That’s the gist of a new U.S. Department of Justice filing against Apple in the agency’s upcoming lawsuit against the company. According to the DOJ, Apple was the “ringmaster” of a plan that raised mainstream e-book pricing well above the $9.99 price point Amazon had established by shifting the industry from a wholesale model, where retailers set prices, to an agency model where publishers set prices. Among the agency’s evidence supporting that allegation:

• An e-mail from Apple co-founder Steve Jobs to James Murdoch of News Corp. — parent company of HarperCollins — that reads in part, “Throw in with Apple and see if we can all make a go of this to create a real mainstream e-books market at $12.99 and $14.99.”
• A comment Jobs made to biographer Walter Isaacson, explaining that Apple “told the publishers, ‘We’ll go to the agency model, where you set the price, and we get our 30 percent, and yes, the customer pays a little more, but that’s what you want anyway.’”

According to the DOJ, those statements are clear evidence of collusion. “Apple knew that the plan it was proposing involved a ‘dramatic business change’ for publisher defendants,” the agency argued in its filing. “Accordingly, Apple kept each publisher defendant aware that it was orchestrating and coordinating a common approach for all of them.”

Apple is now the lone holdout in the DOJ’s lawsuit, originally brought against the company and five major publishing houses last April. HarperCollins, Hachette, Macmillan, Penguin and Simon & Schuster have all since settled. But Apple, the alleged “ringmaster,” continues to dig its heels in.

“Apple did not conspire to fix eBook pricing,” Apple spokesman Tom Neumayr said in a statement. “We helped transform the eBook market with the introduction of the iBookstore in 2010 bringing consumers an expanded selection of eBooks and delivering innovative new features. The market has been thriving and innovating since Apple’s entry and we look forward to going to trial to defend ourselves.”

Below, the DOJ’s latest filing:

apple7 –

Macmillan’s settlement appears to follow a template similar to the one used by the DOJ with Macmillan’s publishing-industry rivals. Here’s a rundown from the DOJ’s announcement:

Under the proposed settlement agreement, Macmillan will immediately lift restrictions it has imposed on discounting and other promotions by e-book retailers and will be prohibited until December 2014 from entering into new agreements with similar restrictions. The proposed settlement agreement also will impose a strong antitrust compliance program on Macmillan, including requirements that it provide advance notification to the department of any e-book ventures it plans to undertake jointly with other publishers and regularly report to the department on any communications it has with other publishers. Also for five years, Macmillan will be forbidden from agreeing to any kind of most favored nation (MFN) provision that could undermine the effectiveness of the settlement.

And then there was Apple …

Cupertino hasn’t yet responded to a request for a comment — nor do I expect it will. But the company made its position on the DOJ’s charges very clear last April, when the suit was first filed.

“The DOJ’s accusation of collusion against Apple is simply not true,” an Apple spokesman told AllThingsD at the time. “The launch of the iBookstore in 2010 fostered innovation and competition, breaking Amazon’s monopolistic grip on the publishing industry. Since then customers have benefited from eBooks that are more interactive and engaging. Just as we’ve allowed developers to set prices on the App Store, publishers set prices on the iBookstore.”

The FBI and Homeland Security Department “are currently reviewing this matter for any national security, law enforcement, and public safety issues but have not yet completed that effort,” a Justice Department lawyer said in a letter to the FCC.

“We therefore request that the Commission defer action until such time as the Agencies notify the Commission of the completion of their review and, based on the results of such review, request appropriate action by the Commission,” the letter continued.

Sprint, for its part, characterized the request as routine.

“This is a routine request when working with the [U.S. government] agencies regarding national security,” Sprint said in a statement.

The No. 4 U.S. carrier, T-Mobile, is already in foreign hands as a unit of Deutsche Telekom, while Verizon Wireless is partly owned by Vodafone.

The request from the DOJ was reported earlier Tuesday by Bloomberg. Dish Network, which like Sprint is bidding for Clearwire, has also asked the FCC to hold off on approving the Softbank deal.

Sprint is still aiming to close the deal in mid-2013.

Photo: Rubra/Ars Electronica (Creative Commons)

WikiLeaks, the organization that collects and publishes sensitive information from anonymous leakers the world round, claimed on Friday an affiliation with Aaron Swartz, the Internet rights activist who committed suicide last week.

