Posts with «company legal & law matters» label

Tesla investors say a judge found Elon Musk’s ‘funding secured’ tweet was misleading

In court documents filed late Friday, a group of Tesla shareholders said a federal judge recently ruled Elon Musk made “false and misleading” statements in 2018 when he said he was considering taking the company private at $420 per share, reports Reuters. Musk’s now-infamous “funding secured” tweet landed the executive in trouble with the US Securities and Exchange Commission, eventually leading to a $40 million settlement with the agency that he’s now trying to end.

Elon on the SEC “Funding was secured” $TSLApic.twitter.com/XcuWqoUawr

— Tesla Nakamoto (@TeslaNakamoto) April 14, 2022

According to those documents, US District Court Judge Edward Chen concluded at the start of the month that Musk had “recklessly made the statements with knowledge as to their falsity.” The investors involved in the class action suit have asked the court to block Musk from continuing his “public campaign to present a contradictory and false narrative” of the episode. The filing comes in the same week Musk shared his version of what went down during a widely watched appearance at the TED 2022 conference.

“The SEC knew that funding was secured but they pursued an active, public investigation nonetheless at the time,” Musk said during the interview. “I was forced to concede to the SEC unlawfully… Now it makes it look like I lied when I did not in fact lie. I was forced to admit I lied to save Tesla’s life, and that’s the only reason.” In the same segment, Musk called officials with the commission’s San Francisco office “bastards.”

On Saturday, Musk’s attorney dismissed the claims made by the investors. “Nothing will ever change the truth which is that Elon Musk was considering taking Tesla private and could have,” he told CNBC. According to the outlet, damages from the lawsuit could amount to billions of dollars that would have to be paid out by Musk and Tesla. The case is currently set to go to trial on May 31st.

DuckDuckGo removes search results for major pirate websites

DuckDuckGo's crackdown on dodgy content now extends to digital bootleggers. TorrentFreak has discovered that the search engine no longer lists results for some major pirate websites, including The Pirate Bay, 1337x and Fmovies — look for anything from their domains and you'll come up empty-handed. Streaming and stream-ripping sites like Flixtor and 2conv also produce no results, while other pirate outlets (such as RarBG) may only turn up one result instead of the hundreds of thousands you see elsewhere.

The site for the video download tool YouTube-dl also produces no results despite recent defenses of its legality. While the RIAA has portrayed YouTube-dl as a piracy tool, the Electronic Frontier Foundation, GitHub and others found that it doesn't rip DRM-protected material.

We've asked DuckDuckGo for comment. As TorrentFreak says, though, liability for copyright violations might be an issue. The company removed pirate "bangs" (shortcuts for pirate sites) as far back as 2018, and competitors like Google and Microsoft are already downranking piracy-related results. A move like this could protect DuckDuckGo against costly copyright battles.

DC Attorney General asks court to reconsider Amazon antitrust lawsuit

DC Attorney General Karl Racine has filed a motion (PDF) asking the court to reconsider its decision to dismiss the antitrust lawsuit he filed against Amazon in 2021. In the original lawsuit, Racine accused the e-commerce giant of "illegally abusing and maintaining its monopoly power by controlling prices across the online retail market." Third-party sellers that use Amazon's Marketplace have to abide by the company's agreement, which includes a fair pricing policy. If they sell their goods for lower prices elsewhere, Amazon could remove their items' buy box, suspend their shipment option and even terminate their selling privileges for "serious or repeated cases."

The company stopped telling sellers back in 2019 in the midst of antitrust scrutiny that they couldn't sell their products for cheaper prices elsewhere. However, the company later added back a clause under its fair pricing policy that's nearly identical. Racine argued that since sellers price their goods with Amazon's cut in mind, the policy artificially raises prices even on sellers' own websites and on competing e-commerce platforms. 

Amazon told us when Racine first filed the lawsuit that the Attorney General had it "exactly backwards." The spokesperson said: "Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively. The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law." The Superior Court of the District of Columbia sided with Amazon and threw out Racine's complaint back in March. 

Now, the DC AG wants another chance at proving that Amazon violated antitrust laws. His office's amended complaint includes additional details about how the company's policy violates DC code, mostly focusing on how it "causes prices to District residents to be higher than they otherwise would be" and how it inhibits sellers from competing with Amazon's own products. 

