Tag Archives: Company Legal & Law Matters

Hundreds of Amazon drivers in NYC join the Teamsters union

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Hundreds of Amazon drivers in New York City have joined the Teamsters union in the hope of obtaining better pay and working conditions. The union says a majority of drivers at each of three delivery service partners (DSPs) working out of a Queens warehouse have signed authorization cards.

According to a Teamsters press release, the drivers have been organizing for a year to secure fair pay, consistent schedules, reasonable workloads and proper pay maintained trucks. They walked off the job last December as part of a nationwide protest against Amazon’s alleged unfair labor practices and union-busting efforts.

At least on paper, joining the union should give the drivers more leverage as they push Amazon for better working conditions. But that doesn’t necessarily mean the company will play ball. The Amazon Labor Union, one of the first major successful organization efforts within the company in the US, has yet to secure a union contract, two years after forming. The group became a Teamsters affiliate this summer.

However, the union has found some success on behalf of Amazon workers. Last month, a regional National Labor Relations Board director determined that Amazon is a joint employer of some third-party drivers in Palmdale, California. The Teamsters hope that finding will set a precedent for the rest for DSP drivers elsewhere. The Queens drivers are the first Amazon workers to organize with the Teamsters following that decision.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/hundreds-of-amazon-drivers-in-nyc-join-the-teamsters-union-202758685.html?src=rss

Former MoviePass CEO reportedly pleads guilty to securities fraud

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Mitch Lowe, one of two MoviePass leaders indicted by the Justice Department in 2022, has pleaded guilty to securities fraud charges. The former CEO admitted to conspiring to deceive the public and investors about the service’s sustainability. Variety reports that the details of Lowe’s plea agreement haven’t been made public.

Prosecutors claim Lowe knew from the start that the company’s $9.95 “unlimited” plan was a short-term gimmick to attract subscribers and inflate stock. He’s also accused of making false statements in press releases, interviews and SEC filings about MoviePass’ long-term viability.

Those statements included allegedly lying about the company’s ability to become profitable on subscription fees alone and having tech that could generate revenue from customer data. He also claimed MoviePass was profiting from multiple revenue streams despite not having any income beyond subscriptions.

Prosecutors also accused Lowe and Ted Farnsworth, former CEO of MoviePass’ parent company Helios and Matheson, of preventing subscribers from getting what was promised from the “unlimited” subscription. The company settled with the FTC in 2021 over allegations that it intentionally invalidated subscriber passwords to freeze their accounts, blocking their ability to get the movie tickets the service promised. MoviePass and its parent company declared bankruptcy in 2020.

Although no sentencing date has been set, Lowe is free on bond and has a status conference court date scheduled in Miami for March 2025. The 72-year-old former executive faces a maximum of five years in federal prison.

“Mitch is a good man who is looking to move forward with his life,” Lowe’s attorneys, Margot Moss and David Oscar Markus, said in a statement to Variety. “He has accepted responsibility for his actions in this case and will continue to try to make things right.”

Meanwhile, Farnsworth is still in custody. He was initially freed on a $1 million bond that was revoked in August 2023 after the feds accused him of misusing nearly $300,000 in company funds. Farnsworth's former boyfriend, who he met on an escort site, was paid $147,000, and received a Cadillac worth $144,000; after the pair split up, the feds say he falsely accused his ex of stealing the vehicle.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/former-moviepass-ceo-reportedly-pleads-guilty-to-securities-fraud-201131284.html?src=rss

23andMe will pay $30 million to settle 2023 data breach lawsuit

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23andMe is close to settling a proposed class action lawsuit filed against the company over a data breach that compromised 6.9 million users' information. According to the preliminary settlement filing, the DNA testing company has agreed to pay $30 million to affected customers, as well as to conduct annual computer scans and cybersecurity audits for three years. A website will be built to notify people eligible to a portion of the settlement fund and to facilitate payments. Affected users will also be sent a link where they can delete all their information from the service, and they'll be able to enroll to a three-year Privacy & Medical Shield + Genetic Monitoring program for free. A judge still has to approve those terms. 

In October 2023, the company admitted that the DNA Relatives profile information of roughly 5.5 million customers and the Family Tree profile information of 1.4 million DNA Relative participants had been leaked. It later revealed in a legal filing that the bad actors started breaking into customer accounts in late April 2023 and that they had access to its systems until September that year. It said that the hackers used a technique called credential stuffing, which uses previously compromised login credentials to access customer accounts. 