The disclosure came in a series of tweets from the official WikiLeaks Twitter account, one of the few main outlets the organization uses for external communications.

“Due to the investigation into the Secret Service involvement with #AaronSwartz we have decided to disclose the following facts (1-3),” the first of four tweets read. The second: “Aaron Swartz assisted WikiLeaks #aaronwartz.” The third: “Aaron Swartz was in communication with Julian Assange, including during 2010 and 2011.” And the final tweet: “We have strong reasons to believe, but cannot prove, that Aaron Swartz was a WikiLeaks source. #aaronswartz”

Elliot Peters, Swartz’s attorney before his death, did not immediately respond to a request for comment.

While the extent of Swartz’s relationship with WikiLeaks remains unsubstantiated, the allegations come in the wake of public outcry over the Department of Justice’s decision to prosecute Swartz to the fullest extent of the law. U.S. Attorneys Carmen Ortiz and Steve Heymann sought heavy penalties against Swartz if he did not plead guilty to charges of computer fraud, wire fraud and others. Swartz faced upward of 30 years in prison and $1 million in fines.

The fact that WikiLeaks decided to out its connection with Swartz, as was first noted by The Verge, could suggest that part of the DoJ’s and Secret Service’s investigation and prosecution of Swartz had to do with ties to the famed whistle-blowing organization.

The Department of Justice did not immediately respond to an email request for comment.

You can find all of the relevant links here, including a 97-megabyte .zip file with every one of the 868 comments the DOJ received over the course of 60 days. But since you may have better things to do with your Monday, a quick summary of the DOJ’s response:

• Not surprisingly, the DOJ says all of the complaints about its settlement with HarperCollins, Hachette and Simon & Schuster over e-book pricing are from self-interested whiners. In their words: “Many critics of the settlements view the consequences of the conspiracy — higher prices — as serving their own self-interests, and they prefer that unfettered competition be replaced by industry collusion that places the welfare of certain firms over that of the public.”
• You can’t accuse the DOJ lawyers of immodesty. They suggest that three recent announcements — that Microsoft would invest in Barnes & Noble’s Nook platform, that Microsoft is going to produce its own Surface tablets and that Google would sell its own Nexus 7 tablets — prove that “more companies are investing to enter or expand in the market and compete against Amazon, Apple,” and they suggest that they should get some credit for this.
• The real value in the DOJ’s response is that it provides a guide to the government’s strategy against its remaining defendants in the price-fixing case: Penguin Group, MacMillan and Apple. The DOJ spends a good chunk of its response filing attacking Apple’s response to its initial charges. A sample heading from that section: “Apple’s Suggested Changes to the Proposed Final Judgment Are SelfServing and Contrary to the Public Interest”

Here’s the full response:
Book response

*HarperCollins is owned by News Corp., which also owns this Web site.

The U.S. Department of Justice fired back with a serious accusation. It filed a civil complaint claiming that the company, by not handing over its files, was interfering “with the United States’ sovereign interests” in national security.

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Micron was the fourth-ranked producer and Elpida third. Combined, they would leap ahead of South Korea’s Hynix into the No. 2 slot by revenue, and would have accounted for $1.54 billion in sales in the first quarter of 2012. Samsung reported DRAM sales north of $2.5 billion in the quarter.

It’s another step in the long-term consolidation of what has turned out to be the most difficult of all the segments of the chip business. DRAM — the memory chips that go inside PCs and servers — are essentially commodities, and thus subject to violent boom-and-bust cycles as demand spurs a round of building new factories. When all the manufacturers build new ones and upgrade the ones they already have, they finish just in time for demand to slack off.

And that usually hurts, because when demand crashes, and it always does, they’re left with two bad choices: One, let some of the new factory lines sit idle, for accounting purposes; or two, make as many chips as they can and compete with the other companies on price. Almost always, all DRAM companies choose option two, and flood the market with cheap chips.

The result is great news for consumers who can benefit by upgrading the computers they already own with relatively cheap chips; it’s also a boon for PC makers, who can add a lot of memory to the machines they sell without upping the price.

But it’s bad for the companies trying to make a profit on DRAM. It turns out that 2011 was one of those flood years, and in fact it was one of the worst in recent memory. It was so bad for DRAM companies that global sales of DRAM chips shrank by 25 percent, from nearly $40 billion in 2010 to less than $30 billion in 2011. This year, sales are expected to inch upward to about $30.5 billion, leading into another boom cycle next year, when demand is high, supplies are tighter and prices rise. And then it will go bust again.

