Tag Archives: Company Legal & Law Matters

Apple ordered to pay back its illegal $14.4 billion Irish tax break

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It's a bad day for big tech in the EU. After rejecting Google's appeal of a $2.7 billion antitrust fine, Europe's highest court ruled that Apple must pay back its €13 billion ($14.4 billion) Irish tax break deemed illegal by the EU Commission way back in 2016. 

The decision by the European Court of Justice overturns an earlier 2020 decision by a lower court in Apple's favor. "[The decision] confirms the European Commission's 2016 decision: Ireland granted Apple unlawful aid which Ireland is required to recover," the judges wrote. 

In a statement to the Financial Times, Apple said the EU was "trying to retroactively change the rules and ignore that, as required by international tax law, our income was already subject to taxes in the US." 

Apple's effective tax rate for revenue earned in Europe was an effective 1 percent on European profits and as low as .005 percent in 2014. Because the deal gave Apple a "significant advantage" over the competition, the EU Commission ordered it to pay back "illegal state aid" over the ten-year period before it began investigating its tax practices. 

The decision follows several setbacks for the European Commission against US corporations. Last year, the ECJ ruled that Amazon wouldn't be required to pay €250 million ($276 million) in back taxes to Luxembourg and lost a similar case to Starbucks in the Netherlands. So despite today's wins for the EU, those decisions could haunt future EU cases against big tech around tax havens in individual member states. 

This article originally appeared on Engadget at https://www.engadget.com/big-tech/apple-ordered-to-pay-back-its-illegal-144-billion-irish-tax-break-110041387.html?src=rss

Google loses its seven-year fight against $2.7 billion EU antitrust fine

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Google has lost a seven-year battle with the European Commission as the EU's highest court upheld a $2.7 billion antitrust fine against the search giant, Reuters reported. Antitrust regulators originally levied the penalty against Google in 2017 for favoring its own shopping service against local rivals. 

"Google's strategy for its comparison shopping service wasn't just about attracting customers by making its product better than those of its rivals," EU commissioner Margrethe Vestager said at the time. "Instead, Google abused its market dominance as a search engine by promoting its own comparison shopping service in its search results, and demoting those of competitors."

Google lost its first appeal with a lower court in 2021, sending the appeal to Luxembourg's Court of Justice of the European Union (CJEU). The company argued that it was being punished for its dominant position in the market and that the original decision "erred in law by treating quality improvements... as abusive." 

However, the CJEU judges upheld the lower court's decision that the company is allowed to have a dominant position but not to abuse it. "In particular, the conduct of undertakings in a dominant position that has the effect of hindering competition on the merits and is thus likely to cause harm to individual undertakings and consumers is prohibited," they noted. 

An unnamed Google spokesperson has already responded to the decision, saying the company is "disappointed" with the judgment. They added "this judgment relates to a very specific set of facts. We made changes back in 2017 to comply with the European Commission’s decision. Our approach has worked successfully for more than seven years, generating billions of clicks for more than 800 comparison shopping services."

Google is also fighting a legal battle in the EU that could force it to sell parts of its adtech businesses over similar arguments that it favors its own services over those of competitors. The EU commission found preliminarily that since Google is unlikely to change its behavior, only the "mandatory divestment" of part of its services would address competition concerns. All told, Google has accumulated 8.25 billion euros ($9.12 billion) in EU antitrust fines over the last ten years.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/google-loses-its-seven-year-fight-against-27-billion-eu-antitrust-fine-090638804.html?src=rss

UK watchdog claims Google’s ad tech practices are harming competition

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Google is facing yet more scrutiny over its ad tech practices after the UK’s competition watchdog provisionally found that the company is abusing its dominant market position. In a statement of objections, the Competition and Markets Authority said Google is harming competition in the country “by using its dominance in online display advertising to favor its own ad tech services.”

The watchdog contends that, since 2015, Google has taken advantage of its dominant position in the sector as the operator of the Google Ads and DV260 ad-buying tools and DoubleClick For Publishers, a publisher ad server, to bolster its AdX advertising exchange. The CMA said that AdX is at the heart of the company's ad tech stack and it's the platform on which it charges the highest fees to advertisers — approximately 20 percent of each bid for ad space that's processed there.

