Tag Archives: Company Legal & Law Matters

New York City is suing social media companies for allegedly harming the mental health of children

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After designating social media as a "public health hazard" in late January, New York City is now suing Meta, Google, Snap and TikTok for "fueling nationwide youth mental health crisis." Specifically, these companies face three counts in the lawsuit: public nuisance, negligence and gross negligence. The Mayor Eric Adams administration accuses TikTok, Instagram, Facebook, Snapchat and YouTube of "endangering our children's mental health, promoting addiction, and encouraging unsafe behavior."

These are allegedly achieved by way of harmful algorithms, gambling-like mechanisms and manipulation through reciprocity — making the user "feel compelled to respond to one positive action with another positive action." The city believes that there is a correlation between the increase in social media usage and the decline in local youth mental health over "more than a decade."

In response, Google and Meta told CNBC that they have always worked with youth safety experts and provided parental control tools. ByteDance's TikTok also highlighted some of its specific tools to Axios, namely age-restricted features, parental controls and an automatic 60-minute time limit for users under 18. However, none of the tech companies acknowledged the problematic features listed by the Adams administration.

This lawsuit follows a recent Senate hearing on online child safety, in which the CEOs of all the aforementioned tech companies (except Google) were present. In his opening remarks, Senator Lindsey Graham told the tech execs that "you have blood on your hands" — a reference to online child exploitations and cyberbullying that unfortunately led to deaths. 

Through this case, the Adams administration wants these tech companies to pay up for the city's youth mental health services, which apparently cost more than $100 million each year. But ultimately, it's about forcing these tech giants to stop manipulating young users into addictive behavior, as well as to make policymakers place new federal laws that safeguard youth mental health on social platforms.

Before this New York City lawsuit, Meta already faces a similar case from 41 states back in October 2023, in which it was accused of misleading the public about the safety of its platform's "addictive" features. Meta, Snap, TikTok and Google were also sued in a multi-district litigation in 2022 for their addictive features that allegedly cause "emotional and physical harms, including death" to adolescents.

This article originally appeared on Engadget at https://www.engadget.com/new-york-city-is-suing-social-media-firms-for-allegedly-harming-the-mental-health-of-children-082524295.html?src=rss

Sarah Silverman’s copyright infringement suit against OpenAI will advance in pared-down form

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Sarah Silverman’s lawsuit against OpenAI will advance with some of her legal team’s claims dismissed. The comedian sued OpenAI and Meta in July 2023, claiming they trained their AI models on her books and other work without consent. Bloomberg reported on Tuesday that the unfair competition portion of the lawsuit will proceed. Judge Martínez-Olguín gave the plaintiffs until March 13 to amend the suit.

US District Judge Araceli Martínez-Olguín threw out portions of the complaint from Silverman’s legal team Monday, including negligence, unjust enrichment, DMCA violations and accusations of vicarious infringement. The case’s principal claim remains intact. It alleges OpenAI directly infringed on copyrighted material by training LLMs on millions of books without permission.

OpenAI’s motion to dismiss, filed in August, didn’t tackle the case’s core copyright claims. Although the suit will proceed, the judge suggested the federal Copyright Act may preempt the suit’s remaining claims. “As OpenAI does not raise preemption, the Court does not consider it,” Martínez-Olguín wrote.

The US court system has yet to determine whether training AI large language models on copyrighted work falls under the fair use doctrine. Last month, OpenAI admitted in a court filing that it would be “impossible to train today's leading AI models without using copyrighted materials.”

The result of Silverman’s OpenAI hearing is similar to one in San Francisco in November when Silverman’s claims against Meta were also slashed down to the core copyright infringement claims. In that session, US District Judge Vince Chhabria described some of the plaintiffs’ dismissed claims as “nonsensical.”

Other groups suing OpenAI for alleged copyright-related violations include The New York Times, a collection of nonfiction authors (a group that grew after the initial lawsuit) and The Author’s Guild. The latter filed its claim alongside authors George R.R. Martin (Game of Thrones) and John Grisham.

This article originally appeared on Engadget at https://www.engadget.com/sarah-silvermans-copyright-infringement-suit-against-openai-will-advance-in-pared-down-form-211456302.html?src=rss

Court orders Elon Musk to testify in the SEC’s investigation of his Twitter takeover

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In a followup to a tentative ruling made in December, a federal judge has ordered Elon Musk to comply with the U.S. Securities and Exchange Commission's (SEC) subpoena and testify again in its probe of his Twitter takeover, Reuters reports. Per the order, which was filed Saturday night in a California court, Musk and the SEC now have a week to work out a time and place for his appearance or it will be decided for them. The SEC has been investigating Musk’s purchase of Twitter, now X, since 2022 over concerns about his lateness in disclosing his stake in Twitter.

