Posts with «business» label

Twitter sued for not paying San Francisco office rent

California Property Trust, the owner of the building that houses Twitter headquarters, is suing Elon Musk’s social media company for failing to pay $136,250 in rent. According to Bloomberg (via The Verge), the firm notified Twitter on December 16th that it would default on its lease for the 30th floor of the Hartford Building, located at 650 California Street in San Francisco, if it didn’t pay its outstanding rent within five days. In a complaint filed this week with the San Francisco County Superior Court, California Property Trust said Twitter failed to comply with the order.

According to a December 13th New York Times report had "for weeks" stopped paying rent on all of its global offices to save on costs. The company also faces a lawsuit for failing to pay $197,725 for charter flights Musk took during his first week at Twitter. Over that same time period, Musk has reportedly brought over “more than half a dozen” lawyers from SpaceX to bolster Twitter's legal team.

Grubhub ordered to pay $3.5 million to settle Washington DC deceptive practices lawsuit

Grubhub has been ordered to pay $3.5 million to settle the lawsuit filed against the company by the District of Columbia over "deceptive trade practices." Washington DC Attorney General Karl Racine has announced that his office has reached an agreement with the food delivery service "for charging customers hidden fees and using deceptive marketing techniques." If you'll recall, his office sued the company earlier this year, accusing it of charging hidden fees and misrepresenting Grubhub+ subscription's offer of "unlimited free delivery," since customers still have to pay a service fee.

The DC Attorney General's office also accused the company of listing 1,000 restaurants in the area without their permission by using numbers that route to Grubhub workers or creating websites without the eateries' consent. A previous TechCrunch report said the company had already ended those practices. Racine also said at the time that Grubhub ran a promotion called "Supper for Support" at the beginning of the pandemic and then "stuck restaurants with the bill" that cut into their profit margins.

Grubhub called the lawsuit frivolous at the time of its filing and said that the company was "disappointed [the AG's office has] moved forward with [it] because [the service's] practices have always complied with DC law, and in any event, many of the practices at issue have been discontinued."

Under the terms of the settlement, Grubhub will pay affected customers in the DC area a total of $2.7 million. Their cut will be credited to their accounts, and it will be sent to them as a check if it remains unused within 90 days. In addition, the company has to pay $800,000 in civil penalties to the District of Columbia and has to clearly mark additional fees people have to pay with their order going forward.

My office reached a $3.5 million settlement with Grubhub for charging customers hidden fees and using deceptive marketing techniques.

As a result, $2.7 million will be returned to the consumers who were impacted, and it will have to shape up and disclose every fee separately.

— AG Karl A. Racine (@AGKarlRacine) December 30, 2022

NLRB says Tesla violated the law by telling employees not to talk about pay

The National Labor Relations Board has accused Tesla of violating labor law by prohibiting employees in Orlando, Florida from talking about workplace matters. According to Bloomberg, NLRB's Tampa regional director filed a complaint against the automaker in September for breaking the law when it told employees not to discuss their pay with other people and not to talk about the termination of another employee. In addition, based on the filing the news organization obtained through a Freedom of Information Act request, Tesla management reportedly told employees "not to complain to higher level managers" about their working conditions. 

Tesla has had to face several complaints by the NLRB over the past years. In 2021, the agency found that the automaker had violated US labor laws by firing a union activist and threatening workers' benefits. The NLRB ordered the company to rehire union activist Richard Ortiz and to remove all mentions of disciplinary action from his files. It also ordered Tesla chief Elon Musk to delete a tweet that the court had deemed a threat that employees would be giving up company-paid stock options if they join a union. The tweet in question is still live, and Tesla is appealing the NLRB's ruling in court. 

An agency spokesperson told Bloomberg that a judge will hear the complaint filed by the Tampa regional director in February. As the publication notes, companies can still appeal the agency judges' decision to NLRB members in Washington and then to federal court, so any corrective action may take years to happen.

Google will pay $9.5 million to settle Washington DC AG's location-tracking lawsuit

Google has agreed to pay $9.5 million to settle a lawsuit brought by Washington DC Attorney General Karl Racine, who accused the company earlier this year of "deceiving users and invading their privacy." Google has also agreed to change some of its practices, primarily concerning how it informs users about collecting, storing and using their location data.

“Google leads consumers to believe that consumers are in control of whether Google collects and retains information about their location and how that information is used,” the complaint, which Racine filed in January, read. “In reality, consumers who use Google products cannot prevent Google from collecting, storing and profiting from their location.”

