Posts with «company legal & law matters» label

Apple and Ericsson call truce in years-long fight over cellular patents

Apple is ending another battle over wireless patents. The iPhone maker and Ericsson have struck a licensing deal that settles all the legal disputes between the two companies, including civil lawsuits and a US International Trade Commission complaint. While the exact terms remain under wraps, the multi-year pact includes cross-licensing for "standard-essential" cellular technology as well as other patent rights.

The tech giants have a long history of fighting over cell tech. Apple sued Ericsson in 2015 to get more favorable terms for LTE patents, but Ericsson responded with a lawsuit of its own claiming that the iPhone and iPad infringed on its patented ideas. The two achieved peace with a seven-year agreement. As that arrangement neared its renewal time, however, the animosity returned. Ericsson sued in October 2021 over Apple's attempts to shrink royalty rates, while Apple countersued in December that year over allegations Ericsson was using unfair pressure tactics for the renewal. Ericsson filed another lawsuit this January over 5G licenses.

We've asked Apple for comment. In announcing the deal, Ericsson's IP chief Christina Petersson said the ceasefire would let the two companies "focus on bringing the best technology" to the world. Ericsson is one of the world's largest wireless patent holders, and said the Apple agreement would help boost its licensing revenue for the fourth quarter to the equivalent of $532 million or more.

The timing may be significant. Apple is reportedly developing 5G iPhone modems to replace Qualcomm's chips, having bought most of Intel's modem business and even launching not-so-subtle recruitment efforts in Qualcomm's backyard. The Ericsson truce may help clear the path for those modems by reducing the chances of legal dust-ups over whatever Apple builds. And time might be in short supply — rumors have circulated that Apple could use its own components as soon as 2023.

Riot Games sues Chinese tech giant NetEase for making a 'copy' of Valorant

Riot Games has sued Chinese tech giant NetEase, calling its mobile game Hyper Front "a copy of substantial parts of Valorant," Law360 has reported. On top of matching the format, NetEase also replicated parts of its character designs, game maps, weapon designs and more, Riot claims. It brought the case to the high court of England and Wales, but is also launching complaints in Germany, Brazil and Singapore, according to Polygon

Like Valorant, Hyper Front is a free-to-play first-person shooter that pits teams of five against each other in different modes. In its claim, Riot noted that Hyper Front began development shortly after it revealed an early of Valorant dubbed "Project A" in October of 2019. NetEase, meanwhile, showed off a beta version of Hyper Front under the code name "Project M." 

The release of Hyper Front in Singapore and other countries prompted complaints from users that it was essentially a "copy" of Valorant. That led to NetEase making modifications to the games, but the level of infringement goes beyond that, Riot said. The modified version of Hyper Front is currently available on Android and iOS stores, boasting more than one million downloads and 48,000+ reviews on Google Play. 

NetEase is currently involved in a dispute with Korea's PUBG corp. over two NetEase mobile games. Earlier this year, two California judges said NetEase faced an "uphill battle" in challenging a settlement agreement with PUBG. Meanwhile, Riot Games recently settled a class-action gender discrimination lawsuit for $100 million. 

Indiana sues TikTok over alleged security and child safety issues

TikTok is now facing its first state lawsuit over data security. Indiana's Attorney General has sued TikTok for allegedly misleading users about China's data access and violating child safety. The social media service supposedly broke state consumer law by failing to warn that the Chinese government could theoretically obtain sensitive data. The ByteDance-owned firm also supposedly tricked customers by giving its app a "12+" age rating on the App Store and Google Play, even though kids could readily find drug- and sex-related content.

Indiana wants fines of up to $5,000 for every violation. It's also asking a state Superior Court to order an end to the purportedly deceptive claims about data handling, and to stop marketing the app toward young teens.

We've asked TikTok for comment. The social network has repeatedly denied sharing US user data with the Chinese government and has taken steps to reassure politicians and critics, such as storing American account data stateside by default. It also says there are "robust" approval processes and controls for ByteDance workers who might access data outside the US. TikTok has also limited teens' access to more mature content, including age gates for some videos.

The lawsuit compounds problems that have emerged for TikTok in recent weeks. Maryland's governor banned use of the app on state government devices over security concerns, echoing a similar move by South Dakota in late November. The Wall Street Journalsources also claim a potential national security deal with the Biden administration has stalled yet again. While TikTok had a tentative agreement this summer, some officials are concerned the deal didn't go far enough to limit China's access.

The lawsuit's chances are uncertain. Potential access to data doesn't mean TikTok is being lax, and it's notable that apps like Facebook and Instagram are also rated 12+ despite the potential to see more adult-oriented material (Twitter is rated 17+). However, the Indiana case puts further pressure on TikTok to explain and potentially modify its practices.

