Tag Archives: Business

DC’s antitrust case against Amazon comes back to life

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An appeals court has revived an antitrust lawsuit against Amazon filed by the Attorney General of Washington, DC more than three years ago. The online retailer must now face allegations that it illegally raised prices for consumers.

The lawsuit was originally filed in 2021 and cited Amazon’s practices related to third-party sellers on its platform. Specifically, it called out a provision in the company’s agreements with third-party sellers that allowed it to punish businesses that offered its products at lower prices on non-Amazon platforms. Karl Racine, the AG at the time, said these agreements allowed the company to “impose an artificially high price floor across the online retail marketplace.” Racine later expanded the case to include Amazon’s pricing tactics for wholesalers.

Amazon has disputed those allegations, and the case was dismissed in 2022. But an appeals court has now reversed that decision. “Viewed as a whole, the District’s allegations about Amazon’s market share and maintenance of its market power through the challenged agreements plausibly suggest that Amazon either already possesses monopoly power over online marketplaces or is close to a ‘dangerous probability of achieving monopoly power,’” the judge wrote.

“We disagree with the District of Columbia’s allegations and look forward to presenting facts in court that demonstrate how good these policies are for consumers," Amazon spokesperson Tim Doyle told Engadget in a statement. "Just like any store owner who wouldn’t want to promote a bad deal to their customers, we don’t highlight or promote offers that are not competitively priced. It’s part of our commitment to featuring low prices to earn and maintain customer trust, which we believe is the right decision for both consumers and sellers in the long run.”

The reversal adds to Amazon’s antitrust woes. The company is also facing a lawsuit from the Federal Trade Commission and more than a dozen states. The UK’s antitrust regulator has also opened an investigation centered around the company’s $4 billion investment into Anthropic.

In a statement, DC's current AG Brian Schwalb noted that the district “was the first jurisdiction to take antitrust enforcement action” against the company. “Now, our case will move forward, and we will continue fighting to stop Amazon’s unfair and unlawful practices that have raised prices for District consumers and stifled innovation and choice across online retail.”

Update, August 22 2024, 7:13 PM ET: This story has been updated to include a statement from Amazon.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/dcs-antitrust-case-against-amazon-comes-back-to-life-194314355.html?src=rss

Texas judge blocks the FTC from enforcing its ban on noncompete agreements

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The Federal Trade Commission's (FTC) efforts to ban noncompete agreements has been blocked by a federal judge in Texas. According to The Washington Post, US District Judge Ada Brown has determined that the agency doesn't have the authority to enforce the rule, which was supposed to take effect on September 4. She reportedly wrote in her decision that the FTC only looked at "inconsistent and flawed empirical evidence" and didn't consider evidence in support of noncompetes. "The role of an administrative agency is to do as told by Congress, not to do what the agency thinks it should do," she added. 

FTC Chair Lina M. Khan explained that "noncompete clauses keep wages low, suppress new ideas, and rob the American economy of dynamism" when the agency voted 3-2 in favor of the ban. Noncompete agreements are widely used in the tech industry, and preventing companies from adding them to contracts would mean that workers will be able to freely move to a new job or start a business in the same field. The two Republican commissioners in the FTC, Melissa Holyoak and Andrew Ferguson, voted against the ban and also said that the agency "overstepped the boundaries of its power."

In July, Brown temporarily blocked the rule's enforcement to assess the lawsuit filed by Dallas tax services firm Ryan LLC mere hours after the FTC announced the ban. The US Chamber of Commerce and other groups of American businesses eventually joined the tax firm in challenging the new rule on noncompete clauses. 

"We are disappointed by Judge Brown's decision and will keep fighting to stop noncompetes that restrict the economic liberty of hardworking Americans, hamper economic growth, limit innovation, and depress wages," FTC spokesperson Victoria Graham told The Post. "We are seriously considering a potential appeal, and today's decision does not prevent the FTC from addressing noncompetes through case-by-case enforcement actions."

A federal judge in Florida also blocked the rule last week, though only for the lawsuit's plaintiffs. Meanwhile, another judge in Pennsylvania ruled last month that the agency has the authority to enforce the ban in a separate case filed by a tree-care company in the state. All three cases could still be appealed and could even make their way to the Supreme Court. 