Racine's office also accused Google of employing "dark patterns," which are design choices intended to deceive users into carrying out actions that don't benefit them. Specifically, the AG's office claimed that Google repeatedly prompted users to switch in location tracking in certain apps and informed them that certain features wouldn't work properly if location tracking wasn't on. Racine and his team found that location data wasn't even needed for the app in question. They asserted that Google made it "impossible for users to opt out of having their location tracked."

The $9.5 million payment is a paltry one for Google. Last quarter, it took parent company Alphabet under 20 minutes to make that much in revenue. The changes that the company will make to its practices as part of the settlement may have a bigger impact.

Folks who currently have certain location settings on will receive notifications telling them how they can disable each setting, delete the associated data and limit how long Google can keep that information. Users who set up a new Google account will be informed which location-related account settings are on by default and offered the chance to opt out.

Google will need to maintain a webpage that details its location data practices and policies. This will include ways for users to access their location settings and details about how each setting impacts Google's collection, retention or use of location data.

Moreover, Google will be prevented from sharing a person's precise location data with a third-party advertiser without the user's explicit consent. The company will need to delete location data "that came from a device or from an IP address in web and app activity within 30 days" of obtaining the information

"Given the vast level of tracking and surveillance that technology companies can embed into their widely used products, it is only fair that consumers be informed of how important user data, including information about their every move, is gathered, tracked, and utilized by these companies," Racine said in a statement. "Significantly, this resolution also provides users with the ability and choice to opt of being tracked, as well as restrict the manner in which user information may be shared with third parties."

Engadget has contacted Google for comment.

Microsoft and Activision Blizzard file responses to the FTC's antitrust lawsuit

Microsoft has filed a formal response to a Federal Trade Commission antitrust lawsuit that seeks to block it from buying Activision Blizzard for $68.7 billion. It pushed back against the agency's claims that the takeover would harm competition in the gaming industry. The company argued that consumers would benefit. "The commission cannot meet its burden of showing that the transaction would leave consumers worse off, because the transaction will allow consumers to play Activision’s games on new platforms and access them in new and more affordable ways," Microsoft wrote.

The FTC asserted earlier this month that, should the deal close, it "would enable Microsoft to suppress competitors to its Xbox gaming consoles and its rapidly growing subscription content and cloud-gaming business." The agency pointed to Microsoft making some titles from Bethesda (whose parent company ZeniMax it bought last year) exclusive to its own platforms.

In the filing, Microsoft acknowledged that it planned to make three future Bethesda titles exclusive to Xbox and PC. The names of those games were redacted, but Starfield and Redfall will only be available on Xbox, PC and Xbox Cloud Gaming, while the FTC claimed in its complaint that Microsoft plans to make Elder Scrolls VI an exclusive as well.

One of the major sticking points about the deal is the future of Call of Duty. In an attempt to appease regulators, Microsoft has pledged to keep Call of Duty on competitors' platforms for at least 10 years if the acquisition closes, and to bring the blockbuster franchise to Nintendo consoles. Sony hasn't taken Microsoft up on that deal, however.

"The acquisition of a single game by the third-place console manufacturer cannot upend a highly competitive industry. That is particularly so when the manufacturer has made clear it will not withhold the game," Microsoft wrote. "The fact that Xbox’s dominant competitor has thus far refused to accept Xbox’s proposal does not justify blocking a transaction that will benefit consumers."

Microsoft and Activision Blizzard both claim that keeping Call of Duty away from other platforms wouldn't make sense. Activision said in its own filing that making the franchise exclusive "would be disastrous for Xbox," as it would lose billions in game sales and give up "a massive portion of the gamers that Activision has worked so hard to attract and retain." It added that "in a world with nearly unlimited gaming alternatives, making Call of Duty exclusive is not a plausible outcome."

Both companies took issue with the FTC, with Microsoft claiming that its procedures are unconstitutional. "The structure of these administrative proceedings, in which the commission both initiates and finally adjudicates the complaint against Microsoft, violates Microsoft's Fifth Amendment Due Process right to adjudication before a neutral arbiter," Microsoft said in reference to the agency's decision to file the complaint in its own administrative court, rather than in a federal one. The company also argued that hearing the case in the FTC's administrative court "violates Article III of the US Constitution and the separation of powers."

Activision asserted that by disregarding the supposed benefits to consumers and focusing "on supposed harms to Xbox's deep-pocketed competitors," the FTC was straying from the "underlying purpose" of antitrust laws to protect competition instead of competitors. It said the agency was "blinded by ideological skepticism of high-value technology deals and by complaints from competitors" and that it "lost sight of the realities of the intensely competitive gaming industry."

