Politics and Law

In a case that raises questions about online journalism and privacy rights, the U.S. Department of Justice sent a formal request to an independent news site ordering it to provide details of all reader visits on a certain day.

The grand jury subpoena also required the Philadelphia-based Indymedia.us "not to disclose the existence of this request" unless authorized by the Justice Department, a gag order that presents an unusual quandary for any news organization.

Kristina Clair, a 34-year-old Linux administrator living in Philadelphia who provides free server space for Indymedia.us, said she was shocked to receive the Justice Department's subpoena. (The Independent Media Center is a left-of-center amalgamation of journalists and advocates that, according to their principles of unity and mission statement, work toward "promoting social and economic justice" and "social change.")

The subpoena (PDF) from U.S. Attorney Tim Morrison in Indianapolis demanded "all IP traffic to and from www.indymedia.us" on June 25, 2008. It instructed Clair to "include IP addresses, times, and any other identifying information," including e-mail addresses, physical addresses, registered accounts, and Indymedia readers' Social Security numbers, bank account numbers, credit card numbers, and so on.

"I didn't think anything we were doing was worthy of any (federal) attention," Clair said in a telephone interview on Monday. After talking to other Indymedia volunteers, Clair ended up calling the Electronic Frontier Foundation in San Francisco, which represented her at no cost.

Read more of "Justice Dept. Asked For News Site's Visitor Lists" at CBSNews.com.

The European Commission on Monday formally dug in its heels over Oracle's planned acquisition of Sun Microsystems, but Oracle accused the regulatory body of "profound misunderstanding" in a rebuttal that declared its intention to fight the opinion.

The regulatory body issued a statement of objections about the merger, according to a Securities and Exchange Commission filing from Sun Microsystems. The open-source MySQL database software is the sole issue of concern in the matter, Sun said in the filing.

"The Statement of Objections sets out the Commission's preliminary assessment regarding, and is limited to, the combination of Sun's open source MySQL database product with Oracle's enterprise database products and its potential negative effects on competition in the market for database products," Sun said in the filing.

Oracle, though, fired back immediately, saying the objection "reveals a profound misunderstanding of both database competition and open-source dynamics." And indicating that other technologies are in limbo during the European deliberations, Oracle said, "Oracle's acquisition of Sun is essential for competition in the high-end server market, for revitalizing Sparc, and Solaris and for strengthening the Java development platform."

Meanwhile, the U.S. Justice Department reiterated its stance that the acquisition isn't anticompetitive. But given the gulf between Oracle and EC perspectives and Oracle's unwillingness to spin the MySQL software group off, it appears the matter won't be resolved soon.

MySQL is open-source software, meaning anyone may see, modify, and distribute the human-readable source code that underlies the software package computers actually run. Oracle's core database product is proprietary, meaning they don't grant those freedoms. MySQL is used widely at Facebook and Google among other companies, and competes to some extent with Oracle's existing products, arguably indirectly by expanding into newer markets to which Oracle's software isn't as well-suited.

Oracle castigated the commission in its statement:

It is well understood by those knowledgeable about open source software that because MySQL is open source, it cannot be controlled by anyone. That is the whole point of open source.

The database market is intensely competitive with at least eight strong players, including IBM, Microsoft, Sybase and three distinct open-source vendors. Oracle and MySQL are very different database products. There is no basis in European law for objecting to a merger of two among eight firms selling differentiated products. Mergers like this occur regularly and have not been prohibited by United States or European regulators in decades...

Sun's customers universally support this merger and do not benefit from the continued uncertainty and delay. Oracle plans to vigorously oppose the Commission's Statement of Objections as the evidence against the Commission's position is overwhelming. Given the lack of any credible theory or evidence of competitive harm, we are confident we will ultimately obtain unconditional clearance of the transaction.

The Justice Department, which is in Oracle's camp, detailed its reasoning in a statement from Deputy Assistant Attorney General Molly Boast of the Justice Department's Antitrust Division.

And though Boast pointed to the department's "strong and positive relationship on competition policy matters" with the EC, she also said, "At this point in its process, it appears that the EC holds a different view. We remain hopeful that the parties and the EC will reach a speedy resolution that benefits consumers in the commission's jurisdiction."

The Justice Department reasoned that there are other database packages available and that open-source projects can be forked by those who disagree with corporate sponsors' handling of the software.

"Several factors led the (Justice Department's antitrust) division to conclude that the proposed transaction is unlikely to be anticompetitive. There are many open-source and proprietary database competitors. The division concluded, based on the specific facts at issue in the transaction, that consumer harm is unlikely because customers would continue to have choices from a variety of well established and widely accepted database products," Boast said. "The department also concluded that there is a large community of developers and users of Sun's open source database with significant expertise in maintaining and improving the software, and who could support a derivative version of it."

