Tag Archives: Company Legal & Law Matters

AI startup argues scraping every song on the internet is ‘fair use’

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When most tech companies are challenged with a lawsuit, the expected defense is to deny wrongdoing. To give a reasonable explanation of why the business' actions were not breaking any laws. Music AI startups Udio and Suno have gone for a different approach: admit to doing exactly what you were sued for.

Udio and Suno were sued in June, with music labels Universal Music Group, Warner Music Group and Sony Music Group claiming they trained their AI models by scraping copyrighted materials from the Internet. In a court filing today, Suno acknowledged that its neural networks do in fact scrape copyrighted material: "It is no secret that the tens of millions of recordings that Suno’s model was trained on presumably included recordings whose rights are owned by the Plaintiffs in this case." And that's because its training data "includes essentially all music files of reasonable quality that are accessible on the open internet," which likely include millions of illegal copies of songs. 

But the company is taking the line that its scraping falls under the umbrella of fair use. "It is fair use under copyright law to make a copy of a protected work as part of a back-end technological process, invisible to the public, in the service of creating an ultimately non-infringing new product," the statement reads. Its argument seems to be that since the AI-generated tracks it creates don't include samples, illegally obtaining all of those tracks to train the AI model isn't a problem.

Calling the defendants' actions "evading and misleading," the RIAA, which initiated the lawsuit, had an unsurprisingly harsh response to the filing. "Their industrial scale infringement does not qualify as ‘fair use’. There’s nothing fair about stealing an artist’s life’s work, extracting its core value, and repackaging it to compete directly with the originals," a spokesperson for the organization said. "Defendants had a ready lawful path to bring their products and tools to the market – obtain consent before using their work, as many of their competitors already have. That unfair competition is directly at issue in these cases."

Whatever the next phase of this litigation entails, prepare your popcorn. It should be wild.

This article originally appeared on Engadget at https://www.engadget.com/ai/ai-startup-argues-scraping-every-song-on-the-internet-is-fair-use-233132459.html?src=rss

The Republican National Committee loses its legal challenge to Gmail

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A federal judge dismissed a case brought by the Republican National Committee (RNC) against Google over its Gmail service. The suit alleged that Google’s email platform labeled GOP fundraising emails as spam at a higher rate than those from the other side of the aisle.

District Court Judge Daniel Calabretta from the Eastern California District Court dismissed the case with prejudice, preventing the Republican party from bringing its case against Google back to court. The dismissal with prejudice means it cannot bring the case to another court but can still file an appeal to Calabretta’s decision, according to The Verge.

Calabretta wrote in his dismissal order that the RNC failed to state a claim under “any legislative policy” or prove there was “sufficient harm to users of Gmail.”

“The RNC has not shown Google’s alleged conduct has violated any other law, which is a necessary element of intentional interference with economic relations,” Calabretta wrote in his dismissal order. “Accordingly, the court grants Google’s motion to dismiss, this time with prejudice.” Calabretta had previously dismissed the case without prejudice.

Thursday’s ruling marks the second case that the RNC has lost over allegations of unfair filtering by Gmail. The RNC filed a lawsuit in the same court in 2022 seeking damages from Google for “donations it allegedly lost as a result” of labeling fundraising emails as spam. Calabretta called the lawsuit a “close case” but ultimately ruled that the RNC “failed to plausibly allege its claims” that Google’s spam filtering was committed in bad faith, according to court filings.

This article originally appeared on Engadget at https://www.engadget.com/the-republican-national-committee-loses-its-legal-challenge-to-gmail-184122392.html?src=rss

The Republican National Committee loses its legal challenge to Gmail

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A federal judge dismissed a case brought by the Republican National Committee (RNC) against Google over its Gmail service. The suit alleged that Google’s email platform labeled GOP fundraising emails as spam at a higher rate than those from the other side of the aisle.

District Court Judge Daniel Calabretta from the Eastern California District Court dismissed the case with prejudice, preventing the Republican party from bringing its case against Google back to court. The dismissal with prejudice means it cannot bring the case to another court but can still file an appeal to Calabretta’s decision, according to The Verge.

Calabretta wrote in his dismissal order that the RNC failed to state a claim under “any legislative policy” or prove there was “sufficient harm to users of Gmail.”