Micron’s acquisition basically leaves the industry with three large players. The next two, after Samsung, Micron and Hynix, are Nanya and Winbond, both significantly smaller.

The deal also represents the end of a long-term goal for Micron. It has long wanted to own an Asian chip supplier in order to boost its scale and help it better ride out these extreme roller-coaster rides.

Way back in 2002, when Hynix was the problem child of the industry, racked by billions in debt and a crash in demand, it was essentially kept alive by support of the South Korean government. Micron offered it a lifeline in the form of an offer to buy $3 billion worth of Hynix’s memory operations. It was all worked out, until Hynix’s bankers insisted first on a corporate restructuring that caused the deal to fall apart.

It was about this time that the DRAM industry price-fixing scandal began. That summer, a U.S. federal grand jury started investigating pricing conditions within the DRAM industry and, within four years, executives with several companies, including Hynix, started serving prison terms.

Micron was implicated, too: An internal memo — revealed in a court filing, about which I first reported for Forbes in 2003 — showed that executives there were raising prices in cooperation with their competitors. One of its sales managers pleaded guilty to charges of obstruction of justice associated with the investigation.

It also marks a second major development in what has turned out to be an eventful year for Micron. In February, its longtime CEO Steve Appleton was killed when the small plane he was flying crashed in Boise. Mark Durcan was named CEO the next day. I had known Appleton for years, and interviewed him a few times. He would have liked to have seen this day.

Although intellectual property law exists to encourage innovation and invention, patents have become the one legal way private companies can exercise a monopoly over the market. Oversized patent portfolios and prolonged patent lawsuits translate into less consumer choice and higher prices. Effectively, patents become the end in and of themselves, and no longer a means for supporting innovation.

These lawsuits have caused real concern at the Department of Justice’s antitrust division, where the patent wars have raised the prospect of anti-competitive activities. The DOJ is charged with viewing the market as a whole. For that reason, the Department of Justice has invoked a little-known form of consumer protection in ensuring the Patent Wars don’t put new technologies out of the consumer’s reach.

It has been well publicized that the battles between tech powerhouses like Google, Apple and Microsoft go far beyond the features of their latest devices. As many of these companies continue to focus large amounts of time and treasure in the courtroom, there is a concern that innovation will take a backseat to genuine competition on tech. Since Google’s acquisition of Motorola Mobility last year, things have especially heated up among the three major players — a situation that can only worsen with Microsoft’s acquisition of AOL’s patent portfolio, which is a symptom of a patent “arms race.”

No longer obtained to protect a new technology or a particular state of art, patents are now used in the smartphone arena to block other players from entrance into the arena, or to stop one company from achieving a dominant position.

A patent-centric strategy works extremely well in the software industry because sets of international standards allow our mass communications devices to work together seamlessly. If a company obtains a patent governing one of these standards, or for technology that is widely relied upon (even if not directed to a specific standard), that company can put a chokehold on the market.

Specifically, rival companies have attempted to block Google’s Android operating system and handsets, which Google licenses to other companies for free, while Apple and Samsung have been engaged in a number of lawsuits over handset technology. One such lawsuit resulted in a suspension of iPad and iPhone sales in Germany.

In fact, when so many patents protect vital, standardized technologies with such broad language, lawsuits are certain to follow. And a glut of patent lawsuits can mean licensing deals, which in turn mean higher prices as the costs of production come to include those licensing deals. In a worst case scenario, a licensing deal can’t be reached and the technology is unavailable to the consumer.

And while the lawsuits have played out largely amid corporate attorneys and IP specialists, the consumer isn’t without an advocate as the patent wars rage. As leverage to avoid antitrust lawsuits, the Department of Justice has emphasized a little-known tool to regulate the cost of patent licenses. It can exert pressure to require that crucial patents be licensed under a set of terms known as FRAND (Fair, Reasonable and Non-Discriminatory) terms.

These terms set strict guidelines regarding the costs of licensing and prevent companies holding vital patents from setting exorbitant, unfair prices. For example, the DOJ recently pressured a consortium led by Apple to commit to FRAND licensing when it bought various Nortel and Novell patents. The government tacitly hinted that it would block the acquisition if the consortium didn’t agree to FRAND terms. If the DOJ hadn’t stepped in, the consortium would have been able to exert enormous leverage on the consumer electronics market.

