Tag Archives: Company Legal & Law Matters

Intel wins latest antitrust battle with EU court

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Intel just won an epic battle with the European Union over a €1.06 billion ($1.1 billion) fine levied way back in 2009, Bloomberg reported. In a final decision, the EU Court of Justice overturned the original judgement, ruling that regulators didn't provide sufficient proof that Intel gave illegal rebates to PC makers. Intel's European misadventures aren't quite finished yet, though, as it's still battling a €376 million fine ($406 million) imposed by the Commission last year.

Back in 2009, the EU ruled that Intel illegally used hidden rebates to squeeze rivals out of the marketplace for CPUs. It also found that Intel paid manufacturers to delay or completely cease the launch of products powered by AMD's CPUs, calling those actions "naked restrictions." The legal process went back and forth for years after that, but in 2017, Europe's highest court ordered the fine to be re-examined as the EU didn't conduct an economic assessment on how Intel's actions impacted rivals. 

Europe's second highest court confirmed that the Commission carried out an incomplete analysis and overturned the €1.06 billion fine back in 2022. At the time, it said that the EU couldn't establish if Intel's rebates were "capable of having, or were likely to have, anticompetitive effects" due to the incomplete analysis. 

The Commission launched an appeal to that ruling, but the EU Court of Justice has now upheld it. Still, Intel never appealed the "naked restrictions" part of past decisions, so last year the Commission imposed a new €376 million fine on that basis. Intel is also fighting that penalty too, though, and has sued the EU to recoup interest on the original, larger fine.

The processor landscape has changed drastically since the original 2009 ruling, of course. Back then, Intel ruled the PC roost with an 81 percent CPU market share, compared to 12 percent for AMD. Today, Intel's share is down to 63 percent and the company has struggled in the area of chip production next to rival TSMC, which manufacturers the bulk of AMD and NVIDIA's CPUs, GPUs and AI processors. Ironically, Intel has outsourced a large chunk of its production to TSMC and other foundries, to the tune of around 30 percent. Luckily, despite its manufacturing problems, it does appear to have excellent legal counsel.

This article originally appeared on Engadget at https://www.engadget.com/computing/intel-wins-latest-antitrust-battle-with-eu-court-133040762.html?src=rss

Apple, Goldman Sachs fined $89 million for misleading Apple Card customers

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The Apple Card has landed Apple and Goldman Sachs in hot water. In a press release spotted by The Verge, the Consumer Financial Protection Bureau (CFPB) said it was fining the two companies a combined $89 million over practices involving the Apple Card.

The CFPB says Apple failed to send “tens of thousands” of disputed card transactions to Goldman Sachs. When it finally sent the transactions to the investment bank, Goldman Sachs failed to follow “numerous federal requirements for investigating the disputes,” according to the CFPB’s announcement.

Apple and Goldman are also accused of misleading customers about the Apple Card. Some consumers believed they could make interest-free payments to purchase an Apple device with the credit card but interest charges still showed up on their bill “because they were not automatically enrolled as expected.”

Apple is also accused of keeping its interest-free payment option off of its website if the customer wasn’t using a Safari browser. The CFPB also says Goldman Sachs misled customers about the application of some refunds that racked up additional interest charges.

The CFPB has ordered Goldman Sachs to pay at least $19.8 million in redress funds and a $45 million civil money penalty. The company is also required to present a “credible plan” to comply with laws before launching any new credit card product. Apple also received a $25 million civil money penalty that will go to the CFPB’s victims relief fund.

Apple and Goldman Sachs introduced the Apple Card in 2019, advertising it as a product that could “help customers lead a healthier financial life.”. Four years later, a report from the Wall Street Journal said that Goldman Sachs was starting to have doubts about the consumer lending industry and thought the venture may have been a mistake.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/apple-goldman-sachs-fined-89-million-for-misleading-apple-card-customers-192538650.html?src=rss

Arm cancels Qualcomm’s license to use its chip design standards

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Arm has taken its feud with Qualcomm to the next level, two years after filing a lawsuit against its former close partner. According to Bloomberg, the British semiconductor company has canceled the architecture license allowing Qualcomm to use its intellectual property and standards for chip design. As the news organization notes, Qualcomm, like many other chipmakers, uses Arm's computer code that chips need to run software, such as operating systems. Arm has reportedly sent Qualcomm a 60-day notice of cancelation — if they don't get to an agreement by then, it could have a huge impact on both companies' finances and on Qualcomm's operations. 