Amazon is being sued for allegedly 'stealing' driver tips in DC

Amazon is facing more legal trouble for allegedly robbing delivery drivers of their tips. The District of Columbia has sued Amazon over claims the company was "stealing" tips from Flex drivers. As the Federal Trade Commission argued last year, DC claims Amazon changed its policies in 2016 so that it would use large portions of drivers' tips to cover base pay and operational costs. The company not only used "misleading" language in its response to worried couriers but falsely told customers that 100 percent of tips would go drivers, according to the District's Office of the Attorney General.

DC acknowledged that Amazon had paid $61.7 million as part of a settlement with the FTC. However, it said the federal deal helped Amazon elude "appropriate accountability" that included punishment for the damage done to consumers. The Attorney General's office is asking for civil penalties for every violation of the District's Consumer Protection Procedures Act as well as a court order barring Amazon from implementing similar practices in the future.

In a statement to Engadget, Amazon maintained that the lawsuit is "without merit" and reflects policies changed in 2019. The tech giant already paid the tips to drivers as part of the FTC deal, according to a spokesperson.

Legal battles like this aren't unique to Amazon. DoorDash faced a DC lawsuit in 2019 over comparable accusations. The food delivery service reportedly used tips under $10 to replace couriers' guaranteed pay, but still implied that these were bonuses. DoorDash revised its rules earlier that year to address the complaints.

The timing of the lawsuit is less than ideal for Amazon, to put it mildly. The company just launched a "thank my driver" feature that lets Alexa users in the US share their appreciation for the courier who dropped off their latest package. While it's supposed to motivate drivers, the gratitude will only be verbal in most cases — Amazon is only handing out $5 rewards to drivers for the first 1 million "thank yous." As you might imagine, that might not go over well at a time when Amazon has been accused of shortchanging drivers and imposing difficult working conditions.

NLRB says Apple violated federal law with anti-union meetings in Atlanta

Apple violated federal law by holding mandatory "captive audience" meetings and making coercive statements with anti-union messaging, the National Labor Relations Board's (NLRB) Atlanta regional director has concluded. The workers at Apple's Cumberland Mall store filed for a union election with the NLRB earlier this year in a bid to join the Communications Workers of America (CWA). In May, however, they withdrew their petition, and the CWA submitted an Unfair Labor Practice complaint on their behalf. 

The CWA said in its complaint at the time that Apple had "conducted mandatory 'captive audience' meetings with bargaining unit employees regarding the upcoming election." In a newer statement sent to Bloomberg, the organization said that holding meetings like that is "not only union-busting, but an example of psychological warfare." As the news organization notes, the NLRB had previously allowed companies to require employees to attend mandatory meetings prior to union elections. But Jennifer Abruzzo, the labor board's current general counsel, sees them as coercive and in violation of the law. 

The NLRB said that it will issue a complaint if the tech giant doesn't settle. While the labor board's regional director has sided with the workers and with CWA, it's still up in the air whether Apple will be required to change its policies or suffer any sort of punishment. Complaints issued by regional directors will have to go through the board's judges, and companies could approach the NLRB's board members in Washington to appeal rulings they hand down. The case could go to federal court after that. 

Apple is facing another complaint by the NLRB, which found enough merit in a report also filed by the CWA on behalf of the company's World Trade Center workers in NYC. For that particular case, Apple was accused of surveilling staff, limiting their access to pro-union fliers and forcing them to listen to anti-union speeches. If Apple doesn't settle, a judge will hear the case on December 13th. 

Judge dismisses indictment against Huawei exec Meng Wanzhou

More than four years after her arrest, the drawn-out legal saga of Huawei Chief Financial Officer Meng Wanzhou came to a formal end this week. On Friday, US District Judge Ann Donnelly dismissed an indictment against Meng, according to Reuters. On behalf of the US, Canadian authorities arrested Meng in 2018 for allegedly violating American sanctions against Iran. Meng, who is also the daughter of Huawei founder and CEO Ren Zhengfei, spent the next three years fighting attempts to extradite her to the US, where she faced up to 30 years in prison for bank and wire fraud charges. Donnelly dismissed the indictment “with prejudice,” meaning the Justice Department can’t bring the same charges against Meng again.

Before entering into an agreement with US prosecutors last year, Meng spent three years under house arrest. The detainment strained relationships between the United States and China and led to an international incident. China apprehended two Canadians, Michael Spavor and Michael Kovrig, within days of Meng’s arrest. They were later released after Meng entered into a deferred prosecution agreement with the Justice Department. As part of the agreement, she acknowledged having made false statements about Huawei’s business in Iran. Meng flew home to China the day Donnelly approved the pact.