Nevertheless, Microsoft wants to agree on conditions with the FTC and other regulators that will lead to them rubberstamping the deal. “Even with confidence in our case, we remain committed to creative solutions with regulators that will protect competition, consumers and workers in the tech sector. As we’ve learned from our lawsuits in the past, the door never closes on the opportunity to find an agreement that can benefit everyone,” Microsoft president and vice chair Brad Smith said.

"There is no sensible, legitimate reason for our transaction to be prevented from closing. Our industry has enormous competition and few barriers to entry. We have seen more devices than ever before enabling players a wide range of choices to play games," Activision Blizzard CEO Bobby Kotick said in a statement to Engadget. "Engines and tools are freely available to developers large and small. The breadth of distribution options for games has never been more widespread. We believe we will prevail on the merits of the case.”

The deadline for the acquisition to close is in July. If it hasn't done so by then, Microsoft and Activision will need to renegotiate the deal or abandon it — Microsoft would then face a breakup fee of as much as $3 billion. As Axios notes, though, the FTC's antitrust case is set to go before its administrative court on August 2nd. In the meantime, the agency could still seek a preliminary injunction in federal court to stop the deal from closing.

The proposed acquisition is also facing scrutiny from regulators in the UK and the European Union. The jurisdictions' respective competition agencies are expected to issue rulings on the deal in the first half of 2023.

Facebook settles Cambridge Analytica class-action lawsuit for $725 million

Fallout from Facebook's Cambridge Analytica privacy scandal continues over four years after it was first exposed. Parent Meta has agreed to pay $725 million to settle a long-running class-action lawsuit accusing Facebook of allowing Cambridge Analytica and other third parties to access user's private information, Reuters has reported. 

The settlement resolves user claims that Facebook violated federal and state laws by allowing the company's preferred vendors and partners to harvest their personal data without consent. It's reportedly the largest ever in a US data privacy class action and the most Meta has ever paid to resolve a class-action lawsuit. 

"This historic settlement will provide meaningful relief to the class in this complex and novel privacy case," the lead lawyers for the plaintiffs said in a statement. 

Meta admitted no wrongdoing as part of the settlement, which is still subject to approval by a federal judge. "Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program," Meta said in a statement, adding that the settlement "was in the best interest of our community and shareholders." 

Cambridge Analytica, now defunct, worked for Ted Cruz and Donald Trump's 2016 presidential campaigns. It accessed the personal data of up to 87 million people by an app (thisisyourdigitallife) and used the information gathered to target individuals with personally tailored messages. The scandal was exposed by The New York Times and The Guardian in 2018, thanks in large part to whistleblower Christopher Wylie.

In 2019, Facebook agreed to pay a $5 billion fine following a Federal Trade Commission investigation and $100 million to settle US Securities and Exchange Commission claims. It also paid £500,000 (about $644,000) in fines to the UK, a pittance compared to what it would have paid had the GDPR been in place when the scandal occurred. 

Facebook hasn't put Cambridge Analytica behind it yet, either. The company is still fighting a lawsuit by the Washington DC attorney general, as well as a number of state attorneys general. 

Robocall company may receive the largest FCC fine ever

The FCC has proposed a $299,997,000 fine against "the largest robocall firm" it has ever investigated, the regulator announced. It would be the FCC's largest fine ever, and targets a firm that made over 5 billion calls in three months, enough "to have called each person in the United States 15 times," it wrote. 

The operation is run by Roy Cox, Jr. and Michael Aaron Jones via their Sumco Panama company, along with other domestic and foreign entities. In July of this year, the FCC issued its first ever "K4 Notice" and "N2 Order" directing all US telephone providers to stop carrying traffic related to the car warranty scam calls. "This resulted in a massive, 99 percent drop in the volume of such calls since June, according to [spam blocking app] RoboKiller," the FCC wrote. 

The FCC proposed its largest-ever fine because it found the robocallers met the criteria for "egregious violations." Consumers described the calls as "incessant" and "harassment," and the robocallers used dirty practices like calling health care workers from spoofed hospital numbers. The firm also violated multiple FCC rules, like failing to identify the caller at the start of a message. 

In the calls, a message would open with something like "we've been trying to reach you concerning your car's extended warranty," and prompt you to speak to a scam "warranty specialist." Robokiller advises users to avoid the calls in the first place if possible, not follow prompts, and above all, never provide personal information like banking details.

