Courtroom clashes reshaping tech realm

From three-strikes in France to antitrust probes in EU to a global e-book dispute, IT industry saw several legal battles fought out last year.
Written by Kevin Kwang, Contributor

Legal battles continued to wage in 2009, but several long-running courtroom conflicts finally drew to a close, resulting in significant changes to the world of technology.

In France, the government threw down the gauntlet to online pirates when its controversial "three-strikes law" was finally approved in the nation's highest constitutional courts.

The European Union (EU) also kept busy last year dealing with antitrust suits involving Microsoft and Oracle's Sun Microsystems buyout. Intel, though, finally resolved its long-standing saga with rival chipmaker Advanced Micro Devices (AMD), giving the latter US$1.25 billion to settle claims for antitrust and patent violations.

Google, however, faced a year of regulatory scrutiny and complaints alluding to intrusion of privacy and anti-competitive behavior.

Adopting hard line with online pirates
Since 2008, the French government led by Prime Minister Nicholas Sarkozy has been championing the "three-strikes" law designed to clamp down on file-sharing and illegal downloads. Last year, the effort paid off.

In October 22, The New York Times reported that France's highest constitutional court finally approved the revised version of the three-strikes law. This was after ensuring that a judge, rather than the new agency created to issue warnings to online pirates, signs off on any Internet account suspensions.

This revision to the law is essential, as fundamental human rights that stipulate everyone should be given a fair trial and due process in a court of law will be preserved.

According to the report, the agency will oversee the issuing of warning letters to people accused of copying music, movies or other media content illegally via the Internet. It added that those who ignore a second warning and copy files illegally a third time could face year-long suspensions of their Net access, as well as fines.

A similar law is being considered in Britain under its Digital Economy Bill proposed by Business Secretary Peter Mandelson in August. Offenders in the U.K. might have their Internet access cut off as one of the punishments meted out. According to a report by ZDNet Asia's sister site ZDNet UK, the Bill is expected to go before Parliament late November.

However, there is still significant opposition to the Bill, with the Serious Organized Crime Agency (Soca) one of the latest. The report wrote that Soca believes the Bill will possibly increase its officers' workload, as "determined unauthorized file-sharers are likely to encrypt their traffic", making monitoring peer-to-peer networks virtually impossible.

No end in sight for Intel's antitrust woes
Rival chipmaker AMD first filed an anti-competitive lawsuit against Intel in 2005 for bribing computer makers not to buy AMD's chips. No one could have guessed it would take four years, and a major climb down from the incumbent market leader, to break the legal impasse.

But that's what happened on November 12, when Intel announced it would pay AMD US$1.25 billion, as well as inked a five-year cross-licensing agreement that would allow both to access each other's technologies.

Intel is also hoping to buy goodwill with the resolution of this long-running legal tussle for its other antitrust cases. The Santa Clara company is currently locked in talks with the EU's executive arm, the European Commission, on the 1.06 billion euros (US$1.45 billion) fine the chipmaker received earlier this year. It is also facing antitrust investigations by the U.S. Federal Trade Commission (FTC) as well as New York Attorney General Andrew Cuomo.

Intel spokesperson, Tom Beerman, said in a report by ZDNet Asia's sister site CNET News: "We hope that having this major litigation settled with AMD would be viewed favorably by these regulatory bodies and eventually the cases would be dropped."

However, the FTC formally brought an antitrust charge against Intel, with the focus now shifting to the lawsuits filed by both Intel and Nvidia. When Intel first produced its Nehalem PC chip, it alleged that Nvidia had no right to make compatible graphics processing units (GPUs) as it was not licensed to.

However, Nvidia counter sued by stating that the 2004 agreement between the two companies allowed the graphics chipmaker to produce Nehalem-compatible GPUs.

Browser joy for Europe as Microsoft relents
Over in Europe, Microsoft had been under intense scrutiny by the EU, particularly after rival Opera Software filed a lawsuit in 2007 alleging anti-competitive practices that saw the Redmond giant bundle its Internet Explorer (IE) browser with its Windows operating system (OS).

Discussions were accelerated in June when Microsoft proposed to remove its browser from Windows 7, its latest OS software. This was met with stiff opposition from both the EU and rival browser operators.