The CMA provisionally found that "the vast majority of publishers and advertisers use Google’s ad tech services in order to bid for and sell advertising space" on websites. By preferencing its own services, "Google disadvantages competitors and prevents them competing on a level playing field to provide publishers and advertisers with a better, more competitive service that supports growth in their business," the CMA stated.

The statement of objections gives Google a chance to provide feedback and the CMA will consider those representations before it makes any final decision. A case decision group comprising three people (none of whom were involved in the preliminary investigation or sending the statement of objections). If the CMA ultimately determines that Google has infringed competition rules, it can fine the company up to 10 percent of its global annual revenue and order legally binding changes to the ad tech business.

Google disagrees with the decision and “will respond accordingly,” Dan Taylor, vice president of Google Ads, said. “Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers,” Taylor told CNBC in a statement. “Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector. The core of this case rests on flawed interpretations of the ad tech sector.”

Regulators elsewhere have taken aim at Google's position in the ad tech space. The European Commission accused the company of "abusive practices" in the online ad space in June last year. The EC said that a potential order for Google to implement remedies may not be enough to resolve those practices. That could lead to the EU breaking up Google's ad business.

Meanwhile, the Department of Justice and Google are set to go head-to-head in a trial that will start on Monday. The agency has called for the company's ad tech business to be broken up, citing an alleged illegal monopoly Google holds in that market. Google failed in an attempt to have the case dismissed. Last month, a federal judge ruled that Google illegally abused a monopoly over the search industry following a trial that stemmed from a separate DOJ lawsuit.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/uk-watchdog-claims-googles-ad-tech-practices-are-harming-competition-144944451.html?src=rss

New Mexico sues Snap over its alleged failure to protect kids from sextortion schemes

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New Mexico's attorney general has filed a lawsuit against Snap, accusing the company of failing to protect children from sextortion, sexual exploitation and other harms on Snapchat. The suit contends that Snapchat's features "foster the sharing of child sexual abuse material (CSAM) and facilitate child sexual exploitation."

The state's Department of Justice carried out a months-long investigation into Snapchat and discovered a “vast network of dark web sites dedicated to sharing stolen, non-consensual sexual images from Snap.” It claims to have found more than 10,000 records related to Snap and child sexual abuse material “in the last year alone,” and says Snapchat was "by far" the biggest source of images and videos on the dark web sites that it examined.

In its complaint [PDF], the agency accused the app of being “a breeding ground for predators to collect sexually explicit images of children and to find, groom and extort them.” It states that "criminals circulate sextortion scripts" that contain instructions on how to victimize minors. It claims that these documents are publicly available and are actively being used against victims but they “have not yet been blacklisted by . . . Snapchat.”

Furthermore, investigators determined that many accounts that openly share and sell CSAM on Snapchat are linked to each other through the app's recommendation algorithm. The suit claims "Snap designed its platform specifically to make it addicting to young people, which has led some of its users to depression, anxiety, sleep deprivation, body dysmorphia and other mental health issues."

The Snapchat complaint follows a similar child safety suit that the state filed against Meta last December.

“Our undercover investigation revealed that Snapchat's harmful design features create an environment where predators can easily target children through sextortion schemes and other forms of sexual abuse,” Attorney General Raúl Torrez said in a statement. “Snap has misled users into believing that photos and videos sent on their platform will disappear, but predators can permanently capture this content and they have created a virtual yearbook of child sexual images that are traded, sold and stored indefinitely. Through our litigation against Meta and Snap, the New Mexico Department of Justice will continue to hold these platforms accountable for prioritizing profits over children's safety.”

A Snap spokesperson sent the following statement to Engadget:

We have received the New Mexico Attorney General’s complaint, are reviewing it carefully, and will respond to these claims in court. We share Attorney General Torrez’s and the public’s concerns about the online safety of young people and are deeply committed to Snapchat being a safe and positive place for our entire community, particularly for our younger users.

