Tag Archives: Company Legal & Law Matters

Google’s multi-state lawsuit settlement will cost it $700 million

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On top of fighting (and losing to) Epic Games over Play Store antitrust concerns, Google has been fighting a similar lawsuit filed by 36 states and the District of Columbia in 2021. A settlement for that suit was announced in September, but a judge still had to confirm the terms. Now, Google has announced that it will pay a $700 million fine and make what amounts to fairly minor changes to the Play Store. 

Of that sum, Google will distribute $630 million to consumers who may have overpaid for apps or in-app purchases on Google Play (after taxes, lawyers’ fees, etc.). That covers around 102 million people, according to The Washington Post. It will also pay $70 million into a "fund that will be used by the states," according to Google's blog. 

The other major change is that Google must allow developers to steer consumers toward sideloading to avoid Google's Play Store fees on subscriptions and the like. It'll do that via updated "language that informs users about these potential risks of downloading apps directly from the web for the first time." However, these actions will be time limited to seven years for the sideloading and five years for the updated language, according to settlement's wording spotted by The Verge. 

Google will also include language stating that "OEMs can continue to provide users with options out of the box to use Play or another app store." Starting with Android 14, third-party stores will be allowed to handle future app updates, including automatic installs. It's also expanding user choice billing that will allow Android apps and games to offer their own payment system in the US. "Developers are also able to show different pricing options within the app when a user makes a digital purchase," Google states. 

The company will only be required to make these changes for five or six years maximum (seven years for alternate means to download apps). In other words, it could feasibly cut off access to sideloading or third-party app stores after that point, or make it harder for the average consumer to find the option. 

Another big thing missing is exterior payment links. "Google is not required to allow developers to include links that take a User outside an app distributed through Google Play to make a purchase," the settlement agreement reads. 

The settlement sum represents a miniscule portion of Google's turnover and the other terms are relatively minor changes over what it already does. It also doesn't include Epic Games, which won its own lawsuit against Google earlier this month (Google has vowed to appeal). A court still needs to formally approve the states' settlement.  

Google also argued at its Epic trial that consumers were able to get games by sideloading and other means, but that failed to sway the jury. When the settlement with the states was announced in September, Epic CEO Tim Sweeny said that if it "left the Google tax in place" his company would fight on. "Consumers only benefit if antitrust enforcement not only opens up markets, but also restores price competition," he said at the time.

This article originally appeared on Engadget at https://www.engadget.com/googles-multi-state-lawsuit-settlement-will-cost-it-700-million-103512109.html?src=rss

Nikola founder Trevor Milton sentenced to four years in prison

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Trevor Milton, the disgraced founder of Nikola, was just sentenced to four years in prison on three counts of fraud. 

In October 2022, a jury found Milton guilty of one count of securities fraud and two counts of wire fraud. Milton faced up to 60 years in prison. Prosecutors asked the judge for an 11-year prison sentence and a $5 million fine, according to The New York Times, while the defense argued for probation. 

After announcing the sentence at a federal court hearing in New York City, U.S. District Judge Edgar Ramos spoke directly to Milton. "As difficult as it may be for you or your family to hear, I believe the jury got it right," Ramos said, as transcribed Reuters.

Milton addressed the court before sentencing was handed down, saying "I did not intend to harm anyone and I did not commit those crimes levied against me." He also spoke at length about his rural upbringing and recited biblical verse. 

Prosecutors claimed that Milton pumped up the value of the company's stock by lying to investors about "nearly all aspects" of Nikola's business. Among other things, Milton claimed his company had a fully functional electric truck. The company released a video that made it appear as though a Nikola One prototype was able to move by itself. However, an indictment alleged that the truck was actually rolling down a hill and that Milton was involved in the video's creation.

In addition, Milton was accused of lying about Nikola having billions of dollars worth of pre-order reservations and that it was producing hydrogen fuel at four times less than market rates. Prosecutors also said Milton falsely claimed Nikola had developed "game-changing" battery tech.

Nikola is still in business and it plans to resume deliveries of its battery electric truck in early 2024 following a recall over battery issues that cost around $61.8 million to resolve. In the nine months to September 30, Nikola produced 96 trucks and shipped 79.

