Tag Archives: Company Legal & Law Matters

The US Consumer Financial Protection Bureau will now regulate Apple Pay, Venmo and others

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The US Consumer Financial Protection Bureau (CFPB) is no longer regulating just banks, now supervising Apple and other companies offering digital wallets and payment apps. It will focus on companies that handle over 50 million transactions per year and ensure they have "the authority to conduct proactive examinations to ensure companies are complying with the law in these and other areas," the bureau said in a statement. "Supervision also is an important tool for the CFPB to assess risks that can emerge rapidly in this market, including from outages and other issues that could lead to millions of consumers losing access to their funds."

The CFPB will supervise Apple Pay, Google Pay, Venmo and others in the areas of privacy and surveillance, debanking (losing access to their app without notice) and errors and fraud. This could provide more options for opting out of data collection and restricting them from misrepresenting their data protection practices, among other regulations. "Digital payments have gone from novelty to necessity and our oversight must reflect this reality. The rule will help to protect consumer privacy, guard against fraud, and prevent illegal account closures," said CFPB Director Rohit Chopra. In October, the CFPB fined Apple and Goldman Sachs $89 million over misleading customers and not following through with disputed transactions on the Apple Card. 

The CFPB originally proposed this setup in November 2023, but the final policies have changed. Most notably, businesses originally had to process just five million transactions, rather than the 50 million. It also reduced the number to just count US dollars, rather than a wider scope. The supervision will go into effect 30 days following the Federal Register publication. 

This article originally appeared on Engadget at https://www.engadget.com/big-tech/the-us-consumer-financial-protection-bureau-will-now-regulate-apple-pay-venmo-and-others-132129928.html?src=rss

X adds Twitch to its advertising boycott lawsuit

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Twitch is now on the docket for X’s lawsuit against companies that stopped advertising on the social media site. X amended its lawsuit on Monday to include Twitch as a defendant in its lawsuit in a federal court in Wichita Falls, Texas, according to Reuters.

The new complaint claims that the gaming stream site owned by Amazon stopped purchasing ads on X at the end of 2022. X alleges that Twitch and other companies conspired with the World Federation of Advertisers (WFA) network’s Global Alliance for Responsible Media (GARM) initiative to withhold “billions of dollars in advertising revenue” from Elon Musk’s social media company. 

The plaintiff alleges the boycott violated federal antitrust laws and is demanding a jury trial to settle the matter. GARM also announced its discontinuation two days after X filed its lawsuit.

X Corp.’s joint lawsuit first filed in August also includes the WFA, the global food manufacturer Mars Incorporated, the drugstore chain CVS and the Danish energy company Ørsted A/S over the advertising boycott. X also has a lawsuit against the media watchdog group Media Matters for publishing a report showing X displayed ads next to antisemitic content on the platform.

This article originally appeared on Engadget at https://www.engadget.com/social-media/x-adds-twitch-to-its-advertising-boycott-lawsuit-215540775.html?src=rss

Department of Justice will reportedly push for Google to sell Chrome

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Google released Chrome in 2008 and it became synonymous with the company and its search engine. Well, that might no longer be the case if if the US Department of Justice (DOJ) has its way. The DOJ's antitrust officials reportedly plan to request a federal judge orders Google to sell off Chrome, Bloomberg reports, citing sources familiar with the plan. 

In August, federal judge Amit Mehta ruled that Google "is a monopolist" in the search engine industry. Mehta further agreed Google used its "monopoly power by charging supracompetitive prices for general search text ads." The company takes signed-in users' data to create targeted advertising, however, Mehta ruled Google doesn't hold the same monopoly power when it comes to the general search advertising market. 

In response to the ruling, antitrust officers also reportedly plan to suggest Google changes its data licensing policies. A new proposal would have Google syndicate search results separately and sell its click and query data. These moves could aid rival search engines and AI startups. The officers reportedly considered asking Mehta to force Google to sell of Android but have moved away from that request. The DOJ submitted initial proposals in October to remedy Google's actions.

Lee-Anne Mulholland, Google’s vice president of regulatory affairs, stated, that the "government putting its thumb on the scale in these ways would harm consumers, developers and American technological leadership at precisely the moment it is most needed."