Huawei and its subsidiaries are still facing charges in the US. Most notably, the Justice Department recently announced charges against two Chinese spies who had allegedly tried to interfere in a criminal investigation into the company. Earlier this week, the FCC also banned telecom and video surveillance equipment from Huawei, among a handful of other Chinese companies. Meng currently serves as the company's rotating chairperson and deputy chairwoman, as well as CFO. 

Meta faces lawsuit for harvesting financial data from tax prep websites

A group of anonymous plaintiffs who filed their taxes online in 2020 using H&R Block has sued Meta, accusing the company of violating users' trust and privacy. If you'll recall, a recent Markup investigation revealed that H&R Block, along with other popular tax-filing websites like TaxAct and TaxSlayer, have been sending users' sensitive financial information to Meta through its Pixel tracking tool. 

Pixel is a piece of code companies can embed on their websites so they can track visitors' activities and identify Facebook and Instagram users to target with ads. Apparently, the aforementioned tax prep websites had been transmitting personal information, such as income data, filing statuses, refund amounts and dependents' tuition grants, to Meta through that code. The tax-filing services had already changed their Pixel settings to stop sending information or had been reevaluating how they used Pixel by the time Markup's report came out. 

In a statement sent to Engadget when the news first came out, Meta said that advertisers are prohibited from sharing personal information and that it uses an automated system that can filter out sensitive content sent through Pixel. The plaintiffs acknowledged in their complaint (PDF, courtesy of The Markup) that Meta does require businesses that use Pixel to "have lawful rights to collect, use and share" user data before providing the company with any information. However, the plaintiffs argue that Meta makes no effort to enforce that rule and instead relies on a "broken honor-system" that has resulted in "repeated, documented violations."

According to The Markup, the lawsuit is seeking class action status for people who used the tax prep services mentioned in the publication's report. The services themselves, however, were not named as defendants in the case. 

Crypto lender BlockFi files for Chapter 11 bankruptcy amid FTX fallout

Cryptocurrency lender BlockFi has filed for Chapter 11 bankruptcy protection. The move comes just over two weeks after BlockFi suspended all platform activity, including withdrawals, in the wake of crypto exchange FTX's implosion. "Given the lack of clarity on the status of FTX.com, FTX US and Alameda, we are not able to operate business as usual," the company said in an FAQ. Withdrawals remain paused.

"BlockFi’s chapter 11 cases will enable BlockFi to stabilize its business and provide BlockFi with the opportunity to consummate a reorganization that maximizes value for all stakeholders," BlockFi said. "The court-supervised restructuring process is transparent and encourages dialogue between all stakeholders."

As with many other players in the industry, BlockFi faced an uncertain future after several crypto companies crumbled in the spring, taking the prices of many cryptocurrencies down with them. Soon after, FTX agreed to prop up BlockFi with a $400 million credit line. The agreement also gave FTX the option to buy BlockFi for up to $240 million. As The New York Times notes, that meant the companies had close financial ties and FTX's collapse into bankruptcy has had a knock-on effect on BlockFi.

“With the collapse of FTX, the BlockFi management team and board of directors immediately took action to protect clients and the company,” Mark Renzi of Berkeley Research Group, BlockFi's financial advisor, said in a statement. “From inception, BlockFi has worked to positively shape the cryptocurrency industry and advance the sector. BlockFi looks forward to a transparent process that achieves the best outcome for all clients and other stakeholders.”

BlockFi says that, as part of its restructuring, it will "focus on recovering all obligations owed to BlockFi by its counterparties, including FTX and associated corporate entities." However, it noted that recoveries from FTX are likely to be delayed, given that company's bankruptcy process. In addition, BlockFi says it has $256.9 million in cash on hand, which should provide “sufficient liquidity to support certain operations during the restructuring process," such as paying employee wages and continuing benefits.

In a court filing, BlockFi estimated it had more than 100,000 creditors and consolidated liabilities of between $1 billion and $10 billion. Among the listed creditors are FTX (to which it owes $275 million in loan repayments) and the Securities and Exchange Commission, which it owes $30 million.

Earlier this year, BlockFi agreed to pay $100 million to settle charges from the SEC and 32 states. The SEC claimed that BlockFi offered interest accounts without registering them under the Securities Act. The agency also found that the company made "false and misleading" claims related to the level of risk in its lending activity and loan portfolio.

