Tag Archives: Business

The US has sued Adobe over early termination fees and making subscriptions hard to cancel

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The US government has sued Adobe and two senior company executives for allegedly deceiving consumers by hiding early termination fees and making them jump through hoops to cancel subscriptions to Adobe products.

The complaint filed by the Department of Justice on Monday accuses the Adobe of pushing consumers towards its “annual paid monthly” subscription plan without adequately disclosing that canceling the plan within the first year could result in an early termination fee. The complaint also alleges that Adobe’s early termination fee disclosures were buried in fine print or required consumers to hover over tiny icons to find them.

“Americans are tired of companies hiding the ball during subscription signup and then putting up roadblocks when they try to cancel,” said Samuel Levine, director of the FTC’s Bureau of Consumer Protection, in a statement. “The FTC will continue working to protect Americans from these illegal business practices.” 

Dana Rao, Adobe's general counsel and chief trust officer said that the company would fight the FTC in court. In a statement published on the company's website, Rao said: "Subscription services are convenient, flexible and cost effective to allow users to choose the plan that best fits their needs, timeline and budget. Our priority is to always ensure our customers have a positive experience. We are transparent with the terms and conditions of our subscription agreements and have a simple cancellation process. We will refute the FTC’s claims in court.”

The FTC said that it took action against Adobe after receiving complaints from consumers around the country who said that they were not aware of Adobe’s early termination fee. It noted that Adobe continued the practice despite being aware of consumers’ confusion. Any consumers who reached out to Adobe’s customer service to cancel their subscription encountered other obstacles like dropped calls and chats and being transferred to multiple representatives, the FTC’s statement adds.

The FTC’s action follows a wave of customer outrage over Adobe’s latest terms of service. Users were concerned that Adobe’s vague language suggested that the company could freely use their work to train its generative AI modes. In response to the backlash, Adobe announced updates to its terms of service to provide more detail around areas like AI and content ownership.

Update, June 17 2024, 1:39 PM ET: This story has been updated with a statement from Adobe. 

This article originally appeared on Engadget at https://www.engadget.com/the-us-has-sued-adobe-for-early-termination-fees-and-making-subscriptions-hard-to-cancel-165808358.html?src=rss

If Clearview AI scanned your face, you may get equity in the company

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Controversial facial recognition company Clearview AI has agreed to an unusual settlement to a class action lawsuit, The New York Times reports. Rather than paying cash, the company would provide a 23 percent stake in its company to any Americans in its database. Without the settlement, Clearview could go bankrupt, according to court documents. 

If you live in the US and have ever posted a photo of yourself publicly online, you may be part of the class action. The settlement could amount to at least $50 million according to court documents, It still must be approved by a federal judge. 

Clearview AI, which counts billionaire Peter Thiel as a backer, says it has over 30 billion images in its database. Those can be accessed and cross-referenced by thousands of law enforcement departments including the US FBI and Department of Homeland Security. 

Shortly after its identity was outed, Clearview was hit with lawsuits in Illinois, California, Virginia, New York and elsewhere, which were all brought together as a class action suit in a federal Chicago court. The cost of the litigation was said to be draining the company's reserves, forcing it to seek a creative way to settle the suit.

The relatively small sum divided by the large number of users likely to be in the database means you won't be receiving a windfall. In any case, it would only happen if the company goes public or is acquired, according to the report. Once that occurs, lawyers would take up to 39 percent of the settlement, meaning the final amount could be reduced to about 30 million. If a third of Americans were in the database (about 110 million), each would get about 27 cents. 

That does beg the question of whether it would be worth just over a quarter to see one of the creepiest companies of all time to go bankrupt. To cite a small litany of the actions taken against it (on top of the US class action):

  • It was sued by the ACLU in 2020 (Clearview agreed to permanently halt sales of its biometric database to private companies in the US as part of the settlement.