This article originally appeared on Engadget at https://www.engadget.com/general/texas-judge-blocks-the-ftc-from-enforcing-its-ban-on-noncompete-agreements-133059676.html?src=rss

OpenAI will now use content from Wired, Vogue and The New Yorker in ChatGPT’s responses

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Condé Nast, the media conglomerate that owns publications like The New Yorker, Vogue and Wired, has announced a multi-year partnership OpenAI to display content from Condé Nast titles in ChatGPT as well as SearchGPT, the company’s prototype AI-powered search engine. The partnership comes amid growing concerns over the unauthorized use of publishers’ content by AI companies. Last month, Condé Nast sent a cease-and-desist letter to AI search startup Perplexity, accusing it of plagiarism for using its content to generate answers.

“Over the last decade, news and digital media have faced steep challenges as many technology companies eroded publishers’ ability to monetize content, most recently with traditional search,” Condé Nast CEO Roger Lynch wrote to employees in a memo that was first reported by Semafor’s Max Tani. “Our partnership with OpenAI begins to make up for some of that revenue, allowing us to continue to protect and invest in our journalism and creative endeavors.” It's not clear how much money OpenAI will pay Condé Nast for the partnership. 

The move makes Condé Nast the latest in a growing line of publishers who have struck deals with OpenAI. These include News Corp, Vox, The Atlantic, TIME and Axel Springer among others. But not everyone is on board with the idea. Last year, the New York Times filed a lawsuit against OpenAI for using information from the publisher’s articles in ChatGPT’s responses.

Lynch has been vocal about these concerns. In January, he warned that “many” media companies could face financial ruin by the time it would take for litigations against AI companies to conclude and called upon Congress to take “immediate action" to take "immediate action" and clarify that publishers must be compensated by AI companies for both training and output if they use their content. Earlier this month, three senators introduced the COPIED ACT, a bill that aims to protect journalists and artists from having their content scraped by AI companies without their permission.

Perplexity, which was recently accused by Forbes and Wired of stealing content, now plans to share a portion of potential advertising revenues with publishers who sign up for a newly-launched Publishers’ Program.

This article originally appeared on Engadget at https://www.engadget.com/ai/openai-will-now-use-content-from-wired-vogue-and-the-new-yorker-in-chatgpts-responses-193057432.html?src=rss

Former Twitter chairman is suing X for $20 million over pay he says was ‘wrongfully withheld’

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Omid Kordestani, who was Twitter’s executive chairman from 2015 to 2020 and served on the board until Elon Musk acquired it in 2022, is suing X over $20 million worth of shares he says the company is refusing to pay. Kordestani filed the lawsuit on Friday with a California superior court.

Per the lawsuit, Kordestani left a high paying job at Google to join Twitter, which offered him a “significantly lower” salary of just $50,000 but sweetened the deal with stock options, performance-based restricted stock units and restricted stock units. These — amounting to $20,112,000 — were supposed to have been paid out when Musk acquired Twitter and replaced the board, but X has failed to do so, according to the lawsuit. “X Corp. seeks to reap the benefits of Mr. Kordestani’s seven years of service to Twitter without paying him for it, despite clear contractual language requiring X Corp. to do so,” it says.

Multiple lawsuits have been filed in the wake of Musk’s Twitter acquisition from employees alleging they were not paid properly after they were laid off or fired. Former Twitter executives sued Musk and X earlier this year, claiming they were fired “without reason” and are owed millions of dollars in unpaid severance. The latest lawsuit says that “Mr. Kordestani is one of many former Twitter employees whose compensation has been wrongfully withheld by X Corp. following Elon Musk’s purchase of the Company in October 2022.”

This article originally appeared on Engadget at https://www.engadget.com/big-tech/former-twitter-chairman-is-suing-x-for-20-million-over-pay-he-says-was-wrongfully-withheld-155407305.html?src=rss

The Morning After: Instagram endorses the photo dump

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Just in time for summer vacation jealousy baiting, Instagram has doubled the number of photos and videos users can share in a carousel post, from 10 to 20. In a way, this harkens back to the late 2000s era of photo dumps on Facebook, probably involving an SD card from your digital camera. The update is rolling out to all Instagram users worldwide from today.

