The Circuit: Justice may sue Apple, publishers; Netflix mulls a cable channel?; China testing cyberattack capabilities

DOJ warns Apple, publishers about e-book suit: The Justice Department has told Apple and the nation’s biggest book publishers that it would sue them for their alleged price-fixing of electronic books unless the companies agree to change their business practices, The Washington Post reported.

Federal officials found that Apple, Simon and Schuster, Hachette Book Group, Penguin Group, Macmillan and HarperCollins have “engaged in a pattern of behavior that violates antitrust laws,” according to a person familiar with Justice’s investigation. At a December Congressional hearing on antitrust, Sharis Pozen, acting head of Justice’s antitrust division, said the agency was looking into the e-book industry.

Apple declined to comment on the case. Justice Department spokeswoman Gina Talamona confirmed that the e-books matter was open but declined to comment further.

Netflix planning a cable channel?: The New York Times reported that there may be something substantial to rumors that Netflix is mulling plans to launch its own cable channel, citing people “familiar with” Netflix’s meetings with major cable operators. A partnership between the rental service and cable providers would add the service’s subscription fees to cable subscribers’ monthly bills.

“We are more and more a classic cable network,” Netflix chief executive Reed Hastings said in a speech, according to the report. The newspaper said that Hastings added that a cable partnership would be, at some point, a “logical step.”

China cyber-attacks: The Washington Post reported that a commission set up by Congress has issued a report saying the Chinese military conducted an exercise in October involving “joint information offensive and defensive operations” and another in 2010 featuring attacks on communications command-and-control systems.

The report, prepared by Northrop Grumman, states that the United States lacks a policy to determine appropriate responses to a large-scale cyberattack on U.S. military or civilian networks in the event that the attacker’s identity cannot be conclusively determined. The report also states that Beijing may try to exploit that “gray area” in U.S. policy.

Proview: The embattled electronics maker Proview has threatened Apple vendors in China with “severe measures” if they sell the iPad, the Associated Press reported. Proview and Apple are embroiled in a legal fight over whether or not the Cupertino, Calif.-based tech giant legally purchased the “iPad” trademark from Proview ahead of the launch of its first-generation tablet.

In the letter, Proview warned vendors that any use of the iPad name would be an infringement of its rights to the name.

Universal Music: Critics have said that the proposed deal between Universal Music Group and EMI has the potential to stifle digital music innovation. In a statement, Universal Music Group said that it would continue to license its music in an effort to combat online piracy.

“We have every business reason to continue licensing our music to as many digital platforms as possible,” a Universal Music Group spokesman said in a statement. “The future of music depends on giving consumers ample legal alternatives to piracy, and that means embracing and empowering digital platforms.”

On Wednesday, Public Knowledge and Media Access Group sent a letter to Federal Trade Commission asking the agency to evaluate the proposed deal, saying it puts the music industry under the control of two companies, UMG and Sony.

Hayley Tsukayama covers consumer technology for The Washington Post.

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