Apple, Google and five other technology companies must face an antitrust lawsuit for illegally agreeing to not poach each other’s employees. District Judge Lucy Koh in San Jose, California, rejected the companies’ bid to dismiss claims brought under the Sherman Act and California state law, Reuters reported on Thursday. In addition to Apple and Google, Intel, Adobe, Pixar, Intuit and Lucasfilm are accused of entering into the illegal agreements. The proposed class action lawsuit was filed after five software engineers claimed the companies conspired to reduce employee pay by eliminating competition for skilled labor.

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Apple wants to go to trial to defend itself against allegations made the United States government surround a price-fixing scheme, Reuters reported on Wednesday.  ”Our basic view is that we would like the case to be decided on the merits,” Apple lawyer, Daniel Floyd, told U.S. District Judge Denise Cote. “We believe that this is not an appropriate case against us and we would like to validate that.” The Department of Justice last week accused the Cupertino-based company and five book publishers of conspiring to fix electronic book prices through Apple’s iBookstore. According to the DOJ’s case, Apple agreed in 2010 to allow some of the top book publishers to set their own prices. Since then, prices have risen and other online retailers such as Amazon have been under pressure from publishers to raise their discounted prices as well. The Justice Department claims Apple colluded with Simon & Schuster, Hachette Book Group, HarperCollins Publishers, Penguin Group and Macmillan to control prices. The the next hearing in the trial is scheduled for June 22nd.

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In a filing with the United States district court for southern New York, Apple claims the Department of Justice has its story all wrong. The Justice Department filed an antitrust suit against Apple and multiple book publishers earlier this week alleging that the group colluded to fix the prices of electronic books. In a recently released document filed with the court on Wednesday, Apple’s counsel addressed the charges by claiming the DOJ has its story backwards — Apple wasn’t working with publishers to fix eBook prices, it was breaking Amazon’s “monopolistic grip” on the eBook market and the publishing industry. Read on for more.

“The DOJ’s accusation of collusion against Apple is simply not true,” Apple stated in its filing, according to Fortune. The document continued, “The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry.”

The company goes on to state that the iBookstore and Apple’s iBooks product have done a huge service for the electronic book industry rather than harm it. Amazon had a 90% share of the eBook market when Apple entered the space, but the retail giant’s share has reportedly dropped to as low as 60% since Apple launched the iBookstore in 2010.

“Since then customers have benefited from eBooks that are more interactive and engaging,” Apple said, proceeding to place the blame for any possible wrongdoing squarely on the shoulders of book publishers. ”Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.”

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Nicholas Merrill, formerly the head of a New York-based Internet Service Provider that fought the FBI and DOJ in court over the constitutionality of the Patriot Act and won, plans to launch a new non-profit, crowd-funded ISP that will make its users’ privacy a central focus. “I have a bit of a track record of fighting for the right to privacy on the Internet, and I have a plan to radically transform the way the Telecommunications industry works,” Merrill said. His new company, The Calyx Institute, aims to be a “non-profit telecommunications provider dedicated to privacy, using ubiquitous encryption,” and it intends to sell Internet access for as little as $20 per month as well as mobile phone service.

“The software is already under development by another nonprofit foundation called LEAP who has given Calyx the green light to be the first commercial provider,” Merrill wrote while describing his project. “The money we raise will go towards setting up a datacenter and implementing the first mass market deployment of this new Internet communications platform, and in a second stage, a mobile phone platform.”

The Calyx Institute is seeking $1 million in funding through crowd-funding service Indiegogo for a “bare-bones launch,” or $2 million in funding for a faster launch. “If we don’t reach our funding goal, we will use what we do raise to do as much as we can with whatever we can raise,” the entrepreneur said. “I have a lot of experience running a business on a shoe-string budget, as I started my original ISP with only $10,000 of initial funds.”

The company has raised $28,500 so far, and Merrill’s video detailing the Calyx Institute project follows below.

[Via CNET]

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The United States Department of Justice is likely to lose its antitrust lawsuit targeting Apple and book publishers, according to a report from CNET. A number of legal experts agree that the case against the Cupertino-based company isn’t as strong as the one against publishers. The DOJ “has a far better case against the publishers than Apple,” said Dominick Armentano, professor and author of Antitrust and Monopoly. “If the CEOs of the various publishers got together in hotel rooms to discuss prices, they are sunk” and might as well settle, he said. Within the 36-page complaint, the Justice Department recounts how publishers met over breakfast in a London hotel and during dinners at a Manhattan restaurant to discuss price-fixing. Apple did not attend those meetings, however.

The Cupertino-based company did agree to allow some of the top book publishers to set their own prices in Apple’s iBookstore. Since then, prices have risen and other online retailers such as Amazon have been under pressure from publishers to raise their discounted prices as well. The DOJ claims Apple struck arrangements with Simon & Schuster, Hachette Book Group, HarperCollins Publishers, Penguin Group and Macmillan in an attempt to control prices.