  • Italy slapped a €20 million fine on the company in 2022 and banned it from using images of Italians in its database

  • Privacy groups in Europe filed complaints against it for allegedly breaking privacy laws (2021)

  • UK's privacy watchdog slapped it with a £7.55 million fine and ordered it to delete data from any UK resident

  • The LAPD banned the use of its software in 2020

  • Earlier this year the EU barred untargeted scraping of faces from the web, effectively blocking Clearview's business model in Europe

This article originally appeared on Engadget at https://www.engadget.com/if-clearview-ai-scanned-your-face-you-may-get-equity-in-the-company-120018460.html?src=rss

Apple hit with lawsuit for allegedly underpaying female employees

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A class action lawsuit filed by two women against Apple seeks damages for 12,000 current and former female employees for allegedly underpaying them. The complaint says the tech giant “systematically” paid them a lower wage than their male employees over a four-year period.

The lawsuit filed in a California state court in San Francisco County on Thursday claims Apple’s systematic behavior of sexual discrimination stems from a policy that set employees’ salaries based on their previous employment, according to the Wall Street Journal.

Prior to fall of 2017, the complaint states that Apple used job applicants’ provided prior pay rates to set their starting salaries. The following year, Apple asked applicants for their pay expectations. The lawsuit alleges that both of these practices led to lower pay rates for women in the workplace. It also claims the latter policy of asking prospective employees for their pay expectations is “highly correlated with prior pay; studies show that persons asked for pay expectations generally provide a number slightly higher than the pay at their current or last job.”

The pay policy for job applicants created a pattern of lower pay for female employees, the lawsuit alleges: “Apple’s policy or practice of collecting information about pay expectations and using that information to set starting salary has had the effect of perpetuating past pay disparities and paying women less than men performing substantially similar work.” 

The lawsuit goes even further by suggesting that Apple regularly punishes female employees because of “scored categories” of job performances that drive pay bonuses and increases.

“Apple’s performance evaluation system is biased against women because for scored categories such as teamwork and leadership, men are rewarded and women are penalized for the same behaviors,” the complaint reads.

The class action lawsuit seeks payment for damages and “declaratory relief” as well as repayment of low earnings and benefits due to the alleged discrepancies by Apple. The plaintiffs are also asking the court to hold a jury trial to hear their complaint.

In 2022, reporters for the Financial Times talked with several female Apple employees who alleged they were the victims of sexual abuse and bullying on the job. Then when they filed complaints with human resources, they alleged that their cases were either minimized or ignored, or they received retaliation for filing their complaints.

One of the most jarring examples came from Apple’s former legal department director Jayne Whitt who says a colleague hacked into her devices and issued death threats. She filed a complaint with HR and was assured action would be taken. Whitt claims that Apple’s HR team not only failed to even reprimand the employee but they eventually fired her. She blew the whistle on Apple in an online essay describing the situation that prompted a wave of support and similar stories from other female Apple employees.

This article originally appeared on Engadget at https://www.engadget.com/apple-hit-with-lawsuit-for-allegedly-underpaying-female-employees-214538519.html?src=rss

LinkedIn’s AI job coach can write your cover letters and edit your resumé

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Last year, LinkedIn began experimenting with AI-powered tools for job seekers on its platform. Now the company has added a bunch of new capabilities for its premium subscribers who are #OpentoWork, including personalized resumé, AI-assisted cover letters and more conversational job searches.

The changes are meant to speed up some of the most tedious aspects of looking for a new role. For example, the revamped job search feature now allows you to look for roles with queries like “find me a marketing job that’s fully remote and pays at least $100,000 a year,” or “find business development roles in biotech.” Those are all relatively simple descriptions but anyone who has searched for jobs on LinkedIn (without the help of AI) knows that it can often be a struggle to narrow down job listings with keywords.

Once you find a role you’re interested in, the built-in assistant can give you feedback on your qualifications and help with your application. You can upload a copy of your current resumé and LinkedIn’s AI will provide tips on what to update based on the job description. This can include suggestions on specific experiences to highlight or the ability to rewrite entire sections of the document. Likewise, LinkedIn can generate cover letters based on your experience and the job you want to apply for.

LinkedIn Job Seeker AI
LinkedIn

The company gave me a preview of these tools and I thought it did a surprisingly decent job for a first attempt at a cover letter. It incorporated specific details from my profile and the tone didn’t feel as robotic as much of the AI-written text I’ve encountered. Of course, as a journalist, I like to believe I can still write a better cover letter than an AI. But, I can see how the tool could be useful for people applying to dozens of jobs at once, especially since many companies use AI software to whittle down applications anyway.

