U.S. District Judge Leonard Stark on Friday canceled a Feb. 14 trial in the high-profile case filed by New York’s attorney general, who charged Intel with monopolistic tactics in the market for microprocessor chips.

The order followed a letter to the judge from Attorney General Eric Schneiderman, who proposed dropping the federal case in view of recent developments that reduced the amount of damages that New York could seek. Mr. Schneiderman said his office would instead pursue damages in New York state court to address “Intel’s egregious and illegal conduct.”

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Sony says that the credit card data associated with the accounts was encrypted, though there are anecdotal reports of credit card fraud occurring coincidental with the timing of the breach.

On top of that, regulators in places as varied as Connecticut and the U.K. and Ireland are demanding information, often the first step in investigations that lead to lawsuits. The office of Ireland’s data protection commissioner (cool title) says it wants a full report on the incident by the end of the week. The U.K.’s Information Commissioner’s Office is investigating. Perhaps Sony’s one lucky draw in all this, as Parmy Olson of Forbes notes, is that it won’t have to face the full fury of the European Union because authority for data privacy issues are reserved to individual member countries.

Meanwhile, the attorneys general of several U.S. states are starting to rumble, starting with Connecticut’s George Jepson, who said he is launching an investigation, while his counterparts in Missouri and Iowa are making the kind of public statements that are often a precursor to investigations of their own. A few lawmakers in Congress are tsk-ing disapprovingly too, mulling hearings and new legislation. Below is an appearance on CNBC by Sen. Richard Blumenthal, D-Conn., suggesting that the Department of Justice should launch its own investigation.

Thanks, Senator. However, my guess is that if the systems compromised are in the U.S.–and given the number of PlayStation Network customers there are in the U.S., how can they not be?–then one branch of Justice is already likely involved: The FBI. Hasn’t Sony already disclosed that it’s working with law enforcement? This isn’t exactly the sort of thing for which you call a local police agency.

ITA Software maintains a database of flight information, including fare comparison and flight schedules, for many major U.S. airlines, including American and United Airlines. Companies such as Kayak.com and Expedia.com are opposing the merger because they claim it will stifle competition.

Google maintains that it is only trying to improve travel-related search since it is among its highest-volume queries. Its goal will be to refer people quickly to a site where they can actually purchase flights–and it doesn’t have plans to sell flights itself, according to a site that answers questions about the deal.

But the American Antitrust Institute’s concerns are more complex than whether Google is buying ITA to compete with online travel agencies.

It says the merger warrants a deep look because a deal of this nature will strain the boundaries of antitrust analysis and raise First Amendment questions as the government participates in decisions about the prioritization of information reaching the public.

In a release today, the non-profit explains: “Maintaining competitive markets for both general and niche search may be the only alternative, ultimately, to an unregulatable monopoly. It is therefore appropriate for the Division, employing a statute intended to stop monopoly in its incipiency, to work within a public vision of longer-term developments and to place the present acquisition within such a context.”

It’s not the first group to come out against the deal. FairSearch.org has been particularly active, and Missouri Attorney General Chris Koster, who chairs the antitrust committee of the National Association of Attorneys General, questions whether the deal would hamper competition in the online travel market.

FairSearch.org produced this video to explain why a merger should not take place:

Google Buys ITA – A Travel Story from FairSearch.org on Vimeo.

And here’s a video from Google:

The 13-page CID includes 39 different requests for documents ranging from those setting forth Google’s policies and procedures for calculating AdWords prices and minimum bids to minutes and agendas from search quality team meetings and records of the “black listing” or “white listing” of specific Web sites. Also requested: Documents that “describe, analyze, or discuss competition for advertisers from Bing and Yahoo” and others concerning the strategy for e-commerce services like Froogle and Google Shopping.

It’s an extraordinarily thorough set of demands and shows the Texas AG to be reviewing not just Google’s ranking of search results and setting of advertising prices, but questioning whether the company favors its own businesses and advertisers in results. Has Google complied with them? That’s not yet clear, though company spokesman Adam Kovacevich says discussions with Abbott’s office continue.

“Since we started Google we have worked hard to do the right thing by our users and our industry, and while there’s always going to be room for improvement, we’re committed to competing fair and square,” he said. “We’re continuing to work with the Texas attorney general’s office to answer their questions and understand any concerns.”