The company then revised its proposal in July, choosing to include a ballot box that would allow European consumers the choice to download other browsers such as Firefox, Opera and Safari.

On December 16, the EU finally decided to drop all Microsoft investigations after the software giant decided to include the browser ballot box that would open the first time the computer is booted up. The Redmond company would also allow computer makers to exclude IE from their products should they choose to.

In response to this outcome, Kroes said: "Millions of European consumers will benefit from this decision by having a free choice about which Web browser they use. Such choice will not only serve to improve people's experience of the Internet now, but also act as an incentive for Web browser companies to innovate and offer people better browsers in the future."

Google against the world, or so it seems
The search giant has had to endure a rough 2009 in terms of handling legal tussles that ranged from intrusion of privacy and anti-competitive business decisions to putting copyrighted material online as part of its Google Books project.

Its Google Street View service, for one, stirred up dissent from people in the U.S., U.K., and Japan, who argued against the intrusion of privacy that this feature would bring into their lives. Private International, a watchdog group, filed a formal complaint on March 23 to the British government, saying that Street View was causing "clear embarrassment and damage" to many residents.

However, the law seemed to be on Google's side as, in February 18, a Pittsburgh federal judge threw out a case filed by an American couple who felt that Street View's online pictures of their house crossed the line in terms of respecting private space.

Google is also under investigation by the U.S. Federal Trade Commission (FTC) for its proposed US$750 million acquisition of AdMob to see if the deal is anti-competitive in nature. AdMob is considered one of the strongest network providers for the mobile computing world.

One of the most attention-grabbing legal battles that Google is embroiled in, though, is its efforts to put digital copies of existing copyrighted books into an Internet-based library under its Google Book Search project.

The search giant's attempts to come to a settlement over the lawsuit filed by the Authors Guild and the Association of American Publishers have encountered numerous roadblocks. In September, the Justice Department pushed for the rejection of the original settlement terms, which led to all parties having to rework the deal.

A revised settlement that limited Google to scanning only out-of-print books from English-speaking countries was later filed on November 13. Further restrictions included the company's monetizing options from scanning and digitizing out-of-print books and a registry required to be formed to seek out authors of these books.

Since then, judge Denny Chin, who's presiding over the approval process, has given preliminary approval of the revised settlement and set February 18, 2010, as the final hearing for the case.

In a related report, a French court on December 18 ruled in favor of French company La Martiniere, which runs the Editions du Seuil publishing firm, and ordered Google to pay the former 300,000 euros (US$430,000) for copyright infringement. The publisher argued in court that Google should compensate authors and publishers if it scans and puts these works in its Book Search function.

A similar lawsuit could soon be filed in China where local author, Mian Mian, has seen her work scanned and put into Google Books without her permission.

Oracle's protracted Sun purchase to see light soon?
For software vendor Oracle, the year could not have ended soon enough, though its heavily investigated attempt to buy over Sun Microsystems will drag on into 2010.

Things started off rosy in April when Oracle made the announcement of a US$7.4 billion deal to purchase the company that holds proprietorship over the Java language and MySQL open-source storage engines. Subsequent thumbs up by the Sun board, shareholders and the U.S. Justice Department appeared to smoothen the takeover process.

The deal hit the skids when the EU's antitrust team started looking into the proposed buyover in September. Its main concern: to make sure the acquisition would not lead to reduced customer choices or higher prices in the European database market.

"The Commission has to examine very carefully the effects on competition in Europe when the world's leading proprietary database company proposes to take over the world's leading open source database company," Kroes said in a statement then.

To assure the regulators that it had no plans to dilute Sun's MySQL offering in preference of its own database technologies, Oracle later outlined 10 steps to ensure an open market.

It promised, among other things, to keep the market open for others to make storage engine software for the MySQL database, be more open than MySQL's previous owners, and not ask for commercial licenses from makers of MySQL storage engines for application programming interfaces.

This appeared to have softened the EU regulators' stance. Reuters reported that the EC released a statement on Dec. 14, which said: "Competition Commissioner Neelie Kroes...is optimistic that the case will have a satisfactory outcome, while ensuring that the transaction will not have an adverse impact on effective competition in the European database market".

Since then, Oracle had issued statements expressing its confidence that the deal will go through in January 2010.

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