LinkedIn product manager Rohan Rajiv says that these tools are meant to be more of a jumping off point for users rather than an all-in-one solution. “What we want to do is make it easy for folks who have a difficult time telling their story, have a difficult time staring at a blank screen trying to put something together to at least get started,” he tells Engadget.

But he also notes that the company is still in the relatively early stages of its AI push and it could eventually automate more of the job application process. “The next horizon is going to be … can you just do that for me,” he says. “You can almost imagine people thinking about it from an agent standpoint, and helping you get things done.”

This article originally appeared on Engadget at https://www.engadget.com/linkedins-ai-job-coach-can-write-your-cover-letters-and-edit-your-resume-130033553.html?src=rss

Elon Musk sued for alleged sexual harassment and retaliation by former SpaceX engineers

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Eight former SpaceX engineers filed a lawsuit against Elon Musk on Wednesday, accusing the CEO of sexual harassment and retaliation. The same group of fired employees have also filed complaints with the US National Labor Relations Board (NLRB) about SpaceX’s alleged retaliation. Bloomberg first reported on the lawsuit.

“Musk knowingly and purposefully created an unwelcome hostile work environment based upon his conduct of interjecting into the workplace vile sexual photographs, memes, and commentary that demeaned women and/or the LGBTQ+ community,” the eight former employees wrote in Wednesday’s filing.

The former SpaceX engineers said some of them were harassed by other co-workers who “mimicked Musk’s posts,” in an alleged example of mob bullying under the influence of their superior’s behavior. The plaintiffs wrote that this “created a wildly uncomfortable hostile work environment.”

The group worked together on an open letter in 2022, highlighting the Tesla founder’s allegedly problematic behavior. They say they were fired in retaliation for that essay.

According to Bloomberg, the filing says the former SpaceX engineers have reason to believe Musk made the decision to fire them in retaliation for their letter. The complaint claims that when a SpaceX HR official suggested the company conduct a formal investigation before taking any decisive action, Musk replied, “I don’t care — fire them.”

The engineers’ case with the NLRB has been held up by an appeals court injunction despite the board agreeing that SpaceX illegally retaliated against them. SpaceX sued the agency in January, calling its structure “unconstitutional.”

The lawsuit follows a report on Tuesday detailing allegations that Musk had sexual relations with two female employees and asked a third to have his babies.

This article originally appeared on Engadget at https://www.engadget.com/elon-musk-sued-for-sexual-harassment-and-retaliation-by-former-spacex-engineers-190846047.html?src=rss

Jabra says it’s exiting the consumer headphones business just as it announces new earbuds

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Jabra is exiting the consumer earbuds business. The move is shocking, as Jabra's parent company made the announcement at the same time it unveiled new models of its Elite earbuds. Peter Karlstromer, CEO of parent company GN, said the decision is “part of our commitment to focus on attractive markets where we can deliver profitable growth and strong returns.”

The company will discontinue the Jabra Elite (consumer earbuds) and Talk (mono Bluetooth) product lines. In late 2023, it pivoted the Elite line towards the premium segment in a move designed to compete with industry heavyweights Apple, Sony and Bose. However, the company lamented that its target markets “have changed over time.” Its current assessment is that “we cannot generate a fair return on investment compared to the many other opportunities we have within our Hearing, Enterprise, and Gaming businesses.”

Jabra will reduce the inventory of the to-be-discontinued products, and it expects to complete the wind-down by the end of the year. However, GN says it will service and support its devices “for several years.”

Although a bit farther under the radar than obvious competitors like AirPods, Jabra made some high-quality audio gear. Engadget’s audio expert Billy Steele called the 2021 Jabra Elite 3 “the new standard for affordable wireless earbuds,” as the company struck an alluring balance between quality and value.

Now, who’s pumped for the new Jabra Elite 10 and Elite 8 Active earbuds coming later this month?

Update, June 12 2024, 1:15PM ET: This story and headline have been updated to note that Jabra's parent company made the announcement it was exiting the headphone business the same day it released new earbuds, not the day after.