Texas_GOOG_CID –

“This transaction causes me concern because of its potential impact on the ability of consumers to search online for competitively priced airline fares in a market that has seen rapid growth,” wrote Koster wrote in a letter to Assistant Attorney General Christine Varney dated Feb. 9 (full letter below). “Ensuring that new sellers can gain meaningful entry into this market, and that all sellers can compete against each other fairly, is our mutual concern.”

Evidently a broadly held one, too.

Because Koster’s letter wasn’t the only one Varney received yesterday. Rep. Howard Coble (R-NC) and Rep. Thomas Petri (R-WI) also wrote to her, again urging close scrutiny of the deal. “We ask that your ongoing review pay particular attention to competitive issues involving consumers, the online ad market and the protection of intellectual property,” they wrote (full letter below). Their chief concern: The possibility that Google might use its dominant position in search and advertising to steer consumers to its travel services, limiting competition.

This, of course, is something that Google insists it would never do. “This acquisition will inject more competition into flight search, not less, and give consumers more options,” the company said in a statement. “Of course, the antitrust laws aren’t designed to protect incumbent companies from new competition, but to make sure that consumers benefit from more competition and innovation.”

Tell that to the DOJ, which has been reviewing the proposed $700 million deal for months and, as NewEnterprise recently noted, has prepared documents for a possible challenge to the acquisition.

Richard Blumenthal and the Connecticut Department of Consumer Protection last week issued a civil investigative demand–the equivalent to a subpoena–for data collected by Google’s Street View vehicles. Friday was the deadline to comply with the demand.

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A 2005 California law bans those under 18 from buying or renting violent videogames that appeal to “a deviant or morbid interest in minors.” Lower courts struck down the law, under precedent authorizing government to restrict youth from only one type of material, obscene sexual content.

In seeking the law’s reinstatement, Zackery Morazzini, a deputy state attorney general, told the court: “California is no less concerned with a minor’s access to the deviant level of violence that is presented in a certain category of video games” than it is with sexually explicit material.

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“Google’s alarming admission last week–confirming it collected entire emails and passwords–only heightened our concerns about how and why this data was collected,” Blumenthal said, adding that he’d rather not “rely on Google’s explanations and assurances…to confirm the facts about how this happened and how consumers will be protected going forward.”

A wise move, I think, particularly given the way Google’s narrative for this particular cock-up has evolved over the past few months, from an outright denial in April to a backpedaling, embarrassing admission in May and finally an apology in October.

In April, an outright denial:

Writing in Google’s European Public Policy blog, Peter Fleischer, the company’s global privacy counsel, denies there was a privacy issue with Google’s Wi-Fi data collection practices. “Google does not store or collect payload data,” he says.

Google product manager Raphael Leiteritz reiterates this assertion in the company’s Submission to Data Protection Authorities that same day. “All data payload from data frames are discarded, so Google never collects the content of any communications,” he writes.

In an interview with the New York Times a few days later, Google spokesman Kay Oberbeck dismisses the privacy concerns of German officials, saying: “What we are doing is totally legal and is being done by other companies around the world….We did not mention the WLAN project during our discussions with data protection officials because it is not related to Street View.”

In May, an embarrassing admission…

Writing in Google’s official blog two weeks later, Google SVP Alan Eustace reveals that the company actually had been collecting payload data. “It’s now clear that we have been mistakenly collecting samples of payload data from open (i.e., non-password-protected) Wi-Fi networks,” he explains. “So how did this happen? Quite simply, it was a mistake.” Then there was this from Peter Barron, Google’s director of communications for Northern and Central Europe: “We didn’t want to collect this data in the first place and we would like to destroy it as soon as possible.”

…followed by some aggressive damage control and a downplaying of the issue:

Speaking at Google’s annual Zeitgeist Europe forum, Google CEO Eric Schmidt describes the payload data collected as inconsequential and excuses the company for its misstep, saying, “There was no harm, no foul.”

In June, an unsettling hypothesis:

Apologizing for the company’s mistaken collection of user data, a Google New Zealand spokesperson tells the Otago Daily Times that the information the company’s Street View cars intercepted might not have been as inconsequential as Schmidt claimed. “Our in-car WiFi equipment automatically changes channels five times a second,” she says. “That said, it’s possible that the fragments of data we collected could contain entire emails or other content if a user broadcast personal information over an open network at that moment.”