Google is being required to maintain FRAND terms with the patents that it received upon purchasing Motorola Mobility. Google also bought patents from IBM under those terms.

In fact, companies holding patents which are considered to be crucial to a particular standard may be required to license those patents by the relevant governing standards body under FRAND terms.

Some companies do choose to license their patents widely, even without explicit FRAND requirements. Microsoft, for example, has chosen to license its patents widely, having reached licensing agreements with makers of more than 70 percent of the Android-based smartphones sold in the U.S. On the other hand, Steve Jobs famously threatened to do whatever was necessary to force Google to significantly change Android to remove features that Jobs felt were proprietary to Apple, refusing to even consider payment from Google to license Apple’s patents.

It’s likely the smartphone war will end in a variety of licensing agreements and cross-licensing agreements. Whether those agreements result in competitive prices for the consumer depends on how effectively the DOJ wields its “FRAND” sword.

D’vorah Graeser, Ph.D., is the founder and CEO of Graeser Associates International (GAI), an international intellectual property firm specializing in the preparation, filing and prosecution of medical device, biotechnology, pharmaceutical, bioinformatics and software patents. Dr. Graeser is a U.S. Patent Agent and is not an attorney at law; none of the above should be construed as legal advice.

Under the deal being discussed, PokerStars would acquire the assets of its smaller rival, according to the person. The deal would be part of a broader settlement of a civil case brought by the DOJ against the two companies, the person said. The DOJ shut down the U.S. web sites of Full Tilt Poker and PokerStars last year as part of a crackdown of online poker sites.

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A letter sent to shareholders today by founder and CEO Jeff Bezos, titled “The Power of Invention,” tackles the publishing industry head-on by explaining how both authors and customers are benefiting from its Kindle publishing business.

While Bezos fails to address the DOJ lawsuit, which accused Apple and five major book publishers of conspiring to raise e-book prices, he provides a glimpse at how he’s changing the economics of the business on a small scale.

Bezos says Amazon’s Kindle Direct Publishing division has already produced more than a thousand authors who are selling more than a thousand copies a month. Some have reached hundreds of thousands of sales, and two have joined the Kindle Million Club.

Authors who use KDP get to keep their copyrights, keep their derivative rights, get to publish on their schedule – a typical delay in traditional publishing can be a year or more from the time the book is finished – and … saving the best for last … KDP authors can get paid royalties of 70%. The largest traditional publishers pay royalties of only 17.5% on ebooks (they pay 25% of 70% of the selling price which works out to be 17.5% of the selling price). The KDP royalty structure is completely transformative for authors. A typical selling price for a KDP book is a reader-friendly $2.99 – authors get approximately $2 of that! With the legacy royalty of 17.5%, the selling price would have to be $11.43 to yield the same $2 per unit royalty. I assure you that authors sell many, many more copies at $2.99 than they would at $11.43.”

If you can’t take Bezos at his own word, the letter includes eight quotes from customers and authors who have benefited from Amazon’s services, including its publishing, fulfillment and Web services.

“These innovative, large-scale platforms are not zero-sum — they create win-win situations and create significant value for developers, entrepreneurs, customers, authors, and readers,” he wrote.

The company’s stock was trading down 1.81 percent, or $3.46 a share today, to $187.23. In recent months, the stock has slipped from its 52-week high of $246.71 a share.

The gist of the Department of Justice’s lawsuit against Apple and five major book publishers: The publishers, assisted by Apple, conspired to fight back against Amazon’s pricing power in the growing e-book market.

The Wall Street Journal, which has been on the story for some time, has plenty of background here. And there’s some great, baroque detail in the DOJ’s complaint, which you can read over here. (New York venues of choice for alleged antitrust meetings: The “Chef’s Wine Cellar” at Picholene, and Alto, a now-defunct Italian restaurant.)

But there’s also this odd, scintillating, throwaway line in the middle of the complaint, where the DOJ casually mentions that before Apple thought about fighting with Amazon, it thought about a different strategy: Ruling the world in concert.

From the complaint:

In addition to considering competitive entry at that time, though, Apple also contemplated illegally dividing the digital content world with Amazon, allowing each to “own the category” of its choice — audio/video to Apple and e-books to Amazon.

