On Friday, news broke that CNET had been forced by its parent company CBS to remove the Dish Network's Hopper set-top box from its "Best of CES" awards due to ongoing litigation between the two companies. CBS has been battling the Dish Network in court over the Hopper's ability to skip past commercials automatically (NBC, ABC, and Fox are also taking action).

CBS Interactive representatives told The Verge that the Hopper with Sling had been "withdrawn from consideration" from the "Best of CES" awards due to CBS's lawsuit with Dish; that the ban on coverage is limited only to specific products implicated in ongoing litigation with CNET's parent company; and that the ban only applied to product reviews and that news coverage would be exempt. That policy appears to have been hastily put in place. Prior to the move Friday, CNET had reviewed the Hopper and written extensively about the device.

But the problems may go deeper than that. The Verge has now learned that the facts of the case are somewhat different than the story CNET and CBS had previously shared with the public. According to sources familiar with the matter, the Hopper was not simply an entrant in the Best of CES awards for the site: it was actually chosen as the winner of the "Best of Show" award (as voted by CNET's editorial staff).

Larkin was distraught while delivering the news, at one point in tears

Apparently, executives at CBS learned that the Hopper would win "Best of Show" prior to the announcement. Before the winner was unveiled, CBS Interactive News senior-vice president and General Manager Mark Larkin informed CNET's staff that the Hopper could not take the top award. The Hopper would have to be removed from consideration, and the editorial team had to re-vote and pick a new winner from the remaining choices. Sources say that Larkin was distraught while delivering the news — at one point in tears — as he told the team that he had fought CBS executives who had made the decision.

Apparently the move to strike the Hopper from the awards was passed down directly to Larkin from the office of CBS CEO, Leslie Moonves. Moonves has been one of the most outspoken opponents of the Hopper, telling investors at one point, "Hopper cannot exist... if Hopper exists, we will not be in business with (Dish)."

According to sources, reviews lead Lindsey Turrentine, Larkin, and CBS Interactive president Jim Lanzone fought hard against the mandate from CBS, with numerous calls between CBS Interactive and CBS in New York. One source told The Verge that Turrentine and Larkin were "beside themselves" over the situation.

This runs counter to the official story given by officials at CBS and CNET to both Dish Network and the public. Dish's head of corporate communications Bob Toevs told CNN that the company had been contacted by CNET representatives and informed that the Hopper had been removed from consideration for an award just prior to the news site's article announcing this year's winners. At this time, CNET also added a disclaimer to its "Best of CES" page stating the following:

The Dish Hopper with Sling was removed from consideration due to active litigation involving our parent company CBS Corp. We will no longer be reviewing products manufactured by companies with which we are in litigation with respect to such product.

That statement suggests that CBS's policy towards Dish's Hopper with Sling was determined when the DVR had been publicly announced as a finalist. Instead, it appears that CBS's official ire (and edict to replace it as winner) was only roused when the award had already been decided on internally, and the corporate side of CBS had been quietly alerted to CNET's editors' vote.

The news raises questions not only about CNET's editorial independence, but concerns over why editors at the site have remained mum on the events surrounding the decision to remove the Hopper as winner of its "Best in Show" award. It suggests a growing influence of CBS' corporate interests in editorial decisions at its digital news subsidiaries. One source says that both Larkin and Turrentine fought for full disclosure, but were rebuffed by CBS.

"CBS legal is just trying to keep its court case clean."

Ironically, in a recent case brought against CBS Interactive which alleged the parent company was responsible for the actions of its subsidiaries, CBS lawyers argued that meddling in the affairs of its independent sites "would chill speech and technological innovation and warrants restraint." In that case, entrepreneur Alki David alleged CBS Interactive was contributing to copyright infringement due to the news articles on CNET that promoted P2P software and taught users how to get around copyright protection on digital media, as well as distribution of P2P software Limewire on its Download.com site. CBS based its motion to dismiss the case on both a distinction between CBS and CBS Interactive, and the potential effects linking the parent with its news subsidiaries would have on editorial independence and freedom of the press. Holding CBS responsible for CNET, CBS' lawyers argued, "would create grave uncertainties for writers and publishers — including search engines, web encyclopedias, blogs and most technology journalists — that seek to communicate truthful information about emerging technologies including P2P file-sharing services."

Sources inside CBS Interactive have said that CBS' primary concern and justification for banning reviews of Timehop DVRs has been that CNET's reviews could be used by Dish in court to embarrass CBS or possibly refute the company's evidence in court. "This incident is much more isolated than many are making it out to be," one source said. "CBS legal [is] just trying to keep its court case clean."

CBS' long-running and storied news arm has been at the center of other controversies over the years, including debate over the authenticity of the "Killian documents" which ultimately led to the retirement of anchor Dan Rather, and a 60 Minutes dispute over reporting on the tobacco industry which became the basis for the film The Insider.

Update: CNET reporter Greg Sandoval has announced on Twitter that he will be leaving the organization due to the controversy.

Update: CBS has released the following statement on the matter:

CBS has nothing but the highest regard for the editors and writers at CNET, and has managed that business with respect as part of its CBS Interactive division since it was acquired in 2008. This has been an isolated and unique incident in which a product that has been challenged as illegal, was removed from consideration for an award. The product in question is not only the subject of a lawsuit between Dish and CBS, but between Dish and nearly every other major media company as well. CBS has been consistent on this situation from the beginning, and, in terms of covering actual news, CNET maintains 100% editorial independence, and always will. We look forward to the site building on its reputation of good journalism in the years to come.

Tim Carmody, Dieter Bohn, and Nilay Patel contributed to this report