Posts with «company legal & law matters» label

A group of TikTok creators are also suing the US government to stop a ban of the app

A group of TikTok creators have joined the legal fight to keep the app from being banned in the United States. Eight creators have sued the US government in an effort to block a law requiring TikTok's parent company ByteDance to sell the service. 

The lawsuit claims that the “Protecting Americans from Foreign Adversary Controlled Applications Act” is unconstitutional because it violates the First Amendment rights of the creators who depend on the platform. “They have found their voices, amassed significant audiences, made new friends, and encountered new and different ways of thinking—all because of TikTok’s novel way of hosting, curating, and disseminating speech,” it states. “The Act’s ban of TikTok threatens to deprive them, and the rest of the country, of this distinctive means of expression and communication.”

The lawsuit comes one week after TikTok filed its own lawsuit against the government. According to The Washington Post, the company is “covering” the legal fees for the creators participating in the latest suit. It’s also strategy that has worked for the company in the past. A group of Montana-based TikTok creators sued the state over an attempted statewide ban last year. That effort was ultimately successful and the ban never went into effect. The Montana creators were represented by the same law firm currently repping the eight creators involved in the latest suit.

This article originally appeared on Engadget at

Most App Store developers aren’t taking Apple up on its new outside payments option

It seems Apple’s recently added option for App Store developers to include links to external payment methods isn’t actually all that appealing. In a hearing on Friday as part of the ongoing legal battle with Epic, Apple said only 38 developers have applied to add such links — out of roughly 65,000 that could, according to Bloomberg. The new guidelines, introduced in January, require developers get Apple’s approval before they can add alternative payment options and stipulate that they’ll still have to pay a commission fee of up to 27 percent.

The changes were intended to satisfy an injunction ordered by U.S. District Judge Yvonne Gonzalez Rogers in 2021, but, per Reuters, Epic in March called Apple’s attempt at compliance “a sham” and filed a complaint with the court. At this point, Rogers doesn’t really seem impressed either. “It sounds to me as if the goal was to then maintain the business model and revenue you had in the past,” Rogers said of Apple's solution during the latest hearing, according to Bloomberg.

On top of Apple’s commission, developers also need to consider payment processing fees, which altogether could lead to them paying even more than they did before. “You’re telling me a thousand people were involved [in approving the new fee] and not one of them said maybe we should consider the cost [to developers]?” the judge reportedly said.

This article originally appeared on Engadget at

FTX plans to refund defrauded customers with interest

FTX has filed a plan with a bankruptcy court to pay back creditors who held cryptocurrency at the embattled exchange. The vast majority of customers are set to get their money back with interest, though they (and the debtors) missed out on major gains in the crypto market since FTX’s dramatic collapse in November 2022 — the price of Bitcoin has more than tripled since then.

FTX aims to fully pay back non-governmental creditors based on the value of their claims as determined by the bankruptcy court. That means 98 percent of creditors (those who have up to $50,000 in claims) will get 118 percent of the amount of their allowed claims. Other creditors will get their money back, plus what FTX describes as billions of dollars in compensation “for the time value of their investments.”

Government creditors are in line for payouts with a nine percent interest rate. The Internal Revenue Service and Department of Justice are among the stakeholders with which FTX has agreed settlements.

The company suggests that, if its plan of reorganization is rubber stamped, it would be able to resolve disputes with private and government stakeholders “without costly and protracted litigation.” All told, FTX says that it will be able to distribute between $14.5 billion and $16.3 billion in cash.

But, you may be wondering, where exactly is all this money coming from? After all, when FTX filed for Chapter 11 bankruptcy protection 17 months ago, it held just 0.1 percent of the Bitcoin and 1.2 percent of the Ethereum that its customers thought it had.

FTX said it was able to monetize “an extraordinarily diverse collection of assets, most of which were proprietary investments held by the Alamedaor FTX Ventures businesses, or litigation claims.” As TechCrunch reports, the assets that FTX CEO John J. Ray III and his team tracked down included around $8 billion in real estate, political donations and venture capital investments.

