US District Judge Yvonne Gonzalez Rogers has ruled that the companies that own and run the most popular social networks today will have the face lawsuits blaming them for teenagers' social media addiction. According to Bloomberg Law, that means Google, which owns YouTube, Meta which runs Facebook and Instagram, ByteDance, which owns TikTok, and Snap can't get out of hundreds of federal lawsuits filed against them over the past couple of years. 

Rogers, who'll be overseeing the cases, disagreed with the companies' argument that they're not liable for personal injury claims under the First Amendment and Section 230 of the Communications Decency Act. Section 230 protects publishers from what their users post on their platforms, but the judge said the lawsuits cover more than just third-party content. Further, she said the companies had failed to explain why they shouldn't be held responsible for other complaints against them, including defective parental controls, the failure to implement effective age verification systems and adding barriers to the account deactivation process. At the same time, the just dismissed some of the complaints, such as the ones suing the companies for failing to limit certain kinds of content. 

The lawsuits in questions were filed on behalf of minors across the country. In 2022, a mother from Connecticut sued Meta and Snap, accusing them of causing an addiction in her 11-year-old daughter who took her own life. In October this year, Meta was sued by 41 states as well as the District of Columbia, accusing the company of knowing that its "addictive" features were harmful to children and teens. Companies like Meta have been facing increased scrutiny over the past couple of years after former employee Frances Haugen revealed an internal Facebook research that found Instagram to be "harmful for a sizable percentage of teens." 

Google spokesperson José Castañeda told Bloomberg Law that protecting children has always been core to the company's work. "In collaboration with child development specialists, we have built age-appropriate experiences for kids and families on YouTube, and provide parents with robust controls," he added. "The allegations in these complaints are simply not true." A TikTok spokesperson gave Reuters a similar statement and said the app has "robust safety policies and parental controls."

Google pays Apple 36 percent of all ad revenue it generates whenever someone does a Google search using Apple’s Safari browser. The number, which was supposed to remain confidential, was revealed by Kevin Murphy, an economics professor at the University of Chicago during his testimony on behalf of Alphabet at the company’s ongoing Justice Department trial in Washington on Monday, Bloomberg reported.

The number shed more light on the relationship between two of the world’s largest tech companies, which has come under antitrust scrutiny in the last few years. The DOJ has accused Google of using its vast resources to maintain market dominance by paying companies like Apple, whose iPhone, iPad, and Mac devices have billions of users collectively, to be the default search engine on Safari. In 2021, Google reportedly paid Apple “around $18 billion” to be the default search engine on Safari, a New York Times report revealed.

Last week, Google and Apple had raised objections making details of their arrangement public, Bloomberg noted. Google said that making more details public "would unreasonably undermine Google's competitive standing in relation to both competitors and other counterparties" in a court filing. 

It’s not clear how much ad revenue Google generates from Safari, but it’s safe to assume that 36 percent of that number would likely be tens of billions of dollars. In 2022, Google’s total revenue was $279.8 billion, and a majority of it came from advertising.

Google and Apple did not respond to Engadget’s request for comment.

The hype surrounding emerging technologies like generative AI creates a wild west, of sorts, for bad actors seeking to capitalize on consumer confusion. To that end, Google is suing some scammers who allegedly tricked people into downloading an “unpublished” version of its Bard AI software. Instead of a helpful chatbot, this Bard was reportedly stuffed with malware.

The lawsuit was filed today in California and it alleges that individuals based in Vietnam have been setting up social media pages and running ads encouraging users to download a version of Bard, but this version doesn’t deliver helpful answers on how to cook risotto or whatever. This Bard, once downloaded by some rube, worms its way into the system and steals passwords and social media credentials. The lawsuit notes that these scammers have specifically used Facebook as their preferred distribution method.

Google’s official blog post on the matter notes that it sent over 300 takedown requests before opting for the lawsuit. The suit doesn’t seek financial compensation, but rather an order to stop the alleged fraudsters from setting up similar domains, particularly with US-based domain registrars. The company says that this outcome will “serve as a deterrent and provide a clear mechanism for preventing similar scams in the future.”

The lawsuit goes on to highlight how emerging technologies are ripe for this kind of anti-consumer weaponization. In this case, the alleged scammers said that Bard is a paid service that required a download. In reality, it’s a free web service.

The internet's "enshittification," as veteran journalist and privacy advocate Cory Doctorow describes it, began decades before TikTok made the scene. Elder millennials remember the good old days of Napster — followed by the much worse old days of Napster being sued into oblivion along with Grokster and the rest of the P2P sharing ecosystem, until we were left with a handful of label-approved, catalog-sterilized streaming platforms like Pandora and Spotify. Three cheers for corporate copyright litigation.

