Posts with «business» label

US Justice Department is reportedly poised to sue Google over its digital ad dominance

Google may soon be facing its second antitrust lawsuit filed by the US Department of Justice. According to Bloomberg, the DOJ is gearing up to sue the tech giant as soon as September after a year of looking into whether it's been using its dominant position to illegally control the digital ad market. The Justice Department's lawyers have reportedly been conducting another round of interviews to glean additional information that could help make their case stronger. These new interviews are expected to build on previous ones conducted much earlier on in the investigation. 

The Justice Department first filed an antitrust lawsuit against the company back in 2020, accusing it of having an unfair monopoly over search and search-related advertising. For that particular case, the agency argued that forcing Android phone manufacturers to set Google as the default search engine prevents rivals from gaining traction and ensures that the company will earn an enormous amount of money from search-related advertising. 

In the same year, Texas filed a multi-state lawsuit against Google, with the state's Attorney General accusing the company of using its "monopolistic power to control" ad pricing. The company's ad practices are under scrutiny not just in the US but in other parts of the world: The European Commission also opened a probe to look into whether Google limits rival services' access to user data for ad purposes last year. As a concession to the EU's concerns, Reuters reported in June that Google may let rival ad platforms run ads on YouTube.

While the DOJ has yet to officially file its case, Google spokesperson Peter Schottenfels defended the company's ad business in a statement to Bloomberg, which says: "Our advertising technologies help websites and apps fund their content, and enable small businesses to reach customers around the world. The enormous competition in online advertising has made online ads more relevant, reduced ad tech fees, and expanded options for publishers and advertisers."

South Korea to investigate Apple, Google over possible in-app payment violations

Apple and Google are already facing scrutiny in the wake of a South Korean law requiring that they allow third-party payments. Reutersreports the Korea Communications Commission (KCC) will investigate Apple, Google and SK Group's One Store over potential violations of the in-app payment law. Regulators said they started inspecting the digital shops on May 17th, and found enough to be concerned all three might have broken the rules.

It's not certain just how the firms might have violated the law. MacRumorsnoted that a delay in communicating changes might have played a role in Apple's case. While the law (a revision of the Telecommunications Business Act) took effect in March, Apple didn't notify developers until late June. Google alerted Android developers in November of last year.

Both companies still take cuts from purchases made using alternative billing systems — they just take smaller portions. When Google announced its policy change, it maintained that it needed fees to "continue to invest" in Android and the Play Store. It's not clear if these policies play any role in the investigation, however.

We've asked Apple and Google for comment. In a statement to Reuters, Google said it would continue cooperating with the KCC and that it had "worked closely" with both the government and developers to comply with the law.

The law allows for fines as high as two percent of the average yearly revenue for related business. Officials didn't set expectations for possible fines, but the stores are major money generators. Apple, for example, paid developers $60 billion worldwide in 2021 and made a tidy profit for itself through fees on those sales. Even if South Korea only considered revenue earned within its borders to be actionable for fines, this could still lead to steep penalties if the KCC finds any violations.

Google and Sonos are now fighting over voice assistant patents

Google has sued Sonos, alleging that its new voice assistant violates seven patents related to its own Google Assistant technology, CNET has reported. It's the latest salvo in a long-running smart speaker battle between the companies, with each suing and countersuing the other following a period when they worked together. 

"[Sonos has] started an aggressive and misleading campaign against our products, at the expense of our shared customers," a Google spokesperson said in a statement. 

Sonos' Voice Control assistant arrived in June, letting users give commands with the phrase "Hey Sonos," much like Amazon's Alexa or Google Assistant. In the complaint, Google said it "worked for years with Sonos engineers on the implementation of voice recognition and voice-activated devices control in Sonos products... even providing its Google Assistant software to Sonos for many years." 

The fight erupted in early 2020 when Sonos sued Google for alleged patent infringement after the companies had collaborated for several years. Sonos claimed that Google gained knowledge of its technology when they worked together and used that information to develop its own smart speaker line. The company filed another suit in September 2020, claiming that Google infringed on five more patents. 