The breach led to several class action lawsuits filed against the company, including one that accused 23andMe of failing to notify the plaintiffs that they were specifically targeted for having Chinese and Ashkenazi Jewish heritage. In the settlement agreement [PDF] for the consolidated lawsuit, 23andMe noted that it "denies the claims and allegations set forth in the Complaint" and that it "denies that it failed to properly protect the Personal Information of its consumers and users." 

According to Reuters, 23andMe describes its financial condition as "extremely uncertain." In its financial report for the 2024 fiscal year, it revealed that it earned a total revenue of $220 million, down 27 percent from a $299 million revenue the year before. A huge chunk of the settlement money will come from cyber insurance, though, which the company expects to cover $25 million out of the $30 million total. 

This article originally appeared on Engadget at https://www.engadget.com/cybersecurity/23andme-will-pay-30-million-to-settle-2023-data-breach-lawsuit-150058702.html?src=rss

Utah judge blocks law preventing youth from accessing social media freely

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On Tuesday, Chief US District Judge Robert Shelby granted a preliminary injunction to block Utah from limiting the social media usage of minors. Republican Governor Spencer Cox had signed the Utah Minor Protection in Social Media Act earlier in March. It was supposed to take effect on October 1, but the court’s decision to block the law is a victory for young social media users in Utah.

This isn’t the first time Utah’s governor has attempted to limit social media use among the youths in the state. Last year, he signed two bills that required parents to grant permission for teens to create social media accounts, and these accounts had limitations like curfews and age verification. He replacing the older laws in March due to lawsuits challenging their legality.

Under the law, social media companies would have been forced to verify the age of all users. If a minor registers for an account, they are subject to various limitations. The content they share would be seen only by connected accounts. Additionally, minor accounts could not be searched for or messaged by non-followers or friends, effectively nonexistent to strangers.

The primary reason for the preliminary injunction is due to NetChoice’s claim that the law constitutes a violation of the First Amendment. NetChoice is a trade association formed by tech giants such as X (formerly Twitter), Snap, Meta and Google. The association has managed to win in court battles and block similar laws entirely or in part in states like Arkansas, California and Texas.

This article originally appeared on Engadget at https://www.engadget.com/social-media/utah-judge-blocks-law-preventing-youth-from-accessing-social-media-freely-160008587.html?src=rss

Utah judge blocks law preventing youth from accessing social media freely

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On Tuesday, Chief US District Judge Robert Shelby granted a preliminary injunction to block Utah from limiting the social media usage of minors. Republican Governor Spencer Cox had signed the Utah Minor Protection in Social Media Act earlier in March. It was supposed to take effect on October 1, but the court’s decision to block the law is a victory for young social media users in Utah.

This isn’t the first time Utah’s governor has attempted to limit social media use among the youths in the state. Last year, he signed two bills that required parents to grant permission for teens to create social media accounts, and these accounts had limitations like curfews and age verification. He replacing the older laws in March due to lawsuits challenging their legality.

Under the law, social media companies would have been forced to verify the age of all users. If a minor registers for an account, they are subject to various limitations. The content they share would be seen only by connected accounts. Additionally, minor accounts could not be searched for or messaged by non-followers or friends, effectively nonexistent to strangers.

The primary reason for the preliminary injunction is due to NetChoice’s claim that the law constitutes a violation of the First Amendment. NetChoice is a trade association formed by tech giants such as X (formerly Twitter), Snap, Meta and Google. The association has managed to win in court battles and block similar laws entirely or in part in states like Arkansas, California and Texas.

This article originally appeared on Engadget at https://www.engadget.com/social-media/utah-judge-blocks-law-preventing-youth-from-accessing-social-media-freely-160008587.html?src=rss

Apple ordered to pay back its illegal $14.4 billion Irish tax break

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It's a bad day for big tech in the EU. After rejecting Google's appeal of a $2.7 billion antitrust fine, Europe's highest court ruled that Apple must pay back its €13 billion ($14.4 billion) Irish tax break deemed illegal by the EU Commission way back in 2016. 

The decision by the European Court of Justice overturns an earlier 2020 decision by a lower court in Apple's favor. "[The decision] confirms the European Commission's 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover," the judges wrote. 

In a statement to the Financial Times, Apple said the EU was "trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US." 

Apple's effective tax rate for revenue earned in Europe was an effective 1 percent on European profits and as low as .005 percent in 2014. Because the deal gave Apple a "significant advantage" over the competition, the EU Commission ordered it to pay back "illegal state aid" over the ten-year period before it began investigating its tax practices. 