This article originally appeared on Engadget at https://www.engadget.com/jabra-says-its-exiting-the-consumer-headphones-business-a-day-after-launching-new-earbuds-164518215.html?src=rss

Musk withdraws his breach of contract lawsuit against OpenAI

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Elon Musk dropped a lawsuit against OpenAI one day before a judge in California state court was set to hear OpenAI’s request for dismissal. Musk’s suit, which was filed in February, had accused OpenAI co-founders Sam Altman and Greg Brockman of violating the company’s non-profit status and instead prioritizing profits over using AI to help humanity.

In the 35-page suit, Musk had alleged that OpenAI had become a “closed-source de facto subsidiary” of Microsoft, which invested $13 billion in the company and owns a 49 percent stake. Microsoft uses OpenAI’s technology to power Copilot, the company’s generative AI tools that are deeply integrated in products like Windows and Office.

OpenAI had reportedly requested for the lawsuit to be dismissed, arguing that Musk would use any information that emerged as a result to get access to the company’s “proprietary records and technology.” The company had also said that there was no founding agreement for it to breach.

OpenAI and Musk’s lawyer, Alex Spiro, did not respond to a request for comment from Engadget.

Musk, who was one of the founders of OpenAI in 2015, left the company three years later after disagreements over the direction of the organization. He runs xAI an AI startup that makes Grok, a ChatGPT rival that is built into X and is available for paid users. xAI recently raised a $6 billion funding round from top investors including Andreessen Horowitz and Sequoia Capital.

On Monday, Musk said that he would ban Apple devices from his company’s after Apple integrated ChatGPT in its operating systems through a partnership with OpenAI.

This article originally appeared on Engadget at https://www.engadget.com/musk-withdraws-his-breach-of-contract-lawsuit-against-openai-221316519.html?src=rss

Popular Anker power bank and Soundcore speaker recalled over potential fire risk

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Some Anker and Soundcore products are being recalled due to a manufacturing defect that could cause fires. Anker issued a recall for its 321 Power Bank (PowerCore 5K, A1112) this week, saying, “The lithium-ion battery in the affected power banks can overheat, potentially causing melting of plastic components, smoke and fire hazards.” Its audio brand, Soundcore, issued a recall for its A3102 Speaker in Black as well.

The company has apparently started notifying customers who may own one of the affected devices via email, but you can double check the serial numbers — which are printed on the bottom of each device — using the above links to be sure. Anker says the issue applies only to a small number of devices manufactured between March and April of 2023. Also affected is a workplace conferencing device, the AnkerWork A3302 speakerphone, according to a press release. If you have one of these devices, the company advises you immediately stop using it and dispose of it properly at a facility that takes lithium batteries.

This article originally appeared on Engadget at https://www.engadget.com/popular-anker-power-bank-and-soundcore-speaker-recalled-over-potential-fire-risk-200637850.html?src=rss

TikTok’s AI efforts reportedly exploit loopholes to use premium Nvidia chips

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The US has banned companies like Nvidia from selling their most advanced AI chips to China since 2022. But if loopholes exist, profit-hungry corporations will find and exploit them. The Information published a bombshell report on Thursday detailing how Oracle allows TikTok owner ByteDance to rent Nvidia’s most advanced chips to train AI models on US soil.

ByteDance, which many US lawmakers believe has direct ties to the Chinese government, is reportedly renting US-based servers containing Nvidia’s coveted H100 chips from US cloud computing company Oracle to train AI models. The practice, which runs against the spirit of the US government’s chip regulations, is technically allowed because Oracle is merely renting out the chips on American soil, not selling them to companies in China.

The US government has cracked down on exporting the chips to China as an extension of the tensions between the two nations. The Biden Administration fears the nation could use advanced AI for military or surveillance purposes or to gain an economic upper hand. The US government passed bipartisan legislation in April that will force ByteDance to either sell its US operations or face a ban. But ByteDance still has until early next year to close a deal, and it’s suing the US government, which could delay enforcement.

Although ByteDance is training its models in the US, “it could be difficult to stop them from sending the models they produced back to their headquarters in China,” according to US-based cloud providers and a former Nvidia employee who spoke to The Information. Quite the loophole, indeed.

ByteDance’s Project Texas initiative, which the company claims siloes off TikTok’s US operations from its Chinese leadership to allay US fears, is at the heart of the arrangement. However, former ByteDance employees have described Project Texas as “largely cosmetic,” as they claim the company’s US wing regularly works closely with its Beijing-based leadership.