Google countersued, alleging that Sonos was using Google’s search, software, networking, audio processing and other technology without paying a license fee and made "false claims" about their work together

In 2021, the US International Trade Commission ruled that Google infringed on five Sonos patents. That forced Google to change the way its speakers were set up to avoid an import ban. Most of those were related to the way speaker groups are controlled — for instance, users can no longer change the volume of a group of speakers and must adjust them individually instead. 

"Google previously sued us all over the world and Sonos has prevailed in every decided case," Sonos' chief legal officer Eddie Lazarus told CNET. "[The latest lawsuits] are an intimidation tactic designed to retaliate against Sonos for speaking out against Google's monopolistic practices." 

Report: Apple retaliated against women who complained about misconduct

The Financial Times has published a lengthy report saying that Apple has fostered a culture of apathy toward reports of employee misconduct, and has actively retaliated against staff members who complained about colleagues, including those who reported incidents of sexual assault. If accurate, the allegations are at odds with the image of inclusiveness that Apple projects, and cast a pall on the real progress it has made in boosting its workforce diversity. 

Multiple women described filing complaints with Apple's human resources department over sexual abuse, bullying and other incidents. Former employee Megan Mohr complained that a colleague removed her bra and clothes while she was asleep and took photos of her after a platonic night out. However, the HR representative called the experience "a minor traffic accident."

"Although what he did was reprehensible as a person and potentially criminal, as an Apple employee he hasn't violated any policy in the context of his Apple work," Apple's HR department said in an email seen by FT. "And because he hasn't violated any policy we will not prevent him seeking employment opportunities that are aligned with his goals and interests." 

An Apple Store Genius employee complained about two instances of serious sexual assault including being raped, and said HR treated her not as a victim, but as the problem. "I was told [the alleged rapist] went on a ‘career experience’ for six months and they said: ‘maybe you’ll be better by the time he’s back?" She requested a transfer but it was declined, and she still works at the same store. 

IP attorney Margaret Anderson complained of a "toxic work environment" and "gaslighting," and said a male vice-president wanted to fire her, citing false allegations that predated her arrival at Apple. HR reportedly ignored a document she created refuting the allegations.

Employees have also complained about Apple suppressing worker organizing and blocking Slack channels used by employees to complain about bad managers and pay inequity. Software engineer Cher Scarlett said Apple retaliated after she filed a complaint with the National Labor Relations Board (NLRB). The company offered her a $213,000 severance package, but she refused to sign it because Apple demanded she hand over a letter sent to the NLRB that included the names of other employees. 

That's their playbook. Offer me enough money to pay off my lawyers and debt, and they wanted a list of people to retaliate against. How do I talk about how egregious that truly is?

She accepted the deal when Apple withdrew the demand, but was forced to pull the NLRB complaint. However, she intentionally broke the agreement when Apple sent a letter to the Securities and Exchange Commission (SEC) saying it "supports the rights of its employees and contractors to speak freely." Scarlett then showed her exit arrangement to the media, which led to eight US state treasurers asking the SEC to investigate "whether or not Apple misled the Commission and investors." 

The highest profile complaint was from Jayne Whitt, a director in Apple's legal department. She told HR that a colleague hacked her devices and threatened her life, with the expectation that the complaint would be handled seriously. Instead, the employee investigative division said Whitt "failed to act in a professional and work appropriate manner" during their meeting, at a time when Whitt "said she was begging for help and reliving trauma," the FT wrote. 

She subsequently posted a 2,800 word essay on the whistleblower platform The Lioness describing the situation, prompting an outpouring of support from Apple employees. However, Apple proceeded to fire her based on what she called an "irrelevant" six-year-old indiscretion. 

Whitt is now challenging Apple legally, and said the Slack channels on gender-pay disparity helped open her eyes. "I was disadvantaged — this is how women struggle," she said. "Had these stories [on Slack] not been coming out, I would not have been compelled to do the right thing, to blow up my career."

Apple told The Financial Times in a statement that it works hard to thoroughly investigate misconduct allegations and strives to create "an environment where employees feel comfortable reporting any issues." However, it acknowledged not having always met those ideals. "There are some accounts raised that do not reflect our intentions or our policies and we should have handled them differently, including certain exchanges reported in this story. As a result, we will make changes to our training and processes." It wouldn't comment on specific cases "out of respect for the privacy of the individuals involved." 