Mehta's August ruling stems from a 2020 lawsuit filed by the DOJ and about one-fifth of the states, including Florida, Indiana and Texas. It argued that Google spent billions of dollars annually to device manufacturers, US wireless carriers and browser developers "to secure default status for its general search engine and, in many cases, to specifically prohibit Google’s counterparties from dealing with Google’s competitors." According to testimony from Prabhakar Raghavan, Google's chief technologist, the company spent $26.3 billion in 2021 to maintain its default search engine status — a majority of which likely went to Apple. 

A two-week hearing is set for April 2025 on changes for Google to implement, with a final ruling expected by August next year.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/department-of-justice-will-reportedly-push-for-google-to-sell-chrome-153612337.html?src=rss

X sues California over deceptive AI-made election content ban

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Elon Musk’s X is taking the state of California to court over a new law that prevents the spread of AI-generated election misinformation. Bloomberg reports that X filed a lawsuit against AB 2655, also known as the Defending Democracy from Deepfake Deception Act of 2024, in a Sacramento federal court.

California Gov. Gavin Newsom signed the bill into law on September 17, creating accountability standards for using false political speech faked with AI programs close to an election. The legislation prevents the distribution of “materially deceptive audio or visual media of a candidate within 60 days of an election at which the candidate will appear on the ballet.”

X argues that the law will create more political speech censorship. The complaint says the First Amendment “includes tolerance for potentially false speech made in the context of such criticisms.”

Newsom signed AB 2655 into law as part of a large package of bills addressing concerns about the use of AI to create sexually explicit deepfakes and other deceptive material. The next day, a federal judge issued a preliminary injunction against the law and other bills from Newsom’s signing.

California has become one of the epicenters of debate over the use and implementation of AI. Concerns about the use of AI in film and television projects, among other issues, prompted SAG-AFTRA to go on strike in 2023. SAG eventually reached a deal that included AI protections for actors prohibiting studios from using their likeness without permission or proper compensation. The following year, the state of California passed AB 2602, a law that makes it illegal for studios, publishers and video game studios to use someone’s likeness without their permission.

This article originally appeared on Engadget at https://www.engadget.com/ai/x-sues-california-over-deceptive-ai-made-election-content-ban-185010406.html?src=rss

Elon Musk adds Microsoft as defendant in his lawsuit against OpenAI

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Elon Musk has amended his lawsuit against OpenAI, adding more anti-trust claims against the company and including Microsoft as a defendant. He also added his company, xAI, as well as Shivon Zilis, a former OpenAI board member and mother to three of his children, as plaintiffs. Musk originally sued OpenAI in March, accusing founders Sam Altman and Greg Brockman of violating the organization's non-profit mission by teaming up with Microsoft. He withdrew the state court lawsuit in June before suing OpenAI and Altman again in federal court. 

Musk was one OpenAI's earliest backers, and one of his arguments was that he was "betrayed by Mr. Altman and his accomplices." In response to his lawsuit, OpenAI published old emails from 2015 to 2018 in a blog post, wherein it claimed that Musk was involved in the planning when the company first explored transitioning into a for-profit structure. xAI's founder allegedly wanted majority equity, control of the initial board of directors and the CEO position and even suggested merging OpenAI with Tesla. Musk left the organization in 2018 before Microsoft invested the first billion in OpenAI. Since then, Microsoft has invested $13 billion in the generative AI firm, and OpenAI has taken steps to complete its transformation into a more traditional for-profit company with a non-profit arm. 

As TechCrunch notes, the amended lawsuit argues that OpenAI is "actively trying to eliminate competitors," including xAI, by making investors promise not to fund them. xAI has been harmed by OpenAI's and Microsoft's exclusive exchange of "competitively sensitive information," the lawsuit also says. Musk's new complaint names LinkedIn co-founder Reid Hoffman and Microsoft VP Dee Templeton as defendants, as well, for being involved with both OpenAI and Microsoft boards. As for why Zilis was named as a plaintiff, the lawsuit says it's because the former OpenAI board member and current director of Neuralink repeatedly raised concerns over OpenAI's deals that were similar to Musks. 