The SoftBank-backed chipmaker sued Qualcomm in 2022 after the latter purchased a company called Nuvia, which is one of its other licensees. Arm argued that the US company didn't obtain the necessary permits to transfer Nuvia's licenses. As such, Nuvia breached their contract and it had terminated its licenses, Arm explained in its lawsuit. Qualcomm has been using Nuvia-developed technology in the chips designed for AI PCs, such as those from Microsoft and HP. But Arm wants the company to stop using Nuvia-developed tech and to destroy any Arm-based technology developed prior to the acquisition. 

Qualcomm will have to stop selling most of the chips that account for its $39 billion in revenue, Bloomberg says, if the companies don't resolve the issue within the next 60 days. It seems the US chipmaker believes this is a tactic by Arm to threaten its business and to get higher royalties, because its spokesperson told Bloomberg and the Financial Times: "This is more of the same from Arm — more unfounded threats designed to strong-arm a longtime partner, interfere with our performance-leading CPUs, and increase royalty rates regardless of the broad rights under our architecture license." Qualcomm also accused Arm of attempting to disrupt the legal process, called its grounds for licensing termination "completely baseless" and said that it's confident its "rights under its agreement with Arm will be affirmed."

Meanwhile, an Arm spokesperson told us: "Following Qualcomm’s repeated material breaches of Arm’s license agreement, Arm is left with no choice but to take formal action requiring Qualcomm to remedy its breach or face termination of the agreement. This is necessary to protect the unparalleled ecosystem that Arm and its highly valued partners have built over more than 30 years. Arm is fully prepared for the trial in December and remains confident that the Court will find in Arm’s favor."

Update, October 23, 2024, 11:33PM ET: This story has been updated to add Arm's statement.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/arm-cancels-qualcomms-license-to-use-its-chip-design-standards-123031968.html?src=rss

Wall Street Journal and New York Post are suing Perplexity AI for copyright infringement

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The Wall Street Journal's parent company, Dow Jones, and the New York Post are suing AI-powered search startup Perplexity for using their content to train its large language models. Both News Corp. publications are accusing Perplexity of copyright infringement for using their articles to generate answers to people's queries, thereby taking traffic away from the publications' websites. "This suit is brought by news publishers who seek redress for Perplexity’s brazen scheme to compete for readers while simultaneously freeriding on the valuable content the publishers produce," the publishers wrote in their complaint, according to the Journal. 

In their lawsuit, the publications argued that Perplexity can serve users not just snippets of copyrighted articles, but the whole thing, especially for those paying for its premium subscription plan. They cited an instance wherein the service allegedly served up the entirety of a New York Post piece when the user typed in "Can you provide the fultext of that article." In addition, the publications are accusing Perplexity of harming their brand by citing information that never appeared on their websites. The company's AI can hallucinate, they explained, and add incorrect details. In one instance, it allegedly attributed quotes to a Wall Street Journal article about the US arming Ukraine-bound F-16 jets that were never in the piece. The publications said they sent a letter to Perplexity in July to raise these legal issues, but the AI startup never responded.  

Various news organizations have sued AI companies in the past for copyright infringement. The New York Times, as well as The Intercept, Raw Story and AlterNet, sued OpenAI for using their content to train its LLMs. In its lawsuit, the Times said OpenAI and Microsoft "seek to free-ride" on its massive investment in journalism. Condé Nast previously sent a cease-and-desist letter to Perplexity to demand that it stop using its publications' articles as responses to users' queries. And in June, Wired reported that Amazon had started investigating the AI company over reports that it scrapes websites without consent. 

News Corp. is asking the court to prohibit Perplexity from using its publications' content without permission, and it's also asking for damages of up to $150,000 for each incident of copyright infringement. Whether the company is willing to negotiate a content agreement remains to be seen — News Corp. struck a licensing deal with OpenAI earlier this year, which allows the ChatGPT owner to use its websites' articles for training over the next five years in exchange for a reported $250 million.

This article originally appeared on Engadget at https://www.engadget.com/ai/wall-street-journal-and-new-york-post-are-suing-perplexity-ai-for-copyright-infringement-050135219.html?src=rss

ESPN faces $146K fine for using emergency alert tones in NBA ads

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The Federal Communications Commission (FCC) could go all the way with a proposed fine against ESPN.