Really? So how would that work? And why didn’t Steve Jobs and Jeff Bezos end up conspiring to work together? The DOJ doesn’t explain any of this — it simply moves on to the rest of its argument.

And here’s where we need to point out that it’s not uncommon for lawsuit complaints to contain big helpings of theatrics, with accusations and context that won’t end up having any bearing in court, if it gets that far.

Indeed, several of the publishers that the DOJ is suing this morning are expected to settle with the government this afternoon — can’t get more theatrical than that. (Actually, they’ve already settled, says Bloomberg.)

Still, that’s an especially juicy bit of red meat to dangle in front of the public, so if the DOJ has more to say about the alleged would-be conspiracy, we’d love to hear about it. Apple declined to comment, but I’ll update if that changes.

(Image courtesy of Shutterstock/Everett Collection)

The lawsuit, filed in Manhattan federal court by the U.S. Department of Justice’s Antitrust Division, alleges Apple and the publishers reached an agreement where retail price competition would cease, retail e-books prices would increase significantly and Apple would be guarantee a 30% “commission” on each e-book sold.

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Increasingly, that phrase can be applied not only to Las Vegas casinos, but also to Facebook, which takes a 30 percent cut of game developers’ revenues for the right to be on the social network.

“Facebook is almost the same business [as casinos],” said Chris Satchell, CTO and EVP of research and development at International Game Technology, which makes both traditional casino games and social games. “Facebook has real estate and customers, just like the casinos.”

Since 1981, IGT has been developing and manufacturing slot and video poker machines for casinos. Some of its games include recognizable brand names such as Wheel of Fortune, Big Buck Hunter, The Hangover and Sex and the City. Now, the casino game-maker is trying its hand at social games.

To make the leap, in January IGT acquired Seattle-based Double Down Interactive for $500 million. This week, the company launched their latest social game, called American Idol Slot, within Double Down’s casino on Facebook, which ranks in the top 25 by drawing 5.4 million gamers a month.

The American Idol game lets people spin the wheels featuring the faces of Season 11 contestants with host Ryan Seacrest looking over their shoulder. The free-to-play game allows you to win additional chips. Those who aren’t as lucky can buy 75,000 for $1.

The company says the game was in development prior to the acquisition, but says it is an example of how the two companies make a great fit.

Satchell said the idea is to enable cross-platform gaming experiences, so that players can connect to games before, during and after visits to casinos. Obviously, using big names helps.

But he also sees Facebook as a way to introduce casino games to a younger crowd, who are more likely to go clubbing at a casino than play highly profitable slot games.

“If we could just get them to understand that it’s fun. Social gaming is a good way to do that, and it’s a good business in its own right,” he said.

It’s a good business now, but it may be an even better business in the future when online gambling is legalized.

Late last year, the Department of Justice issued a new interpretation of the Wire Act of 1961. Under the new ruling, it interprets the Act as only outlawing bets on sporting events — not all events and contests. With that clarification in place, it will now be up to each state to pass legislation outlining operating procedures.

Some states have already passed laws, encouraging several companies, including IGT, Zynga and Caesars Interactive, to place their bets.

Regulators warned Google that their approval of the $12.5-billion acquisition does not preclude continued monitoring of the company’s use of MoMo’s arsenal of 17,000 patents — particularly those deemed standards essential (SEP). Both agencies are clearly very wary of the possibility for their misuse, given Google’s recent endorsement of the not-really-fair-and-reasonable-at-all licensing terms Motorola Mobility has been trying to squeeze out of Apple and others — 2.25 percent of the net selling price in which its patented technology is used. And their dueling statements announcing the approval of the merger reflect this.

Here’s the DOJ:

“In light of the importance of this industry to consumers and the complex issues raised by the intersection of the intellectual property rights and antitrust law at issue here, as well as uncertainty as to the exercise of the acquired rights, the division continues to monitor the use of SEPs in the wireless device industry, particularly in the smartphone and computer tablet markets. The division will not hesitate to take appropriate enforcement action to stop any anticompetitive use of SEP rights.”

And the EC:

“Today’s decision does not mean that the merger clearance blesses all actions by Motorola in the past or all future action by Google with regard to the use of these standard essential patents. Our decision today is without prejudice to the legality under EU antitrust law of Motorola’s past and Google’s future actions. However, the question whether Motorola’s or Google’s conduct is compliant with EU antitrust law cannot be dealt with in the context of the merger procedure.”