While the three other companies have decided to settle the case out of court, Penguin Group, Macmillan and Apple have chosen to fight the suit.

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The United States government has filed an antitrust suit against Apple, Hachette Book Group, HarperCollins, Macmillan and Penguin alleging that the companies conspired to fix electronic book prices. Reports surfaced more than a month ago suggesting that the Department of Justice had launched an investigation into whether or not Apple had colluded with publishers to raise the prices of eBooks sold through Apple’s iBookstore. According to Bloomberg, an antitrust suit was filed by the government on Wednesday in a New York district court.

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The United States Department of Justice has warned Apple and five top U.S. book publishers that it plans to file an antitrust lawsuit against them, The Wall Street Journal reported on Wednesday evening. According to the paper’s multiple unnamed sources, the DOJ alleges that Apple colluded with publishers to raise the prices of eBooks sold through Apple’s iBooks store. Publishers named in the report include Simon & Schuster Inc., Hachette Book Group, Penguin Group, Macmillan and HarperCollins Publishers Inc. Read on for more.

Apple is said to have helped push book publishers away from their traditional pricing model — publishers would typically charge distributors about half the cover price for an eBook — and into an “agency model,” which would let publishers set the end-user price of an eBook and Apple would take a 30% commission on each sale. This new model is said to have made it difficult for booksellers such as Amazon and Barnes & Noble to compete, because they would regularly discount the prices of new books and trim margins in an effort to promote sales. Publishers are reportedly investigating a possible settlement.

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Google has hired Apple’s former senior director of product integrity for a new secret project, according to a report from VentureBeat. The man in question is Simon Prakash, who worked at Apple for more than eight years. Prakash was responsible for the quality control at Apple, a company that has a long-standing reputation for quality. He will now reportedly be working in Google’s “X lab” on a secret project headed by Google co-founder Sergey Brin. It is speculated that the project could be hardware related, and it may tie in with the company’s pending acquisition of Motorola Mobility. Google and Apple are currently being investigated by the Department of Justice following accusations that the companies upheld an illegal “no poach” agreement along with Intel, Adobe, Intuit, Pixar and Lucasfilm.

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Barnes & Noble and Microsoft are currently tied up in two separate legal battles, one being heard by the Department of Justice and the other by the International Trade Commission. In March 2011, like previous Android vendors, Microsoft accused Barnes & Noble’s NOOK and NOOK Color of infringing on the company’s patents. The software giant, which takes in roughly $450 million a year through Android royalties, was looking to license the infringed patents to the bookseller, but the company fired back with claims that Microsoft was creating an abusive monopoly. It is now being suggested by patent expert Florian Muller of FOSS Patents that the ITC is likely to reject Barnes & Noble’s antitrust complaint against Microsoft, however. The complete order is not publicly available, but an administrative law judge has reportedly dismissed Barnes & Noble’s patent misuse defense against Microsoft . The judge issued a detailed order that has not yet been made public, but the headline reads, “Initial Determination Granting Microsoft’s Motion for Summary Determination of Respondents’ First Affirmative Defense of Patent Misuse.” The ITC evidentiary hearing will begin on Monday, February 6th.

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Third-party companies that stored Megaupload’s data may delete all user files on Thursday. Megaupload customers, even those not guilty of piracy or using the service illegally, have been unable to access their files since the website was shut down on January 19th. So far, seven men have been charged for illegally allowing Megaupload users to store and share music, movies and other copyrighted content, among other things. The issue, however, is that millions of Megaupload users used the service legally to store family photos and other personal data. Megaupload doesn’t store the data itself, the AP said Monday, instead it hired Carpathia Hosting and Cogent Communications Group to store its data. A letter from the U.S. Attorney’s Office for the Eastern District of Virginia explained that both companies may begin deleting the data as soon as this Thursday. 50 million users could have their personal photos, videos and music erased; Megaupload attorney Ira Rothken said the company is currently speaking with prosecutors in an effort to save the data.

UPDATE: Megaupload lawyer Ira Rothke on Monday confirmed that Megaupload’s hosting companies have agreed not to delete user files for two weeks, TVNZ reports. “Carpathia and Cogent agreed to preserve consumer data for additional time of at least two weeks so Megaupload can work with US on proposal,” Rothke posted on Twitter.

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The Department of Justice recently released information that suggests a number of large U.S. technology companies may have created secret “no poaching” agreements with one another. The companies that have been under investigation include Apple, Google, Intel, Adobe, Intuit, Pixar, Adobe and Lucasfilm. The alleged no poaching agreements may have been pretty scary: According to TechCrunch, which published the DoJ’s early findings, companies were told to deny offers to anyone who applied for a job voluntarily from competing firms, and were to alert the employee’s current boss. That’s in addition to agreeing not to steal employees from one another. In one excerpt, Adobe’s senior vice president of human resources said: “Bruce [Adobe's former CEO] and Steve Jobs have an agreement that we are not to solicit ANY Apple employees, and vice versa.” The results of the DoJ investigation will be revealed as part of a class-action lawsuit hearing in San Jose next week.

