Tech Law Journal Daily E-Mail Alert
Friday, April 1, 2011, Alert No. 2,214.
Home Page | Calendar | Subscribe | Back Issues | Reference
House Communications and Technology Subcommittee Approves BTOP/BIP Bill

4/1. The House Commerce Committee's (HCC) Subcommittee on Communications and Technology (SCT) held a hearing on, and then approved without amendment, a discussion draft of HR __ [6 pages in PDF].

This bill pertains to oversight by the National Telecommunications and Information Administration (NTIA) and Rural Utilities Service (RUS) of broadband related spending under HR 1 (111th Congress). That bill appropriated $7 Billion for broadband grant and loan programs.

The Department of Commerce's (DOC) NTIA administers the Broadband Technology Opportunities Program (BTOP). The Department of Agriculture's (DOA) RUS administers the Broadband Initiatives Program (BIP).

The Subcommittee also held a hearing on February 10, 2011, on this topic. See, HCC web page with hyperlinks to video, opening statements and prepared testimony.

This bill addresses unused and reclaimed funds, termination of certain awards of funds, and waste, fraud and abuse.

Rep. Greg Walden (R-OR), Chairman of the Subcommittee, wrote in his opening statement that "issues of fraud, waste and abuse will start popping up now that the money is beginning to flow".

The HCC also released a March 30, 2011, memorandum [4 pages in PDF] on this hearing and mark up. It states that the "NTIA has made a total of 233 awards valued at $3.94 billion. Only $300 million has actually been spent to date. Three awards have been returned, worth approximately $39 million altogether (Leech Lake County, MN $1.7 million; Badgernet, WI, $23 million; and Education Network, IN, $14.3 million)." (Parentheses in original.)

This memorandum states that the "RUS has made a total of 320 awards valued at $3.53 billion. Less than $100 million has actually been spent to date. Ten (10) awards worth more than $38 million altogether have been returned. The fact that this number of awards has already been returned, and that so much money still remains obligated but unspent, makes oversight of the program and this legislation all the more important." (Parentheses in original.)

See also, the NTIA's March 3, 2011, report titled "Broadband Technology Opportunities Program (BTOP) Quarterly Program Status Report".

Lawrence StricklingLarry Strickling (at right), head of the NTIA, wrote in his prepared testimony [14 pages in PDF] that "NTIA supports the ultimate goals of the bill, which are to protect against waste, fraud, and abuse and to ensure that unused or reclaimed BTOP funds are promptly returned to the Treasury".

He also said that "NTIA does have some concerns, however, about the specific wording of the requirement to deobligate and return funds to the Treasury and looks forward to working with the Subcommittee to clarify its intent."

It was a hurried hearing and mark up. While numerous members made opening statements, and asked questions, during the hearing, there was no debate, and no amendments were offered, during the mark up.

See also, prepared testimony [9 pages in PDF] of Jonathan Adelstein, head of the RUS.

See also, related story in this issue titled "Summary of BTO/BIP Bill".

Summary of BTO/BIP Bill

4/1. The House Commerce Committee's (HCC) Subcommittee on Communications and Technology (SCT) released a discussion draft of HR __ [6 pages in PDF], a bill pertaining to Department of Commerce's (DOC) National Telecommunications and Information Administration's (NTIA) Billion Broadband Technology Opportunities Program (BTOP), and the Department of Agriculture's (DOA) Rural Utilities Service's (RUS) Billion Broadband Initiatives Program (BIP).

The Subcommittee held a hearing on this discussion draft bill, and approved it without amendment, on April 1, 2011. See, related story in this issue titled "House Communications and Technology Subcommittee Approves BTOP/BIP Bill".

This bill would require the NTIA and RUS to terminate an award of either a grant or loan if the NTIA or RUS determine that "cause exists to terminate the award". Moreover, "Such cause may include an insufficient level of performance, wasteful spending, or fraudulent spending."

It would require the NTIA and RUS to "immediately deobligate" and return to the U.S. Treasury any terminated awards.