In other words, neither agency feels that the SEP and FRAND licensing issues surrounding this acquisition have been properly dealt with. But they will be, if the need arises. And Google best tread carefully.

In its roadshow presentation released online today, the Vegas-based company, which manages 42,000 hotel rooms, said one of the biggest opportunities it had going forward was on the Internet, including social games and real-money gaming.

Mitch Garber, the CEO of the company’s interactive division, said it recently launched Caesars Casino in beta on Facebook, making it the first time that a brand name was used to compete in the casino genre.

Garber believes that the game, which includes video slots, blackjack and roulette, will displace Double Down Casino as one of the category leaders. The developer of Double Down Casino, Double Down Interactive, was recently acquired by video poker giant International Game Technology for $500 million.

Garber said over the past 13 months, so much of the business has changed.

With the sale of Double Down, and the visibility into social games leader Zynga, which went public in December, and the release of more information this week by Facebook in its public filing, there are lots of verifiable signs that this is a big business.

For instance, on Wednesday, Facebook revealed that Zynga made up 12 percent of its overall revenues. Zynga’s Poker game is the leading casino-based game on Facebook, and more recently, it launched Bingo as part of a casino series.

Over the past two days, Zynga’s stock price has soared based on the Facebook news, rising 8.11 percent today alone to close at $13.39 a share.

Caesars said yesterday it was applying to be listed on the Nasdaq market under the symbol “CZR,” and that it was planning to sell 1.8 million shares between $8 and $10 apiece.

Caesars Chairman, CEO and President Gary Loveman was positive about a number of aspects of the business, as he should be in a presentation to potential investors, but one of the highlights was online gaming.

“This is a big deal for us,” he said, calling out the opportunity for gambling online, across both mobile and social networks and across multiple languages.

In addition to launching Caesars Casino on Facebook, the company has been building up its online gaming chops for some time.

Garber said this past year the company purchased Israel-based Playtika, which operates Slotomania, a very popular slots game on Facebook, iPhone and iPad. It also has two software partners that will enable it to expand into online gambling in the U.S. as soon as it becomes legal.

“We aren’t aware of any other bricks and mortar company that has the online experience that is preparing themselves as we are,” he said.

However, Zynga told All Things D it was currently seeking partnerships to pursue real-money gaming, and MGM Resorts also recently unveiled a plan to partner with online poker company Bwin.Party Digital Entertainment.

Of course, the big driver for everyone is that the laws are changing in the U.S., which makes it nearly a foregone conclusion that online gambling — at least some games — will become legal over the next year.

Late last year, the Department of Justice issued a new interpretation of the Wire Act of 1961. Under the new ruling, it interprets the act as only outlawing bets on sporting events — not all events and contests.

With that clarification in place, it will now be up to every state to pass legislation outlining operating procedures.

“We see the odds being close to 100 percent,” Garber said. “It’s just a matter of whether it will be federally regulated or state by state. The states are already doing it, but the federal government is getting their act together, too.”

The company has confirmed to All Things D that it is actively investigating several opportunities, and is in talks with several partners about gambling on the Internet.

A Zynga spokesperson provided this statement to AllThingsD:

“We build games and experiences that our players want and love. Zynga Poker is the world’s largest online poker game with more than 7 million people playing every day and over 30 million each month. We know from listening to our players that there’s an interest in the real money gambling market. We’re in active conversations with potential partners to better understand and explore this new opportunity.”

As with any new entrant in the space, Zynga will have to fulfill several requirements, meaning any major rollout is still months away.

The San Francisco-based social games maker will have to wade through a maze of state, national and international regulations. It will have to secure the correct licenses, and it also needs the right technology to make betting over the Internet secure.

For either of these last two requirements, a partnership or acquisition of an online gambling organization or other technology would make the most sense, instead of starting from scratch.

However, the effort could easily pay off.

Zynga was one of the first online gaming companies on Facebook, and continues to dominate the platform today. If it is able to get its toe in the door, just as the laws change in the U.S., it could be a leader yet again.

Back in October, Zynga first started showing broad interest in the casino category.

