Tag Archives: Company Legal & Law Matters

DC’s antitrust case against Amazon comes back to life

Posted on by

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

X is closing its operations in Brazil immediately, but its service will remain live for users

Posted on by

X says it's ending business operations in Brazil effective immediately, but the service will remain available to users in the country. The company says Alexandre de Moraes, the president of the Superior Electoral Court and a justice of the Supreme Federal Court, threatened one of X's legal representatives with arrest if it did not "comply with his censorship orders." 

According to Reuters, de Moreas demanded that X remove certain content from its platform. Rather than comply, X has opted to end its local operations "to protect the safety of our staff." 

According to X, de Moraes made the threat in a "secret order," which it shared publicly. X owner Elon Musk claimed that the demand "would require us to break (in secret) Brazilian, Argentinian, American and international law." He added that, "The decision to close the 𝕏 office in Brazil was difficult, but, if we had agreed to @alexandre’s (illegal) secret censorship and private information handover demands, there was no way we could explain our actions without being ashamed."

"Despite our numerous appeals to the Supreme Court not being heard, the Brazilian public not being informed about these orders and our Brazilian staff having no responsibility or control over whether content is blocked on our platform, Moraes has chosen to threaten our staff in Brazil rather than respect the law or due process," X said in a statement on its Global Government Affairs account. "[de Moraes'] actions are incompatible with democratic government. The people of Brazil have a choice to make — democracy, or Alexandre de Moraes."

Musk has been railing against de Moraes for months. In April, he said he would defy orders from the legislator to block certain accounts in Brazil, claiming that they were unconstitutional. In response, de Moraes opened an obstruction of justice inquiry against Musk. X said later in April it would comply with every order issued by Brazil's top courts.

That same month, the House Judiciary Committee released an interim staff report claiming that the Brazilian government was trying to force X (and other social media platforms) to censor more than 300 accounts. It said that the accounts included those belonging to former Brazil president Jair Bolsonaro, a member of the country's federal senate and a journalist.

X does not have a public relations team that can be reached for comment.

This article originally appeared on Engadget at https://www.engadget.com/social-media/x-is-closing-its-operations-in-brazil-immediately-but-its-service-will-remain-live-for-users-165224020.html?src=rss

San Francisco aims to take down AI undressing websites in new lawsuit

Posted on by

San Francisco City Attorney David Chiu announced he intended to shut down 16 of the most popular AI “undressing” sites at a press conference on Thursday.

The Verge reported that the City Attorney is accusing these sites of violating federal laws regarding revenge pornography, deepfake pornography and child pornography. Chiu’s office also accused the sites of violating the state of California’s unfair competition law because “the harm they cause to consumers greatly outweighs any benefits associated with those practices,” according to the complaint for injunctive relief filed in a California superior court.

The complaint focuses on a total of 50 defendants Chiu intends to prosecute for operating undressing websites. Some of the defendants’ and websites’ names were redacted but it also publicly identifies a few companies that operate “some of the world’s most popular websites that offer to nudify images of women and girls” such as Sol Ecom located in Florida, Briver in New Mexico and the UK-based Itai Tech Ltd. The only identified defendant in the complaint is Augustin Gribinets of Estonia, who is accused of owning an AI undressing site featuring unconsented images of women and children.

These websites have generated over 200 million visits in a six-month period. The nonconsensual images of women and children on these sites “are used to bully, threaten and humiliate women and girls” as they gain more visitors “and this distressing trend shows no sign of abating,” according to the complaint.

The city’s attorney cites one case in its legal complaint from February in which an AI undressing site generated images of 16 eighth grade students at a California middle school. The incident possibly refers to one that occurred at a Beverly Hills high school in which 16 students were circulating fake nude images of other students. The school district expelled five students for their involvement in disseminating the illicit images, according to the Los Angeles Times.

Deepfake technology has become a major legal concern especially on the federal level. Last month, the US Copyright Office published a report on digital replicas and concluded that “a new law is needed.” Just a few days later, a bipartisan group of senators introduced the NO FAKES Act that would institute a new law protecting individuals from having their voice, face or body recreated with AI without their consent.

This article originally appeared on Engadget at https://www.engadget.com/ai/san-francisco-aims-to-take-down-ai-undressing-websites-in-new-lawsuit-185202792.html?src=rss

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

Posted on by

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

Google and Meta reportedly teamed up for ads targeting young teens

Posted on by

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 sues advertisers for ‘illegal boycott’ of the platform

Posted on by

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

The Morning After: US judge rules that Google ‘is a monopolist’ in search

Posted on by

A federal judge ruled that Google has illegally abused its monopoly over the search industry. The ruling follows a 10-week trial held in 2023, which followed a 2020 lawsuit.

Judge Amit Mehta of the US District Court for the District of Columbia wrote in the ruling that the company had acted “to maintain its monopoly.”

The lawsuit claimed that Google illegally acted to maintain its dominant position in search through behavior like paying Apple, Samsung and Mozilla billions of dollars a year to be the default search engine on smartphones, browsers and elsewhere. The DOJ argued Google is responsible for almost 90 percent of web searches.

Mehta has not imposed any remedies on Google yet, but he could demand it change how it operates or even sell parts of the business. Google plans to appeal.

