managed to raise or otherwise control prices through a series of regular meetings and other illicit contacts. Sony’s fine has been increased by 30% for obstructing the Commission’s investigation during on-site inspections at its premises.

Fuji’s and Maxell’s fines are reduced by 40% and 20% respectively because they co-operated with the investigation under the Commission’s 2002 Leniency Notice. There was no immunity applicant in this case. For the calculation of the fines, the Commission applied for the first time its new 2006 Guidelines.

Competition Commissioner Neelie Kroes said: “This decision sends two warnings to companies engaging in cartel activities: first, the Commission can prosecute cartels effectively even without prompts from immunity applicants, and second, obstructing a Commission’s antitrust investigation leads to severe penalties.”

The Commission started an investigation on its own initiative with surprise inspections, carried out at the premises of Sony’s, Fuji’s and Maxell’s European subsidiaries in May 2002.

The inspections proved particularly successful as abundant evidence of cartel activities was found. However, a Sony employee refused to answer oral questions asked by the Commission’s inspectors, in breach of Sony’s obligation to answer, while another Sony employee was found to have shredded documents during the inspection.

Fuji and, at a later stage, Maxell co-operated with the Commission and submitted additional evidence. Sony only acknowledged its involvement after receiving the Statement of Objections.

The cartel
The cartel covered the two most popular professional videotape formats at the time of the infringement: Betacam SP and Digital Betacam, which in 2001 totalled annual sales of some €115 million in the European Economic Area (EEA). TV stations and independent producers of TV programmes and advertising films are the main customers of professional videotapes.

Sony, Fuji and Maxell, with a combined share of more than 85% of the professional video tape market, organised three successful rounds of price increases and endeavoured to stabilise prices whenever an increase was not possible. They also regularly monitored the implementation of the price agreements.

The evidence uncovered describes in detail eleven meetings during which Sony, Fuji and Maxell discussed and agreed prices and/or exchanged sensitive commercial information as well as continuous contacts intended to monitor the implementation of their cartel agreements.

Fines
This is the first Commission antitrust decision where the 2006 Guidelines on Fines have been applied . Under the new method, fines better reflect the overall economic significance of the infringement as well as the share of each company involved.

More at European Commission.

WASHINGTON — Nov 19, ‘07 — Two U.S. senators on the antitrust subcommittee urged the Federal Trade Commission’s chairman to only approve Google’s purchase of Internet advertising company DoubleClick Inc. if it concludes there will be no adverse impact on competition in the Web advertising market as a result of the transaction.

In a letter, Sen. Herb Kohl, a Wisconsin Democrat, and Sen. Orrin Hatch, a Utah Republican, told FTC Chairman Deborah Platt Majoras that the outcome of the agency’s review of the proposed merger would have far-reaching impact.

Senators argued that Google had a dominant position in a form of Internet advertising called contextual ads while DoubleClick was a market leader in display advertising. They said industry experts believed the deal could harm competition on the Web.

“While we have not reached any definitive conclusion regarding this issue, we urge that you only approve the merger if you determine that it will not cause any substantial lessening of competition with respect to Internet advertising,” they wrote.

Kohl and Hatch also raised questions about privacy implications since both Google and DoubleClick collect information about Web usage. “We believe that this deal raises fundamental consumer privacy concerns worthy of serious scrutiny,” the letter said.

FTC spokeswoman Nancy Judy said Chairman Deborah Majoras had received the letter but that it would inappropriate for her to comment on it.

Kohl is the chairman of the Antitrust, Competition Policy and Consumer Rights subcommittee, while Hatch is the ranking minority member of the panel. The committee held a hearing on the deal in September where Google’s top lawyer and Microsoft’s general counsel testified about the merger.

“Antitrust regulators need to be wary to guard against the creation of a powerful Internet conglomerate able to extend its market power in one market into adjacent markets, to the detriment of competition and consumers,” said the letter.

It also referred to the privacy concerns opponents to the deal have raised, saying the sheer amount of private information both companies hold about individuals Web habits is a cause for concern.