“The RNC has not shown Google’s alleged conduct has violated any other law, which is a necessary element of intentional interference with economic relations,” Calabretta wrote in his dismissal order. “Accordingly, the court grants Google’s motion to dismiss, this time with prejudice.” Calabretta had previously dismissed the case without prejudice.

Thursday’s ruling marks the second case that the RNC has lost over allegations of unfair filtering by Gmail. The RNC filed a lawsuit in the same court in 2022 seeking damages from Google for “donations it allegedly lost as a result” of labeling fundraising emails as spam. Calabretta called the lawsuit a “close case” but ultimately ruled that the RNC “failed to plausibly allege its claims” that Google’s spam filtering was committed in bad faith, according to court filings.

This article originally appeared on Engadget at https://www.engadget.com/the-republican-national-committee-loses-its-legal-challenge-to-gmail-184122392.html?src=rss

CPSC says Amazon is responsible for hazardous items from third-party sellers

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The US Consumer Product Safety Commission has determined that Amazon is responsible for hazardous or defective products sold by third-party retailers through its platform. The CPSC unanimously decided that more than 400,000 products sold through the Fulfilled by Amazon program represent a "substantial product hazard," and that the tech giant is legally responsible for their recall. It also said that Amazon failed to properly notify buyers about the faulty products and did not encourage buyers to return or destroy those items.

Today's decision is several years in the making, with the CPSC initially suing Amazon in July 2021. This investigation centered on carbon monoxide detectors that did not function correctly, hair dryers that did not have electrocution safeguards and children's sleepwear that did not meet federal flammability standards. Under the decision and order issued by the agency, Amazon must submit plans to notify customers about these faulty products and take steps for getting them returned or destroyed.

We've reached out to Amazon for comment and will update this post if we hear from the retailer.

The Department of Justice took similar actions against eBay in recent months. In September 2023, the department sued eBay after environmentally unsafe materials were put up for sale on the retailer, and in January 2024, the company paid $59 million for a DoJ settlement over pill press machines.

This article originally appeared on Engadget at https://www.engadget.com/cpsc-says-amazon-is-responsible-for-hazardous-items-from-third-party-sellers-213334907.html?src=rss

Meta will pay $1.4 billion to Texas, settling biometric data collection suit

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Meta has agreed to pay $1.4 billion to the state of Texas in order to resolve a lawsuit that accused the company of illegally using facial recognition technology. The suit alleges that Meta used this tech to collect the biometric data of millions of Texans without consent. The agreement marks the largest financial settlement ever paid out to a single state.

The lawsuit was originally filed in 2022 and was the first big case brought under the state’s Capture or Use of Biometric Identifier Act, which was put into place back in 2009. A provision of this law mandates up to $25,000 per violation and Texas accused Meta of violating the statute “billions of times” via photos and videos that users uploaded to Facebook that were tagged without consent. 

Additionally, the original suit could have led to an additional $10,000 per alleged violation of the Texas Deceptive Trade Practices Act. In other words, Meta just saved itself a bunch of money, considering the sheer number of alleged violations and a maximum financial penalty of $35,000 each.

A spokesperson for Meta told Reuters that it’s happy the matter is settled and that the company is "exploring future opportunities to deepen our business investments in Texas, including potentially developing data centers.” The company, however, continues to deny any wrongdoing, though it has shut down its automated facial recognition system.

Texas Attorney General Ken Paxton is taking something of a victory lap, declaring in an official statement that the state is fully committed to “standing up to the world’s biggest technology companies and holding them accountable for breaking the law and violating” privacy rights. Texas and Meta reached this settlement just weeks before a court trial was set to begin.

“Facebook will no longer take advantage of people and their children with the intent to turn a profit at the expense of one’s safety and well-being,” Paxton said when the suit was originally filed. “This is yet another example of Big Tech’s deceitful business practices and it must stop.”

This isn’t the first time Meta has had to issue a large payout to a state regarding the alleged collection of biometric data. The company agreed to pay Illinois $650 million back in 2020 to settle a similar class action suit. That suit alleged that the company had violated a privacy law that requires companies to get explicit consent before collecting biometric data from users. Once again, Meta denied any wrongdoing.

This article originally appeared on Engadget at https://www.engadget.com/meta-will-pay-14-billion-to-texas-settling-biometric-data-collection-suit-165451338.html?src=rss

Border agents can’t search cellphones of NYC visitors without a warrant, court rules

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A federal court has ruled that United States border agents cannot search cellphones without warrants in the Eastern District of New York. The decision applies to both US citizens and international visitors entering the region, which includes New York City, the most-visited site by overseas travelers.