The company's stock price has dropped by 99 percent since 2020 and investors are said to have lost more than $660 million. Milton sold around $100 million of his Nikola stock in 2020 and spent most of that on luxury goods such as a plane and real estate, according to the Times. It's likely that Milton will appeal this conviction, as he's already asked Ramos for a new trial following the jury's guilty verdict.

This article originally appeared on Engadget at https://www.engadget.com/nikola-founder-trevor-milton-sentenced-to-four-years-in-prison-192432136.html?src=rss

Apple Watch Series 9 and Ultra 2 sales paused in the US due to a patent dispute

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If you're planning to buy an Apple Watch Series 9 or Apple Watch Ultra 2, you may want to act quickly. Apple says it will soon halt sales of both devices in the US due to a International Trade Commission (ITC) ban, which is related to a patent dispute over the wearables' blood oxygen sensor. Sales will be suspended online this week and at Apple retail locations after December 24.

"A Presidential Review Period is in progress regarding an order from the US International Trade Commission on a technical intellectual property dispute pertaining to Apple Watch devices containing the Blood Oxygen feature," Apple told Engadget in a statement. "While the review period will not end until December 25, Apple is preemptively taking steps to comply should the ruling stand. This includes pausing sales of the Apple Watch Series 9 and Apple Watch Ultra 2 from Apple.com starting December 21, and from Apple retail locations after December 24."

The Apple Watch SE will remain available for purchase as it doesn't have a blood oxygen sensor. Previously purchased Apple Watch units that include the blood oxygen feature are unaffected (the Apple Watch Series 6 was the company's first device to offer blood-oxygen monitoring). The Apple Watch Series 9 and Watch Ultra 2 will still be available to buy outside of the US.

Medical tech company Masimo sued Apple in 2021 over alleged violations of patents related to light-based blood-oxygen monitoring. In October, the ITC upheld a judge's ruling from earlier this year that the Apple Watch did violate Masimo's patents. 

The ITC's order blocks all Apple Watch Series 9 and Ultra 2 imports to the US after December 25. Other retailers, such as Amazon and Best Buy, can continue to sell the devices for the time being, as 9to5 Mac first reported.

Following the ITC's decision, the case went to the White House for a 60-day Presidential Review Period. Although President Biden has one more week to decide whether to veto the ITC ruling, Apple has opted to preemptively comply with the commission's decision. 

Apple plans to lodge an appeal with the Federal Circuit. It can also reach a settlement with Masimo or issue software updates that nullify patent infringements (likely by deactivating blood oxygen features). Apple will provide more information on the situation after the Presidential Review Period expires on December 25.

The US Trade Representative will also review the ITC's order. It has the option to disapprove of the ITC’s action due to policy reasons.

"Apple’s teams work tirelessly to create products and services that empower users with industry-leading health, wellness, and safety features," the company said. "Apple strongly disagrees with the order and is pursuing a range of legal and technical options to ensure that Apple Watch is available to customers. Should the order stand, Apple will continue to take all measures to return Apple Watch Series 9 and Apple Watch Ultra 2 to customers in the US as soon as possible.”

Masimo has released its own smartwatch that Apple claims is an Apple Watch knockoff. Apple filed two patent infringement suits of its own against Masimo in October 2022, asserting that it copied patented Apple Watch features.

This article originally appeared on Engadget at https://www.engadget.com/apple-will-pause-watch-series-9-and-ultra-2-sales-in-the-us-due-to-a-patent-dispute-142051903.html?src=rss

Apple, Visa and Mastercard sued in proposed class action antitrust case over Apple Pay card fees

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A proposed class action lawsuit has accused Apple of accepting a form of bribe from Visa and Mastercard to ensure their dominance over point-of-sale payment card services for Apple Pay transactions, according to Reuters. As a result, the lawsuit says merchants have been forced to pay higher fees.

The companies are being sued by beverage retailer Mirage Wine & Spirits in Illinois on behalf of “all merchants in the United States that accepted Apple Pay as a method of payment at the physical point-of-sale.” According to the complaint, Apple made an agreement with Visa and Mastercard that did away with any incentive for it to develop its own competing point-of-sale transaction payment network or allow other companies to make use of iPhone’s “tap to pay” NFC functionality with third-party wallet apps. On the iPhone, Apple’s own wallet app is the only option. All of this has led to inflated merchant fees, the suit argues.