ByteDance isn’t the only Chinese company looking to game the rules. The Information says Alibaba and Tencent are discussing similar arrangements to gain access to the sought-after chips. Those deals could be harder to squash because they have their own US-based data centers and wouldn’t have to rent servers from American companies.

A building at Oracle headquarters with the company's logo. Dusky blue sky.
US cloud computing company Oracle reportedly enables ByteDance’s training of AI models in the US.
Oracle

Not every company has been as willing as Oracle to skirt the law’s intent. “Two small American cloud providers” reportedly turned down offers to rent servers with Nvidia’s H100 chips to ByteDance and China Telecom because “they seemed to go against the spirit of U.S. chip restrictions.” However, Oracle, cofounded by American businessman Larry Ellison and run by current CEO Safra Catz, apparently found the opportunity for profit through technically legal workarounds too tempting to pass up.

The US Commerce Department, the bureau that could close the loophole, may already be aware of the practices. Earlier this year, the department proposed a rule that would require US cloud providers to verify foreign customers’ identities and notify the US if any of them were training AI models that “could be used in malicious cyber-enabled activity.” However, the Commerce Department recently said most cloud providers disapproved of the proposal, claiming “the burden of additional requirements might outweigh the intended benefit.” In the meantime, the proposed rule, which could theoretically plug the loophole, remains in limbo.

But even if the US manages to shut down that exploit, The Information says it wouldn’t cover Chinese cloud providers like Tencent and Alibaba from buying Nvidia’s chips and using them to train AI models in their own US-based data centers. The Commerce Department will have its hands full figuring this one out as business and defense interests wrestle for control.

This article originally appeared on Engadget at https://www.engadget.com/tiktoks-ai-efforts-reportedly-exploit-loopholes-to-use-premium-nvidia-chips-173432988.html?src=rss

FTC launches an antitrust probe into Microsoft’s deal with Inflection AI

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Microsoft is under investigation by the Federal Trade Commission over its deal with Inflection AI, according to The Wall Street Journal. Back in March, the company hired almost all of Inflection AI's employees, including founders Karén Simonyan and Mustafa Suleyman, who was also a DeepMind cofounder. In addition, Microsoft paid Inflection AI $650 million to license its artificial intelligence technology. Now, the FTC wants to know whether the companies deliberately structured the deal to avoid being the subject of regulatory antitrust review. 

As The Journal notes, companies are required to report any acquisition that's valued at $119 million or more to federal antitrust agencies. The FTC or the Justice Department could then investigate whether the deal stifles competition in the industry and then sue to block the merger or the investment that it deems to be anti-competitive. When companies want to hire all the talent in another firm, they typically buy the other out in an "acquihire." But Microsoft didn't buy Inflection, which denied that the bigger company has any power over it. Ted Shelton, its new COO, told the publication that it still operates as an independent company under new leadership. 

The FTC has already sent out subpoenas to both Microsoft and Inflection, asking for relevant documents over the past two years. If it does determine that the companies entered into an agreement in a way that would give Microsoft control over the other while dodging regulatory review, then Microsoft could be fined, and the transaction could be suspended pending a more in-depth investigation. 

Microsoft provided Engadget with the following statement: "Our agreements with Inflection gave us the opportunity to recruit individuals at Inflection AI and build a team capable of accelerating Microsoft Copilot, while enabling Inflection to continue pursuing its independent business and ambition as an AI studio. We take our legal obligations to report transactions under the HSR Act seriously and are confident that we have complied with those obligations."

US federal agencies have been cracking down on monopolistic practices by the world's largest tech companies over the past few years. To be even more efficient in conducting antitrust investigations involving the current biggest players in artificial intelligence, the agencies have also just struck a deal on how they're dividing their responsibilities. The Justice Department will take the lead in investigations involving NVIDIA, while the FTC will take charge of antitrust probes involving Microsoft and OpenAI.

Update, June 6 2024, 11:46AM ET: This story has been updated to include a statement from Microsoft.

This article originally appeared on Engadget at https://www.engadget.com/ftc-launches-an-antitrust-probe-into-microsofts-deal-with-inflection-ai-130038896.html?src=rss