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Borderlands

The Borderlands movie, based on the violent treasure-hunting comedy adventure, premiers today. Courtesy of reviews, you may want to steer clear: Rotten Tomatoes rounded up 34 reviews of Eli Roth’s adaptation, and so far, it’s earned a freshness rating of 3 percent. Despite Cate Blanchett. 

Cate Blanchett!

An ad industry group named in X’s antitrust lawsuit is “discontinuing,” two days after the social media company filed a lawsuit accusing major advertisers of an “illegal boycott” against the company. The Global Alliance for Responsible Media (GARM) is “discontinuing activities,” according to an email seen by Business Insider. Members were told that GARM is a nonprofit with limited resources, but that the groups planned on fighting the lawsuit.

Continue reading.

Microsoft is teaming up with data analytics company Palantir, which has been accused of enabling the US Immigration and Customs Enforcement (ICE) to operate “as a domestic surveillance agency.” Bloomberg reports Palantir will integrate its products with Microsoft’s government cloud tools, including the Azure OpenAI service, “in a bid to sell software” to US defense agencies. Happy Friday, everyone.

Continue reading.

This article originally appeared on Engadget at https://www.engadget.com/general/the-morning-after-instagram-endorses-the-photo-dump-111504236.html?src=rss

One of the ad industry groups being sued by X is ‘discontinuing’

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An ad industry group named in X’s antitrust lawsuit is “discontinuing,” two days after the social media company filed a lawsuit accusing major advertisers of an “illegal boycott” against the company. The Global Alliance for Responsible Media (GARM) is “discontinuing activities,” according to an email reported by Business Insider.

GARM was created in 2019 to help set brand safety guidelines for major advertisers, and is part of the World Federation of Advertisers (WFA), which was also named in X’s lawsuit. According to Business Insider, WFA CEO Stephan Loerke told members that GARM is a nonprofit with limited resources, but that the groups planned on fighting the lawsuit.

X CEO Linda Yaccarino said the news was “an important acknowledgement and a necessary step in the right direction” in a statement on X. The company’s lawsuit, which was filed in Texas, claims that the WFA, GARM and a handful of major advertisers “conspired … to collectively withhold billions of dollars in advertising revenue from Twitter.” X faced steep declines in its ad revenue over the last two years as advertisers have pulled back following multiple reports about hate speech and antisemitic content on the platform.

GRAM was previously named in a House Judiciary Committee report that alleged the group had an “anti-conservative bias” and engaged in "anti-competitive" behavior. It has called those allegations “unfounded.” In a statement on its website earlier this week, the group pointed out that it was formed in the wake of a mass shooting that was streamed live on Facebook, with the goal of addressing the monetization of harmful content online. “Suggestions that GARM practices may impinge on free speech are a deliberate misrepresentation of GARM’s work,” it wrote. “GARM is not a watchdog or lobby. GARM does not participate in or advocate for boycotts of any kind.”

This article originally appeared on Engadget at https://www.engadget.com/big-tech/one-of-the-ad-industry-groups-being-sued-by-x-is-discontinuing-192721024.html?src=rss

Google and Meta reportedly teamed up for ads targeting young teens

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Google worked with Meta to roll out ads that targeted young teens even if it's against the former's rules, according to the Financial Times. Based on the documents seen by the publication, Google worked on a marketing project designed to advertise Instagram to YouTube users within the 13- to 17-year-old age range. Google had blocked age-based ad targeting for users under 18 years ago, but the company reportedly found and used a loophole. 

Since they couldn't go for the demographic they wanted to reach, they instead targeted a group of users Google had labeled as "unknown." Google's staff proposed the group to Meta, The Times said, because the company had data points to prove that a large number of users under the label are below 18 years in age. The company even reportedly told Meta that the daily engagement it gets from 13- to 17-year-old users exceeds TikTok's and Instagram's. The Information says using this loophole is against Google's rules, as well, since it has policies against proxy targeting. 