Racine said in a statement about the motion he filed:

"We're asking the court to reconsider its decision to dismiss our Amazon case because the antitrust laws and facts are on our side and we are determined to continue standing up for DC consumers. Amazon illegally uses its market power to prevent sellers from lowering their prices on other platforms — including their own. This results in higher prices for DC consumers."

Juul will pay $22.5 million to settle a Washington state lawsuit

Vape pen maker Juul has agreed to settle another state lawsuit alleging that it targeted minors with its marketing. It will pay $22.5 million and undertake measures to prevent underage use and sales to settle a suit filed by Washington Attorney General Bob Ferguson in September 2020. Juul admits no wrongdoing under the settlement, though it told the Associated Press the agreement marked “another step in our ongoing effort to reset our company and resolve issues from the past.”

The AG claimed that when Juul debuted in 2015, it promoted itself with colorful ads on social media, leading to an increase in nicotine use and addiction in teens. Ferguson also claimed in the filing that the company deceived consumers about the addictiveness of its product. His office said the money from Juul's settlement will be used to establish a health equity unit that will "respond to deceptive and discriminatory health care practices that disproportionately impact vulnerable communities and communities of color."

Under the consent decree, Juul is not allowed to promote its products on social media and can't use advertising that appeals to youths. It agreed to monitor and report social media posts from underage users about its products and to require an adult's signature when delivering products that it sells online. Additionally, it must run a secret shopper program in the state for at least two years to ensure retailers aren't selling its products to underage users.

Over the last year, Juul has settled several cases brought by state AGs. It agreed to pay $40 million to settle a case in North Carolina and $14.5 million to settle one in Arizona. The company says it has also resolved a suit in Louisiana but lawsuits in several otherstates remain active. “We will continue working with federal and state stakeholders to advance a fully regulated, science-based marketplace for vapor products,” the company said.

Judge affirms jury's verdict in Tesla racism lawsuit but reduces $137 million payout

US District Judge William Orrick has rejected Tesla's argument that it isn't liable to Owen Diaz, according to The Wall Street Journal and Reuters. Diaz is a former Black Tesla worker who accused the company of turning a blind eye to the racial abuse he suffered while working at its Fremont, California factory from 2015 to 2016. Last year, a jury ruled in favor of Diaz and awarded him $6.9 million in compensatory damages, as well as $130 million in punitive damages. Orrick has affirmed the jury's verdict but reduced the award to $15 million.

To be exact, he reduced the compensatory damages awarded to Diaz to $1.5 million from $6.9 million, which he called "excessive." He also slashed the "unconstitutionally large" punitive damages award from $130 million to $13.5 million. Punitive damages awarded by courts are meant to punish a defendant and deter them from repeating their actions — or, in Tesla's case, from allegedly ignoring the racial abuse of a Black worker. Tesla has a market value exceeding $1 trillion, however, and $13.5 million is a drop in the bucket for the automaker. Diaz's lawyer said they plan to appeal the lowered damages award.

Nevertheless, Judge Orrick agreed that Tesla showed a "striking" indifference to Diaz's plight. In his original lawsuit, Diaz said he wasn't just subjected to racial slurs, fellow workers (and even one supervisor) also left drawings of swastika and racist graffiti around the plant. He said Tesla's management neglected to halt the abuse. Judge Orrick wrote in his ruling:

"Not only does the evidence support a finding of recklessness or indifference to Diaz’s health and safety, it supports a finding that Tesla intentionally built an employment structure that allowed it to take advantage of Diaz’s (and others’) labor for its benefit while attempting to avoid any of the obligations and responsibilities that employers owe employees."

Tesla has faced several racial discrimination lawsuits over the years other than Diaz's, with workers claiming that they were subjected to constant racial abuse in its factories. In February, the California Department of Fair Employment and Housing filed a lawsuit against the automaker after finding evidence that its "Fremont factory is a racially segregated workplace" where Black workers are discriminated against. Tesla denied the accusation, saying it "opposes all forms of discrimination and harassment" and that it has a "dedicated Employee Relations team that responds to and investigates all complaints."

