Craigslist officials were caught off guard when told in 2007 that their minority shareholder, eBay, was going to compete directly with them in the online classifieds business in the U.S., an attorney for Craigslist said Wednesday.

Ed Wes said he was equally troubled by eBay's defiance in the face of Craigslist's subsequent request that eBay divest or sell its 28 percent minority stake because Craigslist was no longer comfortable having the online auction giant as a shareholder.

Wes said eBay attorney Brian Levey warned him in a telephone call after Craigslist asked for divestiture that eBay CEO Meg Whitman's response might be to tell Craigslist to go "pound sand."

"It was as if he knew what the response would be even before Meg responded, even before she saw the e-mail," Wes said. "It was a stunning moment for me."

Wes was testifying in a lawsuit in which eBay is challenging antitakeover measures adopted by Craigslist founder Craig Newmark and CEO James Buckmaster in response to eBay's launch of its Kijiji classifieds site and refusal to sell or divest its shares.

Craigslist contends that eBay was out to control Craigslist despite assurances that it was satisfied with a minority stake, and that it reneged on promises that Craigslist would be eBay's exclusive vehicle in the online classifieds market in the U.S., and that eBay would help Craigslist expand internationally. Craigslist also claims that eBay misused confidential financial information provided by Craigslist to help develop Kijiji.

Switzerland's data protection commissioner on Friday announced that he was taking Google to court in a dispute over privacy concerns on the US Internet giant's "Street View" facility.

Federal Data Protection and Information Commissioner, Hanspeter Thuer, said in a statement that he was taking the case to the Federal Administrative Tribunal after Google had refused to apply the majority of measures he had recommended.

The Street View facility allows users to take a ground level panoramic view of some locations on Google Maps, based on still photographs taken by specially-equipped vehicles.

The Swiss data protection commissioner had repeatedly complained since the service was introduced in Switzerland this year that many images of faces and vehicle number plates were still easily identifiable and insufficiently blurred.

Thuer said on Friday that this was especially the case where the people concerned were shown around "sensitive locations, for example outside hospitals, prisons or schools."

He also raised concerns about the height of the car-top cameras Google uses to film locations, saying they afford a view over fences, hedges and walls "with the result that people see more on Street View than can been seen by a normal passer-by in the street."

Lawyers on both sides are poised to continue their court battle over Google Inc.'s effort to get digital rights to millions of out-of-print books.

A hearing is set for Wednesday in Manhattan federal court.

Judge Denny Chin plans to set a schedule to define how the debate will proceed.

A $125 million agreement between Google and U.S. authors and publishers is being renegotiated. The parties agreed to return to the drawing board after the U.S. government said it seemed the agreement would violate antitrust laws.

Justice Department officials will be part of the new negotiations.

A federal judge in California has vacated a temporary restraining order that directed Google Inc. to deactivate a Gmail account in response to a complaint filed by the Rocky Mountain Bank of Wyoming.

In an order issued Friday, Judge James Ware, of the U.S. District Court for the Northern District of California, also vacated a hearing on the case which had been scheduled for today. The decision came after a motion had been jointly filed by Google and the bank asking the court to quash the restraining order.

Rocky Mountain Bank had mistakenly sent a file containing confidential account information belonging to 1,325 of its customers to the Gmail address in August. When the bank discovered the error, it immediately sent an e-mail to the Gmail address asking the recipient to delete the e-mail and the attachment. The bank also asked the recipient to contact the bank to discuss what actions had been taken to comply with the bank's request.

When it received no reply, the bank sent an e-mail to Google asking whether the Gmail account was active and what it could do to prevent unauthorized disclosure of the leaked information.

Major publishers accused Google Thursday of "brutally" exploiting France's literary heritage as they launched a court challenge to the Internet giant's drive to scan digital copies of books and put extracts online.

Publishing house La Martiniere, the French Publishers' Association and authors' group SGDL asked a Paris court to fine Google 15 million euros ($22.09 million) and 100,000 euros for each day it continues to violate copyright by digitizing their books.

The trial caps a three-year challenge to what publishers say is the web giant's 2005 plan to create a massive online library without prior approval.

"It's an anarchic way of brutally stockpiling French heritage," Yann Colin, the publishers' lawyer, told the court.

"Digitizing is reproduction," he added. "Once it is digitized, you can't undo it."

Colin argued that the case, which targets Google's French unit, should be tried under local law as the publishers, scanned works and authors were French.

The publishers also argue that Google's massive profits are "parasitic," as they were generated from sponsored links which are presented to web surfers searching for copyrighted books.

Google is reportedly working to make its settlement with book publishers more palatable to the court, but even if the deal goes through, consumers are likely a long way from getting out-of-print "orphaned" books onto their e-readers.

The settlement, in its current state, would allow Google to make large passages of these books, which are in copyright but whose authors can't be found, searchable on the Web. The government and other parties have raised privacy concerns, worrying about Google's observation of what people read. (And not all authors and publishers are satisfied, although their associations signed on to the deal.)

But what really has Amazon, Microsoft and other competitors in a tizzy is the part of the settlement that lets Google sell online access and subscriptions to orphaned books. As the e-reader market heats up, Amazon argues, the Google book settlement would create "a cartel of authors and publishers" who could set pricing and availability without restrictions.

These opponents would have a harder time setting up their own market of orphaned materials because they'd have to create an agreement with publishers and authors from scratch, instead of making a settlement in court.

In a case closely watched by the recording industry, the U.S. Second Circuit Court of Appeals upheld a 2007 jury verdict that Launchcast, a webcasting service run by Yahoo's Launch Media Inc unit, did not give listeners enough control to be an "interactive service" that would require the fees.

The three-judge panel said the service is required only to pay licensing fees set by SoundExchange, a nonprofit that collects royalties on sound recordings. It was the first federal appeals court to decide the issue.

Friday's ruling is a setback for record producers that have struggled with slumping sales as customers increasingly obtain music online or through other means.