Meta and Google worked with media agency Spark Foundry to launch the marketing program in Canada between February and April, according to the report. When it did well, they kicked off a trial in the US in May and had made plans to expand it to other regions, as well as to include other Meta apps in the campaign. 

However, Google had investigated and ultimately cancelled the project after being contacted by the Times. "We prohibit ads being personalized to people under-18, period," the company told the publication. It said that its safeguards worked properly in this case because it didn't directly target registered YouTube users know to be 18. That said, it didn't outright deny using the loophole and only said that it will take "additional action to reinforce with sales representatives that they must not help advertisers or agencies run campaigns" that attempt to work around its policies.

This article originally appeared on Engadget at https://www.engadget.com/social-media/google-and-meta-reportedly-teamed-up-for-ads-targeting-young-teens-130024683.html?src=rss

X accused of using EU user data to train Grok without consent

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Ireland's Data Protection Commission (DPC) is taking Elon Musk's X to court. According to Irish broadcaster RTE, the commission has launched High Court proceedings against Twitter International over concerns on how Europeans' public posts on X are being used to train the company's artificial intelligence tools. The data protection watchdog is especially worried that European users' data is being used to train the next version of Grok that Musk previously said will be released sometime this month. 

In July, X rolled out a change that automatically activated a setting for all users, allowing the website to use their public posts on the platform to train its AI chatbot further. The commission told TechCrunch that it was surprised by X's decision, seeing as it has been in contact with the company on the matter for months. X has had a help page instructing users on how to opt out of their data being used for AI training since at least May, but it didn't exactly tell them that it's switching on its access to people's data by default. 

The DPC has acknowledged that X had given people the mechanism to opt out. However, it reportedly isn't enough for the agency, which argued that there's still a significant number of European-based X users whose data had been processed without being afforded the protection of those mitigation measures. X's use of people's data to train Grok violates its obligations under the EU's General Data Protection Regulation (GDPR), according to the commission. Not offering users an opt-out mechanism in a timely manner also violates the GDPR, it added. 

As TechCrunch notes, there must be at least one legal basis for a European user's data to be lawfully processed under the GDPR. If a company wants to legally process a user's data, for instance, it must get their express consent, or it must be because the user needs to fulfill contractual obligations. There are other lawful purposes wherein a person's data could be used, but the DPC's complaint indicates that it doesn't believe X has any legal basis for its actions. 

Twitter International, X's Irish division, also reportedly refused to stop processing users' data and to delay the launch of the next version of Grok as the commission had requested. That's why the DPC has decided to push through with its complaint — so that it can ask the court to suspend or completely prohibit the company from training any AI system with X users' data. If the court determines that X has indeed violated GDPR rules, the company could be fined up to 4 percent of its annual worldwide turnover. 

After the DPC brought its complaint to court, though, X agreed to stop using some European users' data for training, at least for the moment. In particular, it agreed not to use public posts made by Europe-based users gathered between May 7 and August 1. The "developments will help us to continue protecting the rights and freedoms of X users across the EU and [the European Economic Area]," Data Protection Commissioner Des Hogan said. The agency isn't withdrawing its lawsuit, however, and the DPC will continue investigating whether X's actions had violated the GDPR. 

Update, August 09, 2024, 9:39AM ET: This posted was updated to reflect new information that X agreed to pause the use of some European users' data for Grok training. 

This article originally appeared on Engadget at https://www.engadget.com/ai/x-accused-of-using-eu-user-data-to-train-grok-without-consent-133042114.html?src=rss

X sues advertisers for ‘illegal boycott’ of the platform

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X, whose top executives have long railed against advertisers who fled the platform amid concerns over hate speech, is now also suing them. X has filed an antitrust lawsuit against the Global Alliance for Responsible Media (GARM) and several of its members, including Mars, Unilever and CVS Health, CEO Linda Yaccarino said in an open letter shared on X.

According to Yaccarino, the group engaged in an “illegal boycott” of X. “The consequence - perhaps the intent - of this boycott was to seek to deprive X’s users, be they sports fans, gamers, journalists, activists, parents or political and corporate leaders, of the Global Town Square,” she wrote.