In his new book The Internet Con: How to Seize the Means of Computation, Doctorow examines the modern social media landscape, cataloging and illustrating the myriad failings and short-sighted business decisions of the Big Tech companies operating the services that promised us the future but just gave us more Nazis. We have both an obligation and responsibility to dismantle these systems, Doctorow argues, and a means to do so with greater interoperability. In this week's Hitting the Books excerpt, Doctorow examines the aftermath of the lawsuits against P2P sharing services, as well as the role that the Digital Millennium Copyright Act's "notice-and-takedown" reporting system and YouTube's "ContentID" scheme play on modern streaming sites.

Verso Publishing

Excerpted from by The Internet Con: How to Seize the Means of Computation by Cory Doctorow. Published by Verso. Copyright © 2023 by Cory Doctorow. All rights reserved.

Seize the Means of Computation

The harms from notice-and-takedown itself don’t directly affect the big entertainment companies. But in 2007, the entertainment industry itself engineered a new, more potent form of notice-and-takedown that manages to inflict direct harm on Big Content, while amplifying the harms to the rest of us. 

That new system is “notice-and-stay-down,” a successor to notice-and-takedown that monitors everything every user uploads or types and checks to see whether it is similar to something that has been flagged as a copyrighted work. This has long been a legal goal of the entertainment industry, and in 2019 it became a feature of EU law, but back in 2007, notice-and-staydown made its debut as a voluntary modification to YouTube, called “Content ID.” 

Some background: in 2007, Viacom (part of CBS) filed a billion-dollar copyright suit against YouTube, alleging that the company had encouraged its users to infringe on its programs by uploading them to YouTube. Google — which acquired YouTube in 2006 — defended itself by invoking the principles behind Betamax and notice-and-takedown, arguing that it had lived up to its legal obligations and that Betamax established that “inducement” to copyright infringement didn’t create liability for tech companies (recall that Sony had advertised the VCR as a means of violating copyright law by recording Hollywood movies and watching them at your friends’ houses, and the Supreme Court decided it didn’t matter). 

But with Grokster hanging over Google’s head, there was reason to believe that this defense might not fly. There was a real possibility that Viacom could sue YouTube out of existence — indeed, profanity-laced internal communications from Viacom — which Google extracted through the legal discovery process — showed that Viacom execs had been hotly debating which one of them would add YouTube to their private empire when Google was forced to sell YouTube to the company. 

Google squeaked out a victory, but was determined not to end up in a mess like the Viacom suit again. It created Content ID, an “audio fingerprinting” tool that was pitched as a way for rights holders to block, or monetize, the use of their copyrighted works by third parties. YouTube allowed large (at first) rightsholders to upload their catalogs to a blocklist, and then scanned all user uploads to check whether any of their audio matched a “claimed” clip. 

Once Content ID determined that a user was attempting to post a copyrighted work without permission from its rightsholder, it consulted a database to determine the rights holder’s preference. Some rights holders blocked any uploads containing audio that matched theirs; others opted to take the ad revenue generated by that video. 

There are lots of problems with this. Notably, there’s the inability of Content ID to determine whether a third party’s use of someone else’s copyright constitutes “fair use.” As discussed, fair use is the suite of uses that are permitted even if the rightsholder objects, such as taking excerpts for critical or transformational purposes. Fair use is a “fact intensive” doctrine—that is, the answer to “Is this fair use?” is almost always “It depends, let’s ask a judge.” 

Computers can’t sort fair use from infringement. There is no way they ever can. That means that filters block all kinds of legitimate creative work and other expressive speech — especially work that makes use of samples or quotations. 

But it’s not just creative borrowing, remixing and transformation that filters struggle with. A lot of creative work is similar to other creative work. For example, a six-note phrase from Katy Perry’s 2013 song “Dark Horse” is effectively identical to a six-note phrase in “Joyful Noise,” a 2008 song by a much less well-known Christian rapper called Flame. Flame and Perry went several rounds in the courts, with Flame accusing Perry of violating his copyright. Perry eventually prevailed, which is good news for her. 

But YouTube’s filters struggle to distinguish Perry’s six-note phrase from Flame’s (as do the executives at Warner Chappell, Perry’s publisher, who have periodically accused people who post snippets of Flame’s “Joyful Noise” of infringing on Perry’s “Dark Horse”). Even when the similarity isn’t as pronounced as in Dark, Joyful, Noisy Horse, filters routinely hallucinate copyright infringements where none exist — and this is by design. 

