December 2012

Justice Department Reaches Settlement with Penquin in E-Book Case

The Department of Justice announced that it has reached a settlement with Penguin Group (USA) Inc. – one of the largest book publishers in the United States – and will continue to litigate against Apple Inc. and Holtzbrinck Publishers LLC, which does business as Macmillan, for conspiring to raise e-book prices to consumers.

The proposed settlement was filed in the U.S. District Court for the Southern District of New York. If approved by the court, the settlement will resolve the department’s competitive concerns as to Penguin, ending Penguin’s role as a defendant in the civil antitrust lawsuit filed by the department on April 11, 2012. The department’s Antitrust Division previously settled its claims against three book publishers–Hachette Book Group Inc., HarperCollins Publishers L.L.C. and Simon & Schuster Inc. The department said that the publishers eliminated retail price competition, resulting in consumers paying millions of dollars more for their e-books. The settlement with those three publishers was approved by the court in September 2012. A trial against Macmillan and Apple currently is scheduled to begin in June 2013.

Under the proposed settlement agreement, Penguin will terminate its agreements with Apple and other e-books retailers and will be prohibited for two years from entering into new agreements that constrain retailers’ ability to offer discounts or other promotions to consumers to encourage the sale of the Penguin’s e-books. The proposed settlement agreement also will impose a strong antitrust compliance program on Penguin, which will include a requirement that it provide advance notification to the department of any e-book ventures it plans to undertake jointly with other publishers and that it regularly report to the department on any communications it has with other publishers. Also for five years, Penguin will be forbidden from agreeing to any kind of most favored nation (MFN) agreement that could undermine the effectiveness of the settlement.

Tim Cook's plan for manufacturing Apple's Macs in the US should lead to the Bay Area

[Commentary] When Apple moves the manufacturing of some Macs to the United States next year, the company obviously should put the factory in the Bay Area. It's a no-brainer.

Silicon Valley is in Apple's DNA. It's the company's birthplace. It's where Steve Jobs in 1984 famously launched the first Mac factory, a plant in Fremont he helped design to spit out one Macintosh every 27 seconds. But my argument for bringing the Mac back is all about the Bay Area having the people and the proximity to Apple's headquarters to make the company's manufacturing experiment a success. This goes beyond sentiment, though even the most analytical are subject to the nostalgic pull of the company's legacy. The argument against? The Bay Area's expensive land, high wages and steep taxes (though companies, including Apple, have shown great creativity in reducing their tax bills).

Facebook founder Zuckerberg gives $500 million in stock to Silicon Valley Community Foundation

Mark Zuckerberg said he is donating nearly $500 million in Facebook stock to the Silicon Valley Community Foundation, the largest single gift in the history of the local nonprofit and one of the biggest philanthropic donations in the Bay Area this year.

The 28-year-old multibillionaire announced the donation on his personal Facebook page, saying he and his wife want to focus their giving on "education and health." The news drew immediate praise from a local philanthropy expert, who said he hoped Zuckerberg's gift will set a standard for charity among younger tech entrepreneurs who aren't always known for their giving. The foundation, which before Tuesday had about $2 billion in assets, makes grants to a variety of charities that serve the needy locally and around the world. It also assists wealthy donors by advising them on philanthropy, managing their charitable funds and making grants based on their input. Zuckerberg previously tapped the foundation to handle his pledge to give $100 million over five years to improve public schools in the impoverished city of Newark (NJ). Zuckerberg's gift to the Mountain View-based community foundation is roughly four times the $123 million in grants the foundation says it awarded to nonprofits around the Bay Area last year. But if the foundation follows its usual practice, it's unlikely to distribute all of Zuckerberg's gift in a single year. All told, the foundation manages about 1,600 charitable accounts on behalf of individuals and families that use its services.

Sen Feinstein to take over Senate Judiciary Committee

Sen. Dianne Feinstein (D-CA) is poised to take over as chairwoman of the Senate Judiciary Committee, shifting the leadership of the partisan panel in charge of judicial nominations to the center.

She will have primary jurisdiction over two of the biggest issues Congress will tackle next year: immigration reform and gun control. Senate Judiciary Committee Chairman Patrick Leahy (D-VT) is expected to take over the Senate Appropriations Committee following the death of Sen. Daniel Inouye (D-Hawaii). As of Tuesday afternoon, Leahy had not yet made up his mind whether he would take the Appropriations gavel. He told reporters he would announce a decision within 24 hours. Unlike many of her Democratic colleagues on the Judiciary panel, Sen Feinstein is not a lawyer and does not have as cozy a relationship with the powerful trial-attorney lobby. She supported a bill to limit liability in the run-up to 2000, when experts warned the turn of the millennium would create information-technology chaos. Trial lawyers opposed the measure.

If Sen Feinstein takes over as the next chairwoman of the Judiciary panel, she would have to step down as head of the Senate’s Select Committee on Intelligence. Sen. Ron Wyden (D-OR) has the opportunity to replace Feinstein as Intelligence chairman, but he could choose to instead chair the Energy and Natural Resources panel, which is an important committee for his home state, where the timber industry is a major employer. If Sen Wyden sticks with the Energy chairmanship, that would give Sen. Barbara Mikulski (D-MD) a chance to succeed Sen Feinstein as Intelligence Committee chairwoman. She would make cybersecurity one of her priorities as head of the Intelligence Committee.