The company filed the updated plan of reorganization just a few weeks after co-founder and former CEO Sam Bankman-Fried (aka SBF) was sentenced to 25 years in prison. He was found guilty in November of charges including wire fraud and conspiracy to commit money laundering.

This article originally appeared on Engadget at

TikTok is suing the US government to stop its app being banned

TikTok is officially challenging the law that could lead to a ban of the app in the United States. The company, which has long claimed that efforts to force a sale or ban of its app are unconstitutional, announced a lawsuit against the federal government.

In the lawsuit, TikTok claims that a divestiture of its business from ByteDance is “simply not possible,” and that the “Protecting Americans from Foreign Adversary Controlled Applications Act” violates the First Amendment. “They claim that the Act is not a ban because it offers ByteDance a choice: divest TikTok’s U.S. business or be shut down,” the suit states. “But in reality, there is no choice. The ‘qualified divestiture’ demanded by the Act to allow TikTok to continue operating in the United States is simply not possible: not commercially, not technologically, not legally.”

The filing of the lawsuit is the first beat in what’s expected to be a lengthy legal battle over the law, which was passed last month. Under the law, TikTok has up to a year to separate itself from Chinese parent company ByteDance or face a ban in US app stores. However, legal challenges from TikTok could significantly delay that process.


This article originally appeared on Engadget at

Google says Epic’s Play Store demands are too much and too self-serving

Epic Games won its antitrust lawsuit against Google in December when a federal jury found that the latter violated US antitrust laws with regards to how it runs the Play Store. A few months later, the gaming developer submitted its list of demands, which if implemented will blow the Play Store wide open. Now, Google has filed an injunction telling the court that no, it will not give Epic what it wants without a fight, because the company's asks "stray far beyond the trial record." 

The remedies Epic had submitted would require the court not just to create a global regulatory regime to set prices for apps, Google wrote in the filing as seen by Engadget, but also to micromanage "a highly complex and dynamic ecosystem" used by billions of consumers and app developers around the world. If you'll recall, Epic wants Google to open up Android to third-party app stores and to make its catalog of apps available to those stores. It also wants restrictions on pre-installed apps to be outlawed and to prohibit any Google activity that incentivizes third-parties. 

Google said that bowing down to all those demands would "effectively prevent [it] from competing," which in turn would negatively affect Android users and developers. Epic's proposals only benefit Epic, Google said in its filing, and will harm other developers by depriving them of control over where their app is distributed. Manufacturers will no longer be able to take advantage of the partnerships Google typically offers, while users have to deal with additional security and privacy risks. 

The company also slammed Epic over the "vagueness" of its proposed injunction, which would require the repeated and ongoing intervention of the courts. Similarly, Epic's demands would apparently require the court to micromanage Google's business. 

"Epic’s demands would harm the privacy, security, and overall experience of consumers, developers, and device manufacturers," Wilson White, Google's Vice President of Government Affairs & Public Policy, told Engadget in a statement. "Not only does their proposal go far beyond the scope of the recent US trial verdict — which we will be challenging — it’s also unnecessary due to the settlement we reached last year with State Attorneys General from every state and multiple territories. We will continue to vigorously defend our right to a sustainable business model that enables us to keep people safe, partner with developers to innovate and grow their businesses, and maintain a thriving Android ecosystem for everyone."

Google said that if Epic truly wants to promote competition rather than create "an unfair, court- supervised advantage for itself," then it would take cues from its settlement with the state officials that previously accused the company of abusing its dominance on Android app distribution. Epic Games CEO Tim Sweeney was, unsurprisingly, unhappy with that settlement, tweeting at the time: "If Google is ending its payments monopoly without imposing a Google Tax on third party transactions, we'll settle and be Google's friend in their new era. But if the settlement merely pays off the other plaintiffs while leaving the Google Tax in place, we'll fight on. Consumers only benefit if antitrust enforcement not only opens up markets, but also restores price competition."

