If you were a Morgan Stanley manager and knew that financial analysts for your underwriting firm were about to release lower than expected earning estimates for Facebook, would you notify your most loyal investment clients prior to informing everyone? Is it ethical to do so?

And now comes some news about the Facebook (FB) IPO that buyers deserve to be outraged about.

Reuters’ Alistair Barr is reporting that Facebook’s lead underwriters, Morgan Stanley (MS), JP Morgan (JPM), and Goldman Sachs (GS) all cut their earnings forecasts for the company in the middle of the IPO roadshow.

This by itself is highly unusual (I’ve never seen it during 20 years in and around the tech IPO business).

But, just as important, news of the estimate cut was passed on only to a handful of big investor clients, not everyone else who was considering an investment in Facebook.

This is a huge problem, for one big reason:

• Selective dissemination. Earnings forecasts are material information, especially when they are prepared by analysts who have had privileged access to company management. As lead underwriters on the IPO, these analysts would have had much better information about the company than anyone else. So the fact that these analysts suddenly all cut their earnings forecasts at the same time, during the roadshow, and then this information was not passed on to the broader public, is a huge problem.

Any investor considering an investment in Facebook would consider an estimate cut from the underwriters’ analysts “material information.”

What’s more, it’s likely that news of these estimate cuts dampened interest in the IPO among those who heard about them. (Reuters reported exactly this—that some institutions were “freaked out” by the estimate cuts, as anyone would have been.)

In other words, during the marketing of the Facebook IPO, investors who did not hear about these underwriter estimate cuts were placed at a meaningful and unfair information disadvantage. They did not know what a lot of other investors knew, and they suffered for it.

Selective dissemination of this sort could be a direct violation of securities laws. Irrespective of its legality, it is also grossly unfair. The SEC should investigate this immediately.

We first heard rumblings about this last week, and we were so startled that we assumed the reports were wrong. Then, over the weekend, when Reuters reported the basic story again, we said that if it was true, Facebook IPO buyers deserved to be “mad as hell” about it. And now Reuters has the details, and they sound as bad as we had feared.

There are a couple of possibilities for what happened.

The first one is bad news for Morgan Stanley and the other lead underwriters on the deal.

The second is also bad news for Facebook.

According to Reuters, the underwriter analysts cut their estimates after Facebook issued an amended IPO prospectus in which the company mentioned, vaguely, that recent trends in which users were growing faster than revenue had continued into the second quarter.

To those experienced in reading financial statements, this language was unnerving, because its mere existence could have been taken to mean that Facebook’s revenue in the second quarter wasn’t coming in as strong as Facebook had hoped (why else would the language have suddenly been added at the 11th hour?)

To those who aren’t experienced at reading filings, however, the real meaning of this language could easily have been missed. Facebook’s users have been growing faster than revenue for a while, so why would it be news that this was continuing?

In response to the amendment, meanwhile, all three lead underwriter analysts suddenly cut their estimates.

Now, regardless of why the analysts cut their estimates (and this will be important), estimate cuts of any sort are material information, so if this news was given to some institutional clients, it also obviously should have been given to everyone.

That’s the first problem.

The second potential question and problem is whether Facebook told the underwriters to cut their estimates—either by directly telling them to, or, more likely, by “suggesting” that the analysts might want to revisit their estimates in light of the new disclosures in the prospectus.

If there was any communication at all between Facebook and its underwriters regarding the analysts’ estimates, Facebook will likely be on the hook for this, too.

Speaking as a former analyst, it seems highly unlikely to me that the vague language in the final IPO amendment would prompt all three underwriter analysts to immediately cut estimates without some sort of nod and wink from someone who knew how Facebook’s second quarter was progressing. (To get this message from the language, you really have to read between the lines). But even if this is what happened, it is still unfair that news of the estimate cut wasn’t disseminated quickly and clearly to everyone considering buying Facebook’s IPO.

The bottom line is that, even if dissemination laws were followed to the letter (which frankly seems unlikely), the selective disclosure here was grossly unfair.