The proposal calls for a penalty of $146,976 against ESPN for violating the Emergency Alert System (EAS) rules when the network aired ads to promote the 2023-2024 NBA season. The FCC said the tones were used “in the absence of an actual emergency.”

The offending ads contained the unauthorized EAS tune and were aired six times from October 20 to 24, 2023. Several complaints were filed on October 20 about the TV spots. The cable network admitted in response to a letter of inquiry that it used the EAS attention signals in the ads.

ESPN will have an opportunity to respond to the proposed fine. The Commission will examine all the evidence and legal arguments surrounding the alleged illegal tone use before making a final decision on the matter.

This is the third time the network misused an emergency tone on air. The FCC issued a $1.12 million fine as part of a forfeiture order in 2015 when ESPN used EAS tones a total of 13 times across three of its cable networks. ESPN violated EAS tone usage rules a second time during an airing of one of its 30 for 30 documentaries Roll Tide/War Eagle, leading to a $20,000 fine in 2021.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/espn-faces-146k-fine-for-using-emergency-alert-tones-in-nba-ads-200054993.html?src=rss

Google wants to put the consequences of its Epic antitrust ruling on pause during appeal

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Update, October 18, 5PM ET: District Judge James Donato has granted an administrative stay. This effectively puts Donato's prior order, which was due to come into effect shortly, on pause until the 9th Circuit's resolves Google's stay motion. In a statement given to Engadget, a Google spokesperson said: 

"We’re pleased with the District Court’s decision to temporarily pause the implementation of dangerous remedies demanded by Epic, as the Court of Appeal considers our request to further pause the remedies while we appeal. These remedies threaten Google Play’s ability to provide a safe and secure experience and we look forward to continuing to make our case to protect 100 million U.S. Android users, over 500,000 U.S. developers and thousands of partners who have benefited from our platforms.”

The original story follows.

Google has formally filed a motion [PDF] asking the 9th Circuit Court of Appeals to put a pause on the order that forces the company to open the Play store to competitors. If you'll recall, Google lost an antitrust lawsuit filed by Epic Games after a federal jury found that the company held an illegal monopoly on app distribution and in-app billing services for Android devices. Earlier this month, US District Judge James Donato ordered Google to allow third-party app stores access to the Google Play app catalog and to make those stores downloadable from its storefront. Now, Google is asking the court for a stay on that order while it's appealing the Epic antitrust lawsuit decision, saying that it will expose 100 million Android users in the US to "substantial new security risks."

The company called the order "harmful and unwarranted" and said that if it's allowed to stand, it will threaten Google's ability to "provide a safe and trusted used experience." It argued that if it makes third-party app stores available for download from Google Play, people might think that the company is vouching for them, which could raise "real risks for [its] users." Those app stores could have "less rigorous protections," Google explained, that could expose users to harmful and malicious apps. 

It also said that giving third-party stores access to the Play catalog could harm businesses that don't want their products available alongside inappropriate or malicious content. Giving third-party stores access to its entire library could give "bad-intentioned" stores a "veneer of legitimacy." Moreover, it argued that allowing developers to link out from their apps "creates significant risk of deceptive links," since bad actors could use the feature for phishing attacks to compromise users' devices and steal their data. 

One of court's main proposed changes is to allow developers to remove Google Play billing as an option, allowing them to offer their apps to Android users without having to pay the company a commission. However, Google said that by allowing developers to remove its billing system, it could "force an option that may not have the safeguards and features that users expect." 

In its filing, Google emphasized that the three weeks the court gave it to make these sweeping changes is too short for a "Herculean task." It creates an "unacceptable risk of safety" that could lead to major issues affecting the functionality of users' Android devices, it said. The company also questioned why the court sided with Epic in its antitrust lawsuit, whereas it sided with Apple in a similar case also filed by the video game company. "It is pause-inducing that Apple, which requires all apps go through its proprietary App Store, is not a monopolist, but Google — which built choice into the Android operating system so device makers can preinstall and users can download competing app stores — was condemned for monopolization."

Epic Games provided Engadget with the following statement: "The jury’s verdict and the court’s injunction were clear: Google’s anticompetitive Play Store practices are illegal. Google is merely fear mongering and falsely using security as a pretext to delay the changes mandated by the court. This is Google’s last ditch effort to protect their control over Android and continue extracting exorbitant fees. The court’s injunction must go into effect swiftly so developers and consumers can benefit from competition in the mobile ecosystem."