The order comes after Musk failed to appear for a testimony in September and later refused to attend a rescheduled interview, prompting the SEC to sue. US Magistrate Judge Laurel Beeler sided with the SEC after Musk tried to challenge its subpoena, which he claims is seeking irrelevant information and is harassment, as he’s already been interviewed twice. But, the SEC says it has obtained new documents in relation to the probe and has further questions for the X owner. Musk also argued that the subpoena exceeds the SEC’s authority because it was issued by a staff member appointed by the SEC’s Director of Enforcement. Beeler struck these arguments down, ruling that the subpoena is valid. 

This article originally appeared on Engadget at https://www.engadget.com/court-orders-elon-musk-to-testify-in-the-secs-investigation-of-his-twitter-takeover-193303461.html?src=rss

Apple reaches possible settlement with the startup it sued for trade secret theft

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Apple has reached a possible settlement with Rivos, the Mountain View startup it accused in 2022 of poaching its employees and stealing its trade secrets. In the companies' filing seen by Bloomberg and Reuters, they told the US District Court for the Northern District of California that they have signed an agreement that "potentially settles the case." Their deal would allow Apple to conduct a forensic examination of Rivos' systems, as well as of its activities. 

When Apple sued Rivos, it said the startup led a "coordinated campaign" to hire away employees from its chip design division. Apple also accused the defendant of instructing the employees it hired away to steal presentations and other proprietary information for unreleased iPhone chip designs that cost billions of dollars to develop. Rivos countersued Apple last year, accusing the larger company of restricting employees' ability to work elsewhere and of hindering emerging startups' growth by using anticompetitive measures. 

The court dismissed Apple's trade secret claims against Rivos in April 2023, though the company was allowed to file a revised complaint. Apple already settled with its six former employees who filed a countersuit against Apple along with Rivos after they dropped their claims against each other last month. Both companies are now requesting the court to put their cases on hold until March 15, when they expect the settlement to be completed. 

This article originally appeared on Engadget at https://www.engadget.com/apple-reaches-possible-settlement-with-the-startup-it-sued-for-trade-secret-theft-121513902.html?src=rss

Meta and TikTok sue over paying the EU’s fee for policing content

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Meta and TikTok owner ByteDance are not keen on the idea of paying the European Union to regulate them. The companies have challenged a supervisory fee set forth by EU moderators, who are now required to monitor Meta, TikTok, and other major platforms under the Digital Services Act (DSA), Politico reports. Meta first announced its action, with ByteDance following suit a day later.

Under the current arrangement, all designated companies must split the €45.2 million ($48.7 million) that EU's regulators argue is necessary to properly supervise the 20 Very Large Online Platforms and two Very Large Online Search Engines (VLOSEs). Each regulated platform has 45 million or more users with its financial contribution based on the size of that number. They also can't owe more than 0.05 percent of its 2022 net profits. However, companies like Amazon and Pinterest that reported little to no profits won't owe anything. Meta, on the other hand, got a €11 million ($11.9 million) bill under the current arrangement. ByteDance has not publicly announced how much it owes.

Meta takes issue with the European Union regulators' methodology for choosing each company's fees. "Currently, companies that record a loss don't have to pay, even if they have a large user base or represent a greater regulatory burden, which means some companies pay nothing, leaving others to pay a disproportionate amount of the total," a Meta spokesperson remarked. Failure to comply with the fee could lead to a fine of up to six percent of a company's global revenue.

The DSA went into effect in 2023, with Meta's and ByteDance's VLOP designations came alongside other major sites, like Google and X, formerly known as Twitter. Along with the fee, VLOPs must comply with specific regulations like transparent advertising and content moderation, sharing data with the European Commission and cooperating with an annual independent audit.

This article originally appeared on Engadget at https://www.engadget.com/meta-and-tiktok-sue-to-get-out-of-paying-the-eus-fee-for-policing-content-123511827.html?src=rss

Phony AI Biden robocalls reached up to 25,000 voters, says New Hampshire AG

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Two companies based in Texas have been linked to a spate of robocalls that used artificial intelligence to mimic President Joe Biden. The audio deepfake was used to urge New Hampshire voters not to participate in the state's presidential primary. New Hampshire Attorney General John Formella said as many as 25,000 of the calls were made to residents of the state in January.

Formella says an investigation has linked the source of the robocalls to Texan companies Life Corporation and Lingo Telecom. No charges have yet been filed against either company or Life Corporation's owner, a person named Walter Monk. The probe is ongoing and other entities are believed to be involved. Federal law enforcement officials are said to be looking into the case too.