Governor Newsom faces accusations of meddling in Activision Blizzard lawsuit

A former lawyer with California’s Department of Fair Employment and Housing has accused Governor Gavin Newsom of interfering with the agency’s sexual harassment lawsuit against Activision Blizzard. According to an email seen by Bloomberg, DFEH assistant chief counsel Melanie Proctor said Tuesday she was resigning her position to protest the abrupt firing of Janette Wipper, the watchdog’s chief counsel.

“The Office of the Governor repeatedly demanded advance notice of litigation strategy and of next steps in the litigation,” Proctor writes in her resignation. “As we continued to win in state court, this interference increased, mimicking the interests of Activision’s counsel.” Proctor alleges Wipper was “abruptly terminated” for attempting to protect the DFEH’s independence. According to the email, the former chief counsel is considering “all avenues of legal recourse,” including a claim under California’s Whistleblower Protection Act.

We’ve reached out to the Office of Governor Newsom for comment.

News of the resignation comes little more than two weeks after a federal judge ordered Activision Blizzard to pay $18 million to settle a US Equal Opportunity Commission lawsuit accusing the publisher of fostering a discriminatory workplace. Before that complaint was filed, California's fair employment agency launched its own lawsuit against Activision Blizzard following a two-year investigation into sexual harassment allegations at the publisher. The DFEH case is currently scheduled to go to trial in February 2023, but the allegations put forward by Proctor are likely to raise questions about the ultimate fate of the lawsuit.

Elon Musk is hit with a class action lawsuit over his Twitter investment

Elon Musk has only been Twitter’s largest shareholder for a few weeks, but he’s already facing a class action lawsuit over his handling of the investment. A Twitter shareholder has filed a class action lawsuit against Musk over his 11-day delay in officially disclosing his investment in Twitter to the SEC.

Under securities law, Musk was required to file paperwork with the SEC by March 24th — 10 days after his stake in Twitter grew to 5 percent — but he didn’t do so until April 4th. That delay might not sound particularly significant, but it may have netted him as much as $156 million. According to the lawsuit, those gains came at the expense of other shareholders, who were not able to similarly profit.

“Investors who sold shares of Twitter stock between March 24, 2022, when Musk was required to have disclosed his Twitter ownership, and before the actual April 4, 2022 disclosure, missed the resulting share price increase as the market reacted to Musk’s purchases and were damaged thereby,” the lawsuit states.

According to the shareholder who brought the suit, he and other investors sold shares at “artificially deflated” prices as a result of Musk’s actions. The suit also alleges that Musk made “materially false and misleading statements and omissions by failing to disclose to investors that he had acquired a 5% ownership stake in Twitter as required.”

The lawsuit comes after a chaotic few days for Twitter and Musk. The Tesla CEO and noted Twitter troll had initially agreed to join Twitter’s board of directors, much to the dismay of some employees. But the decision was abruptly reversed following several days of characteristically bizarre tweets from Musk, who polled his Twitter followers whether the company should change its name, and speculated on whether the service was “dying.”

In an email to employees, Twitter CEO Parag Agrawal noted that as a board member Musk would have been a "fiduciary of the company, where he, like all board members has to act in the best interest of the company and all our shareholders.” He added that he believed it was “for the best” that Musk ultimately wouldn’t take the position.

Biden administration cracks down on 3D-printed 'ghost guns'

The Biden administration is taking new measures that would limit the spread of 3D-printed guns. The Justice Department has issued a final rule with multiple measures restricting the sale and distribution of "ghost guns," including a requirement for federally licensed dealers and gunsmiths to serialize any unmarked firearm (such as a 3D-printed gun) before selling it to a customer. You couldn't print a gun at home and sell it to a store without some ability to trace its origins.

The rule also includes several other restrictions that aren't aimed at 3D-printed weapons, including an effective ban on unserialized "buy build shoot" kits by treating them as firearms subject to strict licensing and background check requirements. The DOJ will also treat guns with split receivers as subject to regulations, and demands that licensed dealers keep "key records" until they shut down, not just for 20 years.

The move is the latest in a back-and-forth fight over attempts to regulate 3D-printed guns. After a case over Defense Distributed's 3D-printed pistol bounced through courts (including the Supreme Court), the Trump administration's State Department reached a settlement that legally allowed these homemade weapons. States sued the administration over alleged constitutional and procedural violations, earning a ban on the technology (albeit one with a claimed loophole). A judge determined that the Defense Distributed settlement violated procedural law, but the Trump administration tried to override that by transferring regulation to the Commerce Department and making it difficult to implement substantial limits. State attorneys general sued over the rule change.