The SEC needs to look into this.

And as it does, the SEC should also revisit the practice that allows underwriter analysts to develop estimates that are used to market IPOs to institutional clients but are not shared with the public. In Europe, research analysts publish full reports on companies BEFORE they go public. This is a much better system, and the U.S. should switch to it. But at the very least, the SEC should mandate that any information given to some clients (e.g., earnings estimates and changes in earnings estimates) be given to all clients.

If you were an airline executive, would you charge extra fee for passengers who want an aisle or window seat (instead of a middle seat), thus breaking up families?

If you’re flying this summer, be prepared to kiss your family goodbye at the gate. Even if they’re on the same plane.

Airlines are reserving a growing number of window and aisle seats for passengers willing to pay extra. That’s helping to boost revenue but also making it harder for friends and family members who don’t pay this fee to sit next to each other. At the peak of the summer travel season, it might be nearly impossible.

Buying tickets two or more months in advance makes things a little easier. But passengers are increasingly finding that the only way to sit next to a spouse, child or friend is to shell out $25 or more, each way.

With base fares on the rise — the average round-trip ticket this summer is forecast by Kayak.com to be $431, or 3 percent higher than last year — some families are reluctant to cough up more money.

“Who wants to fly like this?” says Khampha Bouaphanh, a photographer from Fort Worth, Texas. “It gets more ridiculous every year.”

Bouaphanh balked at paying an extra $114 round-trip in fees to reserve three adjacent seats for him, his wife and their 4-year-old daughter on an upcoming trip to Disney World. “I’m hoping that when we can get to the counter, they can accommodate us for free,” he says.

Airlines say their gate agents try to help family members without adjacent seats sit together, especially people flying with small children. Yet there is no guarantee things will work out.

Not everyone is complaining.

Rewarding frequent fliers

Frequent business travelers used to get stuck with middle seats even though their last-minute fares were two or three times higher than the average. Now, airlines are setting aside more window and aisle seats for their most frequent fliers at no extra cost.

“The customers that are more loyal, who fly more often, we want to make sure they have the best travel experience,” says Eduardo Marcos, American Airline’s manager of merchandising strategy.

For everybody else, choosing seats on airline websites has become more of a guessing game.

To travelers who haven’t earned “elite” status in a frequent flier program, flights often appear full even though they are not. These casual travelers end up paying extra for an aisle or window seat believing they have no other option.

But as flights get closer many of the seats airlines had set aside for those willing to pay a premium do become available — at no extra cost.

“Airlines are holding these seats hostage,” says George Hobica, founder of travel site AirfareWatchdog. “The seat-selection process isn’t as fair as it used to be.”

Airlines are searching for more ways to raise revenue to offset rising fuel costs. In the past five years, they have added fees for checked baggage, watching TV, skipping security lines and boarding early.

Now they are turning to seats.

Since last summer, American, Delta Air Lines, Frontier Airlines and United Airlines have increased the percentage of coach seats requiring an extra fee. Some — like those on Delta, JetBlue Airways and United — come with more legroom. Others, including those on American and US Airways, are just as cramped but are window and aisle seats near the front.

Allegiant Air and Spirit Airlines go one step further, charging extra for any advanced seat assignment. On Spirit, passengers who aren’t willing to pay the extra $5 to $15 per flight, are assigned a seat at check-in. The computer doesn’t make any effort to keep families together.

“It gets really difficult, unfortunately, because all you end up with is a lot of onesies and twosies,” says Barry Biffle, Spirit’s chief marketing officer. “If you want to sit together, we would highly encourage you to get seat assignments in advance.”

Delta just launched a discounted “Basic Economy” fare on certain routes where it competes with Spirit that doesn’t include advance seat assignments.

“Airlines have to be careful. They can only push this so far before they risk incurring the wrath of customers or the government,” says Henry Harteveldt, co-founder of Atmosphere Research Group.