Filing for Chapter 11 bankruptcy protection doesn't inherently mean a company is done for. The process allows a struggling business to keep trading while it restructures and looks for ways to pay back creditors. However, bankruptcy isn't easy to come back from, and BlockFi is just the latest in a long line of dominoes to fall in the precarious crypto industry.

Meta fined €265 million over Facebook data scraping in the EU

Meta has been hit with a €265 million ($277 million) fine for failing to prevent millions of Facebook users' mobile phone numbers and other data from being scraped and dumped online, Independent.ie has reported. It's the second fine levied by the Irish Data Protection Commission (DPC) in just the past few months, following a €405 million ($402 million at the time) penalty issued in September. In just the last 18 months, Meta has tallied nearly €1 billion in fines. 

The penalty was issued in response to the leak of 533 million Facebook users' data reported in April last year. That included phone numbers, birth dates, email addresses and locations, information that could be exploited in phishing and other attacks. The private information of sitting judges, prison officers, social workers, journalists and others were posted online, the DPC said.

At the time, Meta blamed the attack on "bad actors," but Ireland's regulator said the company failed to comply with GDPR obligations of "data protection by design and default." It wrote in a news release that other data protection authorities in the EU "agreed with the decision of the DPC." 

Meta confirmed to the The Wall Street Journal that the flaw had been patched back in 2019. The company said that it will review DPC Ireland's decision, but has not yet decided whether to appeal. "Unauthorized data scraping is unacceptable and against our rules," the spokesperson added. 

Last year, the DPC fined Meta's WhatsApp €225 million ($267 million) for not providing details of how it shares European Union users' data with Facebook. It was also hit with a €17 million ($18.6 million) fine over 12 separate data breaches, and penalized €405 million ($402 million) for its handling of children’s privacy settings on Instagram. 

UK aims to ban non-consensual deepfake porn in Online Safety Bill

The UK government will amend its Online Safety Bill with measures designed to prohibit abuse of intimate images, whether or not they're real. If the bill becomes law as is, it will be illegal to share deepfake porn without the subject's consent. This would be the first ban on sharing deepfakes in the country and if the law comes into effect, violating this rule could lead to a prison sentence.

Additionally, the Ministry of Justice aims to ban "downblousing," which it describes as an incident "where photos are taken down a woman’s top without consent." The country banned upskirt photos, which are exactly what the term suggests, in 2019. Furthermore, the government wants to make it illegal to install certain equipment, including hidden cameras, to capture images of someone without their consent.

The UK banned revenge porn in 2015 and the government is aiming to expand the scope to make it illegal for anyone to share any intimate image of someone without consent. As it stands, prosecutors have to prove that the perpetrator had "intent to cause distress." Based on recommendations from the Law Commission, the government also intends to establish two additional serious offenses, which are "based on intent to cause humiliation, alarm, or distress and for obtaining sexual gratification." Officials already intended to outlaw cyberflashing, or sending unsolicited nudes, as part of the Online Safety Bill.

"We must do more to protect women and girls, from people who take or manipulate intimate photos in order to hound or humiliate them," Dominic Raab, the deputy prime minister and secretary of state for justice, said. "Our changes will give police and prosecutors the powers they need to bring these cowards to justice and safeguard women and girls from such vile abuse."

The government hasn't yet released the text of the amended Online Safety Bill. "The government will bring forward the wider package of changes as soon as parliamentary time allows and will announce further details in due course," the Ministry of Justice said. The bill has been delayed several times but it's set to return to parliament in December

As TechCrunch notes, though, finding parliamentary time to formally read the amended bill, then to eventually debate and vote on it, may not be easy. It's unclear whether the government will be able to pass the legislation before the next general election is called within the next two years.

Critics have pushed back against certain aspects of the bill, including a revived plan to verify a person's age before permitting them to access adult content online. For many reasons, that measure may not be workable in practice.

The proposed legislation has also been described as a threat to free speech. On Thursday, an open letter to Prime Minister Rishi Sunak signed by 70 cyber security experts, organizations and elected officials laid out some of the dangers to privacy and security that the bill poses. Among other issues, the signatories argued that the Online Safety Bill includes "clauses that would erode end-to-end encryption in private messaging." The letter adds that UK businesses would have less data flow protection than counterparts in the US and EU, "leaving them more susceptible to cyberattacks and intellectual property theft."

"The bill is a deeply flawed censorship proposal that would allow UK residents to be thrown in jail for what they say online," the Electronic Frontier Foundation said this week. "It would also force online service providers to use government-approved software to search for user content that is deemed to be related to terrorism or child abuse. In the process, it will undermine our right to have a private conversation, and the technologies that protect that right, like end-to-end encryption."