To understand why, first we have to think about filters as a security measure — that is, as a measure taken by one group of people (platforms and rightsholder groups) who want to stop another group of people (uploaders) from doing something they want to do (upload infringing material). 

It’s pretty trivial to write a filter that blocks exact matches: the labels could upload losslessly encoded pristine digital masters of everything in their catalog, and any user who uploaded a track that was digitally or acoustically identical to that master would be blocked. 

But it would be easy for an uploader to get around a filter like this: they could just compress the audio ever-so-slightly, below the threshold of human perception, and this new file would no longer match. Or they could cut a hundredth of a second off the beginning or end of the track, or omit a single bar from the bridge, or any of a million other modifications that listeners are unlikely to notice or complain about. 

Filters don’t operate on exact matches: instead, they employ “fuzzy” matching. They don’t just block the things that rights holders have told them to block — they block stuff that’s similar to those things that rights holders have claimed. This fuzziness can be adjusted: the system can be made more or less strict about what it considers to be a match. 

Rightsholder groups want the matches to be as loose as possible, because somewhere out there, there might be someone who’d be happy with a very fuzzy, truncated version of a song, and they want to stop that person from getting the song for free. The looser the matching, the more false positives. This is an especial problem for classical musicians: their performances of Bach, Beethoven and Mozart inevitably sound an awful lot like the recordings that Sony Music (the world’s largest classical music label) has claimed in Content ID. As a result, it has become nearly impossible to earn a living off of online classical performance: your videos are either blocked, or the ad revenue they generate is shunted to Sony. Even teaching classical music performance has become a minefield, as painstakingly produced, free online lessons are blocked by Content ID or, if the label is feeling generous, the lessons are left online but the ad revenue they earn is shunted to a giant corporation, stealing the creative wages of a music teacher.

Notice-and-takedown law didn’t give rights holders the internet they wanted. What kind of internet was that? Well, though entertainment giants said all they wanted was an internet free from copyright infringement, their actions — and the candid memos released in the Viacom case — make it clear that blocking infringement is a pretext for an internet where the entertainment companies get to decide who can make a new technology and how it will function.

A federal jury has found Sam Bankman-Fried, the founder of FTX, guilty on all seven counts of fraud and conspiracy he was charged with in relation to the downfall of his cryptocurrency exchange. According to The New York Times, he faces a maximum sentence of 110 years in federal prison. Bankman-Fried was arrested in the Bahamas back in December 2022 after the Department of Justice took a close look at his role in the rapid collapse of FTX. The agency examined whether he transferred hundreds of millions of dollars when the exchange filed for bankruptcy and whether FTX broke the law when it moved funds to sister company Alameda Research.

During Bankman-Fried's trial that took place over the past month, prosecutors argued that he used FTX's funds to keep Alameda Research running. The fallen entrepreneur also founded the cryptocurrency hedge fund, which was ran by his girlfriend Caroline Ellison, who was aware that he used FTX customers' money to help Alameda meet its liabilities. Bankman-Fried previously denied that he deliberately misused FTX's funds. The Times says his lawyers tried to portray him as a math nerd who had to grapple with "forces largely outside of his control," but the jury clearly disagreed after the prosecution called Ellison and three of Bankman-Fried's former top advisers to the witness stand. Ellison and all of those advisers had pleaded guilty, with the Alameda Research chief admitting that she committed fraud at Bankman-Fried's direction.

Bankman-Fried was charged with wire fraud on FTX customers, wire fraud on Alameda Research lenders, conspiracy to commit wire fraud on both, conspiracy to commit securities and commodities fraud on FTX customers, as well as conspiracy to commit money laundering. He is scheduled to be sentenced on March 28, 2024 by US District Judge Lewis A. Kaplan, who also presided over his trial. 

It looks like Amazon is hellbent on keeping its spot as the biggest online retailer — even if that means hurting both sellers and customers. In September, the FTC filed a long-expected antitrust lawsuit against Amazon over its alleged use of illegal strategies to stay on top. Details of the suit were previously withheld from the public, but today a mostly unredacted version was released.

Amazon's undeniable dominance of the online retail space has helped small businesses to reach more consumers. However, over the years, it seems Amazon has become exploitative in its approach. The company continues to increase third-party seller fees, which are taking a toll on the smaller businesses and even causing bankruptcy for some. Amazon previously said these claims were baseless, but the documents revealed today show otherwise.

