LEADING THE DAY: A judge rejected Google’s settlement with authors and publishers yesterday, setting the company back on its plans for Google Books. The Washington Post reported that a federal judge in New York said the terms of the settlement “simply go too far.” The decision laid out arguments similar to those made last year by the Justice Department, which laid out antitrust concerns. The judge, Denny Chin, also said Google’s service has privacy implications as well, since the company could track what kinds of books users read.

Hilary Ware, managing counsel at Google said the company was disappointed by the decision but would consider its next options. “Like many others, we believe this agreement has the potential to open up access to millions of books that are currently hard to find in the U.S. today.”

More merger talk: Sprint CEO Dan Hesse elaborated on remarks he made about the proposed merger of AT&T and T-Mobile during CTIA’s annual conference in an interview with CNBC’s Jim Cramer. According to an unofficial transcript of the interview from NBC Universal, Hesse said that AT&T’s argument against antitrust concerns is flawed. AT&T has argued that there is plenty of competition in the wireless market, citing large competitors such as Verizon and Sprint, but also companies like MetroPCS. Hesse said, “These companies — other companies are very small, and they tend to be very niche players and carriers like prepaid.”

FCC Commissioner Mignon Clyburn said that she doesn’t want to prejudge the proposed merger between AT&T and T-Mobile, but will focus on how the merger will affect consumers, reported GreenvilleOnline.com. (h/t Hillcon Valley)

Netflix outage: Netflix’s Web site crashed for over two hours last night, on the same day that Netflix stock surged thanks to a Credit Suisse analyst’s upgrade. Netflix confirmed the outage on its Web site and Twitter feed, though it did not offer an explanation for the service disruption.

Crain’s New York Business reported earlier this week that Showtime would be pulling many of its programs from the company’s streaming service including the network’s hit show Dexter.

Groupon president to leave: Groupon president and COO Rob Solomon will be stepping down, reports All Things Digital. In an e-mail to staff, Groupon CEO Andrew Mason announced that Solomon will be leaving, though he will “remain a friend and advisor to the company in perpetuity.” Solomon, a former Yahoo executive, said he is leaving because the company has grown so much over the past year, according to the Wall Street Journal. The departure was a surprise to many, particularly as Groupon considers an initial public offering. The company is set to roll out a new service, Groupon Now, which will show users current deals in their area.

Apple pulls “Gay Cure” app: After coming under fire for approving the “Gay Cure” app for its store, Apple pulled the application, according to the Next Web. More than 146,000 people signed a petition to have the application, which is intended to “reconcile their faith with their sexual behavior,” removed from Apple’s application store. The president of the group behind the app, Exodus International, tweeted Tuesday night that the app had been removed.