Zynga founder and CEO Mark Pincus announced at a press event that the company was going to launch Zynga Casino, which would serve as a single destination on Facebook to build off its strong brand in poker.

Its first new game, which has not launched yet, will be bingo.

Until now, the company’s efforts have been limited to building social and mobile games that are given away for free and monetized through the sale of virtual goods.

Getting users to make bets and part with real money could prove difficult, even for a company that has so many dedicated fans.

One thing Zynga has going for it is that social games are frequently compared to gambling because of their addictive nature — both lure consumers into spending a few more dollars to continue playing.

The casino genre has also been quietly racking up big numbers on Facebook.

Besides Zynga Poker, which is the most popular poker game on Facebook, and one of the company’s longest standing titles, there are many other sleeping giants. Sean Ryan, Facebook’s director of game partnerships, has even called them “unbelievable monsters.”

Said Ryan: “It turns out that people are completely okay winning virtual currency that they can never cash out.”

If players actually have the chance to win money, who knows the size of the opportunity?

A Facebook spokesperson said the company does not necessarily see a future for gambling on the social network. “We don’t have any plans to get into real-money gambling,” she said.

It’s unclear if that eliminates others from experimenting. In the meantime, it hasn’t stopped game makers from exploring the category or the concept.

Last week, Seattle-based Double Down Interactive, which was named by Facebook as one of the most popular game makers of 2011, was acquired by video poker giant International Game Technology for $500 million. It has 4.7 million monthly active users playing a variety of games, including blackjack, slots, video poker and roulette.

The deal closely followed Caesars Entertainment’s purchase of Playtika, an Israeli game company known for its Facebook title Slotomania. Caesars bought the company in two stages, the first of which was rumored to be purchased for up to $90 million.

Caesars, which filed to go public in November, declined to comment because it is currently in its quiet period.

However, some of its plans were revealed in a document filed with the Securities & Exchange Commission. It said its Caesars and World Series of Poker brands are dedicated to online gaming, and will take advantage of real-money gaming as it becomes legalized. Right now, Caesars Entertainment offers games “for fun” in jurisdictions where online gambling is not yet legal, but has identified the legalization of online poker in the U.S. as “the largest opportunity in online gaming in the near term.”

Still, the biggest hurdle is the law.

Internationally, several countries have permitted gambling for some time, and those areas represent the most immediate opportunities.

But there are signs of the U.S. beginning to open up, too. On the day before Christmas, the Department of Justice gave the online gambling community an early present, according to a blog post written by Nelson Rose, a professor and lawyer.

“President Barack Obama’s administration has just declared, perhaps unintentionally, that almost every form of intra-state Internet gambling is legal under federal law, and so may be games played interstate and even internationally,” Rose wrote.

Essentially, what the Justice Department did was to issue a new interpretation of the Wire Act of 1961. Under the new ruling, it interprets the act as only outlawing bets on sporting events — not all events and contests, according to an article in the San Francisco Chronicle.

With that clarification in place, it will now be up to every state to pass legislation outlining operating procedures. So far, Nevada and the District of Columbia have moved quickly to enact laws. To get other state laws passed could be a lengthy process, especially during an election year.

In the meantime, launching games only in Nevada and D.C. doesn’t represent the big opportunity everyone was hoping for.

To be competitive against Caesars and IGT, Zynga may have to partner or acquire companies that already have the licenses in place or the necessary expertise.

Some of the more obvious candidates include Bwin, which operates PartyGaming.com and is traded on the London Stock Exchange; Betfair, and other operators, like Bodog, Bet365 and 888.com. Many are based in the U.K. and handle a variety of casino games and sporting contests there.

The entrance into a new market, such as gambling, would take substantial resources, and Zynga has them thanks to its public offering. In December, it raised $1 billion, making it the largest Internet IPO since Google.

So, will Zynga be the next “unbelievable monster?” Clearly, it is willing to try.

With the Federal Communications Commission threatening to block the deal, and the Justice Department already suing to do the same, AT&T last month pulled its application before the FCC, in hopes that a court would take its side in the DOJ case. The company said it would deal with the FCC once a court heard its case with the Justice Department.

However, the DOJ one-upped the telecom giant on Friday, arguing that the court case should be put on hold, now that AT&T has yanked its application to the FCC to acquire T-Mobile’s licenses.

Check.

Your move, AT&T.