Summer brings passengers traveling in larger groups and fewer empty seats. Last July and August, a record 86.4 percent of seats were filled by paying customers. Planes will be “slightly fuller this year,” says John P. Heimlich, chief economist at the industry’s trade group, Airlines for America. Add in seats occupied by off-duty airline staff and passengers who redeemed frequent-flier miles, and on many flights there won’t be a spare seat.

Should Notre Dame University be required to pay for contraceptive for employees even though birth control is against it’s religious beliefs?

In an effort to show a unified front in their campaign against the birth control mandate, 43 Roman Catholic dioceses, schools, social service agencies and other institutions filed lawsuits in 12 federal courts on Monday, challenging the Obama administration’s rule that their employees receive coverage for contraception in their health insurance policies.

The nation’s Catholic bishops, unable to reverse the ruling by prevailing on the White House or Congress, have now turned to the courts, as they warned they would. The bishops say the requirement is an unprecedented attack on religious liberty because it compels Catholic employers to provide access to services that are contrary to their religious beliefs. The mandate is part of the Obama administration’s overhaul of the health care system, which the bishops say they otherwise support.

Cardinal Timothy M. Dolan, whose archdiocese in New York is among the plaintiffs, said in a statement, “We have tried negotiations with the administration and legislation with the Congress — and we’ll keep at it — but there’s still no fix.”

The bishops rejected a compromise offered by President Obama in February that would have insurance companies — not the Catholic employers — pay for and administer the coverage for birth control. When some Catholic organizations broke with the bishops and greeted the accommodation positively, the bishops resolved that Catholic institutions must present a united front.

Among those filing suit are the Archdioceses of New York, Washington and St. Louis; the Dioceses of Dallas, Fort Worth, Pittsburgh, Rockville Centre on Long Island and Springfield, Ill.; the University of Notre Dame and the Catholic University of America; and Our Sunday Visitor, a Catholic publication. All the plaintiffs are being represented pro bono by the law firm Jones Day.

The defendants are the Treasury, Labor and Health and Human Services Departments.

At least 11 other Catholic and evangelical organizations had already filed lawsuits challenging the mandate, but those cases are still pending. For most religious organizations, the mandate takes effect in August 2013.

The White House declined to comment on Monday, instead providing Mr. Obama’s comments when he announced his attempt at the compromise in February: “These employers will not have to pay for, or provide, contraceptive services. But women who work at these institutions will have access to free contraceptive services, just like other women.”

Sister Mary Ann Walsh, a spokeswoman for the United States Conference of Catholic Bishops, said the president’s accommodations were vague and insufficient and would still compel Catholic organizations to violate their consciences. “They sound like empty promises,” she said.

If you were a Google engineer, would you set it up for Google to display links to its own services, like Google maps or images, when it answers a query, giving preference to them over those of competitors? Is this unethical/unfair?

Google may have abused its dominance in Internet search by promoting its own businesses at the expense of competitors, the European Commission said Monday. It warned the company to propose changes in “a matter of weeks” to its method of answering user queries, or possibly face an antitrust lawsuit.

Search is the crucial tool that sends consumers to new restaurants and hotels, cheap airplane flights, and local services as varied as plumbers or baby sitters. In issuing the ultimatum, European regulators sent their strongest signal yet that they believe Google, which has long said its search results are neutral, tips the scales in its favor.

“The Europeans are saying to Google: ‘Time’s up. Cave in or we’ll sue,’ ” said Keith N. Hylton, an antitrust expert at the Boston University School of Law.

A Google spokesman said the company disagreed with the commission’s conclusions and said “innovation online has never been greater.”

If Google decides to fight, the case could fuel a fledging Federal Trade Commission investigation. United States regulators have been working closely with the European officials, speaking by phone at least weekly.

Google is the dominant search engine in the United States and holds even greater sway in Europe, accounting for four of every five searches on the Continent.

Joaquín Almunia, the European antitrust chief, said at a news conference here that regulators had identified “four concerns where Google business practices may be considered as abuses of dominance.”

He said Google might have unfairly exploited its market position by displaying links to its own services, like Google maps or images, when it answers a query, giving preference to them over those of competitors. He also said Google included material in its own search results that was copied from competitors’ Web sites.