The Google-DoubleClick merger is the subject of a number of antitrust reviews globally. In addition, to the FTC investigation, the European Union recently announced it was launching a detailed review of the deal.

Full text of the letter is available at Sen. Hatch’s Press Releases.

Brussels – Nov 13, ‘07 — European Union regulators started an in-depth investigation into Google’s plan to buy DoubleClick Inc., saying the purchase may hurt competition for online advertising dollars.

The European Commission, the EU’s antitrust authority in Brussels, said in a statement today that it will review the $3.1 billion acquisition for 90 working days and make a ruling by April 2. Google announced the proposed purchase in April to bolster sales of Internet ads that include pictures and videos.

An in-depth EU probe sets the stage for a wider fight over the deal, which is already under scrutiny in the U.S. after competitors including Yahoo! Inc., Microsoft Corp. and AT&T Inc. expressed concerns that the combination would hurt competition in the $40.6 billion global online advertising market. Other groups have complained that the combination may harm consumers’ privacy.

The inquiry is one of the few major business challenges that Google, the dominant Internet search engine and a stock market favorite, has encountered in its nine years. The company makes most of its money from text advertisements that appear next to search results and on partner sites, while DoubleClick, a privately held company, places banner ads on Web sites and sells analyses of who sees them.

In Brussels, many of the mounting objections filed to the commission in recent weeks centered on privacy issues, rather than questions about how a Google-DoubleClick merger would affect competition. A commission spokesman said that by law the EU inquiry could not make an antitrust decision on anything but its market impact.

BEUC, the umbrella group of European consumer organizations, as early as July had complained to the commission that the DoubleClick takeover would damage privacy rights and limit Internet content. Others joining BEUC included the European Publishers Council and the World Federation of Advertisers.

Their concern revolves around the information that Google and DoubleClick collect about the demographics of Internet users as they go from site to site. Most of the information is generic description that cannot be used to identify an individual, but some of it can. More at European Commission.

New York — November 07, 2007 — As earlier reported by CNBC, American Express said today that it has reached an agreement to drop Visa as a defendant in a lawsuit alleging that MasterCard, Visa and their member banks had illegally blocked American Express from the bank-issued card business in the United States.

Under terms of the settlement agreement, Visa will pay a maximum amount of $2.25 billion to American Express. Individual banks named in the lawsuit will also be dropped as defendants. These include: J.P. Morgan Chase, Capital One, U.S. Bancorp, Wells Fargo and Providian. The agreement is subject to the approval of Visa’s member banks.

MasterCard remains the sole defendant in the American Express case. The lawsuit, which was filed in Federal court (November 2004) by American Express, seeks monetary damages for the lost business opportunity that resulted from the illegal conspiracy to boycott American Express. American Express is expected to seek damages in the billions of dollars. As the sole remaining defendant, MasterCard would be liable for the full amount.

“The size of this settlement, along with earlier court rulings, underscores the seriousness of the damage done by the illegal boycott,” said Kenneth I. Chenault, chairman and chief executive. “We plan to move forward with the litigation to hold MasterCard accountable for the illegal actions that blocked banks from working with us for many years and to seek full compensation for the value that would have been generated for our shareholders.”

Under terms of the agreement reached with Visa, Inc., Visa USA, and Visa International, American Express will receive an aggregate maximum payment of $2.25 billion. An initial payment of $1.13 billion will likely be recognized by American Express in income during the fourth quarter 2007. The remainder, payable in installments of up to $70 million per quarter over the next four years, is subject to achieving certain quarterly performance criteria within the U.S. network services business of American Express. More at American Express.

Nov 07, ‘07 — CNBC is reports, “Visa has tentatively agreed to pay American Express a record $2.25 billion to settle a three-year-old antitrust case, CNBC has learned.” The payment, which still needs to be approved by Visa’s members, is being described as the largest antitrust settlement in U.S. history.