This article originally appeared on Engadget at https://www.engadget.com/ai/elon-musk-adds-microsoft-as-defendant-in-his-lawsuit-against-openai-140023400.html?src=rss

Meta will have to defend itself from antitrust claims after all

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The Federal Trade Commission will get a chance to argue its case for Meta’s breakup in court. On Wednesday, US District Judge James Boasberg allowed the FTC’s lawsuit against the social media giant to move forward (PDF link). The FTC first sued Meta in 2020 in an attempt to force the company, then known as Facebook, to divest itself of Instagram and WhatsApp. Alongside dozens of attorneys general, the agency alleged Meta acquired the platforms in 2012 and 2014 to stifle growing competition in the social media market.

This past April, Meta asked Judge Boasberg to dismiss the case. In addition to noting that the FTC had previously approved both acquisitions, Meta argued that the agency had failed to show that the company held monopoly power in the social networking services market, and that, in buying Instagram and WhatsApp, it had harmed consumers. Additionally, the company claimed that it had invested billions of dollars in both platforms and made them better as a result, to the benefit of social media users everywhere.

While he did not entirely dismiss the lawsuit, Boasberg did force the FTC to narrow its case, dismissing an allegation that Facebook had provided preferential access to developers who agreed not to compete with it.

“We are confident that the evidence at trial will show that the acquisitions of Instagram and WhatsApp have been good for competition and consumers. More than 10 years after the FTC reviewed and cleared these deals, and despite the overwhelming evidence that our services compete with YouTube, TikTok, X, Apple’s iMessage, and many others, the Commission is wrongly continuing to assert that no deal is ever truly final, and businesses can be punished for innovating,” a Meta spokesperson told Engadget. “We will review the opinion when it’s filed.”

Judge Boasberg will meet with the two sides on November 25 to schedule the trial. The FTC lawsuit, it should be noted, was filed under the previous Trump administration, though whether it moves forward and in what form will depend on who President-elect Trump appoints to lead the agency.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/meta-will-have-to-defend-itself-from-antitrust-claims-after-all-155730259.html?src=rss

Discord leaker Jack Teixeira gets 15-year sentence for sharing classified documents

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Massachusetts Air National Guard member Jack Teixeira received a 15-year sentence in federal prison for leaking classified military documents on Discord in a Boston federal court, according to The Washington Post.

Teixeira appeared before the court earlier today and asked the judge for leniency. He also issued a statement apologizing for “all of the harm that I’ve caused, to my friends, family and those overseas.”

Defense attorney Michael Bachrach also claimed that Teixeira was subjected to bullying in high school and his military unit as an adjudicating factor for his actions. Judge Indira Talwani didn’t buy the defense’s bullying claims stating that the Air Force has already disciplined 15 other members connected to Teixeira for not taking more actions “that might have stopped him from doing this.”

Teixeira shared classified military documents as far back as late 2022 on a Discord server dedicated to the pixelated sandbox game Minecraft. The leak included information about the Ukrainian and Russian troop movements and military equipment used in the war in Ukraine and Russia's attempts to obtain more weapons from Egypt and Turkey. The documents eventually found their way to other Discord servers as well as 4chan and Telegram.

FBI officials arrested Teixeira at his home in April of last year. Teixeira originally agreed to a plea deal with federal prosecutors in March that included a 16-year prison sentence for pleading guilty to six counts of willful retention and transmission of national defense information and violating the Espionage Act. If he stuck with his not guilty plea and received a guilty verdict, Teixeira faced a much steeper maximum prison term of 60 years.

This article originally appeared on Engadget at https://www.engadget.com/cybersecurity/discord-leaker-jack-teixeira-gets-15-year-sentence-for-sharing-classified-documents-231319586.html?src=rss

NetEase executives and workers were reportedly arrested amid a corruption investigation

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The ex-head of NetEase's esports division and NetEase Games' former general manager are said to have been arrested on money laundering and bribery charges. Alongside ex-executives Xiang Liang and Jin Yuchen, several other people who worked at the company were reportedly arrested over alleged corruption.

As noted by Game Developer, Chinese outlet Leifeng reported that the former employees in question allegedly laundered in the region of 800 million to 1 billion yuan ($111 million to $139 million). NetEase confirmed to Bloomberg Law only that police were investigating possible corruption. The company is said to have dismissed nine staff members for alleged bribery.

Several external individuals were also implicated, according to Yicai Global. The outlet noted that, per an internal memo, NetEase will refuse to do business with 27 companies that have been connected to the alleged fraud and corruption.