Former Alaska Gov. Sarah Palin is a lightning rod for controversy, but a recent attempt to keep a low profile might just result in, well, more press. The onetime vice presidential hopeful Palin, who stepped down from the governorship this summer, will be speaking at a Right to Life event in Milwaukee, Wis., on Friday evening, and her team has mandated that there are no reporters allowed--or gadgets.

According to CNN, laptops, cell phones, cameras, and anything else that could potentially be used as a recording device will not be allowed into the auditorium. Tickets to the event were $30.

It's not an unprecedented move by any means. Advance screenings of movies, for instance, regularly have a no-cell-phones policy now that just about any phone can be used as a recording device. And Palin is hardly the only high-profile politician to put a no-press, no-recording rule in place for a speech: Former Vice President Al Gore did just that for a keynote address at the RSA security conference in early 2008.

But the funny part is that banning the press will generally do very little good, since anyone with a notebook or a good memory could easily post quotes or a synopsis to a blog or Twitter account within minutes of the event ending. In this case, as with Gore's press ban at RSA, it's likely that Palin's move will just end up stirring up more buzz.

Considering her book "Going Rogue: An American Life" is coming out in a matter of days, that might ultimately turn out well--or not.

Europe is set to get a major overhaul of its telecommunications regulation, after the European Parliament and Council of Telecoms Ministers reached a compromise on the rights of Internet users.

The Telecoms Reform Package is a raft of new laws that tackle issues ranging from data-breach notification to faster number porting. Following an agreement reached on Wednesday night, the package will now become part of national legislation in every EU country, with a deadline of May 2011.

A sticking point in the package's progress had been a provision regarding "three strikes" laws targeting Internet users suspected of unlawful file-sharing of copyrighted material. But negotiations led to an "Internet freedom provision," which states that any measures taken by member states to limit Internet access or use must "respect the fundamental rights and freedoms of natural persons, as guaranteed by the European Convention for the Protection of Human Rights and Fundamental Freedoms and general principles of Community law."

Read more of "European 'internet freedom' law agreed at ZDNet UK.

"I don't think John McCain could run a major corporation. I don't think Barack Obama could run a major corporation. I don't think Joe Biden could, either. But it is not the same as being the president or vice president of the United States. It is a fallacy to suggest that the country is like a company. To run a business, you have to have a lifetime of experience in business, but that's not what Sarah Palin, John McCain, Barack Obama or Joe Biden are doing."
- Former Hewlett-Packard CEO Carly Fiorina

(Credit: AllThingsDigital)

Her dreams of heading up the World Bank dashed, former Hewlett-Packard Chief Executive Carly Fiorina, the architect of one of the worst tech mergers in history, has turned her attention to the U.S. Senate.

After months of speculation, Fiorina on Wednesday officially announced her candidacy. She'll run as a Republican against Sen. Barbara Boxer (D-Calif.). Of course to do that, she must first win the Republican primary. Fiorina broke the news in an op-ed in the Orange County Register.

"Admittedly, I have not always been engaged in the electoral process, and I should have been," she wrote. "For many years I felt disconnected from the decisions made in Washington and, to be honest, really didn't think my vote mattered because I didn't have a direct line of sight from my vote to a result. I realize that thinking was wrong. As I grew throughout my career, beginning as a secretary and eventually becoming a CEO, I saw how government impacted business. I learned more as a member of advisory boards at the State Department, the Pentagon and the CIA. I now understand, in a very real way, that the decisions made by the Senate impact every family and every business, of any size, in America. This is what motivates me to run for the U.S. Senate. And so today I am announcing my candidacy to serve the people of California as your next U.S. senator. ... Together we can turn things around."

Together we can turn things around? Not if Fiorina's performance at HP is any indication. Before she was forced out of the company by its board of directors, she was so at odds with the uniquely Californian "HP Way" that her corner office could have been powered solely by Bill Hewlett spinning in his grave.

UPDATE: Here's another Fiorina op-ed (PDF) from earlier this year in which she discusses executive pay. Unsurprisingly, she is against President Obama's efforts to restore "common sense" to CEO compensation. And why wouldn't she be? After all she walked away from HP with a $21 million severance package ...

Story Copyright (c) 2009 AllThingsD. All rights reserved.

For the last decade or so, Internet service providers have been dealing with requests to block access to pornographic or copyright-infringing Web sites, or in China, ones that dare to criticize the government.