“In exchange for agreeing not to compete with Visa and Mastercard in the Relevant Market, the two card networks offered Apple a very large and ongoing cash bribe,” the lawsuit states. This bribe came as a percentage of the two companies’ transaction fees for credit and debit card payments made with Apple Pay. “Even as Apple Pay was in its infancy, the Entrenched Networks and Apple understood that this bribe would amount to hundreds of millions of dollars per year.”

Apple has been accused of anti-competitive behavior with Apple Pay in the past for how it blocks third-party access to its contactless payment technology. But earlier this week, Reuters reported that Apple may open up NFC access in the EU to avoid a fine in a case that has been ongoing since 2020.

This article originally appeared on Engadget at https://www.engadget.com/apple-visa-and-mastercard-sued-in-proposed-class-action-antitrust-case-over-apple-pay-card-fees-203445696.html?src=rss

Activision Blizzard will pay $54 million to settle California’s gender discrimination lawsuit

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California's Civil Rights Department (CRD) has announced that it has reached a settlement agreement with Activision Blizzard for a case it filed in 2021, accusing the company of systemic gender discrimination and fostering a culture that encouraged rampant misogyny and sexual harassment. The agency, which sued the developer when it was still called the California Department of Fair Employment and Housing, said Activision Blizzard will have to pay $54 million to settle its allegations. Out of the total, $45.75 million will go towards a fund meant to compensate female employees and contract workers who worked for the company in California from October 12, 2015 until December 31, 2020. 

In addition, the developer is expected to retain an independent consultant to evaluate its promotion policies and training materials, as well as to make recommendations based on what they see. If you'll recall, the agency's lawsuit alleged that female employees were overlooked for promotions and were paid less than their male colleagues. According to Marketwatch, though, the settlement will also see the agency withdraw its claims that there was widespread sexual harassment at the company. The department will reportedly have to file an amended complaint that only focuses on gender-based pay gap and discrimination. 

California's original lawsuit detailed how Activision Blizzard condoned a "frat boy" culture that encouraged certain unsavory behaviors. Male employees allegedly did "cube crawls," wherein they routinely groped and sexually harassed their female colleagues at their desks. A spokesperson for the company told Marketwatch that it is "gratified that the CRD has agreed to file an amended complaint that entirely withdraws its 2021 claims alleging widespread and systemic workplace harassment at Activision Blizzard." They added: "We appreciate the importance of the issues addressed in this agreement and we are dedicated to fully implementing all the new obligations we have assumed as part of it. We are committed to ensuring fair compensation and promotion policies and practices for all our employees, and we will continue our efforts regarding inclusion of qualified candidates from underrepresented communities in outreach, recruitment, and retention."

Meanwhile, the department told the website that its announcement, which contains no reference to its earlier sexual harassment allegations, "largely speaks for itself with respect to the historic nature of this more than $50 million settlement agreement, which will bring direct relief and compensation to women who were harmed by the company’s discriminatory practices."

As The Wall Street Journal noted when it reported the settlement, this lawsuit set the stage for Microsoft to acquire the developer. After reports came out that Activision Blizzard CEO Bobby Kotick kept sexual harassment allegations within the company from reaching its board of directors, the developer's shares fell, giving Microsoft the opening to offer a deal. The $68.7 billion acquisition was finalized in October after almost two years of contending with regulators trying to block the purchase. 

This article originally appeared on Engadget at https://www.engadget.com/activision-blizzard-will-pay-54-million-to-settle-californias-gender-discrimination-lawsuit-101149166.html?src=rss

Apple is settling a class action lawsuit over Family Sharing for $25 million

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If you used Apple’s Family Sharing feature with at least one other person and bought a subscription to an app through the App Store between 2015 and 2019, you might just get a settlement of up to $50 from the company. MacRumors reports that Apple will pay $25 million to settle a class action lawsuit that accuses the tech giant of misleading customers over Family Sharing.

The feature lets up to six family members share app subscriptions with each other but allows individual developers to forbid people from sharing a single subscription if they wish to. The lawsuit, which was filed in 2019, accuses Apple of not being transparent about this and misleading customers by making them think they could share a subscription to every app available in the App Store. “[The] vast majority of subscription-based apps” did support Family Sharing, the lawsuit claims.