In October, some hard evidence, another embarrassing admission and a change of tack…

A few months pass, and then a Canadian Privacy Commissioner’s investigation reveals “that Google did capture personal information–and, in some cases, highly sensitive personal information such as complete emails.” Interestingly, in its report on the matter, the Canadian Privacy Commissioner’s office notes that while Google “does not intend to resume collection of Wi-Fi data through its Street View cars…[it does intend to] rely on its users’ handsets to collect the information on the location of Wi-Fi networks that it needs for its location-based services database.”

And then the Schmidtstorm:

Appearing on CNN’s “Parker Spitzer,” Google CEO Schmidt cavalierly suggests that folks worried about Google Street View invading their privacy should “just move.” Ironically, he says this on the very day that Google admits those cars captured more than just fragments of personal payload data and says it is “mortified by what happened.”

Schmidt apologizes for his remark the next day:

“As you can see from the unedited interview, my comments were made during a fairly long back and forth on privacy,” he says. “I clearly misspoke. If you are worried about Street View and want your house removed please contact Google and we will remove it.”

And a day later the FTC announces that it has concluded its inquiry into Google Street View, saying the improvements Google has made to its internal privacy practices have alleviated its concerns for consumer safety.

Meanwhile, Blumenthal’s investigation continues.

Texas’s top prosecutor has inquired about allegations by several small companies that Google unfairly demoted their rankings in search results or the placement of their advertisements on the search engine, Google said Friday.

The Internet giant disputed the allegations, which have been reported previously, tracing them to three companies with ties to rival Microsoft Corp.

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Craiglist CEO Jim Buckmaster let one fly yesterday at CNN reporter Amber Lyon for a report on child sex trafficking she did that focused on the role played by the online-classified giant.

It included using a May interview with Craigslist founder Craig Newmark that Buckmaster characterized as an ambush, and he accused Lyon of “mischaracterizing your stunt as a serious interview on this subject.”

He ended by noting that if “[CNN anchor] Anderson Cooper would like to come out to SF and sit with us for an interview worthy of CNN’s viewers, we’ll consider it.”

But Lyon’s bio on the CNN site told a different story:

“Lyon also investigated the sex trafficking of minors on Craigslist. In a CNN exclusive, Lyon brought her findings to the ‘Craig’ in Craigslist, founder Craig Newmark. Her interview left Newmark speechless.”

Actually, Newmark wasn’t exactly speechless, as you can see from the video below–he just declined to answer and was silent, which is quite typical of him.

Nonetheless, San Francisco-based Craigslist has been under serious fire of late from state attorneys general nationwide who are seeking to get Craigslist to voluntarily take down its “adult services” section, which is lucrative, but which they allege is a thinly veiled venue for prostitution.

Today, the Boston Globe posted a tough editorial supporting a voluntary takedown, noting:

“While Craigslist should be lauded for having in place stronger safeguards than many other websites–and the classifieds sections of some newspapers and magazines–the site is, at the end of the day, profiting off of prostitution.”

Ouch.

Currently, the company says it now screens every adult ad before it goes up, which Lyon alleged was not being done effectively.

More to come, obviously, but here’s an open invite for Buckmaster to do a video with BoomTown, although I am nowhere near as glam as Cooper.

Until then, here is one of the CNN videos by Lyon:

And here is the Buckmaster blog:

For Amber Lyon, CNN

I see you’ve now gotten around to requesting an interview with me or a company spokesperson, 90 days after you ambushed our namesake and founder, Craig Newmark, following his May 20th talk on veteran’s affairs and other issues unrelated to craigslist, at a conference in Washington.

You knew Craig was not in management or a company spokesperson, but setting CNN’s ethical code aside, you sidestepped company channels in favor of ambushing our semi-retired founder, complete with a misleading “set up” for your surprise questions. Now that CNN has aired your highly misleading piece dozens of times, mischaracterizing your stunt as a serious interview on this subject, and you’ve updated your “bio” to showcase this rare jewel of investigative journalism, you’re ready to try actually interviewing the company itself on this subject.

There is a class of “journalists” known for gratuitously trashing respected organizations and individuals, ignoring readily available facts in favor of rank sensationalism and self-promotion. They work for tabloid media. Your stunt has veteran news pros we know recoiling in journalistic horror, some of them chalking it up to a decline in CNN’s standards, which is unfortunate.

Seeing how you’ve pinned your career hopes on butchering this story, I’ll have to pass. If Anderson Cooper would like to come out to SF and sit with us for an interview worthy of CNN’s viewers, we’ll consider it.