As Axios points out, GARM is part of the World Federation of Advertisers (which is also named in the lawsuit) and was created to come up with brand safety guidelines for online advertisers. The lawsuit alleges that the group “conspired, along with dozens of non-defendant co-conspirators, to collectively withhold billions of dollars in advertising revenue from Twitter.”

GARM didn't immediately respond to a request for comment.

It’s not the first time X has filed a lawsuit against a group that Musk has accused of stoking an advertiser exodus from the platform. The company previously sued the Center Countering Digital Hate (CCDH), an anti-hate group that published research showing that X failed to take down hateful posts shared by premium subscribers. That lawsuit was later dismissed by a judge who said X was trying to “punish” the group for sharing unflattering research. X is also suing Media Matters, a watchdog group that published a report showing X had displayed ads alongside anti-Semitic content.

“We tried being nice for 2 years and got nothing but empty words,” Musk, who nearly a year ago publicly told advertisers to “go fuck themselves," wrote in a post on Tuesday. “Now, it is war.”

This article originally appeared on Engadget at https://www.engadget.com/big-tech/x-sues-advertisers-for-illegal-boycott-of-the-platform-173100888.html?src=rss

Google ‘is a monopolist’ in search, US judge rules in antitrust case

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Google is in deep trouble after a federal judge ruled that the company illegally abused a monopoly over the search industry. The ruling follows a 10-week trial held in 2023 that stemmed from a 2020 lawsuit filed by the Department of Justice and several states. 

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Judge Amit Mehta of the US District Court for the District of Columbia wrote in the ruling. "It has violated Section 2 of the Sherman Act."

Mehta has not imposed any remedies on Google at the time of writing. The judge may order Google to change how it operates or even sell parts of its business. 

The lawsuit claimed that Google illegally acted to maintain its dominant position in search through a number of actions, such as paying the likes of Apple, Samsung and Mozilla billions of dollars per year to be the default search engine on their phones and web browsers. The DOJ argued that Google facilitates almost 90 percent of web searches and that by paying to be the default option, it prevented rivals from achieving the kind of scale needed to compete. As such, Google is deemed to benefitted in terms of both revenue and data collection.

"Those search access points are preset with a 'default' search engine," the ruling reads. "The default is extremely valuable real estate. Because many users simply stick to searching with the default, Google receives billions of queries every day through those access points. Google derives extraordinary volumes of user data from such searches. It then uses that information to improve search quality."

According to Mehta, Google has acknowledged that losing its position as the default search engine on various platforms would harm its bottom line. "For instance, Google has projected that losing the Safari default would result in a significant drop in queries and billions of dollars in lost revenues," the ruling states. 

Google released the following statement from Kent Walker, President of Global affairs, on X regarding the judge's decision:

"This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available. We appreciate the Court’s finding that Google is ‘the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,’ that Google ‘has long been the best search engine, particularly on mobile devices,’ ‘has continued to innovate in search’ and that ‘Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior.’ Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal. As this process continues, we will remain focused on making products that people find helpful and easy to use.”

During the trial, Google argued that its significant slice of market share was due to having a better product that consumers appreciated. 

In addition, the DOJ claimed that Google held a monopoly over ads that appear in search results. It argued that Google artificially inflated the prices of ads beyond what they'd cost in a free market.

In his ruling, Mehta agreed that "Google has exercised its monopoly power by charging supracompetitive prices for general search text ads. That conduct has allowed Google to earn monopoly profits." However, the judge added that Google does not hold monopoly power in the broader market of search advertising.

Meanwhile, Mehta declined to impose sanctions on Google for failing to preserve employee chat messages that may have been pertinent to the case. The ruling notes that, since 2008, Google deletes chat messages between its employees by default after 24 hours.

"The court’s decision not to sanction Google should not be understood as condoning Google’s failure to preserve chat evidence," Mehta wrote. "Any company that puts the onus on its employees to identify and preserve relevant evidence does so at its own peril. Google avoided sanctions in this case. It may not be so lucky in the next one."

Google and the DOJ are set to return to federal court in September over an ad tech case.

Update, August 5 2024, 4:40PM ET: This story was updated to include Google's statement on the ruling.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/google-is-a-monopolist-in-search-us-judge-rules-in-antitrust-case-193358356.html?src=rss