Update: For its part, AT&T general counsel Wayne Watts says the company is “anxious to bring to the American consumer the benefits of increased wireless network capacity and efficiencies that can only arise from combining the resources of AT&T and T-Mobile USA,” and is “eager” to present its case in court.

Industry sources expect the Department of Justice, who had been reviewing the $400 million transaction for antitrust violations, to approve the deal in the next couple weeks, perhaps as early as this Friday.

It’s unclear whether the DOJ will impose any restrictions on the deal. But Web ad players, reading tea leaves and DOJ body language, are betting the sale goes through unhindered. No comment from Google; I’ve yet to hear back from a Department of Justice rep. UPDATE: “Our investigation is ongoing,” a DOJ spokeswoman emails.

Admeld helps publishers sell their ads by negotiating bids from multiple buyers, and is a big player in the complicated and fractured display advertising business. Google, which has long been dominant in search advertising, has been steadily increasing its presence in display ads via acquisitions like DoubleClick and Invite Media.

So it was easy to see why regulators might give another big deal some scrutiny. In fact, at this point, every big deal Google makes will get a hard look from Washington, which is already pursuing a broad antitrust investigation. But so far regulators have yet to stop a deal, including Google’s $750 million acquisition of AdMob and its more recent deal for ITA. Next up: The $12.5 billion Googorola deal.

The DOJ first began looking at Google-Admeld six months ago, and in late July extended their review. At the time, Google published a blog post explaining why the company couldn’t dominate display ads, even while its executives told Wall Street it had big ambitions in display.

More recently, Google has gotten help making its case from competitors. Facebook, for instance, is already ahead of Google in the display ad market, at least by the estimation of some analysts.

And Yahoo, which still competes fiercely with Google for display ad dollars, has put together a battle plan designed specifically to take on Google: It has lined up a coalition of big Web players with AOL and Microsoft, and it has begun pulling back its inventory from third-party ad buyers, including Google’s Invite Media.

(Image credit: iStockphoto/alexsl)

The Department of Justice has already filed suit seeking to block the deal, which requires approval from both agencies.

FCC Chairman Julius Genachowski has circulated a draft opinion that would seek to have a hearing before an administrative law judge, though the commission is likely to hold that hearing only after the DOJ suit is decided. If the Justice Department is successful in its effort, the FCC move would be moot. However, AT&T now needs to go 2-for-2 if it hopes to complete the deal.

The decision is not shocking, given that the FCC had indicated it shared some of the Justice Department’s concerns.

However, what is noteworthy is just how strong the agency’s concerns are.

FCC officials said on Tuesday that the agency found in its review not only that the deal would hurt competition, but also that it represents an unprecedented reduction in competition. In every market except Omaha (where T-Mobile does not offer service), the agency found that the merger would reduce competition to a meaningful degree.

The agency staff also rejected AT&T’s claims that the deal would lead to a faster or more complete rollout of 4G. And, rather than create jobs, the FCC staff believes approval of the deal would actually lead to fewer U.S. jobs.

AT&T, naturally, said it was not thrilled with the decision.

“The FCC’s action today is disappointing,” said Larry Solomon, SVP of corporate communications. “It is yet another example
of a government agency acting to prevent billions in new investment and the creation of many thousands of new jobs at a time when the U.S. economy desperately needs both. At this time, we are reviewing all options.”

In addition to setting up a possible second court battle, the FCC findings also mean that any proposed settlement would have to satisfy two agencies, both of whom seem to see little merit — and lots of harm — in the deal. Oh yeah, Sprint and C-Spire Wireless have also filed suits of their own.

In a regulatory filing, Motorola Mobility said: “On September 28, 2011, Motorola Mobility Holdings, Inc. and Google Inc. each received a Request for Additional Information and Documentary Material from the Antitrust Division of U.S. Department of Justice (DOJ) regarding the proposed merger between the companies. The companies intend to cooperate fully and respond expeditiously to the DOJ. The transaction is currently expected to close by the end of 2011 or in early 2012.”

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The department filed an amended legal complaint in a Washington D.C. federal court to indicate that state attorneys general from New York, Washington, California, Illinois, Massachusetts, Ohio and Pennsylvania have joined the case.

“We are pleased that these states have joined the department in its lawsuit,” the department said in a written statement. “Together, we will seek to protect consumers from the anticompetitive harm that would result from this proposed transaction.”

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