Tag Archives: Company Legal & Law Matters

The EU is reportedly set to hit Apple with a $539 million fine in antitrust probe

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Apple may be facing a fine of roughly $539 million (500 million euros) from the EU and a ban on its alleged anti-competitive App Store practices for music streaming services, according to FT. The publication, which cites five unnamed sources with knowledge of the matter, reports that the European Commission will announce its ruling early next month.

The probe stems from a 2019 antitrust complaint filed by Spotify and is focused on App Store rules that at the time prevented developers from directing customers to alternative subscription options outside the app, which could be cheaper as they wouldn’t have to compensate for Apple’s 30 percent fee. Apple later loosened these restrictions. According to FT, the Commission will say Apple broke EU antitrust law and created “unfair trading conditions” for its rivals with the App Store’s “anti-steering obligations.”

This article originally appeared on Engadget at https://www.engadget.com/the-eu-is-reportedly-set-to-hit-apple-with-a-539-million-fine-in-antitrust-probe-162106781.html?src=rss

Amazon, one of the world’s largest employers, has called the National Labor Relations Board ‘unconstitutional’

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Amazon, a company that employs more than 1.54 million people, has claimed that the National Labor Relations Board Relations Board (NLRB), the federal agency responsible for protecting the rights of workers, is unconstitutional. Amazon made the claim in a legal document filed on Thursday as part of a case in which prosecutors from the Board have accused the e-commerce giant of discrimination against workers at an Amazon warehouse in Staten Island who had voted to unionize, according to The New York Times.

Amazon is not the first company to challenge the Board’s constitutionality. Last month, Elon Musk’s SpaceX sued the NLRB after the agency accused the company of unlawfully firing eight employees and called the agency “unconstitutional” in the lawsuit. Weeks later, grocery chain Trader Joe’s, which the NLRB accused of union-busting, said that the NLRB’s structure and organization was “unconstitutional,” Bloomberg reported. And in separate lawsuits, two Starbucks baristas have independently challenged the agency’s structure as they sought to dissolve their unions.

Amazon’s claim is similar to the existing claims filed by SpaceX and Trader Joe’s. In the lawsuit, the company’s lawyers argued that “the structure of the N.L.R.B. violates the separation of powers” by “impeding the executive power provided for in Article II of the United States Constitution.” In addition, Amazon claimed that the NLRB’s hearings “can seek legal remedies beyond what’s allowed without a trial by jury.”

Seth Goldstein, a lawyer who represents unions in the Amazon and Trader Joe’s cases told Reuters that these challenges to the NLRB increase the chances of the issue reaching the Supreme Court. And they might cause employers to stop bargaining with unions in hope that courts will finally strip the federal agency of its powers, Goldstein said. Amazon has a contentious history with the NLRB, which said the company broke federal labor laws last year. 

This article originally appeared on Engadget at https://www.engadget.com/amazon-one-of-the-worlds-largest-employers-has-called-the-national-labor-relations-board-unconstitutional-011519013.html?src=rss

Amazon, one of the world’s largest employers, has called the National Labor Relations Board ‘unconstitutional’

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Amazon, a company that employs more than 1.54 million people, has claimed that the National Labor Relations Board Relations Board (NLRB), the federal agency responsible for protecting the rights of workers, is unconstitutional. Amazon made the claim in a legal document filed on Thursday as part of a case in which prosecutors from the Board have accused the e-commerce giant of discrimination against workers at an Amazon warehouse in Staten Island who had voted to unionize, according to The New York Times.

Amazon is not the first company to challenge the Board’s constitutionality. Last month, Elon Musk’s SpaceX sued the NLRB after the agency accused the company of unlawfully firing eight employees and called the agency “unconstitutional” in the lawsuit. Weeks later, grocery chain Trader Joe’s, which the NLRB accused of union-busting, said that the NLRB’s structure and organization was “unconstitutional,” Bloomberg reported. And in separate lawsuits, two Starbucks baristas have independently challenged the agency’s structure as they sought to dissolve their unions.

Amazon’s claim is similar to the existing claims filed by SpaceX and Trader Joe’s. In the lawsuit, the company’s lawyers argued that “the structure of the N.L.R.B. violates the separation of powers” by “impeding the executive power provided for in Article II of the United States Constitution.” In addition, Amazon claimed that the NLRB’s hearings “can seek legal remedies beyond what’s allowed without a trial by jury.”

Seth Goldstein, a lawyer who represents unions in the Amazon and Trader Joe’s cases told Reuters that these challenges to the NLRB increase the chances of the issue reaching the Supreme Court. And they might cause employers to stop bargaining with unions in hope that courts will finally strip the federal agency of its powers, Goldstein said. Amazon has a contentious history with the NLRB, which said the company broke federal labor laws last year. 

This article originally appeared on Engadget at https://www.engadget.com/amazon-one-of-the-worlds-largest-employers-has-called-the-national-labor-relations-board-unconstitutional-011519013.html?src=rss

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