It would require the NTIA and RUS to return to the U.S. Treasury any awards that have been returned to the NTIA or RUS, and any awards "disclaimed by the award recipient".

It would require the NTIA and RUS to make determinations on matters of "material noncompliance with the award terms or provisions or improper usage of award funds" within 30 days of receiving information.

The bill would also designate the officials who would make such determinations, and require notice and explanation of such determinations within three days to the Committees of Congress with jurisdiction.

Finally, the bill would amend Section 6001 of the HR 1 (111th Congress) to make explicit that BTOP funds for awards that are terminated because of insufficient performance, waste, or fraud shall be deobligated.

House Subcommittee Holds Hearing on NSL Authority

3/30. The House Judiciary Committee's (HJC) Subcommittee on Crime, Terrorism and Homeland Security held a hearing titled "The Permanent Provisions of the PATRIOT Act".

The hearing centered on National Security Letter (NSL) authority, which empowers the FBI, for example, to compel phone companies and internet service providers to turn over records without seeking prior judicial approval.

Republican members of the Subcommittee defended the Department of Justice (DOJ) and its Federal Bureau of Investigation (FBI), and their use of NSL authority. Rep. Trey Gowdy (R-SC) badgered the ACLU witness. Democrats criticized or questioned the FBI's use of NSL authority.

As is the case for most hearings on surveillance issues, the Subcommittee gained only  limited information, because it heard from government witnesses, but not from representatives of service providers, law professors with expertise in this area, or people targeted by electronic surveillance.

Introduction to NSLs. Three provisions of the huge 2001 surveillance act (Title II of the HR 3162, 107th Congress, titled "USA PATRIOT Act", signed October 26, 2001, Public Law 107-56) are subject to sunsets -- those regarding Section 215 business records, lone wolves, and roving wiretaps. Many others are not. No NSL powers are subject to sunset provisions.

The 2001 Act did not create NSL authority. However, it lowered the standard. Before passage of the 2001 Act, the government had to have specific and articulable facts demonstrating that the information sought pertained to a foreign power or an agent of a foreign power. The 2001 Act provides that the FBI may use NSLs to obtain information from a "wire or electronic communication service provider" that is merely "relevant to an investigation to protect against international terrorism or clandestine intelligence activities".

These NSLs also include non-disclosure orders, or gag orders.

NSL authority is codified at 18 U.S.C. § 2709 (criminal code's ECPA), 12 U.S.C. § 3414 (Right to Financial Privacy Act), 15 U.S.C. §§ 1681u and v (Fair Credit Reporting Act), and 50 U.S.C. § 436 (National Security Act).

History of Abuse of NSL Authority. The Department of Justice's (DOJ) Office of the Inspector General (OIG) has written reports that document the FBI's abuse of NSL authority.

On March 9, 2007, the DOJ's OIG released a report [30 MB in PDF] titled "A Review of the Federal Bureau of Investigation's Use of National Security Letters". See also, story titled "DOJ IG Releases Reports on Use of NSLs and Section 215 Authority" in TLJ Daily E-Mail Alert No. 1,551, March 13, 2007. That report covered the use of NSLs in 2003 through 2005.

On March 13, 2008, the OIG released a report [187 pages in PDF] titled "A Review of the FBI’s Use of National Security Letters: Assessment of Corrective Actions and Examination of NSL Usage in 2006". See also, story titled "DOJ Inspector General Releases Second Report on FBI Misuse of National Security Letters" in TLJ Daily E-Mail Alert No. 1,730, March 12, 2008.

DOJ Testimony. Todd Hinnen, the acting Assistant Attorney General (AAG) in charge of the DOJ's National Security Division (NSD) testified at this hearing. See, prepared testimony [PDF].

David Kris, the last AAG, recently left the DOJ. President Obama has nominated Lisa Monaco to replace him. See, story titled "Obama Nominates Lisa Monaco to Be Head of DOJ's National Security Division" in TLJ Daily E-Mail Alert No. 2,205, March 21, 2011.