Now a U.S. House of Representatives bill is taking the unusual step of requiring Internet providers to block access to online financial scams that fraudulently invoke the Securities Investor Protection Corporation--or face fines and federal court injunctions.

The House Financial Services Committee approved the legislation on Wednesday by a 41 to 28 vote.

If you've never heard of the SIPC, you're not alone. It's a government-linked entity that aids investors when funds are missing from their accounts, up to a limit of $500,000 for stocks, bonds, and mutual funds. Only investor accounts that investors have opened with members of the SIPC--here's a list--qualify for its protection.

It turns out that occasionally, Internet fraudsters, scamsters, and other assorted malcontents have posed as legitimate brokerage firms that are SIPC members, often with a similar name or domain name. The scam may be a too-good-to-be-true offer to buy securities that asks the unwitting customer to pay fees in advance, or schemes involving fraudulent checks that eventually bounce.

That seems to be in part what prompted Rep. Paul Kanjorski, a Pennsylvania Democrat and chairman of a key subcommittee, to introduce the Investor Protection Act a few weeks ago. Section 508 of that bill says:

Any Internet service provider that, on or through a system or network controlled or operated by the Internet service provider, transmits, routes, provides connections for, or stores any material containing any misrepresentation (of the SIPC) shall be liable for any damages caused thereby, including damages suffered by the SIPC, if the Internet service provider...is aware of facts or circumstances from which it is apparent that the material contains a misrepresentation.

That section isn't mentioned in Kanjorski's press release dated October 1, which is why Internet providers were a bit taken aback when they found out about it a few days ago. The Internet Commerce Coalition sent a letter to Kanjorski before Wednesday's vote raising concerns with the bill, but the industry isn't terribly optimistic.

One potential problem with Kanjorski's bill is that most Internet providers simply don't have a good way to block access to any electronic "material" containing fake SIPC data. That wording is broader than just Web pages: it includes blocking certain e-mail, IM conversations, VoIP chats, and so on. And even the more straightforward task of blocking Web sites can be overly broad and problematic, which is why a federal judge in Pennsylvania declared a child porn filtering law to be unconstitutional in a landmark 2004 ruling.

Internet providers are also worried that Kanjorski's requirement--and the accompanying civil penalties and injunctions--would apply even if the blocking is not technically feasible. Or if it's impossible. (Other questions: Would this blocking requirement apply to private-sector employers? Schools and universities? Locally owned coffee shops that provide Internet service through Wi-Fi?)

Fraudulent Web sites have bedeviled the SIPC, off and on, for at least six years. In 2003, the group distributed a public warning against "brokerage identity theft" and followed up by asking the FBI to investigate a fake site that resembled the SIPC's own.

The SIPC does have a searchable database of its members, listing street addresses, but it doesn't take the obvious step of listing members' official Web sites, which other certification programs like Truste do.

Searching on San Francisco shows, for instance, that SIPC-listed Whitehall-Parker Securities has an address on Pacific Avenue. But an investor can't easily tell whether whitehall-parker.com is the actual site; a scammer could easily set up a fake site at whitehallparker.com (which, as of this writing, is available to be registered).

The Treasury Department's version of the Investor Protection Act of 2009 released in July doesn't seem to include the Internet-filtering section, meaning that the Obama administration concluded that it was unnecessary. So what prompted Kanjorski to insert it?

Addendum at 11:30 a.m. PT: Abigail McDonough, Kanjorski's spokeswoman, told me that her boss is open to modifying the language of the bill to reflect industry concerns. It also turns out that the language from the Investor Protection Act was borrowed from H.R. 2798, which was introduced in June by Rep. Michael Arcuri, D-N.Y., as part of a post-Bernie Madoff scandal effort to increase the level of SIPC guarantees for investors.

One Capitol Hill source says the SIPC asked for that language to be included in the Investor Protection Act. And a representative of SIPC says the organization may not have a response until Thursday because its president, Stephen Harbeck, is traveling from China.

New York Attorney General Andrew M. Cuomo filed a federal antitrust lawsuit Wednesday against Intel that accuses it of paying computer makers rebates to illegally maintain its monopoly power, the newest among several such attacks that have dogged the chipmaker in recent years.

"Intel has engaged in a systematic worldwide campaign of illegal, exclusionary conduct to maintain its monopoly power and prices in the market for x86 microprocessors," the suit asserts. "By exacting exclusive or near-exclusive agreements from large computer makers in exchange for payments totaling billions of dollars, and threatening retaliation against any company that did not heed its wishes, Intel robbed its competitors of the opportunity to challenge Intel's dominance in key segments of the market. This illegal behavior was highly detrimental to consumers, competition, and innovation."