Hawaii's Dems move to draft shortlist for Inouye’s Senate seat

The Hawaiian Democratic Party is moving quickly to develop a shortlist of potential successors for Sen. Daniel Inouye’s (D-Hawaii) seat, following the senator’s sudden death.

Hawaii Democratic Party Chairman Dante Carpenter said he had already been contacted by a number of Hawaii Democrats interested in the seat and that party officials had already begun the process of collecting applications in the state’s counties. Democrats must submit three possible Democratic appointees for the seat to Gov. Neil Abercrombie (D), who will choose a replacement to serve until a special election is held in 2014. One of Inouye’s final acts was to send a letter to Gov Abercrombie urging him to appoint Rep. Colleen Hanabusa (D-Hawaii) as his successor

Budget battle hobbles White House tech tool

A cutting-edge online dashboard launched by the White House in 2009 to help keep federal tech projects on time and on budget has been largely unusable — it hasn’t been updated since August — because of the struggle between Congress and the Administration over federal spending. The reason: To be on budget, you need to know your budget.

Now, as the clock ticks down on fiscal cliff negotiations, information technology officials across federal agencies find themselves in a tough spot marked by uncertainty over just what their 2013 budgets will look like. The technology dashboard website was created to help agency officials and the public analyze and evaluate more than 7,000 different federal information technology projects, including such features as providing data on how agency initiatives have performed historically. While the updates have ceased temporarily before, this year’s data drought is longer than ever and leaves agency officials and the public largely in the dark on how investments are performing.

EU to review Microsoft’s new terms of use

The European Union’s privacy watchdog has announced it will review Microsoft’s new services agreement, in a similar investigation to one carried out on Google’s new policies earlier this year.

Microsoft updated its service agreement, or terms of use, in October, allowing it to collect data on how free services such as Hotmail webmail, Windows Live instant messaging and Bing search were being used by consumers. “Given the wide range of services you offer, and popularity of these services, changes in your Services Agreement and the linked Privacy Policy may affect many individuals in most or all of the EU member states,” said the Article 29 Data Protection Working Party – the EU privacy watchdog – in a letter to Microsoft.

Public Divided over What Newtown Signifies

The shootings at an elementary school in Newtown (CT) have drawn widespread public interest.

A weekend survey finds that 57% of Americans say they followed news about the tragedy there very closely. That is higher than interest in the shootings at an Aurora, Colo. movie theater in July (49% very closely), though not as great as interest in the Columbine shootings in 1999 (68%). Nearly six-in-ten (57%) say they followed news about the Newtown shooting very closely, making it by far the public’s top story last week. News interest in the Newtown shooting is higher than for other recent gun tragedies, including shootings in Aurora, Colo. (41% very closely), Tucson, Ariz. (49% very closely), and Virginia Tech (45% very closely). In April 1999, somewhat more followed news about shootings at Columbine High School in Littleton, Colo. very closely (68%).

The media should be ashamed of its Connecticut coverage

[Commentary] It's time to have a national conversation... about the media. When it comes time for moralizing, the media predictably assumes that the availability of guns is the problem, without considering how journalists themselves might be contributing to the coarsening of our already-violent society. The entertainment-media complex promotes and glamorizes violence — for profit — in film and on TV. Meanwhile, the news media ensures that killers get the attention and fame they so desperately crave.

To be sure, a transparent society demands reporting newsworthy incidents — and this definitely qualifies. But it should be done responsibly. And that is not what we have witnessed. We have instead a feeding frenzy that is all about beating the competition — not disseminating information. It's about being first, beating other media outlets, and making a name for themselves. It's a ghoulish mentality that stokes controversy and violence — for business purposes. It's a sort of "if it bleeds it leads" mentality that causes cable networks to create logos and theme music for such tragic events (all the while, they feign maudlin concern and outrage.) Come to think of it, the media is guilty of doing what they criticize big business for — putting money (in this case, ratings, newsstand sales, and web traffic) ahead of humanity and decency. Just as greedy businessmen put profit and personal gain ahead of ethics, so too do our media outlets.

Another casualty of shootings

[Commentary] Many say we need a post-Newtown “national conversation” about gun violence. We do. While we’re at it, let’s soul-search about the fact that the instantaneous spread of misinformation after mass killings is becoming almost as frequent as the massacres. And some of our leading media institutions are culpable.

Something has to be done about this problem, too. Calling for restraint on the flow of information — even, perhaps, self-restraint — might make me as popular with my media brethren as a gun control advocate in the National Rifle Association. Like gun enthusiasts, we journalists have our very own section in the Bill of Rights, the First Amendment. And, not unlike the Second Amendment crowd, we tend to view complaints about misuse and abuse of our favorite freedom as a threat to it. Just as the revolver has given way to the rapid-fire Glock pistol, modern technology enables the media, our sources and our audience to communicate, accurately and inaccurately, with breathtakingly sudden impact. Journalism doesn’t need new laws to adapt — just a genuine rededication to the values of accuracy, skepticism and prudence with which we already claim to operate. No more excuses. Among the reputations we save may be our own.

Benton

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