European Commission tells Meta that Facebook Marketplace is unfair to rivals

Europe has hit Facebook owner Meta with a complaint that its Marketplace classified service is unfair to competitors. By tying its main social media site to Marketplace, it has a "substantial distribution advantage" over rivals, the EU Commission wrote in a press release

"With its Facebook social network, Meta reaches globally billions of monthly users and millions active advertisers," EU Antitrust Commissioner said in a statement. "Our preliminary concern is that Meta ties its dominant social network Facebook to its online classified ad services called Facebook Marketplace. This means that users of Facebook automatically have access to Facebook Marketplace, whether they want it or not."

In addition, the Commission found that Meta imposes imposes unfair trading conditions on competitors that advertise on Facebook or Instagram. That essentially allows it to use "ads-related data derived from competitors for the benefit of Facebook Marketplace," it said. The practices, if confirmed, would infringe on EU rules that prohibit the abuse of a dominant market position. The EU has the power to impose a fine of up to 10 percent of Meta's annual revenue and prohibit the behavior. 

In a statement, Meta's head of EMEA competition said the "claims made by the European Commission are without foundation" and that the company "will continue to work with regulatory authorities to demonstrate that our product innovation is pro-consumer and pro-competitive." 

Last year, the EU Commission launched an antitrust probe into Facebook's classified advertising practices to determine if it broke competition rules by using advertiser data to its own benefit. The so-called Statement of Objects released today is a formal step in EU antitrust investigations, informing parties of complaints raised against them. Meta can now examine the documents, reply in writing and request an oral hearing to present their comments, according to the Commission. 

Huawei signs a patent cross-licensing agreement with its biggest Chinese rival

Before Trump-era sanctions made the company a non-player in the market, Huawei was briefly the world’s largest phone manufacturer, surpassing both Samsung and Apple in shipments. In a sign of how much it has fallen since then, Huawei announced this week it recently entered into a patent cross-licensing agreement with its biggest domestic rival. Oppo, the parent company of OnePlus and subsidiary of one of China’s largest electronics manufacturers, now has global rights to Huawei’s coveted 5G patents.

The companies did not disclose the financial terms of the deal, but we have some idea of the money involved thanks to information Huawei has shared in the past. When the firm announced it was planning to monetize its patent portfolio more aggressively last year, it said it would charge phone makers a “reasonable” $2.50 per device to license its technologies. Huawei also said it expected to generate an additional $1.2 billion to $1.3 billion in revenue between 2019 and 2021 due to the move. When you consider Oppo and Vivo (both owned by China’s BBK Electronics) shipped more than 51 million smartphones last quarter, that’s a lot of money on the line.

At the same time, Oppo is obtaining access to some critical technologies. As of 2021, approximately 18.3 percent of Huawei’s 5G patents fell under the Standard Essential Patent (SEP) category, meaning they were considered critical to the 5G standard. At the time, Huawei had the most in-use 5G-related SEPs of any company in the world.

It will be interesting to see if the agreement draws interest from lawmakers in the US and other parts of the world. For much of the past decade, BBK has managed to stay under the radar of regulators and mainstream media in the way that Huawei and ZTE have not. The company’s segmented brand portfolio makes its footprint seem smaller than it is. In reality, it’s consistently been one of the largest and most important phone makers in the world.

Juul will pay $1.2 billion to settle multiple youth-vaping lawsuits

Juul has faced numerous lawsuits over the past few years, accusing the company of targeting underage users with its marketing and sales tactics. Now, according to Bloomberg, Juul has agreed to pay $1.2 billion in settlement, which will resolve around 10,000 lawsuits — including 8,500 personal injury cases, over 1,400 cases by government entities and school districts, as well as 32 tribal cases. California, for instance, sued Juul in 2019, accusing the company of targeting minors in the state, failing to verify the age of its customers and failing to warn users of their exposure to chemicals linked to cancer and birth defects. 

The San Francisco Unified School District, which also filed a lawsuit against Juul over its marketing practices, reportedly said it was "very pleased" with the settlement. Who can actually participate in the settlement and how much each plaintiff will get are still under discussion. The plaintiffs' lawyers said people eligible to sign onto the deal will receive a minimum gross amount of $1,000 before attorney fees and other deductions. They also said that most people are expected to receive "substantially higher settlements." Plaintiffs who sued the company over personal injury will learn how much they'll get in February, according to the lawyers. US District Judge William Orrick will still have to approve this proposed settlement before it can be finalized.

Juul has been under scrutiny since 2018 after the US Food And Drug Administration ordered e-cigarette brands to stop selling flavored pods if they can't prove that they can keep them out of minors' hands. It's been facing one lawsuit after another since then. In addition to this particular deal, the company also agreed to pay $439 million to settle a two-year investigation by multiple states and Puerto Rico that accuse Juul of marketing products to teens.