Google is making it easier to find and support Asian-owned businesses

Google is making it easier for people to find and support Asian-owned businesses in their communities. Starting today, US merchants can now add an "Asian-owned" label to a verified Google business profile, which will appear in Search and Maps queries.

The move is part of Google's efforts to support historically marginalized communities. It previously rolled out labels for Black-owned, Latino-owned, veteran-owned, women-owned and LGBTQ+ owned businesses. 

In addition, the company says its Grow with Google initiative, along with the non-profit US Pan Asian American Chamber of Commerce, will help another 10,000 Asian-owned small businesses learn digital skills. To date, they've assisted more than 20,000 Asian-owned businesses with workshops on things like e-commerce, analytics-driven decisions and design.

SEC charges 11 people over 'textbook' $300 million crypto Ponzi scheme

It's a day of the week ending in the letter "y," which inevitably means there's news of anothermessysaga in the cryptocurrency world. The Securities and Exchange Commission has charged 11 people who allegedly set up and promoted Forsage, which it said was a crypto Ponzi scheme that pulled in over $300 million from retail investors.

The agency asserts that Forsage enabled millions of people to engage in transactions through smart contracts on the Ethereum, Tron, and Binance blockchains. It alleged that Forsage had essentially been operating as a pyramid scheme for over two years, wherein the main way for investors to make money was by luring other people into the scheme. “Fraudsters cannot circumvent the federal securities laws by focusing their schemes on smart contracts and blockchains," Carolyn Welshhans, acting chief of the SEC’s Crypto Assets and Cyber Unit, said in a statement.

"Forsage is a textbook pyramid and Ponzi scheme," the SEC's complaint reads. "It did not sell or purport to sell any actual, consumable product to bona fide retail customers during the relevant time period and had no apparent source of revenue other than funds received from investors."

Four of those charged are Forsage's founders, who were last known to be living in Russia, the Republic of Georgia and Indonesia. The SEC also charged three promoters based in the US, who the founders allegedly recruited to endorse Forsage on its website and social media. Several members of a group called Crypto Crusaders, a group that promoted the scheme, were charged with violating the registration and anti-fraud provisions of federal securities laws as well. Two defendants have agreed to settle the charges without admitting or denying the allegations.

As CNBC notes, Forsage's founders launched the platform in January 2020. Regulators in the Philippines and Montana tried to shut it down with cease-and-desist actions. The SEC alleged that the defendants continued to promote Forsage while denying claims made against the platform in YouTube videos.

Microsoft negs Activision Blizzard to push through $68.7 billion acquisition

Microsoft is taking an interesting approach to secure regulatory approval for its acquisition of Activision Blizzard. In a recent filing spotted by Rock Paper Shotgun, the company told New Zealand’s Commerce Commission the troubled publisher produces no “must have” games. Yes, you read that right.

“There is nothing unique about the video games developed and published by Activision Blizzard that is a ‘must have’ for rival PC and console video game distributors that give rise to a foreclosure concern,” the company says in the document. Put another way, Microsoft believes owning the rights to best-selling Activision Blizzard franchises like Call of Duty won’t prevent rivals like Sony from competing against it.

At first glance, that would seem to be a nonsensical argument to make about a company Microsoft plans to spend $68.7 billion to acquire. All the same, it’s a claim the tech giant is making in response to its rivals. In a filing with Brazilian regulators, Sony called Call of Duty “an essential game” and an AAA title “that has no rival.” It argues the franchise is so popular that it influences the consoles people buy. Sony is likely speaking from experience. In 2015, the company announced an agreement with Activision that saw some Call of Duty content arrive on PlayStation consoles first.

Downplaying the importance of Call of Duty is just one of the ways Microsoft has tried to placate regulators. In February, the company pledged it would continue to make the franchise available on PlayStation consoles beyond the end of any agreements Sony and Activision had in place before the acquisition was announced. More recently, the company announced a labor neutrality agreement with the Communications Workers of America, which has been organizing video game workers across the industry.