Hinnen wrote that "A national security letter is effectively an administrative subpoena, issued by a federal agency, requiring the production of certain limited types of information held by third-party custodians."

He continued that "Under ECPA, the FBI may obtain subscriber information, toll billing records, and electronic communication transactional records from a wire or electronic communications service provider, such as a telephone company or an Internet service provider. This is the NSL authority that is used most frequently by the FBI". But, he added, "the FBI cannot obtain the content of communications through an ECPA NSL."

He disclosed that some service providers have concluded that the FBI cannot compel service providers to produce "electronic communication transactional records" (ECTR). He said the the DOJ wants the ECPA to be amended to state that such production is required.

He argued that "the current standards for issuance of an NSL are appropriate". He added that "Imposing a higher evidentiary standard on NSLs, as was the case before the reforms of the USA PATRIOT Act, would significantly impair the effectiveness of this important investigative tool."

And, he argued that "NSLs are an indispensable investigative tool, and have often been described as the “building blocks” of national security investigations. NSLs contribute significantly to the FBI’s ability to carry out its national security responsibilities by directly supporting its counterterrorism, counterintelligence, and intelligence missions."

As for the DOJ/OIG reports, Hinnen wrote that recent changes at the FBI have "significantly improved the FBI’s compliance with the NSL statute and has reduced errors in the production of NSLs to a very low rate".

Kenneth Wainstein was the NSD AAG late in the Bush administration. He now works for the law firm of O'Melveny & Myers. He did not disclose any of his clients.

He noted in his prepared testimony that "Thanks to the determined efforts of our law enforcement and intelligence leadership and personnel, we now have a formidable counterterrorism program that has succeeded in preventing another 9/11 attack and keeping al Qaeda off balance".

He added that "we now have a well-balanced legislative framework" and "we have every reason to approach the ten-year anniversary of the PATRIOT Act with confidence that its authorities and safeguards will continue to contribute both to the defense of our national security and to the protection of our civil liberties."

ACLU Testimony. Mike German of the ACLU criticized the FBI's history of abuse of NSL authority. See, prepared testimony and ACLU release.

He wrote that "It is time for Congress to act. Lawmakers should take this opportunity to examine thoroughly all Patriot Act powers, and indeed all national security and intelligence programs, and bring an end to any government activities that are illegal, ineffective or prone to abuse."

He continued that "NSLs are secret demand letters issued without judicial review to obtain sensitive personal information such as financial records, credit reports, telephone and e-mail communications data and Internet searches."

Mike German
Mike German
Copyright ACLU

German (at right) urged the Congress to "Repeal the expanded NSL authorities that allow the FBI to demand information about innocent people who are not the targets of any investigation. Reinstate prior standards limiting NSLs to information about terrorism suspects and other agents of foreign powers."

He also urged the Congress to "Impose judicial oversight of all Patriot Act authorities. Allowing the FBI to self-certify that it has met the statutory requirements invites further abuse and overuse of NSLs."

German's 31 page singled spaced prepared testimony also contains detailed reviews of, and proposals for changes to, other surveillance provisions of the 2001 act. However, the Subcommittee members focused on his proposals regarding NSL authority.

Who Speaks for the Privacy Interests of Individuals? The Subcommittee heard no testimony from individuals whose records have been obtained pursuant to NSLs.

In his oral testimony, Hinnen made the assertion that in protecting the interests of individuals, the telecommunications companies are a "proxy" for their customers.

German disputed this. He said that the "telecommunications companies were not looking out for the interests of their customers".

Even if the service providers represent the interests of their customers, the Subcommittee heard no testimony from executives at phone companies, internet service providers, other targets of NSLs, or from representatives of their trade groups. No one testified for either surveilled individuals, or for the service providers.

Nor did the Subcommittee hear testimony from any law professors who teach or write on surveillance law.

As is the case at almost all Congressional hearings on surveillance, the only witnesses with particular or personal knowledge of relevant information were current and former government officials engaged in surveillance activities.