This article originally appeared on Engadget at

A researcher is suing Meta for the right to ‘turn off’ Facebook’s news feed

Facebook’s News Feed algorithm has long been at the center of debates about some of Meta’s biggest problems. It’s also been a near constant source of complaints from users. But, if a newly filed lawsuit is successful, Facebook users may be able to use the social network with a vastly different feed. The Knight First Amendment Institute at Columbia University is suing Meta on behalf of a researcher who wants to release a browser extension that would allow people to “effectively turn off” their algorithmic feeds.

The extension was created by Ethan Zuckerman, a researcher and professor at the University of Massachusetts Amherst. He argues that Facebook users would be better off with more control over their feeds. “The tool, called Unfollow Everything 2.0, would allow users to unfollow their friends, groups, and pages, and, in doing so, to effectively turn off their newsfeed—the endless scroll of posts that users see when they log into Facebook,” the lawsuit explains. “Users who download the tool would be free to use the platform without the feed, or to curate the feed by refollowing only those friends and groups whose posts they really want to see.” (Meta officially renamed the News Feed to “Feed” in 2022.)

Zuckerman isn’t the first to come up with such a tool. He was inspired by a similar project, also called “Unfollow Everything,” from 2021. Facebook sued the U.K man who created that extension and permanently disabled his account. Zuckerman is trying to avoid a similar fate with his lawsuit. The suit, filed in San Francisco federal court Wednesday, asks the court “to recognize that Section 230 protects the development of tools designed to empower people to better control their social media experiences.”

The case could be a novel test of Section 230 of the 1996 Communications Decency Act, which is mostly known as the law that shields online platforms from legal liability for the actions of their users. But unlike recent Supreme Court cases involving the statute, Zuckerman’s case “relies on a separate provision protecting the developers of third-party tools that allow people to curate what they see online, including by blocking content they consider objectionable.”

A spokesperson for Meta declined to comment on the lawsuit. The company has a history of heavy-handed tactics when it comes to independent researchers. In addition to shutting down the earlier version “Unfollow Everything,” the company disabled the Facebook accounts of a group of NYU researchers attempting to study political ad targeting in 2021. Those types of tactics have led to some researchers pursuing “data donation” programs, which recruit volunteers to “donate” their own browsing data for academic studies.

If released, Zuckerman’s browser extension would also have a data donation component, allowing users to opt-in to sharing “anonymized data about their Facebook usage.” The data would then be used for research into the effects of Facebook’s feed algorithm.

This article originally appeared on Engadget at

Binance founder Changpeng Zhao sentenced to four months in prison

A federal judge has sentenced Binance founder Changpeng Zhao (often known as “CZ”) to four months in prison, as first reported by The New York Times. Prosecutors had recommended three years. Zhao pleaded guilty in November to violating the Bank Secrecy Act by failing to set up an anti-money-laundering program.

The DOJ accused Zhao of allowing criminal activity to flourish on the crypto exchange. “Binance turned a blind eye to its legal obligations in the pursuit of profit. Its willful failures allowed money to flow to terrorists, cybercriminals, and child abusers through its platform,” Treasury Secretary Janet Yellen said in November.

The government accused Binance of refusing to comply with American sanctions and failing to report suspicious transactions related to drugs and child sexual abuse materials. Prosecutors said in court that Zhao had told Binance employees it was “better to ask for forgiveness than permission” while bragging that if Binance had obeyed the law, it wouldn’t be “as big as we are today.”

Under the plea deal’s terms, Binance agreed to forfeit $2.5 billion and pay a $1.8 billion fine. Zhao personally paid $50 million as part of the settlement.

Although the charges differed, Zhao’s sentence is dramatically shorter than the 25 years fellow crypto figurehead Sam Bankman-Fried received in March. SBF, as he’s often known, was convicted on seven counts of fraud and conspiracy for his role at the helm of the crypto platform FTX.