According to the Wall Street Journal, the internal documents cited in the original complaint showed that Amazon executives were well aware of the effects of the company's policies. In the documents, Amazon executives acknowledged that these policies, which included requiring Amazon sellers to have the lowest prices online or risk consequences, had a “punitive aspect.” One executive pointed out that many sellers “live in constant fear” of being penalized by Amazon for not following the ever-changing pricing policy.

The FTC alleges that the company had been monitoring its sellers and punishing them if they offered lower prices on other platforms, which the agency says is a violation of antitrust laws. The unreacted documents showed that Amazon has increased prices by over $1 billion between 2016 to 2018 with the use of secret algorithms known as “Project Nessie." It was also revealed that the "take rate," aka the amount Amazon makes from sellers who use the Fulfillment By Amazon logistics program,  increased from 27.6 percent in 2014 to 39.5 percent in 2018. It's unclear if that has changed in more recent years since those numbers remained redacted.

And Amazon isn't just ruining its sellers’ experience. The complaint also revealed Amazon's increased use of ads in search results. Several ad executives at the company acknowledged that these sponsored ads were often irrelevant to the initial search and caused “harm to consumers" and the overall experience on the site.

The FTC alleges that these policies were the brainchild of Jeff Bezos, Amazon’s founder and former chief executive, to increase the company's profit margins.

“Mr. Bezos directly ordered his advertising team to continue to increase the number of advertisements on Amazon by allowing more irrelevant advertisements, because the revenue generated by advertisements eclipsed the revenue lost by degrading consumers’ shopping experience,” the FTC complaint alleges.

It looks like Amazon is hellbent on keeping its spot as the biggest online retailer — even if that means hurting both sellers and customers. In September, the FTC filed a long-expected antitrust lawsuit against Amazon over its alleged use of illegal strategies to stay on top. Details of the suit were previously withheld from the public, but today a mostly unredacted version was released, including details about Amazon's secret pricing tool, known as Project Nessie. These algorithms helped Amazon increase prices by over $1 billion over two years, the FTC alleges.

As Amazon would argue, Amazon's dominance of the online retail space has helped small businesses reach more consumers. But the FTC would argue that over the years, Amazon has become exploitative in its approach. The company continues to increase third-party seller fees, which are taking a toll on smaller businesses and even causing bankruptcy for some. Amazon previously said these claims were baseless, but the documents revealed today show otherwise.

According to the The Wall Street Journal, the internal documents cited in the original complaint show that Amazon executives were well aware of the effects of the company's policies. In the documents, Amazon executives acknowledged that these policies, which included requiring Amazon sellers to have the lowest prices online or risk consequences, had a “punitive aspect.” One executive pointed out that many sellers “live in constant fear” of being penalized by Amazon for not following the ever-changing pricing policy.

The FTC also alleges that the company had been monitoring its sellers and punishing them if they offered lower prices on other platforms, which the agency says is a violation of antitrust laws. The unredacted documents indicate that Amazon has increased prices by over $1 billion between 2016 to 2018 with the use of secret price gouging algorithms known as Project Nessie. It was also revealed that the "take rate" — aka the amount Amazon makes from sellers who use the Fulfillment By Amazon logistics program — increased from 27.6 percent in 2014 to 39.5 percent in 2018. It's unclear if that has changed in more recent years since those numbers remained redacted.

And Amazon isn't just ruining its sellers’ experience. The complaint also revealed Amazon's increased use of ads in search results. Several ad executives at the company acknowledged that these sponsored ads were often irrelevant to the initial search and caused “harm to consumers" and the overall experience on the site.

The FTC alleges that these policies were the brainchild of Jeff Bezos, Amazon’s founder and former chief executive, to increase the company's profit margins.

“Mr. Bezos directly ordered his advertising team to continue to increase the number of advertisements on Amazon by allowing more irrelevant advertisements, because the revenue generated by advertisements eclipsed the revenue lost by degrading consumers’ shopping experience,” the FTC complaint alleges.

Uber and Lyft have agreed to pay a combined $328 million in settlements following a wage theft investigation by the New York attorney general’s office. According to New York AG Letitia James, the companies’ policies “systematically cheated their drivers out of hundreds of millions of dollars in pay and benefits.” They’ll both now have to pay settlement funds to more than 100,000 current and former drivers in New York, and offer both minimum hourly pay rates and paid sick leave.

In the two settlements, Uber has to pay $290 million, while Lyft must pay $38 million. The AG’s office found both Uber and Lyft shortchanged drivers by deducting sales taxes from drivers’ commissions that should have been paid by riders between 2014 and 2017. They also did not offer paid sick leave. As a result of the settlement, drivers outside of New York City will be guaranteed an earnings floor of $26 per hour (NYC drivers already have minimum rates under Taxi & Limousine Commission regulations), and will earn one hour of sick pay for every 30 hours worked. This will be capped at 56 hours per year.