About Tech Law Journal

Tech Law Journal publishes a free access web site and a subscription e-mail alert. The basic rate for a subscription to the TLJ Daily E-Mail Alert is $250 per year for a single recipient. There are discounts for subscribers with multiple recipients.

Free one month trial subscriptions are available. Also, free subscriptions are available for federal elected officials, and employees of the Congress, courts, and executive branch. The TLJ web site is free access. However, copies of the TLJ Daily E-Mail Alert are not published in the web site until two months after writing.

For information about subscriptions, see subscription information page.

Tech Law Journal now accepts credit card payments. See, TLJ credit card payments page.

Solution Graphics

TLJ is published by David Carney
Contact: 202-364-8882.
carney at techlawjournal dot com
P.O. Box 4851, Washington DC, 20008.

Privacy Policy
Notices & Disclaimers
Copyright 1998-2011 David Carney. All rights reserved.

In This Issue
This issue contains the following items:
 • House Communications and Technology Subcommittee Approves BTOP/BIP Bill
 • Summary of BTO/BIP Bill
 • House Subcommittee Holds Hearing on NSL Authority
 • Microsoft Complains to EC Antitrust Regulators About Google
Washington Tech Calendar
New items are highlighted in red.
Friday, April 1

The House will meet at 9:00 AM for legislative business. See Rep. Cantor's schedule for week of March 28.

The Senate will not meet.

Supreme Court conference day (discussion of argued cases, and decision on cert petitions). Closed.

9:00 - 11:00 AM. The House Intelligence Committee (HIC) will hold a closed hearing titled "FY 2012 Budget Overview". Location: Room HVC-304, House Visitor Center.

10:00 AM. The House Judiciary Committee's (HJC) Subcommittee on Intellectual Property, Competition and the Internet will hold a hearing titled "Competition and Consolidation in Financial Markets". See, notice. Location: Room 2141, Rayburn Building.

10:30 AM. The House Commerce Committee's (HCC) Subcommittee on Communications and Technology will hold a hearing and markup for HR __ [6 pages in PDF], a yet to be introduced bill regarding broadband spending under HR 1 (111th Congress) for the National Telecommunications and Information Administration (NTIA) and Rural Utilities Service (RUS). See, notice. Location: Room 2322, Rayburn Building.

2:00 - 4:00 PM. The National Science Foundation's (NSF) Advisory Committee for Cyberinfrastructure will meet, on site and by teleconference. See, notice in the Federal Register, March 16, 2011, Vol. 76, No. 51, at Page 14436. Location: NSF, 4201 Wilson Blvd., Room 1160, Arlington, VA.

Day three of a three day conference of the American Bar Association's (ABA) Section of Antitrust Law. See, conference web site. Prices vary. CLE credits. Location: JW Marriott Hotel.

Deadline to submit comments to the Department of Commerce (DOC) in response to its Notice and Request for Information regarding the USA's "innovative capacity and international competitiveness". See, original notice in the Federal Register, February 4, 2011, Vol. 76, No. 24, at Pages 6395-6397, and correction notice in the Federal Register, February 17, 2011, Vol. 76, No. 33, at Pages 9320.

Monday, April 4

12:00 NOON - 1:30 PM. The DC Bar Association will host an event titled "Demystifying Social Media -- What Every Lawyer Should Know". The speakers will be Tasha Coleman, Tom Foster, Laura Possessky, Michelle Thomas. See, notice. Free. For more information, contact Daniel Mills at 202-626-1312. Location: DC Bar Conference Center, 1101 K St., NW.

12:30 - 2:00 PM. The Federal Communications Bar Association's (FCBA) International Telecommunications Committee will host a brown bag lunch titled "Internet Ecosystem". The speakers will include Jack Nadler (Squire Sanders), Michael Kende (Analysys Mason USA), Paul Kouroupas (Global Crossing), Eric Loeb (AT&T), and Dennis Weller (Navigant Economics). For more information, contact Jennifer Ullman at jennifer at thejgroupplanning dot com. Location: Squire Sanders, Suite 500, 1201 Pennsylvania Ave., NW.

Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Notice of Proposed Rulemaking (NPRM) regarding extending to June 30, 2012, the current freeze of jurisdictional separations category relationships and cost allocation factors. This NPRM is FCC 11-34 in CC Docket No. 80-286. The FCC adopted and released it on March 1, 2011. See, Federal Register, March 14, 2011, Vol. 76, No. 49, at Pages 13576-13579.

Tuesday, April 5

2:30 PM. The Senate Commerce Committee (SCC) will hold a hearing titled "Closing the Digital Divide: Connecting Native Nations and Communities to the 21st Century". See, notice. Location: Room 253, Russell Building.

Wednesday, April 6

8:30 AM - 4:30 PM. Day one of a two day meeting of the National Archives and Records Administration (NARA) Advisory Committee on the Electronic Records Archives (ACERA). See, notice in the Federal Register, March 21, 2011, Vol. 76, No. 54, at Page 15349. Location: 700 Pennsylvania Ave., NW.

9:30 AM. The Federal Communications Commission (FCC) will hold an event titled "workshop" regarding its February 8, 2011, NPRM regarding its intercarrier compensation system and universal service fund. See also, NPRM [289 pages in PDF] adopted on February 8, 2011, and released on February 9, 2011. It is FCC 11-13 in WC Docket No. 10-90, GN Docket No. 09-51, WC Docket No. 07-135, WC Docket No. 05-337, CC Docket No. 01-92, CC Docket No. 96-45, and WC Docket No. 03-109. See, notice. Location: FCC, Commission Meeting Room.

10:00 AM. The Senate Judiciary Committee (SJC) will hold a hearing titled "The Electronic Communications Privacy Act: Government Perspectives on Protecting Privacy in the Digital Age". The witnesses will be Cameron Kerry (General Counsel, Department of Commerce) and James Baker (Associate Deputy Attorney General). The SJC will webcast this hearing. See, notice. Location: Room 226, Dirksen Building.

10:45 AM. The House Judiciary Committee's (HJC) Subcommittee on Intellectual Property, Competition and the Internet will hold a hearing titled "Promoting Investment and Protecting Commerce Online: Legitimate Sites v. Parasites, Part II". See, notice. Location: Room 2141, Rayburn Building.

1:00 - 4:30 PM. The American Enterprise Institute (AEI) will host a half day conference titled "Rare Earth Crisis?". See, notice. This event is free and open to the public. Location: AEI, 12th floor, 1150 17th St., NW.

6:00 - 8:00 PM. The Federal Communications Bar Association (FCBA) will host an event titled "Congressional Reception". See, notice and registration form [PDF]. Prices vary. The FCBA excludes reporters from some of its events. Location: Hyatt Regency Capitol Hill, 400 New Jersey Ave., NW.

Day one of a four day conference hosted by the the American Bar Association (ABA) titled "26th Annual Intellectual Property Law Conference". See, notice. Location: Crystal Gateway Marriott, Arlington, VA.

Thursday, April 7

Day one of a two day event hosted by the National Institute of Standards and Technology (NIST) titled "Cloud Computing Forum & Workshop III". See, notice in the Federal Register, March 15, 2011, Vol. 76, No. 50, at Pages 13984-13985. Location: NIST, 100 Bureau Drive, Gaithersburg, MD.

9:00 AM - 12:00 NOON. Day two of a two day meeting of the National Archives and Records Administration (NARA) Advisory Committee on the Electronic Records Archives (ACERA). See, notice in the Federal Register, March 21, 2011, Vol. 76, No. 54, at Page 15349. Location: 700 Pennsylvania Ave., NW.

10:30 AM. The Federal Communications Commission (FCC) may hold an event titled "open meeting". Location: FCC, Commission Meeting Room, 445 12th St., SW.