A rule like this won't stop individuals or black market operators from making and trading 3D-printed guns. It might, however, discourage licensed dealers from letting those guns enter their shops. If nothing else, it signals a reversal from the previous administration's stance — the current White House sees untraceable 3D-printed firearms as significant threats.

Amazon is planning to appeal Staten Island union’s victory

Amazon will reportedly object to a recent union election victory at its warehouse in Staten Island, alleging that organizers pressured workers into voting to organize. The Wall Street Journal reported that the company revealed its intention to appeal JFK8’s election in a legal filing released to the public on Thursday. Roughly 55 percent of workers at the JFK8 warehouse voted to join the Amazon Labor Union, the first victory of its kind for Amazon workers in the US. The company has until April 22nd to gather evidence and formally file its objections to the National Labor Relations Board (NLRB).

In the document, Amazon gave a preview of what objections it plans on raising. The company wrote that it believes that the union threatened employees unless they voted to unionize. Some may think this is a fairly ironic move on Amazon’s part, considering NLRB accused the company of threatening employees unless they did the opposite. Amazon also accused the union of “electioneering” or interfering while employees waited in line to vote. It argued that unusually long waits at polling booths led to insufficient voter turnout. The company also believes organizers loitered by the polling area and intimidated voters, even going as far as to threaten immigrant employees with the loss of their rights if they didn’t vote to unionize.

Eric Milner, an attorney who represents the ALU, believes that Amazon’s objections will be dismissed. "To say that the Amazon Labor Union was threatening employees is really absurd," Milner said to Reuters. "The Amazon Labor Union is Amazon employees."

Meanwhile, a separate labor union attempting to organize an Amazon facility in Alabama filed its own objections on Thursday regarding the pending results of its recent rerun election. The Retail, Wholesale and Department Store Union (RWDSU) is accusing Amazon of “countless attempts to intimidate workers” in the Bessemer plant, including firing or suspending workers who supported the union. The results of that election are currently too close to call and will be determined in the coming weeks by an NLRB hearing over several hundred challenged ballots.

“Amazon’s behavior must not go unchallenged, and workers in Bessemer, Alabama must have their rights protected under the law. We urge the NLRB to carefully review our objections and ensure no company, not even with the bottomless pockets of Amazon, is allowed to act above the law,” said RWDSU president Stuart Appelbaum in a statement.

Engadget has reached out to Amazon for comment on both matters, and will update if we hear back. 

Google ‘unfairly’ blocked rival payments, India’s antitrust regulator says

The Competition Commission of India (CCI) on Friday released early findings of an investigation into Google’s app store and its payment system, Google Pay. As Bloombergreported, it found that Google’s Play Store billing system for app developers is “unfair and discriminatory”. 

Back in 2020, Google decided to delay enforcing its 30% commission for app developers in India following an outcry from the country's startup community. The tech giant agreed to defer the policy until this month. But in the interim, Indian developers lobbied the nation’s government to stop Google from enacting what they felt was an unfairly high fee. Developers also believed that since Android phones are preloaded with the Play Store, it gave Google an unfair advantage over rival payment systems.

Of particular concern in India is whether Google Pay will undercut rival United Payments Interface (or UPI) apps, which allow users to directly debit payments from their bank accounts using just a virtual address. UPI payment apps like Google Pay, PhonePe and Paytm are currently the most popular way for Indians to make payments online. Critics have alleged that Google’s control of the Play Store and the Android operating system gives it an unfair amount of control over India's digital payment ecosystem.

India’s antitrust regulator echoed similar concerns over Google Pay. “Google’s conduct is also resulting in a denial of market access to competing UPI apps since the market for UPI enabled digital payment apps is multi-sided, and the network effects will lead to a situation where Google Pay’s competitors will be completely excluded from the market in the long run," wrote CCI in documents viewed by Bloomberg.

India’s antitrust agency has yet to finish its investigation into Google. Upon its conclusion, the tech giant may be forced to pay fines or change its policies. 

The search giant has come under fire in India, both for its developer's fees and the potential threat Google Pay poses to domestic payment platforms. Last year Google announced that all Play Store developers would have to integrate with Google’s payment system by October 2022.