Zhao played an integral role in Bankman-Fried’s downfall — and the crypto industry’s broader decline in the last 18 months. The Binance founder tweeted in November 2022 that his company would liquidate its holdings in FTX’s de facto token. He said “recent revelations that have came[sic] to light” while citing “ethical concerns” and “regulatory risks.” The posts not only crushed FTX but the crypto world at large. (They likely helped attract the government’s attention as well.) When FTX’s wells dried up following the platform’s rapid collapse, Zhao briefly agreed to buy the company but quickly backed out.

Prosecutors said Zhao’s crime carried a standard federal sentence of 12 to 18 months but argued for a three-year term, describing his crimes as being “on an unprecedented scale.” But Judge Richard A. Jones saw it differently, sentencing him to a measly one-twelfth of the government’s suggested term.

“This wasn’t a mistake — it wasn’t a regulatory oops,” Kevin Mosley, a DOJ lawyer, reportedly said in court on Tuesday. “Breaking U.S. law was not incidental to his plan to make as much money as possible. Violating the law was integral to that endeavor.”

This article originally appeared on Engadget at

The US Supreme Court rejects Elon Musk’s appeal in ‘funding secured’ tweet ruling

On Monday, the US Supreme Court dismissed Elon Musk’s appeal about a 2018 SEC settlement regarding his infamous “funding secured” tweet. Ars Technica reports that the conservative-majority court took a break from weighing whether US Presidents should be above the law to pass on Musk’s attempt to throw out the agreement, which required him to pay fines, step down from Tesla’s board and have his tweets pre-screened by a lawyer.

The justices denied Musk’s petition without commenting. Their unwillingness to take up the billionaire’s appeal leaves intact an appeals court ruling from a year ago that smacked down the Tesla founder’s claims of victimhood.

The saga began in 2018 when Musk tweeted, “Am considering taking Tesla private at $420. Funding secured.” He also posted, “Investor support is confirmed. Only reason why this is not certain is that it’s contingent on a shareholder vote.” Tesla’s stock rose by more than six percent.

There was only one tiny problem: The funding wasn’t secured, and the SEC takes false statements that affect investors very seriously. The SEC said, “Musk had not even discussed, much less confirmed, key deal terms, including price, with any potential funding source” and that he “knew that he had not satisfied numerous additional contingencies.” The government agency claimed the post caused “significant confusion and disruption in the market for Tesla’s stock.”

The SEC settlement hit his wallet hard, requiring Musk and Tesla to each pay $20 million in penalties. He also had to step down from his board chairman role at the automaker and have a Tesla attorney screen any investor-related tweets before posting. Of course, Musk later bought Twitter and changed its name to X. But at least that’s going splendidly!

His appeal said the settlement forced him to “waive his First Amendment rights to speak on matters ranging far beyond the charged violations.” Musk, who currently has an estimated net worth of $185 billion, claimed he was a victim of “economic duress” when agreeing to the settlement, which he described as a tactic to “muzzle and harass” him and his company.

The 2nd Circuit appeals court, whose ruling will now be the final word on the matter, shot down Musk’s arguments. “Parties entering into consent decrees may voluntarily waive their First Amendment and other rights,” they said. The appeals court saw “no evidence to support Musk’s contention that the SEC has used the consent decree to conduct bad-faith, harassing investigations of his protected speech.”

This article originally appeared on Engadget at

OpenAI hit with another privacy complaint over ChatGPT’s love of making stuff up

OpenAI has been hit with a privacy complaint in Austria by an advocacy group called NOYB, which stands for None Of Your Business. The complaint alleges that the company’s ChatGPT bot repeatedly provided incorrect information about a real individual (who for privacy reasons is not named in the complaint), as reported by Reuters. This may breach EU privacy rules.

The chatbot allegedly spat out incorrect birthdate information for the individual, instead of just saying it didn’t know the answer to the query. Like politicians, AI chatbots like to confidently make stuff up and hope we don’t notice. This phenomenon is called a hallucination. However, it’s one thing when these bots make up ingredients for a recipe and another thing entirely when they invent stuff about real people.