This article originally appeared on Engadget at https://www.engadget.com/big-tech/google-wants-to-put-the-consequences-of-its-epic-antitrust-ruling-on-pause-during-appeal-020354621.html?src=rss

NLRB accuses Apple of illegally restricting employee Slack and social media use

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The National Labor Relations Board has accused Apple of infringing on its employees’ rights to advocate for better working conditions. In a complaint spotted by Reuters, the agency alleges Apple illegally fired an employee who had used Slack to advocate for workplace changes at the company. Separately, the NLRB accuses Apple of forcing another worker to delete a social media post.

The case stems from a 2021 complaint filed by #AppleToo co-organizer Janneke Parrish. In October of that year, Apple fired Parrish for allegedly sharing confidential information, a claim she denies. Per the complaint, Parrish used Slack and public social media posts to advocate for permanent remote work.

She also shared open letters critical of the tech giant, distributed a pay equity survey, and recounted instances of sexual and racial discrimination at Apple. According to the labor board, Apple’s policies bars employees from creating Slack channels without first obtaining permission from a manager. Instead, workers must direct their workplace concerns to either management or a “People Support” group the company maintains. An example of the type of concerns some employees used Slack to voice can be seen in a 2021 tweet from former Apple employee Ashley Gjøvik.

“We look forward to holding Apple accountable at trial for implementing facially unlawful rules and terminating employees for engaging in the core protected activity of calling out gender discrimination and other civil rights violations that permeated the workplace,” Parrish’s lawyer, Laurie Burgess, told Reuters.

Apple disputes Parrish's claims. "We are and have always been deeply committed to creating and maintaining a positive and inclusive workplace. We take all concerns seriously and we thoroughly investigate whenever a concern is raised and, out of respect for the privacy of any individuals involved, we do not discuss specific employee matters," an Apple spokesperson told Engadget. "We strongly disagree with these claims and will continue to share the facts at the hearing."

Provided Apple does not settle with the agency, an initial hearing is scheduled for February with an administrative judge. The NLRB is looking to force the company to change its policy and reimburse Parrish for the financial hardships she suffered due to her firing. Last week, the NLRB accused Apple of forcing employees to sign illegal and overly broad confidentially, non-disclosure and non-compete agreements.

Update 7:09PM ET: Added comment from Apple. 

This article originally appeared on Engadget at https://www.engadget.com/big-tech/nlrb-accuses-apple-of-illegally-restricting-employee-slack-and-social-media-use-200059723.html?src=rss

Xbox gamers will soon be able to buy games from the Xbox Android app

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Starting in November, Xbox players will be able to play and purchase games directly from the Xbox App on Android. Sarah Bond, the president of Xbox at Microsoft, has made the announcement on X, with a comment that the "court's ruling to open up Google's mobile store in the US will allow more choice and flexibility." She's talking about the ruling on Google's four-year antitrust battle with Epic Games that was recently handed down by US District Judge James Donato. The judge issued a permanent injunction that would force Google to give third-party app stores access to the Play library and to make Android apps available on alternative storefronts. 

As CNBC notes, players can download games to their Xbox consoles through the Android app, and Game Pass Ultimate subscribers can also stream games on their phones. However, they can't buy games straight from the app. After the court's ruling, Google won't be able to require developers to use its billing system and will be not be allowed to prohibit devs from telling people about more affordable payment options. Microsoft will be able to offer titles for purchase without having to pay Google a commission, which was most likely the reason why Xbox didn't sell games within its Android app. 

Epic's lawsuit against Google has been going on for years. In 2023, a federal jury sided with the plaintiff and found that Google held an illegal monopoly on app distribution and in-app billing services for Android devices. When Judge Donato handed down his ruling, Google told Engadget that it's going to appeal the decision, because it "fails to take into account that Android is an open platform and developers have always had many options in how to distribute their apps."

This article originally appeared on Engadget at https://www.engadget.com/gaming/xbox/xbox-gamers-will-soon-be-able-to-buy-games-from-the-xbox-android-app-120001529.html?src=rss

More than a dozen states sue TikTok, alleging that it’s designed to addict kids

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Fourteen states have just filed lawsuits against TikTok that claim the social media platform damages the mental health of young users and collects their data without consent. Each lawsuit was filed individually. The suits, which are led by the attorneys general of New York and California, say the platform violated the law by “falsely claiming its platform is safe for young people.”