The complaint also alleges that Apple placed ads on the landing pages of some subscription-based apps that didn’t support Family Sharing. This led “millions of customers” to download subscription-based apps believing they would be able to access them through their Family Sharing subscription, it says, citing YouTube Red and a puzzle game called Brainwell as examples of apps that didn’t support sharing their subscriptions with family members. 

Apple has reportedly denied any wrongdoing and has only agreed to settle the case to avoid the potential costs associated with a jury trial. The company did not respond to a request for comment from Engadget.

This article originally appeared on Engadget at https://www.engadget.com/apple-is-settling-a-class-action-lawsuit-over-family-sharing-for-25-million-235208522.html?src=rss

Elon Musk will have to testify in the SEC’s Twitter probe after all

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Despite Elon Musk's earlier attempts to avoid further testifying for the Twitter-takeover investigation, his luck appears to have run out. Reuters reported that in a San Francisco hearing on Thursday, a federal judge shot down Musk's attorney's challenge on whether the Securities and Exchange Commission (SEC) officials had the power to issue subpoenas, thus ruling that the exec must therefore comply with the regulator and appear for testimony. US Magistrate Judge Laurel Beeler was quoted saying, "you've got one more four-hour deposition, one more day of depositions to survive and it's over." Failing that, the judge would have to issue an order.

The SEC's ongoing probe dives into Musk’s late disclosure of his stake in Twitter — a publicly-traded company back then — which went against the requirements of US securities law. This 10-day delay on the paperwork, along with some potentially misleading information within, may have earned the exec as much as $156 million, according to The Washington Post. Former Twitter shareholders also filed a class-action lawsuit against Musk over his controversial $44 billion takeover of the social media platform, which has since been renamed X.

While it's unlikely that Musk can skip future testimonies for this case, he would be better off heeding Beeler's advice, regardless. "It seems unlikely there’s going to be any more hassle," the judge added, should the world's richest man "work it out" with the SEC. Whether that would help his case is a whole different matter, of course.

This article originally appeared on Engadget at https://www.engadget.com/elon-musk-will-have-to-testify-in-secs-twitter-probe-after-all-050742127.html?src=rss

Apple now needs a judge’s order to hand over push notification records

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Following the revelation that our mobile push notification records can be handed over to law enforcements, Apple put the blame on the Department of Justice (DOJ) for preventing tech companies from revealing such process. At the same time, the company updated its Legal Process Guidelines document to state that "a subpoena or greater legal process" was required to obtain the relevant records. However, Reuters spotted that a week later, Apple quietly tweaked this particular line to match Google's stricter policy on this matter:

"The Apple ID associated with a registered APNs token and associated records may be obtained with an order under 18 U.S.C. §2703(d) or a search warrant."

In other words, law enforcement will now need a judge's consent in order to obtain push notification data from Apple — as is the case with Google all this time, according to a statement provided to Reuters. Engadget reached out to Apple, but it refused to comment on the updated guidelines.

The "push notification spying" concerns were originally brought to light by Oregon Senator Ron Wyden who, in an open letter to the DOJ, claimed that foreign governments have been demanding Google and Apple to provide push notification records. Given how push notifications go through these companies' servers, the senator is worried that "Apple and Google are in a unique position to facilitate government surveillance of how users are using particular apps."

Wyden then addressed the elephant in the room, by arguing that these two tech giants "should be permitted to be transparent about the legal demands they receive, particularly from foreign governments." Apple's response regarding the DOJ's suppression appears to align with the senator's claims, but it's unclear whether the department will take action on both tech companies' stepped-up transparency on push notification surveillance.

This article originally appeared on Engadget at https://www.engadget.com/apple-now-needs-a-judges-order-to-hand-over-push-notification-records-052710429.html?src=rss

The EU will reportedly rule against Apple in Spotify’s complaint over App Store policies

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EU regulators have reportedly sided against Apple in its long fight against Spotify over App Store policies. The complaint centered on "anti-steering" rules that allegedly prevented platforms like Spotify from adequately promoting alternative methods of payment. While Spotify was the key opposition, the decision impacts not just music-streaming, but anyone offering software that requires a monthly subscription.