American Express filed an antitrust suit against Visa and MasterCard three years ago, claiming that American Express had been shut out of offering credit cards through banks that were Visa or MasterCard members.

MasterCard hasn’t settled the suit and apparently will take the case to court. If it loses, it faces triple damages.

One reason why Visa settled is that the Justice Department and the courts had weighed in against both Visa and MasterCard and found that they engaged in anticompetitive practices, a ruling upheld on appeal by the Supreme Court. Also, Visa is preparing for an initial public offering soon.

The lawsuit came on the heels of the Supreme Court’s vindication of the DOJ and sought solely to establish monetary damages that American Express suffered because of its two competitors’ actions, given that the courts had already ruled in its favor. The suit also had named a number of banks that cooperated with Visa and MasterCard in shutting out American Express.

Though it did not attach an official dollar number to the suit, American Express said it lost billions because of the practices. The company said it was prevented from launching a planned new generation of products and for eight years could not compete on a level ground with Visa and MasterCard in providing network services to banks.

Visa plans to pay half of the $2.25 billion now and the other half over four years. The deal has been approved by Visa’s general counsel.

Visa’s settlement could be announced in coming days and is a big victory for famed antitrust lawyer David Boies. At the time the suit was filed, Boies alleged the defendants were operating as “a cartel to eliminate competition and ignore the American consumer.”" More at CNBC.

October 28, ‘07 — It appears from the buzz in blogosphere that some time in past week search giant Google has changed its PageRank algorithm to punish its critics, internal linking networks and illegitimate webmasters.

Forbes, CNET’s News.com, The Sydney Morning Herald and many others writes on the Google changing its PageRank calculations.

SMH writes, “In the brave new world of online media, fortunes can be won and lost on the whim of Google’s key search algorithm. And when, without warning, Google tweaked that mathematical formula this week, there was panic on the world wide web.

Swarms of bloggers and webmasters of major sites like Washingtonpost.com, Forbes.com, Engadget.com and SFGate.com noticed a downgrading in their PageRank, Google’s measure of a web page’s value. A site’s PageRank impacts not only its ranking in Google search results but also the price it can charge advertisers. A drop in ranking can have serious financial consequences, especially for smaller operators.

The search giant, through its dominant search engine and AdWords/AdSense network, is relied on by millions of websites not only for traffic referrals but for monetisation as well.

Ironically, in the ultimate democracy that is the internet, Google reigns as virtual dictator. By changing the way it ranks sites in search results, it has the power to effortlessly shape the digital economy and manipulate the incomes of millions of web businesses around the world.”

Forbes: “Google, for online businesses, has the impact that Alan Greenspan once had on the financial markets. Online companies pounce on every whisper or cryptic comment from Google about how it ranks pages as an indicator–up or down–of how online traffic will flow for millions of Web sites.

On Thursday, Web site administrators for major sites including the Washingtonpost.com, Techcrunch, and Engadget (as well as Forbes.com) found that their “pagerank”–a number that typically reflects the ranking of a site in Google results for key search terms–had dropped precipitously according to Google Toolbar, a software program that tracks Google’s assessment of a site.”

CNET’s News.com: “Well, speculation in the blogosphere today has it that Google has decided to punish popular sites that accept paid links to lesser sites. As Valleywag puts it, “Google’s bean counter, naturally, would prefer that you pay Google for sponsored links instead.

Anyway, part of the buzz about this move is that some of the sites that are taking PageRank hits are the very sites (Search Engine Journal, Copyblogger, Search Engine Guide and the Blog Herald, among them) that cover search engine optimization issues, and some suspect that perhaps the search giant is punishing them for being critics.”

PageRank algorithm explained by Wikipedia: Simplified PageRank algorithmAssume a small universe of four web pages: A, B, C and D. The initial approximation of PageRank would be evenly divided between these four documents. Hence, each document would begin with an estimated PageRank of 0.25.

If pages B, C, and D each only link to A, they would each confer 0.25 PageRank to A. All PageRank PR( ) in this simplistic system would thus gather to A because all links would be pointing to A.