We have been working diligently to find, remove and report bad actors, educate our community, and give teens, as well as parents and guardians, tools to help them be safe online. We understand that online threats continue to evolve and we will continue to work diligently to address these critical issues. We have invested hundreds of millions of dollars in our trust and safety teams over the past several years, and designed our service to promote online safety by moderating content and enabling direct messaging with close friends and family. We continue this work in collaboration with law enforcement, online safety experts, industry peers, parents, teens, educators and policymakers towards our shared goal of keeping young people safe online.

Update September 5, 2024, 3:24PM ET: Added Snap's statement.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/new-mexico-sues-snap-over-its-alleged-failure-to-protect-kids-from-sextortion-schemes-182426135.html?src=rss

The Internet Archive loses its appeal of ebook copyright case ruling

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The Internet Archive is starting to run out of legal options. Wired reports that the non-profit internet cataloguer of videos, games and books lost its appeal in the US Court of Appeals for the Second Circuit. The court rejected Archive.org’s claim in its ongoing lawsuit with several high profile book publishers that its virtual library of books can legally operate under the fair use doctrine.

The lawsuit stems from the online archive’s National Emergency Library (NEL) that launched in March 2020. The NEL helped readers access library materials during the COVID pandemic with digitized copies of books that users could check out one at a time. Sometime later, the Internet Archive allowed users to check out an unlimited number of e-books and authors like Colson Whitehead and Neil Gaiman as well as the Authors Guild condemned the NEL, according to NPR.

The website reinstated the book borrowing caps but it didn’t stop publishers like Hachette Book Group, HarperCollins and Random House from filing a lawsuit the following June. Less than three years later, a federal judge ruled in favor of the plaintiffs declaring the non-profit website violated the publishers’ copyright protections.

The only upside for Archive.org’s appeal is the court’s recognition of the Internet Archive as a non-commercial entity. The Internet Archive still faces a separate copyright infringement lawsuit over its music digitization projects brought by Universal Music Group and Sony last year.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/the-internet-archive-loses-its-appeal-of-ebook-copyright-case-ruling-202452279.html?src=rss

HP is seeking up to $4 billion from Mike Lynch’s estate

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British tech billionaire Mike Lynch died in August after the yacht he was on capsized off the coast of Sicily. Yet, Hewlett-Packard is continuing its UK lawsuit, seeking up to $4 billion in damages — just against his estate instead. In a statement, HP said it intended "to follow the proceedings through to their conclusion."

Lynch and HP have been at odds since the entrepreneur sold his company, Autonomy, to HP for $11 billion in 2011. One year later, a new management team at HP valued the company at only $8.8 billion and accused Lynch of inflating sales, accounting improprieties and misleading HP overall. In June, a US jury found Lynch not guilty on all 15 counts of fraud. 

However, in 2022, HP won its civil claim in the UK when a high court judge found Lynch and his former finance director, Sushovan Hussain, had defrauded the company — a claim Lynch denied until his death. The amount paid out to HP should be decided soon, though the judge stated in his initial ruling that the damages would likely be "substantially less than is claimed." 

Lynch, his 18-year-old daughter and five others died when Bayesian, an 183-foot super-yacht, was caught in a violent storm early in the morning on August 19. Fifteen other passengers were rescued, including Lynch's wife, Angela Bacares. The outing had been a celebration of Lynch's recent acquittal, with a mix of loved ones and business associates joining him on board. 

This article originally appeared on Engadget at https://www.engadget.com/hp-is-seeking-up-to-4-billion-from-mike-lynchs-estate-120027940.html?src=rss

Social media companies can’t be forced to block teens from seeing ‘harmful’ content, judge rules

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A federal judge has ruled that social media companies can’t be required to block certain types of content from teens. The ruling will prevent some aspects of a controversial social media law in Texas from going into effect.

The ruling came as the result of tech industry groups’ challenge to the Securing Children Online Through Parental Empowerment (SCOPE) Act, a Texas law that imposes age verification requirements and other policies for how social media companies treat teenage users. But, as The Verge points out, the measure also requires companies to “prevent the known minor’s exposure to harmful material,” including content that “glorifies” self-harm and substance abuse.

