Silicon Valley antitrust lawyer Gary Reback made his case against the Google Books settlement Tuesday, arguing that the settlement is illegal but could be remedied if the Justice Department insists that Google (GOOG) license the books it scanned to competitors.

In a court filing on behalf of the Open Book Alliance, a consortium that opposes the settlement, the attorney argues that the settlement between Google, the Authors Guild and the Association of American Publishers gives publishers and Google monopoly control over the pricing of digital books. Reback, who was involved in spurring the Justice Department to bring an antitrust suit against Microsoft in the 1990s, co-founded the consortium along with the Internet Archive, a nonprofit that is trying to create a digital archive of the Web, last month. Many members of the consortium, including the Internet Archive, Amazon.com (AMZN), Yahoo (YHOO) and Microsoft (MSFT), have filed their own briefs opposing the settlement too.

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Whether the Google (GOOG) books settlement passes muster with the U.S. District Court and the Justice Department, Google’s book search is clearly on track to becoming the world’s largest digital library. No less important, it is also almost certain to be the last one. Google’s five-year head start and its relationships with libraries and publishers give it an effective monopoly: No competitor will be able to come after it on the same scale.

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Silicon Valley was abuzz Wednesday with news that the Justice Department had begun an antitrust investigation into the hiring practices of some of the best-known companies in the technology and biotech industries, including Google, Apple, Yahoo and Genentech.

The question being asked most frequently was how the word “anticompetitive” could possibly be applied to the industry’s perpetual fight over talent.

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Just what, exactly, are all those Hollywood types getting in return for their investment in Barack Obama’s presidential bid? The Justice Department, a steady ally for the entertainment industry on copyright issues during the Bush administration, today opposed the studios in a potentially precedent-setting dispute with Cablevision over TV recording services.

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Many lessons have been drawn from the U.S. government’s antitrust assault on Microsoft (MSFT) in the late 1990s. Intel’s (INTC) new scrape with the European Union is likely to spark memories of one of the simplest: don’t put it in writing.

The Justice Department struggled to prove some of its points about Microsoft’s behavior. But it didn’t have much trouble attacking the contracts that the software company forged with various partners, such as Internet access providers, to discourage them from promoting the browser software used by rival Netscape. A federal appeals court upheld a lower court’s finding that the pacts were exclusionary and violated antitrust laws.

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The FCC voted 5-0 today to approve a plan to combine Sprint’s Xohm network with Clearwire’s (CLWR) own WiMax network. Investors in the newly combined company include Google (GOOG), Intel (INTC) and a group of cable companies.

According to the AP, the Justice Department has already indicated that it will allow the deal to proceed, but will continue to monitor it.

Both Sprint (S) and Clearwire today built on robust gains posted on Monday.

Sprint, which rose 87 cents yesterday, added 15 cents in today’s regular session, and has advanced another 42 cents to $4.57 after hours. That brings the two-day rally to $1.44, or 46 percent.

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The planned advertising partnership between Google (GOOG) and Yahoo (YHOO), which was devised during Microsoft’s (MSFT) unsolicited bid for Yahoo, is headed for a federal antitrust challenge. And that could mean, according to one analyst, that Google could wind up walking away from the deal. Two days after the Association of National Advertisers sent a letter to the Justice Department opposing the Google-Yahoo ad pact, antitrust regulators hired high-powered attorney Sanford Litvack to lead its legal challenge to block the deal, according to The Wall Street Journal.

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Talking Points Memo’s Josh Marshall reports that he’s been “Banned at the DoJ”–taken off the email distribution list for press releases and the like. This has to be one of the more lame governmental PR decisions of the recent past.

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