The US Treasury is investigating Kraken for enabling crypto trading in sanctioned countries

It's rough seas for crytpocurrency exchanges these days and the latest to be buffeted is one of the world's largest, Kraken. It's reportedly under investigation by the US Treasury Department over possible sanctions violations for letting users in Iran and elsewhere trade digital tokens, according to The New York Times

Kraken is a private exchange valued at $11 billion co-founded by chief executive Jesse Powell in 2011. The Treasury Department's Office of Foreign Assets Control (OFAC) has been investigating the company since 2019 and may impose a fine, according to the NYT's sources. It would be the largest crypto company to face enforcement action related to US sanctions imposed in 1979 prohibiting the export of goods or services to Iran.

Sanctions issues at Kraken first came up in November 2019 when an employee sued the company for doing business with prohibited countries. That suit was settled, but the OFAC began investigating the company the same year over accounts in Iran, along with other sanctioned countries including Syria and Cuba.

Powell allegedly posted a spreadsheet to a company Slack channel showing that Kraken had 1,522 accounts in Iran, 149 in Syria and 83 in Cuba as of last month, according to the NYT. The data supposedly came from residence information on "verified accounts." 

Kraken declined to comment to the NYT, but said that it "closely monitors compliance with sanctions laws and, as a general matter, reports to regulators even potential issues." A Treasury spokesperson said the agency was committed to enforcing "sanctions that protect US national security," but also gave no further details. 

OFAC has previously fined other cryptocurrency exchanges over similar sanctions violations. BitGo was hit with a $98,000 fine in 2020 over 183 violations, and BitPay face a $500,000-plus fine last year for 2,102 violations.

Cryptocurrency exchanges are facing more than the usual scrutiny these days. Last year, the world's largest crytpo exchange Binance faced a US money laundering probe for being a major destination of illicit cryptocurrency. Crypto lender Celcius is under investigation by multiple states after it froze transactions, and the Winklevoss twins' crytpo exchange Gemini is facing lawsuits over a $36 million crypto theft. 

Apple and Koss settle dispute over wireless headphone patents

Apple and Koss have ended their feud over wireless headphone patents shortly before trial. As Reutersnotes, the two told a Waco, Texas-based federal court on Saturday that they had reached a settlement over Koss' claims Apple had infringed on patents for wireless audio technology. The terms of the settlement haven't been disclosed, but the two firms said they made peace on "all matters in controversy." The trial was supposed to have started today.

Koss sued Apple, Bose, JLab, Plantronics and Skullcandy in 2020 over allegations wireless earbuds and headphones like AirPods were copying technology from the Striva line of WiFi audio devices. In filing the lawsuit, Koss argued that rivals were "catching up" to its early work and needed to pay compensation. Apple countersued, arguing that Koss' patents were invalid.

Lawsuits against Bose, Skullcandy and others are still pending. While it's unclear if those cases will move forward in light of this settlement, there's little doubt that Apple and Koss were eager to avoid a courtroom fight.

We've asked Apple and Koss for comment and will update if we hear back.

T-Mobile will pay $350 million to settle lawsuits over massive data breach

If you were a T-Mobile customer in August 2021, you may get a few dollars from the carrier in the near future. It has agreed to settle a consolidated class action lawsuit filed against the company over a data breach that exposed the personal information of 76.6 million "current, former and prospective customers." Back when T-Mobile's CEO, Mike Sievert, admitted and apologized for the breach, the carrier said the individual who hacked its network used "specialized" tools and knowledge of its infrastructure in order to gain access to its testing environment. That individual then stole customer data from the network and sold them on hacker forums.

The type of information that the bad actor sold varies per person, but it could include the name, birth date and social security number for each individual. T-Mobile got in touch with people affected by the data leak shortly after it came to light and offered them two free years of access to McAfee’s ID Theft Protection Service. Now, they're also getting monetary compensation, though it will likely be a few dollars at most. While the $350 million settlement may sound substantial, a huge chunk of that amount will go towards paying off legal fees. The rest will be divided among tens of millions of affected customers. According to the SEC filing spotted by GeekWire, the company will also spend $150 million on data security technologies throughout this year and the next.

The settlement still has to be approved by the court. But if it does, it will "resolve substantially all of the claims brought by the company’s current, former and prospective customers who were impacted by the 2021 cyberattack." You can read the full proposed settlement here.