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The antitrust division of the United States Justice Department will investigate Verizon Wireless’s plans to acquire spectrum from Comcast and its partners for $3.6 billion. Verizon Wireless announced in early December its intentions to purchase 122 AWS spectrum licenses from SpectrumCo, a joint venture between Comcast, Time Warner Cable and Bright House Networks. The carrier said it plans to use the additional spectrum to build out its 4G LTE network, pending government approval of the purchase. The Justice Department has the power to block the deal, although it is unclear when the investigation will be concluded. 

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AT&T said Monday that it, along with Deutsche Telekom, has asked Judge Ellen Huvelle to delay any further court hearings regarding AT&T’s planned $39 billion acquisition of T-Mobile USA until January 18th, 2012. AT&T said the delay will “allow the two companies time to evaluate all options” and that the U.S. Justice Department also joined in on the filing. AT&T recently withdrew its merger application from the FCC to instead focus on the lawsuit that was brought against the merger by the Department of Justice. “AT&T is committed to working with Deutsche Telekom to find a solution that is in the best interests of our respective customers, shareholders and employees,” AT&T said in a statement. “We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.” The delay makes a lot of sense, since the Department of Justice doesn’t have much of a reason to sue AT&T unless it has a merger application filed with the FCC. ”It’s not a real transaction until they file with the FCC,” Justice Department lead attorney Joseph Wayland said last week. AT&T’s full press release follows after the break. 

AT&T UPDATES STATUS OF T-MOBILE USA MERGER

DALLAS, December, 12, 2011 – AT&T today issued the following statement regarding the status of its merger with T-Mobile USA:

“AT&T and Deutsche Telekom advised Judge Huvelle this morning that they wish to stay any further Court proceedings until January 18, 2012, to allow the two companies time to evaluate all options.  The U.S. Department of Justice joined in the filing.

“AT&T is committed to working with Deutsche Telekom to find a solution that is in the best interests of our respective customers, shareholders and employees.  We are actively considering whether and how to revise our current transaction to achieve the necessary regulatory approvals so that we can deliver the capacity enhancements and improved customer service that can only be derived from combining our two companies’ wireless assets.”

The Justice Department intends to file a motion next week to delay or dismiss its lawsuit against AT&T’s planned acquisition of T-Mobile USA. The DOJ originally sued AT&T to block the deal in August, and AT&T soon after decided to pull its merger application from the FCC to instead focus on the suit. In light of the withdrawal of AT&T’s merger application, however, the DOJ seemingly no longer has cause to sue. ”It’s not a real transaction until they file with the FCC,” Wayland told Judge Ellen Huvelle according to Reuters. With that, it looks we’re now watching at a giant game of cat and mouse. AT&T CEO Randall Stephenson recently said that U.S. regulators don’t understand the wireless industry enough to see the benefits of its proposed T-Mobile USA purchase. Earlier Friday he said in an interview that ”regulators can’t keep up with the changes in the industry” and that blocking the merger will increase wireless prices for U.S. consumers.

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AT&T may propose to divest as much as 40% of T-Mobile USA’s assets in an effort to win approval from the Department of Justice in an upcoming lawsuit against the government agency. The DOJ sued to block the merger on August 31st, when it said “AT&T’s elimination of T-Mobile as an independent, low-priced rival would remove a significant competitive force from the market.” AT&T is planning to divest a lower percentage of spectrum and a higher share of T-Mobile USA’s customers, Bloomberg said Monday. The divestiture may not be enough to add balance to the market, however. “It’s unlikely that the DOJ would allow a big competitor like Verizon to purchase the assets,” Macquarie Securities analyst Kevin Smithen told Bloomberg, which means AT&T may need to rely on smaller regional carriers to pick up the customers and spectrum.

“[DOJ] guidelines require that any settlement or remedy replace the market power T-Mobile currently brings to the marketplace,” Sprint’s spokesperson for public policy John Taylor wrote on his personal blog. “Any new entity would have to create a nationwide network comparable to T-Mobile’s, which covers 97% of America… [and] offer exclusive handsets, just as T-Mobile does each year. AT&T would have to divest enough T-Mobile customers to ensure that any new entity or purchaser of the assets would have the same market share T-Mobile enjoys.”

Wall Street isn’t so sure the divestiture will help AT&T’s cause, either. “Realistically, AT&T is going to take its chances in court in February,” Sanford C. Bernstein analyst Craig Moffet said. “It’s all or nothing.”

On November 24th, AT&T withdrew its original application from the FCC to acquire T-Mobile USA and said it will instead focus on its lawsuit with the Department of Justice, which kicks off in February, before it reapplies for the FCC’s approval of the acquisition.

Read [Bloomberg] Read [John Taylor]