The decision follows several setbacks for the European Commission against US corporations. Last year, the ECJ ruled that Amazon wouldn't be required to pay €250 million ($276 million) in back taxes to Luxembourg and lost a similar case to Starbucks in the Netherlands. So despite today's wins for the EU, those decisions could haunt future EU cases against big tech around tax havens in individual member states. 

This article originally appeared on Engadget at https://www.engadget.com/big-tech/apple-ordered-to-pay-back-its-illegal-144-billion-irish-tax-break-110041387.html?src=rss

Google loses its seven-year fight against $2.7 billion EU antitrust fine

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Google has lost a seven-year battle with the European Commission as the EU's highest court upheld a $2.7 billion antitrust fine against the search giant, Reuters reported. Antitrust regulators originally levied the penalty against Google in 2017 for favoring its own shopping service against local rivals. 

"Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals," EU commissioner Margrethe Vestager said at the time. "Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors."

Google lost its first appeal with a lower court in 2021, sending the appeal to Luxembourg's Court of Justice of the European Union (CJEU). The company argued that it was being punished for its dominant position in the market and that the original decision "erred in law by treating quality improvements... as abusive." 

However, the CJEU judges upheld the lower court's decision that the company is allowed to have a dominant position but not to abuse it. "In particular, the conduct of undertakings in a dominant position that has the effect of hindering competition on the merits and is thus likely to cause harm to individual undertakings and consumers is prohibited," they noted. 

An unnamed Google spokesperson has already responded to the decision, saying the company is "disappointed" with the judgment. They added "this judgment relates to a very specific set of facts. We made changes back in 2017 to comply with the European Commission’s decision. Our approach has worked successfully for more than seven years, generating billions of clicks for more than 800 comparison shopping services."

Google is also fighting a legal battle in the EU that could force it to sell parts of its adtech businesses over similar arguments that it favors its own services over those of competitors. The EU commission found preliminarily that since Google is unlikely to change its behavior, only the "mandatory divestment" of part of its services would address competition concerns. All told, Google has accumulated 8.25 billion euros ($9.12 billion) in EU antitrust fines over the last ten years.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/google-loses-its-seven-year-fight-against-27-billion-eu-antitrust-fine-090638804.html?src=rss

UK watchdog claims Google’s ad tech practices are harming competition

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Google is facing yet more scrutiny over its ad tech practices after the UK’s competition watchdog provisionally found that the company is abusing its dominant market position. In a statement of objections, the Competition and Markets Authority said Google is harming competition in the country “by using its dominance in online display advertising to favor its own ad tech services.”

The watchdog contends that, since 2015, Google has taken advantage of its dominant position in the sector as the operator of the Google Ads and DV260 ad-buying tools and DoubleClick For Publishers, a publisher ad server, to bolster its AdX advertising exchange. The CMA said that AdX is at the heart of the company's ad tech stack and it's the platform on which it charges the highest fees to advertisers — approximately 20 percent of each bid for ad space that's processed there.

The CMA provisionally found that "the vast majority of publishers and advertisers use Google’s ad tech services in order to bid for and sell advertising space" on websites. By preferencing its own services, "Google disadvantages competitors and prevents them competing on a level playing field to provide publishers and advertisers with a better, more competitive service that supports growth in their business," the CMA stated.

The statement of objections gives Google a chance to provide feedback and the CMA will consider those representations before it makes any final decision. A case decision group comprising three people (none of whom were involved in the preliminary investigation or sending the statement of objections). If the CMA ultimately determines that Google has infringed competition rules, it can fine the company up to 10 percent of its global annual revenue and order legally binding changes to the ad tech business.

Google disagrees with the decision and “will respond accordingly,” Dan Taylor, vice president of Google Ads, said. “Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” Taylor told CNBC in a statement. “Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector. The core of this case rests on flawed interpretations of the ad tech sector.”

Regulators elsewhere have taken aim at Google's position in the ad tech space. The European Commission accused the company of "abusive practices" in the online ad space in June last year. The EC said that a potential order for Google to implement remedies may not be enough to resolve those practices. That could lead to the EU breaking up Google's ad business.