“We have issued a cease-and-desist letter to Life Corporation that orders the company to immediately desist violating New Hampshire election laws," Formella said at a press conference, according to CNN. "We have also opened a criminal investigation, and we are taking next steps in that investigation, sending document preservation notices and subpoenas to Life Corporation, Lingo Telecom and any other individual or entity."

The Federal Communications Commission also sent a cease-and-desist letter to Lingo Telecom. The agency said (PDF) it has warned both companies about robocalls in the past.

The deepfake was created using tools from AI voice cloning company ElevenLabs, which banned the user responsible. The company says it is "dedicated to preventing the misuse of audio AI tools and [that it takes] any incidents of misuse extremely seriously."

Meanwhile, the FCC is seeking to ban robocalls that use AI-generated voices. Under the Telephone Consumer Protection Act, the agency is responsible for making rules regarding robocalls. Commissioners are to vote on the issue in the coming weeks.

This article originally appeared on Engadget at https://www.engadget.com/phony-ai-biden-robocalls-reached-up-to-25000-voters-says-new-hampshire-ag-205253966.html?src=rss

Samsung chair acquitted in Korean stock manipulation case

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Samsung chairman Jay Y. Lee's legal troubles may be in the rearview mirror as a Korean court acquitted him of stock manipulation and accounting fraud charges over a 2015 merger, The Financial Times has reported. The ruling allows Lee to continue leading Samsung, which saw a sharp decline in revenue last year. 

Seeking a five year jail term, prosecutors accused Lee of manipulating the share price of two Samsung subsidiaries to smooth the way for a merger that allowed him to consolidate his power. However, the Seoul Central District Court ruled that the prosecutors failed to prove that. "It is hard to say that Lee Jae-yong [aka Jay Y. Lee] . . . spearheaded the merger, and that the merger was done just for the sake of Lee’s succession," the judge stated in the ruling.

The verdict will allow Lee and Samsung to focus on its declining smartphone and memory chip businesses. Samsung recently lost its smartphone sales crown to Apple, and is now behind SK Hynix in the new and hot market of high-bandwidth memory (HBM) used by NVIDIA and others to create artificial intelligence (AI) models. 

The decision was heralded by business groups including the Korea Chamber of Commerce and Industry, but not everyone in the country agreed. "The ruling will free Lee of legal risks, but I am at a loss for words in terms of the country’s economic justice," Park Ju-geun, head of corporate thinktank Leaders Index, told the FT. "This goes totally against all previous court rulings on the merger."

Lee was originally sentenced to five years in prison in 2017 after being found guilty of bribing public officials over the same merger. He walked free after a year in detention, but the South Korean Supreme Court overturned that decision and ordered the case to be retried.

While Lee was sentenced with two-and-a-half years of prison time in early 2021 in that retrial, he was paroled half a year later in a development that civic groups had described as another example of the justice system being lenient towards the country's elite. (Korea's former president Park Geun-hye also went to jail for her role in the same affair.) 

In 2022, Lee was given a pardon by South Korean President Yoon Suk Yeol, ostensibly so he could help the country overcome its economic crisis. Ironically, Yoon is the country's former chief prosecutor and oversaw the original convictions of Lee and Park. 

This article originally appeared on Engadget at https://www.engadget.com/samsung-chair-acquitted-in-korean-stock-manipulation-case-114530368.html?src=rss

Tesla settles California hazardous waste lawsuit for $1.5 million

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Tesla and the 25 California counties that sued the automaker for mishandling hazardous waste at its facilities around the state have already reached an agreement just a few days after the lawsuit was filed. The court has ordered the automaker to pay $1.5 million as part of the settlement, which also includes hiring a third party to conduct annual waste audits of its trash containers for five years. These auditors will be taking a close look at the company's trash containers to check for hazardous materials. 

The counties that sued Tesla, which include Los Angeles and San Francisco, accused the company of dumping improperly labeled materials at transfer centers and landfills that were "not permitted to accept hazardous waste." Based on the complaint filed in San Joaquin County, Tesla was illegally disposing the waste it generated manufacturing and servicing its vehicles. 

Undercover investigators from the environmental division at the San Francisco District Attorney's Office were the first to find evidence of Tesla's illegal activities back in 2018. They found trash containers at the company's service centers containing materials, such as aerosols, antifreeze, lubricating oils, brake cleaners, lead acid batteries, aerosols, antifreeze, waste solvents, electronic waste and waste paint when they weren't supposed to. Investigators from other California counties' District Attorney's offices conducted their own investigations and found similar unlawful disposals. The Alameda country authorities who looked into its Fremont factory activities, for instance, discovered illegal disposal of waste containing copper and primer-contaminated debris. 