Jim Buckmaster
CEO, craigslist

“My office will lead a multistate investigation–expected to involve a significant number of states–into Google’s deeply disturbing invasion of personal privacy,” Blumenthal said in a statement. “Street View cannot mean Complete View–invading home and business computer networks and vacuuming up personal information and communications. Consumers have a right and a need to know what personal information–which could include emails, web browsing and passwords–Google may have collected, how and why. Google must come clean, explaining how and why it intercepted and saved private information broadcast over personal and business wireless networks.”

Blumenthal says some 30 states have expressed concern over the matter, and he expects a number of them to ultimately join the investigation, which will determine the legality of Google’s collection of data from personal wireless networks.

Google (GOOG), for its part, insists the practice wasn’t illegal–just stupid.

Under terms of the agreement, Intel (INTC) will pay AMD (AMD) $1.25 billion (nearly a quarter of AMD’s $4.46 billion market cap) and agree to “abide by a set of business practice provisions” presumably crafted to temper Intel’s allegedly anticompetitive practices. Here are details of the agreement:

Business Practices Provisions Prohibit Intel From:

• Offering inducements to customers in exchange for their agreement to buy all of their microprocessor needs from Intel, whether on a geographic, market segment, or any other basis (Section 2.1.1.a)
• Offering inducements to customers in exchange for their agreement to limit or delay their purchase of microprocessors from AMD, whether on a geographic, market segment, or any other basis (Section 2.1.1.b)
• Offering inducements to customers in exchange for their agreement to limit their engagement with AMD or their promotion or distribution of products containing AMD microprocessors, whether on a geographic, channel, market segment, or any other basis (Section 2.1.2a-b)
• Offering inducements to customers in exchange for their agreement to abstain from or delay their participation in AMD product launches, announcements, advertising, or other promotional activities (Section 2.1.2.b)
• Offering inducements to customers or others to delay or forebear in the development or release of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis (Section 2.2.2 and 2.1.2)
• Offering inducements to retailers or distributors to limit or delay their purchase or distribution of computer systems or platforms containing AMD microprocessors, whether on a geographic, market segment, or any other basis (Section 2.2.1)
• Withholding any benefit or threatening retaliation against anyone for their refusal to enter into a prohibited arrangement such as the ones listed above.

In return, AMD will drop all its pending litigation against the company and pull out of regulatory complaints worldwide. Finally, the two rivals will enter into a five-year patent cross-licensing agreement.

In a joint statement, the companies said, “While the relationship between the two companies has been difficult in the past, this agreement ends the legal disputes and enables the companies to focus all of our efforts on product innovation and development.”

Interesting. Clearly, AMD CEO Dirk Meyer’s earlier comments about the ratification of its complaints about Intel’s business practices and the company’s hope for a future in which AMD’s “ability to succeed as a business is really determined by the quality of our products and customer relationships” was quite prefigurative.

During a call to discuss the settlement, Meyer said the accord marks the beginning of a new era, one that changes the game for AMD. “It is an important milestone for us, for our customers, our partners, and most importantly–for consumers and businesses worldwide,” Meyer said.

“It is the culmination years of litigation and regulatory engagement, and we are optimistic that it will usher a new era for our industry,” the CEO continued, further noting that change may not be immediate. “We recognize that it will take time for people to understand how the operating conditions in processor business have changed–but make no mistake–they have changed….We look forward to healthy competition with the mutual respect one would expect between world-class competitors.”

It is unclear if the settlement will affect the antitrust suit brought against Intel by New York Attorney General Andrew Cuomo last week as Cuomo hasn’t yet commented. But the European Union says it will not change its decision in May to fine Intel a record $1.5 billion for anticompetitive behavior.

“The European Commission takes note that Intel and AMD have settled all their litigation and that Intel is paying AMD compensation of one-and-quarter billion dollars,” said an EC spokesman. “But Intel has an ongoing obligation to comply with the commission’s antitrust decision and with EU competition law. The commission continues to vigorously monitor Intel’s compliance with its obligations under the EU antitrust decision.”

In remarks made during AMD Financial Analyst Day, CEO Dirk Meyer said that Intel’s (INTC) current legal woes “ratify” AMD’s (AMD) allegations.

“We’ve said for a long time that our success in the marketplace was hampered by anticompetitive behavior on the part of Intel,” Meyer said. “And over the last 12 months that we’ve seen our statements ratified by regulators around the world….I’m looking forward to a future in which our ability to succeed as a business is really determined by the quality of our products and customer relationships. And I can tell you that hasn’t always been true.”