NYC drivers will get $17 per hour for sick leave, while drivers outside of the city will get $26 per hour. Both rates will be adjusted annually for inflation. Drivers can put in a claim for their share of the settlement on the New York Attorney General’s website. The companies will also be required to update their apps to improve the process for putting in sick leave requests and provide support for pay-related questions, plus earnings statements for drivers which explain their compensation in detail.

New York has been cracking down on app-based service providers in recent years amid a push by the Biden administration to see gig workers classified as employees. A California court, however, slapped down one such bill in March, allowing companies to continue classifying their drivers as contractors. But NY has made progress recently in securing more protections. In September, Uber, GrubHub and DoorDash were told they must pay their delivery workers a minimum wage.

Oscar-nominated actor Scarlett Johansson has taken legal action against an AI app developer for using her voice and image in an ad without permission, Variety has reported. The 22-second ad promoted an AI image editor called Lisa AI: 90s Yearbook & Avatar, and reportedly used an AI-generated version of Johansson's voice and image.

The ad showed a real clip of Johansson in a Black Widow behind-the-scenes clip, saying "What's up guys? It's Scarlett and I want you to come with me...". It then transitions to AI-generated photos and a cloned version of her voice promoting the AI app. Under the ad is fine print that states: "Images produced by Lisa AI. It has nothing to do with this person." Multiple Lisa AI apps created by Convert Software remain on the App Store and Google Play, according to Variety, but the ad no longer appears on X. 

Johansson is "handling the situation in a legal capacity," said her lawyer Kevin Yorn. "We do not take these things lightly. Per our usual course of action in these circumstances, we will deal with it with all legal remedies that we will have," he added. 

Johansson has one of the best known faces (and voices) in Hollywood and is the spokesperson for high-end companies including Dolce & Gabbana and Louis Vuitton. Given that, it's hard to believe that someone would even attempt to rip off her likeness, if the claim is accurate (and it's not exactly a ringing endorsement for the quality of advertisers on X). 

The idea of using AI to rip off celebrity likenesses is a relatively new phenomenon, so the legal ramifications are still being worked out. In one notable incident, actor Tom Hanks warned his fans on social media that videos using AI versions of his likeness were being used to fraudulently hawk products. 

Though it's still a legal grey area, some states have related laws around privacy rights, with California for one allowing civil lawsuits for the unauthorized use in advertising or promotion of someone’s "name, voice, signature, photograph or likeness." 

The antitrust lawsuit Epic Games and Match Group have filed against Google was supposed to go to trial on November 6, but now it looks like the video game developer might go at it alone. Google and Match, the parent company of Tinder, OkCupid and Hinge, have reached an agreement and have agreed to drop all claims against each other. According to Bloomberg and The Wall Street Journal, Google has agreed to return the $40 million Match had place in escrow to cover the service fees it would supposedly owe the Alphabet unit while the dispute is ongoing.

Match also announced in its earning report that its apps will be using Google's User Choice Billing program starting on March 31, 2024. Under the program, users will have the option to choose between Google's and the developer's billing systems when purchasing an app or paying for a subscription. If they choose to use Google's system, then Match will have to pay Google 15 percent for recurring subscriptions and 30 percent for one-off payments. Google's cut is reduced to 11 percent and 26 percent, respectively, for payments that go through the developer's provided alternative. The dating services provider said that the terms they agreed on will offset the additional costs its apps will incur implementing the User Choice Billing program over three years starting in 2024.

Tinder's parent company originally sued Google in 2022, accusing it of violating federal and state antitrust laws. Match said that Google previously assured it that it could use its own payment system. However, when it announced a new policy that would require all Android developers to process payments through the Play Store billing system, Google allegedly threatened to remove its apps from the store if it didn't comply. Match also claimed that the company had been rejecting app updates that maintained the payment system it was using.

Later that year, Match had joined up with Epic Games, and the two consolidated their antitrust lawsuit against their common foe. They even expanded their allegations and accused Google of paying major developers hundreds of millions of dollars to keep their apps in the Play Store. Bloomberg says Epic is now scheduled to face Google in court alone on November 2, and the judge is waiting for both parties to decide whether they want a jury to make the decision for their case. Epic had also sued Apple over the same issue, but in Google's case, the court has to acknowledge that Android users can sideload applications to their devices. The video game developer hasn't dropped any hints that it's also hashing out an agreement with the bigger company, but we'll know for sure if the trial still pushes through on November 2.