Meanwhile, the Department of Justice and Google are set to go head-to-head in a trial that will start on Monday. The agency has called for the company's ad tech business to be broken up, citing an alleged illegal monopoly Google holds in that market. Google failed in an attempt to have the case dismissed. Last month, a federal judge ruled that Google illegally abused a monopoly over the search industry following a trial that stemmed from a separate DOJ lawsuit.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/uk-watchdog-claims-googles-ad-tech-practices-are-harming-competition-144944451.html?src=rss

New Mexico sues Snap over its alleged failure to protect kids from sextortion schemes

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New Mexico's attorney general has filed a lawsuit against Snap, accusing the company of failing to protect children from sextortion, sexual exploitation and other harms on Snapchat. The suit contends that Snapchat's features "foster the sharing of child sexual abuse material (CSAM) and facilitate child sexual exploitation."

The state's Department of Justice carried out a months-long investigation into Snapchat and discovered a “vast network of dark web sites dedicated to sharing stolen, non-consensual sexual images from Snap.” It claims to have found more than 10,000 records related to Snap and child sexual abuse material “in the last year alone,” and says Snapchat was "by far" the biggest source of images and videos on the dark web sites that it examined.

In its complaint [PDF], the agency accused the app of being “a breeding ground for predators to collect sexually explicit images of children and to find, groom and extort them.” It states that "criminals circulate sextortion scripts" that contain instructions on how to victimize minors. It claims that these documents are publicly available and are actively being used against victims but they “have not yet been blacklisted by . . . Snapchat.”

Furthermore, investigators determined that many accounts that openly share and sell CSAM on Snapchat are linked to each other through the app's recommendation algorithm. The suit claims "Snap designed its platform specifically to make it addicting to young people, which has led some of its users to depression, anxiety, sleep deprivation, body dysmorphia and other mental health issues."

The Snapchat complaint follows a similar child safety suit that the state filed against Meta last December.

“Our undercover investigation revealed that Snapchat's harmful design features create an environment where predators can easily target children through sextortion schemes and other forms of sexual abuse,” Attorney General Raúl Torrez said in a statement. “Snap has misled users into believing that photos and videos sent on their platform will disappear, but predators can permanently capture this content and they have created a virtual yearbook of child sexual images that are traded, sold and stored indefinitely. Through our litigation against Meta and Snap, the New Mexico Department of Justice will continue to hold these platforms accountable for prioritizing profits over children's safety.”

A Snap spokesperson sent the following statement to Engadget:

We have received the New Mexico Attorney General’s complaint, are reviewing it carefully, and will respond to these claims in court. We share Attorney General Torrez’s and the public’s concerns about the online safety of young people and are deeply committed to Snapchat being a safe and positive place for our entire community, particularly for our younger users.

We have been working diligently to find, remove and report bad actors, educate our community, and give teens, as well as parents and guardians, tools to help them be safe online. We understand that online threats continue to evolve and we will continue to work diligently to address these critical issues. We have invested hundreds of millions of dollars in our trust and safety teams over the past several years, and designed our service to promote online safety by moderating content and enabling direct messaging with close friends and family. We continue this work in collaboration with law enforcement, online safety experts, industry peers, parents, teens, educators and policymakers towards our shared goal of keeping young people safe online.

Update September 5, 2024, 3:24PM ET: Added Snap's statement.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/new-mexico-sues-snap-over-its-alleged-failure-to-protect-kids-from-sextortion-schemes-182426135.html?src=rss

The Internet Archive loses its appeal of ebook copyright case ruling

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The Internet Archive is starting to run out of legal options. Wired reports that the non-profit internet cataloguer of videos, games and books lost its appeal in the US Court of Appeals for the Second Circuit. The court rejected Archive.org’s claim in its ongoing lawsuit with several high profile book publishers that its virtual library of books can legally operate under the fair use doctrine.

The lawsuit stems from the online archive’s National Emergency Library (NEL) that launched in March 2020. The NEL helped readers access library materials during the COVID pandemic with digitized copies of books that users could check out one at a time. Sometime later, the Internet Archive allowed users to check out an unlimited number of e-books and authors like Colson Whitehead and Neil Gaiman as well as the Authors Guild condemned the NEL, according to NPR.

The website reinstated the book borrowing caps but it didn’t stop publishers like Hachette Book Group, HarperCollins and Random House from filing a lawsuit the following June. Less than three years later, a federal judge ruled in favor of the plaintiffs declaring the non-profit website violated the publishers’ copyright protections.

The only upside for Archive.org’s appeal is the court’s recognition of the Internet Archive as a non-commercial entity. The Internet Archive still faces a separate copyright infringement lawsuit over its music digitization projects brought by Universal Music Group and Sony last year.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/the-internet-archive-loses-its-appeal-of-ebook-copyright-case-ruling-202452279.html?src=rss