NetEase is behind the likes of Diablo Immortal and Naraka: Bladepoint (the latter of which averages more than 109,000 players on Steam at any given time). It has two free-to-play shooters on the way based on major franchises, namely Marvel Rivals and Destiny: Rising.

White collar crimes aren't quite a rarity in the games industry. Sonic the Hedgehog co-creator Yuji Naka was last year handed a suspended prison sentence and ordered to pay just over $1.1 million after admitting to insider trading.

This article originally appeared on Engadget at https://www.engadget.com/gaming/netease-executives-and-workers-were-reportedly-arrested-amid-a-corruption-investigation-180055502.html?src=rss

NetEase executives and workers were reportedly arrested amid a corruption investigation

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The ex-head of NetEase's esports division and NetEase Games' former general manager are said to have been arrested on money laundering and bribery charges. Alongside ex-executives Xiang Liang and Jin Yuchen, several other people who worked at the company were reportedly arrested over alleged corruption.

As noted by Game Developer, Chinese outlet Leifeng reported that the former employees in question allegedly laundered in the region of 800 million to 1 billion yuan ($111 million to $139 million). NetEase confirmed to Bloomberg Law only that police were investigating possible corruption. The company is said to have dismissed nine staff members for alleged bribery.

Several external individuals were also implicated, according to Yicai Global. The outlet noted that, per an internal memo, NetEase will refuse to do business with 27 companies that have been connected to the alleged fraud and corruption.

NetEase is behind the likes of Diablo Immortal and Naraka: Bladepoint (the latter of which averages more than 109,000 players on Steam at any given time). It has two free-to-play shooters on the way based on major franchises, namely Marvel Rivals and Destiny: Rising.

White collar crimes aren't quite a rarity in the games industry. Sonic the Hedgehog co-creator Yuji Naka was last year handed a suspended prison sentence and ordered to pay just over $1.1 million after admitting to insider trading.

This article originally appeared on Engadget at https://www.engadget.com/gaming/netease-executives-and-workers-were-reportedly-arrested-amid-a-corruption-investigation-180055502.html?src=rss

Nintendo Palworld lawsuit seeks $65,700 in damages

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Nintendo and the Pokémon Company are seeking approximately $65,700 in compensation from their lawsuit against Palworld developer Pocketpair. In a press release the studio issued on Friday, it said Nintendo and the Pokémon Company want ¥5 million each (plus late fees), for a total of ¥10 million or $65,700 in damages.

At first glance, that's a paltry amount of money to demand for copying one of the most successful gaming properties ever, particularly when you consider Tropic Haze, the creator of the now defunct Yuzu Switch emulator, agreed to pay $2.4 million to settle its recent case with Nintendo. While Nintendo and the Pokémon Company may have well wanted to sue for more, their legal approach may have limited their options somewhat.

As you might recall, when the two sued Pocketpair in September, they didn’t accuse it of copyright infringement. Instead, they went for patent infringement. On Friday, Pocketpair listed the three patents Nintendo and the Pokémon Company are accusing the studio of infringing. Per Bloomberg, they relate to gameplay elements found in most Pokémon games. For example, one covers the franchise’s signature battling mechanics, while another relates to how players can ride monsters.

Pokémon games have featured those mechanics since the start, but here’s the thing: all three patents were filed and granted to Nintendo and the Pokémon Company after Pocketpair released Palworld to early access on January 19, 2024. The earliest patent, for instance, was granted to Nintendo and the Pokémon Company on May 22, 2024, or nearly four months after Palworld first hit Steam and Xbox Game Pass.

According to Pocketpair, the two companies seek “compensation for a portion of the damages incurred between the date of registration of the patents and the date of filing of this lawsuit.” Put another way, it's a small window of time the suit targets. 

I’m not a lawyer, so I won’t comment on Nintendo’s strategy of attempting to enforce patents that were issued after Palworld was already on the market. However, I think it’s worth mentioning that Pocketpair CEO Takuro Mizobe had said before the game's release that Palworld had “cleared legal reviews,” suggesting the studio had looked at Nintendo's patent portfolio for possible points of conflict. In any case, the Tokyo District Court is scheduled to hear opening remarks from each side next week.

This article originally appeared on Engadget at https://www.engadget.com/gaming/nintendo/nintendo-palworld-lawsuit-seeks-65700-in-damages-163051523.html?src=rss