The case stems from a 2022 incident in which border agents manually searched the phone of a man named Kurbonali Sultanov at JFK Airport in New York. He initially refused and then handed over the device once agents said he had no choice. The phone was later searched more thoroughly with a warrant, but Sultanov moved to suppress evidence obtained during the initial search, claiming it violated his rights. 

Civil liberties groups backed the motion. "As the court recognizes, warrantless searches of electronic devices at the border are an unjustified intrusion into travelers' private expressions, personal associations, and journalistic endeavors — activities the First and Fourth Amendments were designed to protect," said Scott Wilkens, senior counsel at the Knight First Amendment Institute. The court didn't dismiss the evidence, however, claiming the border agents acted in good faith. 

The debate over whether border control agents can search electronic devices has raged for years. In 2017, the American Civil Liberties Union and the Electronic Frontier Foundation filed a lawsuit against the Department of Homeland Security on behalf of 11 individuals who had their phones searched at the border.

This article originally appeared on Engadget at https://www.engadget.com/border-agents-cant-search-cellphones-of-nyc-visitors-without-a-warrant-court-rules-130231682.html?src=rss

Border agents can’t search cellphones of NYC visitors without a warrant, court rules

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A federal court has ruled that United States border agents cannot search cellphones without warrants in the Eastern District of New York. The decision applies to both US citizens and international visitors entering the region, which includes New York City, the most-visited site by overseas travelers.

The case stems from a 2022 incident in which border agents manually searched the phone of a man named Kurbonali Sultanov at JFK Airport in New York. He initially refused and then handed over the device once agents said he had no choice. The phone was later searched more thoroughly with a warrant, but Sultanov moved to suppress evidence obtained during the initial search, claiming it violated his rights. 

Civil liberties groups backed the motion. "As the court recognizes, warrantless searches of electronic devices at the border are an unjustified intrusion into travelers' private expressions, personal associations, and journalistic endeavors — activities the First and Fourth Amendments were designed to protect," said Scott Wilkens, senior counsel at the Knight First Amendment Institute. The court didn't dismiss the evidence, however, claiming the border agents acted in good faith. 

The debate over whether border control agents can search electronic devices has raged for years. In 2017, the American Civil Liberties Union and the Electronic Frontier Foundation filed a lawsuit against the Department of Homeland Security on behalf of 11 individuals who had their phones searched at the border.

This article originally appeared on Engadget at https://www.engadget.com/border-agents-cant-search-cellphones-of-nyc-visitors-without-a-warrant-court-rules-130231682.html?src=rss

California Supreme Court upholds classification of gig workers as independent contractors

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Ride-share companies scored a victory in the California Supreme Court, allowing them to continue classifying gig workers as independent contractors rather than employees. Uber, Lyft, DoorDash and other gig-economy companies invested around $200 million in the passage of Proposition 22, which voters approved in 2020. The state’s highest court rejected a legal challenge from a drivers’ group and a labor union, ending their quest to bring full employee benefits to the state’s gig workers.

The California Supreme Court ruling affirms the state’s definition of drivers and other gig workers as independent contractors. Proposition 22, which received the support of 59 percent of voters in 2020, gives gig workers limited benefits like a baseline income and health insurance for those working at least 15 hours a week. However, it also allows the companies to avoid providing the broad swath of benefits full employees receive.

The Service Employees International Union and a drivers’ group sued to challenge the law after it went into effect in early 2021. Their lawsuit got an early boost from lower courts: An Alameda County Superior Court Justice ruled that year that Proposition 22 was “unconstitutional and unenforceable,” as the LA Times reported. The lower-court judge determined that the law diminished the state Legislature’s power to regulate injury compensation for workers.

However, in 2023, a state appeals court ruled the opposite, that Proposition 22 didn’t impede on the Legislature’s authority. Thursday’s decision upholds that ruling, ending the long saga and leaving the state’s gig workers with fewer benefits than they’d otherwise have. Proposition 22 remained in effect during the legal challenges, so nothing will change in how they’re treated.

Uber, Lyft, DoorDash and other gig-economy companies fought tooth and nail to pass and uphold the law. Four years ago, they invested upwards of $200 million in campaigning for it. They even threatened to pull their businesses from the state if they were forced to classify drivers as employees.

