Bloomberg

Amazon Blocking Warner Movies Pre-Orders in Latest Feud

Amazon.com isn’t accepting pre-orders for Warner Bros movies on its website, the latest of the online retailer’s contract feuds to spill into public view. Customers trying to pre-order films such as “The Lego Movie,” “300: Rise of an Empire” and “Winter’s Tale” are instead asked to sign up to be notified when the item becomes available.

Digital downloads of the movies are available for purchase through Amazon Instant Video. The world’s biggest online retailer is seeking concessions from Warner Bros that would give it more of a margin on sales of DVDs and digital versions of its movies, said a person familiar with the matter, who asked not to be identified because the negotiations are private.

Don't Let Sprint Buy T-Mobile

[Commentary] For the same reason the merger of AT&T and T-Mobile US didn’t go through in 2011, a Sprint/T-Mobile joinder shouldn't be permitted either: No matter how the deal is conditioned, it will cause a reduction in competition. We already have a highly concentrated mobile-phone marketplace.

It's a "duopoly with a fringe": Two behemoths, Verizon Communications and AT&T, take home three-quarters of mobile revenue in the US. Their spectrum holdings, existing physical networks, powerful brands and lobbying heft create significant barriers to entry in an industry in which scale and scope are everything.

Sprint, with about 16 percent market share, argues that combining with T-Mobile (13 percent) will create a viable third player. But if a Sprint/T-Mobile deal is approved, the combined entity will have less incentive to be disruptive and more incentive to raise prices than either of them have now as separate businesses.

That matters even if you're not one of their customers. T-Mobile's aggressive marketing plans have driven Verizon Wireless and AT&T to act differently, offering better and cheaper family plans to some of their customers.

[Crawford is a professor at the Benjamin N. Cardozo School of Law]

President Obama's Destructive War on the Media

[Commentary] Few presidential candidates enjoyed better press than Barack Obama in 2008. He reciprocated by promising unprecedented "openness in government" and a new era of transparency. He has fallen far short of the promise.

This administration has prosecuted more whistle-blowers for leaks and gone after more journalists than any of its predecessors.

The issue was crystallized anew recently when the Supreme Court refused to hear an appeal from New York Times reporter James Risen, who has been ordered to testify in the trial of Jeffrey Sterling, a former Central Intelligence Agency official.

Sterling is charged with giving Risen classified information about an attempt to sabotage Iran's nuclear program. The Justice Department has relentlessly pursued Risen, and he could face jail time for failing to comply with the subpoena. Similar claims about protecting national security are being made about Sterling, who proclaims his innocence. A federal judge dismissed the proceedings against Risen, but the Obama administration successfully appealed the decision. On the federal level, much depends on an administration's attitude.

As it stands, in the US, the news media has considerable protections when it comes to censorship or libel, but they don't apply to news gathering. Attorney General Eric Holder has vowed in private meetings and some public pronouncements to change this approach. With the decision by the Supreme Court, the Risen case offers the opportunity to do so.

T-Mobile’s Legere Said Likely CEO After Sprint Merger

As Sprint nears an agreement to buy T-Mobile US, the man in the hot pink T-shirt will soon step into the limelight. John Legere, the chief executive officer of T-Mobile who’s known for wearing company-branded shirts and taunting his competitors on Twitter, is likely to run the combined company, according to two people familiar with the matter who asked not to be identified because the plans are private.

He’s being favored over Dan Hesse, the 60-year-old CEO of Sprint, who took over a broken company in 2007 and did enough fixing, even while operating at a loss, to attract a new owner in 2013.

As negotiators hammer out the finer points of an agreement, Legere will increasingly be responsible for the prospects of an enlarged company. It would fall to him to integrate disparate management teams and divergent marketing strategies, while also combining two networks that are years behind the technological advances of their biggest rivals, AT&T and Verizon Communications.

Germany Mulls Arbitration for Web ‘Right to Be Forgotten’

The German government is considering setting up arbitration courts to weigh in on what information people can force Google and other search-engine providers to remove from results.

Following a European Union court decision in May granting consumers the “right to be forgotten,” the Interior Ministry in Berlin would seek to establish “dispute-settlement mechanisms” for consumers who file so-called take-down requests. If search providers introduce automatic deletion, public information would be at risk, the ministry said.

“Politicians, prominent figures and other persons who are reported about in public would be able to hide or even delete reports they find unpleasant,” it said. The ministry suggested that the removal of information shouldn’t be left to company algorithms.

DirecTV Investor Sues to Block AT&T $48 Billion Takeover

A DirecTV investor sued to block AT&T’s $48 billion takeover of the largest US satellite-television company, calling the offer “inadequate.”

