[rbarooah]

I don't see how you reach that conclusion.

Twitpic is part of the Twitter ecosystem and is such is certainly competitive with Google's social and photo sharing efforts (i.e. Google+ and Picasa)

Being a known distributor of malware (described by Google as: software which causes things like identity theft, financial loss, and permanent file deletion) is a crime.

So yes, they are a competitor, and yes they are being accused of a crime.