The suit "seeks to bar further anticompetitive acts by Intel, restore lost competition, recover monetary damages suffered by New York governmental entities and consumers, and collect penalties," Cuomo said in a statement.

The suit (click for PDF) makes the state the newest party to go after the dominant chipmaker. Intel also is in the midst of an antitrust suit brought by top rival AMD in 2005 and appealing a massive $1.5 billion fine from the European Commission from a later case in the European Union.

New York Attorney General Andrew M. Cuomo

(Credit: New York Office of the Attorney General)

Intel will defend itself, Intel spokesman Chuck Mulloy said in response to the New York suit.

"We disagree with the New York attorney general. Neither consumers--who have consistently benefited from lower prices and increased innovation--nor justice are being served by the decision to file this case now," Mulloy said.

Of e-mails the attorney general quoted as evidence Intel abused its position, all already emerged in earlier cases, he added. "It is the AMD case filed 4.5 years ago. It's the same case the EU brought. There's nothing significant or new here that hasn't been discovered," Mulloy said.

According to the suit, computer makers "frequently decided, when faced with the array of incentives and threats which Intel brought to bear, to collaborate with Intel in restricting their purchases from AMD."

"In a February 27, 2003 internal Dell document, for example, it was assumed that 'aggressive' purchases by Dell from AMD could result in '(r)etaliatory (rebate) reductions (by Intel that) could be severe and prolonged with impact to all LOBs (lines of business),'" the suit said. "Another Dell document from March 2003 concluded that '(a)nticipated Intel response wipes out all potential opinc (operating income) upside from going with AMD.'"

And an unnamed IBM executive said in a 2005 e-mail that balancing business interests against Intel's response was hard. From the suit:

I understand the point about the accounts wanting a full AMD portfolio. The question is can we afford to accept the wrath of Intel if we do the AMD full portfolio? It is a very hard question to deal with. On the one hand, having Intel help us has been one element of why we are doing better in the market. If they start to sell against us again I am afraid that we would be in a very difficult spot. On the other hand, if we leave Sun and HP an opening with AMD we will (be) very exposed on that side of things.

Cuomo's office said it began investigating the case in January 2008, "reviewed millions of pages of documents and e-mails and took testimony from several dozen witnesses."

Updated 9:43 a.m. PST with further details from the lawsuit.

Oracle is taking a hard line in dealing with European Union objections to its planned acquisition of Sun Microsystems, according to a Financial Times report Tuesday.

EU antitrust regulators are concerned that Oracle, which has a large business in proprietary software, won't be a good home for Sun's open-source MySQL database business. According to the report, Oracle is unyielding, offering no concessions to deal with the EU's concerns.

That stance could lead the regulators to issue a formal complaint objecting to the deal, and that move could occur within days, according unnamed sources in the story. Neither the EU or Oracle commented for the story.

MySQL's former chief executive, Marten Mickos, has urged the EU to approve the acquisition, but cofounder Monty Widenius has objected. Sun shareholders and the U.S. Justice Department have approved the deal.

Could a legal challenge threaten the launch of Barnes & Noble's Nook e-reader?

In a new lawsuit, start-up Spring Design is seeking not only monetary damages from Barnes & Noble, but also is looking to get an injunction barring sales of the Nook, which it says misappropriates its trade secrets.

Spring Design said in a statement Monday that it had filed a lawsuit against Barnes & Noble, but the statement did not specify what damages it was seeking.

However, it turns out that the lawsuit, filed in federal court in San Jose, Calif., seeks both monetary damages as well as a halt to sales of the Nook.

According to the lawsuit, a copy of which was seen by CNET News, Spring Design says it is seeking "preliminary and permanent injunctive relief... restraining and enjoining B&N from use or disclosure of Spring's confidential information or trade secrets, including the sale of the Nook."

The Nook, like Spring Design's Alex, combines a color touch screen with an e-ink display, and both readers use the Android operating system. In its lawsuit, Spring Design says it showed its plans for the Alex to Barnes & Noble, which showed interest in the product and gave no indication it was working on a similar device.

The Nook, a clear and present challenger to Amazon's Kindle, is due to go on sale later this month for $259.

Barnes & Noble has declined to comment on the lawsuit, saying it does not discuss litigation matters.

Court papers filed by Spring Design also include a confidentiality agreement, signed in February, between the company and Barnes & Noble, as well as early Spring Design presentations and e-mails between Barnes & Noble and Spring executives.

As a reminder, here's a look at Spring Design's Alex (left) and Barnes & Noble's Nook (note--the images are not to scale):

(Credit: Spring Design)

(Credit: Barnes & Noble)