The LA Times reports the decision could influence other states’ laws. Uber has lobbied for similar legislation in other parts of the US. A law in Washington state closely parallels it, and the companies recently settled with the Massachusetts attorney general to provide similar (minimal) benefits to gig workers in that state.

Uber framed the ruling as a victory for upholding the will of the people (well, apart from the gig workers who wanted more benefits and protections). The company described the Supreme Court’s decision as “affirming the will of the nearly 10 million Californians who voted to deliver historic benefits and protections to drivers, while protecting their independence.”

This article originally appeared on Engadget at https://www.engadget.com/california-supreme-court-upholds-classification-of-gig-workers-as-independent-contractors-210735586.html?src=rss

TikTok will still be a ‘gatekeeper’ under the Digital Markets Act, EU rules

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As far as the EU is concerned, TikTok requires strong, ongoing regulations. The EU's General Court dismissed an action brought by TikTok's parent company, ByteDance, which argued that the platform shouldn't be considered a "gatekeeper" under the Digital Markets Act (DMA). The designation came in September 2023, and ByteDance filed to undo it just two months later. 

ByteDance had painted TikTok has an up and comer EU market, citing pushback through the development of Reels and Shorts — the General Court disagrees: "Although in 2018 TikTok was indeed a challenger seeking to contest the position of established operators such as Meta and Alphabet, it had rapidly consolidated its position, and even strengthened that position over the following years, despite the launch of competing services such as Reels and Shorts, to the point of reaching, in a short time, half the size, in terms of number of users within the European Union, of Facebook and of Instagram."

ByteDance had argued that TikTok was not dominant in the EU market, citing Instagram's Reels and YouTube's Shorts as meaningful competition. The General Court disagreed, writing that "although in 2018 TikTok was indeed a challenger seeking to contest the position of established operators such as Meta and Alphabet, it had rapidly consolidated its position ... to the point of reaching, in a short time, half the size ... of Facebook and of Instagram."

The General Court added that TikTok meets the qualifications set out to be a gatekeeper: a €75 million ($82 million) global market value, over 45 million monthly active end users and over 10,000 yearly active business users across the EU over the last three years. 

The DMA went into effect in March and prohibits gatekeepers — including Alphabet, Meta, Amazon and more — from favoring their own platforms or forcing users to stay inside their company's ecosystem. ByteDance has just over two months to launch an appeal with the Court of Justice, the EU's highest court. 

This article originally appeared on Engadget at https://www.engadget.com/tiktok-will-still-be-a-gatekeeper-under-the-digital-markets-act-eu-rules-131534890.html?src=rss

Verizon faces lawsuit after record labels say it profits from piracy

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A group of record labels that include Universal, Capitol, Warner and Sony has filed a lawsuit against Verizon, accusing it of "contributory and vicarious copyright infringement." Verizon "knowingly provides its high-speed service to a massive community of online pirates," the companies said in their complaint. Apparently, the plaintiffs have sent the internet provider "hundreds of thousands" of copyright infringement notices over the past few years, identifying subscribers who've been using Verizon's network to share copyrighted music via peer-to-peer (P2P) file-sharing networks. 

Verizon, they said, acknowledged that it received their notices. The company allegedly chose to ignore them and continued to provide internet services to "thousands of known repeat infringers so it could continue to collect millions of dollars from them." Since it didn't terminate the accounts of the alleged copyright infringers, Verizon "obtained a direct financial benefit" from their "continuing infringing activity," the plaintiffs argued. The labels are asking for damages worth up to $150,000 for each work infringed. Based on the list posted by Ars Technica, 17,335 titles are involved in the case, which means Verizon could be fined for as much as $2.6 billion. 

Back in 2018, music labels also sued Cox Communications for allegedly refusing to fully terminate the accounts of users who were pirating music. A US District Court jury originally sided with the labels and ordered Cox to pay $1 billion in damages. But earlier this year, an appeals court overturned the verdict and found that the provider didn't profit directly from its users' activities. A group of record labels also sued Charter Communications in 2021 over over song piracy and similarly accused the company of turning a "blind eye" to music piracy.

This article originally appeared on Engadget at https://www.engadget.com/verizon-faces-lawsuit-after-record-labels-say-it-profits-from-piracy-133047303.html?src=rss