“In this way they are appropriating the benefits of investments of competitors,” Mr. Almunia said, explaining that restaurant guides and travel sites were particularly affected.

The other two areas of concern involve how Google conducts its advertising business, including how it delivers search ads on partner sites.

Thomas Vinje, a lawyer for FairSearch, a coalition of 17 companies including Microsoft, said the group was “pleased that the commission has identified some serious concerns with Google’s anticompetitive behavior.”

If Google does make concessions in Europe, computer users could notice a greater variety of Web services displayed on their computer screens besides those offered by Google, said Nicolas Petit, a law professor at the University of Liège in Belgium.

Mr. Petit drew a comparison with an earlier European requirement for Microsoft to include a raft of competing Web browsers as part of its operating system as a way of trying to curb Microsoft from promoting its own software products.

Antitrust fines in Europe can reach up to 10 percent of a company’s annual global revenue. Google’s revenue was nearly $38 billion last year.

Mr. Almunia’s office also can demand far-reaching changes to the way companies run their businesses.

Antitrust experts expressed surprise at the rare public offer by the commission, which reflects the delicate balance regulators are trying to strike as they seek to fix problems in the fast-changing technology marketplace before proposed remedies lose their relevance.

Mr. Almunia’s move, some said, was a new phase in aggressive European antitrust enforcement.

There may be a need to act swiftly, said Paul Lugard, the former head of antitrust at Philips, the giant Dutch electronics company, and now an assistant professor at the Tilburg School of Economics and Management in the Netherlands.

But he said he was concerned that “this form of highly unusual public encouragement in the full glare of the media puts even more pressure on companies like Google to settle early rather than contest charges that they really do think are groundless.”

Neither Google nor Mr. Almunia described what kinds of offers or changes in search methods could lead to a settlement in the case. Instead, each side appeared to hold out the prospect that it was prepared to walk away from negotiations.

Both sides are likely to want to avoid the decade-long case the commission undertook against Microsoft, which ended up paying $2 billion in penalties and fines.

“The Europeans are moving with the kind of speed you need to get these issues resolved,” said David Balto, a former policy director at the Federal Trade Commission. “In five years, everyone might be searching through Facebook.”

Mr. Almunia declined to comment in any detail on potential concerns about Google’s Android operating system, which the company has used to move into the leading position among mobile phone operating systems.

“It’s an ongoing investigation,” Mr. Almunia said, referring to Android.

Ominously for Google, those comments suggest that the company could face yet more pressure from the European authorities to change its practices in another facet of its business.

Sources close to the United States investigation have said regulators may be focusing on whether Google has strong-armed phone manufacturers using the Android system to offer only Google search on their phones.

The F.T.C. last month hired a litigator to examine the evidence against Google and, if deemed sufficient, file charges against the company.

Long before that decision is made, weeks of hard discussions will take place behind closed doors in Brussels involving Mr. Almunia and his investigators, and lawyers, engineers and executives from Google.

Al Verney, a Google spokesman, said competition on the Web had increased sharply in the two years since the commission began examining the company’s practices. That highlights how “the competitive pressures Google faces are tremendous,” he said.

While Google has faced new rivals, most notably Microsoft, which has plowed billions of dollars into its Bing search engine, the company’s share of the market has been surprisingly durable in recent years. In the United States during March, Google accounted for 66.4 percent of searches, up slightly from 65.7 percent during the same month in 2011, and 65.1 percent for that month in 2010, according to comScore.

In Europe, Google accounted for 79.3 percent of searches in March, compared with 79.8 percent the same month a year earlier, comScore estimates. In most cases, any gains in market share that Google rivals make tend to come at the expense of other competitors in the search market, not Google.

Some experts said a settlement might be an attractive prospect for Mr. Almunia, partly because of the complexities of the way search engines operate.

“Google updates its algorithms so frequently that any proposal from the agency that regulates search algorithms probably would be ineffective and unworkable,” said Mr. Hylton of Boston University.