The complaint also indicates that OpenAI refused to help delete the false information, responding that it was technically impossible to make that kind of change. The company did offer to filter or block the data on certain prompts. OpenAI’s privacy policy says that if users notice the AI chatbot has generated “factually inaccurate information” about them that they can submit a “correction request”, but the company says that it “may not be able to correct the inaccuracy in every instance”, as reported by TechCrunch.

This is bigger than just one complaint, as the chatbot’s tendency toward making stuff up could run afoul of the region’s General Data Protection Regulation (GDPR), which governs how personal data can be used and processed. EU residents have rights regarding personal information, including a right to have false data corrected. Failure to comply with these regulations can accrue serious financial penalties, up to four percent of global annual turnover in some cases. Regulators can also order changes to how information is processed.

“It’s clear that companies are currently unable to make chatbots like ChatGPT comply with EU law, when processing data about individuals,” Maartje de Graaf, NOYB data protection lawyer, said in a statement. “If a system cannot produce accurate and transparent results, it cannot be used to generate data about individuals. The technology has to follow the legal requirements, not the other way around.”

The complaint also brought up concerns regarding transparency on the part of OpenAI, suggesting that the company doesn’t offer information regarding where the data it generates on individuals comes from or if this data is stored indefinitely. This is of particular importance when considering data pertaining to private individuals.

Again, this is a complaint by an advocacy group and EU regulators have yet to comment one way or the other. However, OpenAI has acknowledged in the past that ChatGPT “sometimes writes plausible-sounding but incorrect or nonsensical answers.” NOYB has approached the Austrian Data Protection Authority and asked the organization to investigate the issue.

The company is facing a similar complaint in Poland, in which the local data protection authority began investigating ChatGPT after a researcher was unable to get OpenAI’s help with correcting false personal information. That complaint accuses OpenAI of several breaches of the EU’s GDPR, with regard to transparency, data access rights and privacy.

There’s also Italy. The Italian data protection authority conducted an investigation into ChatGPT and OpenAI which concluded by saying it believes the company has violated the GDPR in various ways. This includes ChatGPT’s tendency to make up fake stuff about people. The chatbot was actually banned in Italy before OpenAI made certain changes to the software, like new warnings for users and the option to opt-out of having chats be used to train the algorithms. Despite no longer being banned, the Italian investigation into ChatGPT continues.

OpenAI hasn’t responded to this latest complaint, but did respond to the regulatory salvo issued by Italy’s DPA. “We want our AI to learn about the world, not about private individuals,” the company wrote. “We actively work to reduce personal data in training our systems like ChatGPT, which also rejects requests for private or sensitive information about people.”

This article originally appeared on Engadget at

Google asks court to reject the DOJ’s lawsuit that accuses it of monopolizing ad tech

Google filed a motion on Friday in a Virginia federal court asking for the Department of Justice’s antitrust lawsuit against it to be thrown away. The DOJ sued Google in January 2023, accusing the company of monopolizing digital advertising technologies through “anticompetitive and exclusionary conduct.” Per Bloomberg, Google is now seeking summary judgment to avoid the case going to trial in September as planned.

Attorney General Merrick B. Garland said at the time the lawsuit was first announced that Google “has used anticompetitive, exclusionary, and unlawful conduct to eliminate or severely diminish any threat to its dominance over digital advertising technologies.” The lawsuit alleges that Google controls digital advertising tools to such an extent that it “pockets on average more than 30 percent of the advertising dollars that flow through its digital advertising technology products,” according to a press release from the agency last year.

Google now argues that that the DOJ hasn’t shown that the company controls at least 70 percent of the market, which some previous cases have used as the threshold for qualifying as a monopoly, and that the agency “made up markets specifically for this case,” according to Bloomberg, excluding its major competitors like social media platforms. The company also claims the DOJ’s case goes “beyond the boundaries of antitrust law,” Reuters reports.

This article originally appeared on Engadget at