Apple Inc. (AAPL), Google Inc (GOOG) Legal Briefs: E-books and E-mail
Apple Inc. (NASDAQ:AAPL) CEO Tim Cook and Google Inc (NASDAQ:GOOG) boss Larry Page have had attorneys deployed all over the U.S. and even in several countries around the world, as each company has been very active in fighting and defending charges ranging from patent infringement to antitrust violations to privacy and security concerns. On this Friday, we will provide you with a couple updates on some recent legal issues involving both companies.
Apple Inc. (AAPL): Bitten by E-book Lawsuit?
Our first legal brief takes us to New York, where U.S. District Judge Denise Cote declared that Apple Inc. (NASDAQ:AAPL) must change its contracts with e-book publishing houses with which Cupertino was connected with a price-fixing scheme. Larry Neumeister of the Associated Press wrote that Cote's order as a response to the initial ruling that stated Apple had colluded with several publishers to raise e-book prices. In the order, Cote said that Apple needs to take all collusion or price-fixing language out of all contracts with publishers, and Cote ordered a compliance officer to be in place for the next two years to ensure the contracts negotiated are compliant with her order.
Apple Inc. (NASDAQ:AAPL) spokesperson Tom Neumayr, however, was quoted as saying that Apple will appeal the initial ruling and this subsequent order, claiming that Apple did not fit the legal definition of price-fixing.
Google Inc (GOOG) Still Wants to Read E-mails
On the opposite coast, U.S. District Judge Lucy Koh has Google Inc (NASDAQ:GOOG) in her courtroom in San Jose, Calif., where she has been hearing arguments in a class-action lawsuit from several Gmail account holders who claim that Google illegally scans and reads e-mail messages in violation of federal wiretap laws and California state privacy laws. Both sides presented their arguments, and Koh will issue a decision whether to proceed to a trial. She said she would consider Google's request to dismiss, but as she did not grant that motion at the end of the hearing, and there seems to be a general impression that Koh will schedule a trial for sometime early next year.
Attorney Sean Rommel claimed that Google Inc (NASDAQ:GOOG) "reads, on a daily basis, every email that's submitted, and when I say read, I mean looking at every word to determine meaning."
As a less-than-stellar rebuttal, Google attorney Whitey Somvichian said that Gmail users "must necessarily expect that their emails will be subject to automated processing." The plaintiffs also claim, however, that Google also scans e-mails sent to Gmail users from other e-mail clients - clients which did not require users to consent to Google policies.
What do you think? Between Apple Inc. (NASDAQ:AAPL) and Google Inc (NASDAQ:GOOG), which legal battle do you think will have the bigger impact on each company? Why do you think so? And if you are an major investor like fund managers David Einhorn in Apple or Philippe Laffont in Google, what might you do with your stake over the next six months and why?