4:00 PM. George Mason University (GMU) will host a lecture by Shane Greenstein (Northwestern University business school) titled "The Mythology of Networks and Other Lessons from the Commercial Internet". See, notice. Location: Room 120, Hazel Hall, GMU law school, Arlington, VA.

6:00 - 9:15 PM. The DC Bar Association will host an event titled "Preserving Intellectual Property Rights in Government Contracts: A Beginner’s Guide (Part 1)". The speakers will be David Bloch (Winston & Strawn), Richard Gray (Department of Defense, Office of General Counsel), John Lucas (Department of Energy), and James McEwen (Stein McEwen). See, notice. The price to attend ranges from $89 to $129. CLE credits. For more information, call 202-626-3488. Location: DC Bar Conference Center, 1101 K St., NW.

Day two of a four day conference hosted by the the American Bar Association (ABA) titled "26th Annual Intellectual Property Law Conference". See, notice. Location: Crystal Gateway Marriott, Arlington, VA.

Deadline to submit comments to be considered by the Federal Trade Commission (FTC) in advance of its April 28, 2011, event titled "Public Workshop: Debt Collection 2.0: Protecting Consumers as Technologies Change". See, notice in the Federal Register, March 15, 2011, Vol. 76, No. 50, at Pages 14010-14014, and story titled "FTC Workshop to Address Use of Facebook and Other New Technologies for Debt Collection" in TLJ Daily E-Mail Alert No. 2,204, March 15, 2011.

Friday, April 8

Day two of a two day event hosted by the National Institute of Standards and Technology (NIST) titled "Cloud Computing Forum & Workshop III". See, notice in the Federal Register, March 15, 2011, Vol. 76, No. 50, at Pages 13984-13985. Location: NIST, 100 Bureau Drive, Gaithersburg, MD.

Day three of a four day conference hosted by the the American Bar Association (ABA) titled "26th Annual Intellectual Property Law Conference". See, notice. Location: Crystal Gateway Marriott, Arlington, VA.

Microsoft Complains to EC Antitrust Regulators About Google

3/30. Microsoft announced the filing of "a formal complaint with the European Commission as part of the Commission's ongoing investigation into whether Google has violated European competition law". The complaint pertains to search.

Microsoft did not release its filings with the European Commission (EC). Nor did the EC.

However, Brad Smith, SVP and General Counsel of Microsoft, stated in a release that "were concerned by a broadening pattern of conduct aimed at stopping anyone else from creating a competitive alternative".

Brad SmithSmith (at right) wrote that "Having spent more than a decade wearing the shoe on the other foot with the European Commission, the filing of a formal antitrust complaint is not something we take lightly.  This is the first time Microsoft Corporation has ever taken this step."

He also stated that "Over the past year, a growing number of advertisers, publishers, and consumers have expressed to us their concerns about the search market in Europe. They've urged us to share our knowledge of the search market with competition officials."

Allegations of Anticompetitive Conduct. Brad Smith asserted that "Google has engaged in a broadening pattern of walling off access to content and data that competitors need to provide search results to consumers and to attract advertisers."

For example, Smith wrote, "in 2006 Google acquired YouTube -- and since then it has put in place a growing number of technical measures to restrict competing search engines from properly accessing it for their search results."

As another example, Smith wrote that "in 2010 and again more recently, Google blocked Microsoft's new Windows Phones from operating properly with YouTube. Google has enabled its own Android phones to access YouTube so that users can search for video categories, find favorites, see ratings, and so forth in the rich user interfaces offered by those phones. It's done the same thing for the iPhones offered by Apple, which doesn’t offer a competing search service. Unfortunately, Google has refused to allow Microsoft's new Windows Phones to access this YouTube metadata in the same way that Android phones and iPhones do."

Smith also complained about Google's efforts to block advertisers' "access to their own data". He also complained that "Google contractually blocks leading Web sites in Europe from distributing competing search boxes". And, he complained that "Google discriminates against would-be competitors by making it more costly for them to attain prominent placement for their advertisements".