It’s that latter requirement that was struck down, with the judge saying that “a state cannot pick and choose which categories of protected speech it wishes to block teenagers from discussing online.” The judge also criticized the language used in the law, writing in his decision that terms like “glorifying” and “promoting” are “politically charged” and “undefined.”

At the same time, the judge left other aspects of the law, including age verification requirements and bans on targeted advertising to minors, in place. NetChoice, the tech industry group that challenged the law, has argued that measures like the Scope Act require major tech companies to increase the amount of data collected from minors.

The Texas law, originally passed last year, is one of many across the country attempting to change how social media platforms deal with underage users. New York recently passed two laws restricting social media companies’ ability to collect data on teenage users, and requiring parental consent for younger users to access “addictive” features like algorithmic feeds. California lawmakers also recently passed a measure, which has yet to be signed into law by the governor, that requires social media companies to limit notifications to minors and restrict them from “addictive” algorithms.

This article originally appeared on Engadget at https://www.engadget.com/big-tech/social-media-companies-cant-be-forced-to-block-teens-from-seeing-harmful-content-judge-rules-221321184.html?src=rss

Elon Musk’s Starlink will comply with the Brazil X ban after all

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Update, September 3, 5:15PM ET: Starlink has reversed course on its decision to not comply with Brazil’s block of X. In a statement posted to X, the company said:

“To our customers in Brazil (who may not be able to read this as a result of X being blocked by @alexandre):

The Starlink team is doing everything possible to keep you connected.

Following last week’s order from @alexandre that froze Starlink’s finances and prevents Starlink from conducting financial transactions in Brazil, we immediately initiated legal proceedings in the Brazilian Supreme Court explaining the gross illegality of this order and asking the Court to unfreeze our assets. Regardless of the illegal treatment of Starlink in freezing of our assets, we are complying with the order to block access to X in Brazil.

We continue to pursue all legal avenues, as are others who agree that @alexandre’s recent orders violate the Brazilian constitution.”

The original story, "Starlink is refusing to comply with Brazil's X ban," as published on September 2, continues below unedited.

After the country’s Supreme Court ordered internet service providers to block access to X, the platform was largely unavailable in the country by Sunday night. The only ways to access X since then have been through VPNs (for those willing to risk huge fines) and Starlink, the satellite internet service that’s also run by X owner Elon Musk.

The president of Brazil’s telecom agency, Anatel, said that Starlink refused to comply with the court order until officials released its frozen assets, The New York Times reports. Alexandre de Moraes, the Supreme Court justice who has been on the warpath against X, also blocked the local bank accounts of Starlink, which is a SpaceX subsidiary. Moraes, who has accused X of disseminating hate speech and disinformation, is said to have done so with the aim of collecting $3 million in fines levied against X for ignoring his orders to block certain accounts.

Starlink petitioned the court to unblock its assets but the court dismissed the request. Musk called the Starlink account freeze "illegal," arguing that SpaceX and X are separate entities while claiming he owns 40 percent of the former.

There are around 250,000 Starlink customers in Brazil. The service has proven popular there in rural areas and among Indigenous tribes in the Amazon. Starlink pledged to provide free internet access to its Brazilian customers while its accounts in the country remain blocked.

If Starlink maintains its stance on X, Brazil could revoke the internet service’s license. If it continues to operate after that, officials could seize equipment from 23 ground stations. The gear helps Starlink improve the quality of its satellite connections.

Meanwhile, a majority of a Supreme Court panel upheld the X ban, which Moraes issued after Musk defied several of his orders, at a trial on Monday. X will have the right to appeal the decision. The panel also approved an order by Moraes to fine anyone caught using a VPN to access X in Brazil a daily fine of 50,000 Brazilian Real (around $8,900).

This article originally appeared on Engadget at https://www.engadget.com/big-tech/elon-musks-starlink-will-comply-with-the-brazil-x-ban-after-all-181144471.html?src=rss

Brazil bans X for refusing to comply with Supreme Court order

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Brazilian Supreme Court Justice Alexandre de Moraes has ordered the nation’s internet service providers to block the social media platform X. The New York Times reports that the order stems from owner Elon Musk’s refusal to appoint a legal representative for his case and comply with Moraes’ order to shut down X accounts he deemed as harmful to the democratic process. The order has been published online by Brazilian news site Poder 360.