Tesla reached a settlement with the Environmental Protection Agency over its handling of hazardous materials back in 2019 and had to agree to properly manage waste at its Fremont plant in addition to paying a $31,000 fine. The automaker had also taken steps to screen its trash containers for hazardous waste before taking them to the landfill after being notified of the issue. But as District Attorney Brooke Jenkins said, "today's settlement against [the company] serves to provide a cleaner environment for citizens throughout the state by preventing the contamination of [their] precious natural resources when hazardous waste is mismanaged and unlawfully disposed." By having a third party regularly check whether Tesla continues to comply with the agreement, authorities can ensure that the company isn't illegally dumping harmful materials across the state over the next few years. 

This article originally appeared on Engadget at https://www.engadget.com/tesla-settles-california-hazardous-waste-lawsuit-for-15-million-070513014.html?src=rss

Comcast agrees to kill 10G branding after advertising watchdogs said it was misleading

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Comcast is discontinuing its its “Xfinity 10G Network” branding to describe its internet service after a National Advertising Review Board (NARB) panel found that the term could mislead consumers into thinking that Comcast’s cellular and broadband services would offer much faster speeds than current-generation networks. Comcast rivals T-Mobile and Verizon had challenged the branding with the National Advertising Division (NAD), an ad industry watchdog, which had recommended that Comcast get rid of it in October 2023. Comcast’s confusing branding is at the heart of this challenge: “5G” refers to mobile internet, while “10G” refers to 10-gigabit broadband speeds typically delivered to homes through physical infrastructure.

On Wednesday, the NARB said that it agreed with the NAD’s decision and recommended that Comcast “discontinue use of the term 10G in the product service name ‘Xfinity 10G Network’ and when 10G is used descriptively to describe the Xfinity network.” The NARB found that the branding could mislead consumers into thinking that “10G” offered significantly faster speeds than current-generation 5G networks

The NARB also decided that using “10G” to refer to home broadband, as Comcast did, was misleading because consumers would assume that they would get 10-gigabit internet speeds on every Xfinity connection. In reality, as Ars Technica pointed out, getting those speeds requires getting Xfinity’s fiber-to-the-home connection, which typically costs hundreds of dollars more in monthly fees, installation, and activation over Xifnity’s regular cable broadband plans.

In a statement that Comcast provided to the NARB, the company agreed to stop using the misleading branding in its marketing. "Although Comcast strongly disagrees with NARB's analysis and approach, Comcast will discontinue use of the brand name 'Xfinity 10G Network' and will not use the term '10G' in a manner that misleadingly describes the Xfinity network itself," Comcast said. 

The company said, however, that it still “reserves the right” to use both “10G” and “Xifnity 10G” in ways that do “not misleadingly describe the Xfinity network itself”, so expect both terms to still show up in Xfinity marketing, just, hopefully, in less misleading ways.

This article originally appeared on Engadget at https://www.engadget.com/comcast-agrees-to-kill-10g-branding-after-advertising-watchdogs-said-it-was-misleading-185550194.html?src=rss

Tesla sued by 25 California counties for allegedly mishandling hazardous waste

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Tesla is facing a lawsuit from 25 California counties accusing it of mishandling hazardous waste at facilities around the state, according to a complaint filed in San Joaquin County Superior Court. The lawsuit, which seeks civil penalties and an injunction forcing Tesla to correctly handle waste, was filed after months of negotiations reportedly broke down. Civil penalties could amount to as much as $70,000 per violation per day, Reuters reported.

Los Angeles, San Francisco and other counties accused Tesla of improperly labeling and disposing of materials at transfer stations or landfills "not permitted to accept hazardous waste." Waste materials include "lubricating oils, brake fluids, lead acid batteries, aerosols, antifreeze, cleaning fluids, propane, paint, acetone, liquified petroleum gas, adhesives and diesel fuel," the complaint states. It adds that Tesla "continues to do so at and/or from its facilities."

Tesla revealed that it was being probed by California district attorneys over its waste management handling in a 2022 Securities and Exchange Commission (SEC) filing. It stated at the time that it "had implemented various remedial measures, including conducting training and audits and enhancements to its site waste management programs," according to TechCrunch. It said in October 2023 that it was in settlement talks with District Attorneys across California, but those apparently failed to bear fruit.

Tesla has previously faced legal repercussions over its handling of waste. In 2019, it reached a settlement with the Environmental Protection Agency over federal hazardous materials violations. As part of that, Tesla agreed to properly manage waste at its Fremont plant and pay a $31,000 fine. 

This article originally appeared on Engadget at https://www.engadget.com/tesla-sued-by-25-california-counties-for-allegedly-mishandling-hazardous-waste-082034366.html?src=rss