The lawsuits spotlight what the plaintiffs call “addictive” features. These include the kinds of things present with many modern social media apps, like 24/7 notifications and autoplay videos. However, the lawsuit also focuses on “dangerous TikTok challenges.” There have been plenty of these, from challenges that task people with taking an excessive amount of Benadryl to messing with an electrical outlet.

“Young people are struggling with their mental health because of addictive social media platforms like TikTok,” New York Attorney General Letitia James said in a statement. “TikTok claims that their platform is safe for young people, but that is far from true.”

It’s worth noting that the aforementioned challenges were issued by other TikTok users, and not by the platform itself. However, the suits do attempt to illustrate TikTok's “underlying business model”, which is accused of “maximizing young users’ times on the platform so the company can boost revenue from selling targeted ads.”

The various lawsuits even suggest that TikTok allows for the sexual exploitation of its younger users, via a proprietary currency and a live streaming component. The TikTok Live platform is technically only for adults, but one of the suits alleges "lax age verification measures incentivize US minors to lie about their age to gain access."

Once live, users can receive currency from viewers. The suit suggests that this practice “enables other serious harms to minors including sexual exploitation" and that "TikTok is fully aware that these features combine to create an environment where children are often sexually exploited by users but has chosen to turn a blind eye in favor of increasing its profitability." 

The suits also accuse TikTok and parent company ByteDance of collecting the data of young users without consent. This is not a new complaint, as the Department of Justice filed a suit back in August that charged TikTok of collecting the personal information of children on the platform and failing to comply with requests for that data to be deleted. Texas also recently sued the platform for violating child privacy laws.

Today’s suits seek to impose financial penalties on the platform, including “the disgorgement of all profits resulting from the fraudulent and illegal practices, and to collect damages for users that have been harmed.”

TikTok has responded to the suits, saying "we strongly disagree with these claims." The platform went on to call the claims "inaccurate and misleading." It listed all of the various "robust safeguards" it has put in place to protect kids, including "default screentime limits, family pairing, and privacy by default for minors under 16." 

This is all happening as parent company ByteDance faces a decision to either sell TikTok to a non-Chinese buyer or experience a nationwide ban. The current deadline for this decision is January 17, but the company’s lawyers recently argued that the terms of this law were unconstitutional.

The Electronic Frontier Foundation provided Engadget with the following statement from the organization's free speech and transparency litigation director, Aaron Mackey:

We’re still reviewing the complaints filed by the attorneys general, but at first blush, we’re troubled. Social media algorithms aren’t inherently evil – they can sift through vast amounts of data to present users with content they’ll find relevant, entertaining, and educational. The states' claims regarding features like autoplay and endless scrolling are really just a smokescreen for their distaste for First Amendment-protected content. We doubt the attorneys general would sue if TikTok presented an endless scroll of high school math problems or excerpts from classic literature. Parents and minors, not states, should decide when and how young people use TikTok. Finally, the complaint's troubling allegations about TikTok processing user data without appropriate consent shows once again the need for strong privacy first legislation to protect all users.

Update October 8, 3:18PM ET: Added the EFF's statement.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/more-than-a-dozen-states-sue-tiktok-alleging-that-its-designed-to-addict-kids-151242893.html?src=rss

X reportedly paid its Brazil fines to the wrong bank, causing further delay in reinstatement case

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Despite the company’s recent decision to abide by the demands of the Brazilian Supreme Court, X still isn’t back online in Brazil — and according to Reuters, that’s at least in part because it paid its fines to the wrong bank. After weeks being banned in Brazil, X in late September named a legal representative for the country as ordered, and took down accounts the court accused of spreading misinformation and hate speech. Its final hurdle was to pay off the fines that it had racked up, reportedly amounting to roughly $5 million.

Citing Friday court filings, Reuters reports that X says it’s paid the fines and requested to have services restored. But, Justice Alexandre de Moraes said the funds went to the wrong bank, and the decision will have to wait until they’ve been transferred. X maintains that it paid its fines correctly, according to Reuters. X has been banned in Brazil since the end of August. While the company initially resisted the court’s orders, it recently changed its tune and said it was working with the Brazilian government to get the platform back online in the country.

This article originally appeared on Engadget at https://www.engadget.com/social-media/x-reportedly-paid-its-brazil-fines-to-the-wrong-bank-causing-further-delay-in-reinstatement-case-164959494.html?src=rss