Allegations Regarding Orphan Works. Smith also stated that "Google is seeking to block access to content owned by book publishers. This was underscored in federal court in New York last week".

On March 22, 2011, the U.S. District Court (SDNY) issued its opinion [48 pages in PDF] in Authors Guild v. Google, denying, without prejudice, the motion for approval of the proposed class action settlement. See, story titled "District Court Rejects Google Books Class Action Settlement" in TLJ Daily E-Mail Alert No. 2,206, March 22, 2011.

Smith asserted that "Under Google's plan only its search engine would be able to return search results from" certain "orphan books". See, story titled "Orphan Works and the Court's Rejection of the Google Book Deal" in TLJ Daily E-Mail Alert No. 2,207, March 23, 2011.

Smith quoted from page 37 of the District Court's opinion: "Google's ability to deny competitors the ability to search orphan books would further entrench Google’s market power in the online search market."

It should also be noted that the Department of Justice's (DOJ) Antitrust Division filed a pleading on September 18, 2009, and an amended pleading on February 4, 2010, with the District Court in which it raised antitrust concerns.

The DOJ wrote in its first pleading that the proposed class action settlement would grant "Google de facto exclusive rights for the digital distribution of orphan works". Moreover, "Google's competitors are unlikely to be able to obtain comparable rights independently." This then "appears to create a dangerous probability that only Google would have the ability to market to libraries and other institutions a comprehensive digital-book subscription. The seller of an incomplete database -- i.e., one that does not include the millions of orphan works -- cannot compete effectively with the seller of a comprehensive product."

The DOJ wrote in its second filing regarding the amended settlement agreement (ASA) that "Google's exclusive access to millions and millions of books may well benefit Google's existing online search business. Google already holds a relatively dominant market share in that market. That dominance may be further entrenched by its exclusive access to content through the ASA. Content that can be discovered by only one search engine offers that search engine at least some protection from competition. This outcome has not been achieved by a technological advance in search or by operation of normal market forces; rather, it is the direct product of scanning millions of books without the copyright holders' consent and then using Rule 23 to achieve results not otherwise obtainable in the market." (Footnotes omitted. Rule 23 of the Federal Rules of Civil Procedure pertains to class actions.)

See also, story titled "DOJ Files Pleading in Google Books Case" in TLJ Daily E-Mail Alert No. 1,985, September 21, 2009, and story titled  "DOJ Criticizes Amended Google Books Settlement" in TLJ Daily E-Mail Alert No. 2,043, February 12, 2010.

Why Europe? Microsoft has just complained to the EC. Both Microsoft and Google are U.S. companies.

In recent years U.S. companies have been taking their antitrust grievances with other U.S. companies to the EC, and have, in matters pertaining to Microsoft and Intel, obtained results not obtained from U.S. antitrust regulators.

One reason that U.S. companies take complaints to Europe may be that the EC's competition related actions sometimes lack the basis in rigorous economic analysis, and a finding of harm to consumers, that usually but not always characterize actions by the U.S. DOJ or Federal Trade Commission (FTC).

For more on the EC role in regulating US companies, see story titled "Kroes Discusses EC's Global Regulation Goals" in TLJ Daily E-Mail Alert No. 1,722, February 25, 2008, and "Commentary" subsection of story titled "EC Demands More Money From Microsoft" in TLJ Daily E-Mail Alert No. 1,723, February 26, 2008.

However, Microsoft's Smith endeavored to portray this complaint as a European matter.

He wrote that "By the European Commission's own reckoning, Google has about 95 percent of the search market in Europe. This contrasts with the United States, where Microsoft serves about a quarter of Americans' search needs either directly through Bing or through our partnership with Yahoo!."

He also stated that "As troubling as the situation is in United States, it is worse in Europe. That is why our filing today focuses on a pattern of actions that Google has taken to entrench its dominance in the markets for online search and search advertising to the detriment of European consumers."

Disclosure. The home page of the Tech Law Journal contains a Google search box that is configured to enable users to search the TLJ web site. TLJ receives no compensation from Google in connection with this box.