Bloomberg reports that regulators are still putting the final touches on the ruling, with a formal decision expected for early next year. Along with the ruling, the EU will likely penalize Apple for the practice and ban it outright. It’s expected that Apple will get hit with a steep fine, with some experts suggesting it could be as much as ten percent of its annual global revenue. This could add up to nearly $40 billion.

However, the fine is likely to be lower than that, as the EU tends to place more of an emphasis on actually ending abusive practices, instead of relying solely on fines as a deterrent. So the big news will be Apple being forced to play by the rules when operating in Europe, ending anti-steering practices once and for all. Of course, it’s all up in the air until the regulating body releases its judgment.

This follows a probe that started four years ago. It all began with a complaint from Spotify alleging that Apple’s anti-steering practices were forcing the music-streaming platform to raise prices to cover costs associated with appearing on the App Store. This led to an initial “statement of objections” against Apple in 2021 and a formal charge sheet this past February, as reported by The Verge.

The formal charge sheet declared in a “preliminary view” that “Apple’s anti-steering obligations” offer “unfair trading conditions.” For years, Apple didn’t allow rival streaming services like Spotify to even include links in third-party apps to their own subscription sign-ups. The company has since loosened this restriction slightly after an antitrust investigation in Japan. The EU ruling could further erode this mandate.

The European regulatory commission will address the accusation that Apple stopped companies from advertising alternative subscription methods but will not address anything related to in-app purchases. If you’ve been following this story, fees associated with in-app purchases were also part of the complaint until being dropped in February. The EU has issued a separate probe into Apple’s tap-to-pay technology and whether there are any inherent antitrust concerns. According to reports, the company’s in talks to settle that case.

How will this affect the rest of the world? There’s a similar case making its way through the US courts, via an antitrust suit brought forth by Epic Games. A judge sided with Epic, but Apple recently asked the Supreme Court for an appeal. The court granted a temporary reprieve, so Apple can still do whatever it wants in its App Store, for now. Apple is a global entity, however, so all it takes is a few countries to force a company-wide change. As an example, just look at USB-C ports.

Google faced a different outcome in a US court this week. A federal jury sided with Epic Games in a similar antitrust case against Google. The jury unanimously agreed that Google held an illegal monopoly on app distribution and in-app billing services for Android devices.

This article originally appeared on Engadget at https://www.engadget.com/the-eu-will-reportedly-rule-against-apple-in-spotifys-complaint-over-app-store-policies-195704039.html?src=rss

European Commission agrees to new rules that will protect gig workers rights

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Gig workers in the EU will soon get new benefits and protections, making it easier for them to receive employment status. Right now, over 500 digital labor platforms are actively operating in the EU, employing roughly 28 million platform workers. The new rules follow agreements made between the European Parliament and the EU Member States, after policies were first proposed by the European Commission in 2021.

The new rules highlight employment status as a key issue for gig workers, meaning an employed individual can reap the labor and social rights associated with an official worker title. This can include things like a legal minimum wage, the option to engage in collective bargaining, health protections at work, options for paid leave and sick days. Through a recognition of a worker status from the EU, gig workers can also qualify for unemployment benefits.

Given that most gig workers are employed by digital apps, like Uber or Deliveroo, the new directive will require “human oversight of the automated systems” to make sure labor rights and proper working conditions are guaranteed. The workers also have the right to contest any automated decisions by digital employers — such as a termination.

The new rulings will also require employers to inform and consult workers' when there are “algorithmic decisions” that affect them. Employers will be required to report where their gig workers are fulfilling labor-related tasks to ensure the traceability of employees, especially when there are cross-border situations to consider in the EU.

Before the new gig worker protections can formally roll out, there needs to be a final approval of the agreement by the European Parliament and the Council. The stakeholders will have two years to implement the new protections into law. Similar protections for gig workers in the UK were introduced in 2021. Meanwhile, in the US, select cities have rolled out minimum wage rulings and benefits — despite Uber and Lyft’s pushback against such requirements.

This article originally appeared on Engadget at https://www.engadget.com/european-commission-agrees-to-new-rules-that-will-protect-gig-workers-rights-175155671.html?src=rss