— Mat Smith

Neuralink successfully implants its chip into a second patient’s brain

NVIDIA’s AI team reportedly scraped YouTube, Netflix videos without permission

Elon Musk drags OpenAI into federal court

​​You can get these reports delivered daily direct to your inbox. Subscribe right here!

Apple dropped the fifth developer beta, and with it comes a few changes to Safari and Photos. Specifically, Apple’s browser gets Distraction Control. It’s not quite an ad blocker, but it could be even more useful for sites with video embeds, moving elements and other chaos. Press the Page Menu button in the Search field (where the Reader and Viewer buttons are) and tap Hide Distracting Items to select which parts of a page you want to filter out. If something you’ve chosen to block, like a headline or an ad, changes in any way, it will resurface upon your next visit.

Apple also used the update to rewind its Photos app redesign, something I wasn’t super keen on in my preview of the iOS beta.

Continue reading.

TMA
HBO

HBO has released the first teaser for The Last of Us season two. It starts with Joel (Pedro Pascal) in conversation with a new character played by Catherine O’Hara (seemingly his therapist), reckoning with his past actions. It’s set to broadcast in 2025.

Watch here.

TMA
Engadget

I won’t be taking questions at this time.

Continue reading.

This article originally appeared on Engadget at https://www.engadget.com/general/the-morning-after-us-judge-rules-that-google-is-a-monopolist-in-search-111531098.html?src=rss

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

Posted on by

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

CrowdStrike says Delta’s woes aren’t its fault after massive IT outage

Posted on by

CrowdStrike has taken a lot of flak over the enormous IT outage that brought much of the planet's computer systems to a halt last month. One thing that the company isn't willing to accept full blame for though is Delta's severe flight troubles.

Delta CEO Ed Bastian said last week the company had "no choice" but to seek damages. The airline canceled more than 5,000 flights and said it was looking at a cost of over $500 million in lost revenue and compensation to passengers.

However, CrowdStrike claims it offered Delta assistance several times only to be rebuffed. "CrowdStrike worked tirelessly to help its customers restore impacted systems and resume services to their customers," CrowdStrike lawyer Michael Carlinsky wrote in a letter to his counterpart at Delta. "Within hours of the incident, CrowdStrike reached out to Delta to offer assistance and ensure Delta was aware of an available remediation. Additionally, CrowdStrike's CEO personally reached out to Delta's CEO to offer onsite assistance, but received no response."

Carlinsky goes on to state that if Delta does pursue legal action, it will have to explain "why Delta's competitors, facing similar challenges, all restored operations much faster" and why it rejected free onsite help from CrowdStrike technicians "who assisted many other customers to restore operations much more quickly than Delta." The lawyer adds that CrowdStrike's liability is contractually capped "in the single-digit millions."

CrowdStrike's public relations team made similar comments last week about Delta turning down "our repeated efforts to assist it in a speedy recovery.” However, a formal letter from the company's lawyer holds a bit more weight, especially amid the threat of legal action.

This article originally appeared on Engadget at https://www.engadget.com/transportation/crowdstrike-says-deltas-woes-arent-its-fault-after-massive-it-outage-181803828.html?src=rss

Elon Musk drags OpenAI into federal court

Posted on by

Here we go again. Elon Musk has filed another lawsuit against OpenAI and the company's CEO Sam Altman, two months after withdrawing a previous one. Musk once again alleges that OpenAI breached its founding commitments by putting commercial concerns ahead of the public good.

This time around, though, the suit has been filed in federal court rather than in a state court. That's because the new filing alleges that OpenAI violated federal racketeering laws by conspiring to defraud Musk, according to his lawyer, Marc Toberoff. “The previous suit lacked teeth — and I don’t believe in the tooth fairy,” Toberoff told The New York Times. “This is a much more forceful lawsuit.”

The latest suit claims that Altman and fellow OpenAI founder Greg Brockman knowingly misled Musk when the trio (and others) formed the company. It alleges that Altman and Brockman walked back on their pledge to open source OpenAI's tech by instead granting Microsoft an exclusive license to it. Microsoft has invested billions of dollars into OpenAI's for-profit subsidiary and holds a 49 percent stake (the FTC is said to be investigating those business dealings).

Furthermore, Musk has asked the court to determine whether OpenAI has achieved artificial general intelligence (AGI), a form of AI that's the equivalent of a human brain. Altman said in January that AGI could be developed in the “reasonably close-ish future.”

Per the suit, Microsoft's contract with OpenAI stipulates that once the latter has reached AGI, it can no longer use the company's tech. If OpenAI has reached AGI in the eyes of the court, then its pact with Microsoft should be declared null and void, according to the filing.

Musk filed the original suit in February. He withdrew it in June, one day before a judge was set to rule on OpenAI's request to dismiss it, but did not provide a reason for doing so.

In a response to the original suit, which it claimed was "incoherent," OpenAI says it aimed to serve the public good by creating AGI. It claims that it needed far more resources than initially thought to do so. The company added that it (and Musk) agreed that a for-profit arm was required to accrue enough resources. However, the parties disagreed on how to go about this, according to OpenAI. The company said Musk wanted full control or for OpenAI to merge with Tesla. Musk ultimately left OpenAI and eventually went on to start his own AI company, xAI.

This article originally appeared on Engadget at https://www.engadget.com/elon-musk-drags-openai-into-federal-court-152709507.html?src=rss