Under the terms of the deal announced in May, AT&T will pay $95 for each share of DirecTV, split between $28.50 in cash and the equivalent of $66.50 in stock.

“Given the fact that the company was poised for significant future growth and success, the value of DTV stock is being significantly undervalued in the proposed acquisition,” investor David Rivera said in a complaint filed in Delaware Chancery Court. Rivera asked a judge to stop the DirecTV acquisition under its present terms and to award damages and legal fees.

In his complaint, he claims that DirecTV directors improperly agreed to an onerous breakup fee of $1.45 billion in order to block other potential suitors from making a higher bid. He also said the board’s sales procedure was “fundamentally flawed.”

“Not only did the board fail to run a full and fair sales process on the front-end of the transaction, it ensured no competing bid would emerge on the back-end as well,” according to the complaint.

AT&T and DirecTV Team Up Against Customers

[Commentary] Just when you thought the information infrastructure industry in America couldn't be consolidated any further, AT&T has announced another merger.

It's one more megadeal that promises to provide the giant carrier with more opportunities to increase its profits, while not moving the country any closer to being competitive on the global informational stage.

What's really going on is that companies are recognizing that the satellite industry can't survive. Given this reality, DirecTV needs to be rescued. Meanwhile, AT&T wants to maintain the status quo. Although it is primarily a wireless company, AT&T still has some wired operations, and is looking to hang on to the customers it already has in a quarter of the country for U-Verse, its bundled pay TV and data product. At the same time, it plans to abandon (rather than upgrade) many of its other wired customers, sell them on its more-profitable wireless services instead, and cede wired subscriptions in the rest of the country to the dominant cable operators.

We'll become two Americas: poorer people and people in rural areas depending on wireless smartphones, and richer people paying through the nose for expensive bundled services.

[Crawford is a professor at the Benjamin N. Cardozo School of Law]

US Companies Hacked by Chinese Didn’t Tell Investors

Three US public companies identified as Chinese hacking victims didn’t report the theft of trade secrets and other data to investors, despite rules designed to disclose significant events.

Two of the companies -- aluminum maker Alcoa and metals supplier Allegheny Technologies -- said the thefts weren’t “material” to their businesses and therefore don’t have to be disclosed under Securities and Exchange Commission rules designed to give investors information that may affect share prices.

Scott Kimpel, a lawyer who previously worked on disclosure rules as a member of the SEC’s executive staff, said there is “a gray area where a lot of the companies are not perfectly clear on what they should be disclosing.”

Apple, Samsung Blame Each Other for Lack of Settlement

Apple and Samsung Electronics blamed each other for blocking progress toward a settlement of their patent disputes in a report to the judge who has presided over their two US trials.

While both companies vowed to continue pursuing an accord to end their three-year legal fight over smartphone technology, each said its adversary has taken positions that make out-of-court resolution more difficult, according to a filing in federal court in San Jose, California.

Reaching a settlement is “impossible” as long as Samsung refuses to agree that Apple’s participation in talks can’t be used in any proceedings over royalties or possible sales bans, Apple lawyer Mark Selwyn said in the filing with US District Judge Lucy Koh, who has repeatedly urged the companies to make peace.

Michael Fazio, a lawyer for Suwon, South Korea-based Samsung, said Quinn’s published comments don’t undermine Samsung’s willingness to discuss a settlement. While Samsung doesn’t have pre-conditions for the settlement process, it’s improper for Apple to insist that participation in negotiations can’t be cited in future court proceedings, Fazio said.

“Simply put, though both parties contend that they are committed to resolution, only Apple seeks to impose an obstacle to this resolution through a unilateral condition,” Fazio said in the filing.

Net Neutrality an Oxymoron as FCC Decides Winners and Losers

Federal Communications Commission Chairman Tom Wheeler said “the prospect of a gatekeeper choosing winners and losers on the Internet is unacceptable.” That’s what the FCC will be, no matter how it fashions final rules.

If it adopts toughened rules as demanded by advocacy groups, some Democratic lawmakers and content providers including Google and Netflix, Chairman Wheeler and carriers foresee years of litigation. If the FCC adopts the Chairman Wheeler proposal advanced to allow some priority arrangements as long as they aren’t “commercially unreasonable,” it could determine winners and losers on a case-by-case basis.

If it kills the preliminary proposal that passed 3-2, there would be no rules to prevent Internet service providers including AT&T, Comcast and Verizon Communications from charging to distribute Web content.

“Without rules governing a free and open Internet it is possible that companies -- fixed and wireless broadband providers -- could independently determine whether they want to discriminate or block content, pick favorites, charge higher fees or distort the market,” Democratic Commissioner Mignon Clyburn said.