The justice issued a deadline to telecom companies and tech giants to remove the X from its app stores and platforms. Apple and Google have five days to take down the social media app from its app stores. Brazil’s telecommunication’s agency Anatel has confirmed it has received the order, and ISPs in the country have just 24 hours to comply with the order.

Justice Moraes’ order doesn’t just block the country’s access to X. It also makes it a crime to use the app through a virtual private network (VPN). Anyone caught accessing X with a VPN could face a daily fine of 50,000 Brazilian Real (around $8,900).

Justice Moraes also froze the Brazillian bank accounts of SpaceX’s Starlink internet service provider on Thursday to further pressure Musk to comply with the court’s order. SpaceX, like X, is a private company majority owned by Musk, and X has $3 million in unpaid fines related to its case in the country. The day before, Justice Moraes issued a threat to ban the X platform entirely across Brazil if the social media company did not appoint a legal representative in the country. The deadline passed without any change to the court’s docket so the judge followed through on his promise.

Starlink expressed its disapproval with the order, vowing to fight the ruling. It even threatened to make its services free to customers to subvert the justice’s order.

The legal fight between Justice Moraes and Musk has been fuming for months. The Supreme Court Judge is also Brazil’s electoral authority and has been monitoring and issuing orders to candidates to steer clear of spreading false information through internet and social media channels.

Brazil’s 2022 presidential election between infamous incumbent Jair Bolsonaro and challenger and former President Luiz Inácio Lula da Silva was reportedly filled with attempts to present voters with false information. Justice Moraes was, until recently, president of the nation's Superior Electoral Court, which gave him the power to order takedowns of content that violated previous court orders. The judge issued a similar block of the messaging app Telegram for failing to freeze offending accounts, which was lifted after compliance.

Musk characterized Moraes’ directives to take down or freeze similar misinformation accounts from X as “censorship orders.” Earlier this month, Musk expressed his continued refusal to comply with the court by closing X’s Brazilian office in order “to protect the safety of our staff.” X’s Global Governments Affairs team also promised to publish all of “Judge de Moraes’ illegal demands and all related court filings.”

This article originally appeared on Engadget at https://www.engadget.com/social-media/brazil-bans-x-for-refusing-to-comply-with-supreme-court-order-230247980.html?src=rss

Judge denies Media Matters’ motion to dismiss X’s not-libel lawsuit

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A Texas judge denied Media Matters for America’s request for a dismissal on Thursday allowing X’s lawsuit over alleged anti-semitic and racist content. The Verge reported that Northern District of Texas Judge Reed O’Connor dismissed the request for a dismissal paving the way for X’s lawsuit against Media Matters to continue.

Media Matters submitted its dismissal request in early March on the grounds that X’s case lacked “personal jurisdiction,” an “improper venue” and the “failure to state a claim.” O’Connor dismissed all of those claims, according to court records.

The lawsuit filed last year in federal court seeks damages from the media watchdog group over “maliciously manufactured” images reporting that X’s platform placed Neo-Nazi and white-nationlist content next to advertisers’ images causing advertisers to flee the site. The images Media Matters used weren’t manufactured but X’s claim is that its dogged pursuit of ads’ placement with racist content by using certain accounts to bypass ad filters caused irreparable harm to the social media giant.

X owner Elon Musk’s other companies are located in Texas but aren’t directly connected to the Media Matters lawsuit. X closed its San Francisco offices earlier this month and owner Elon Musk announced in July that X’s headquarters will move to Austin. Tesla moved its headquarters from California to the Lone Star State in 2021 and SpaceX from Delaware earlier this year when a judge threw out a $56 billion pay package from the state.

However, in dismissing the personal jurisdiction argument, O’Connor noted that two of X’s “blue-chip” advertisers like AT&T and Oracle included in Media Matters’ coverage are based in Texas. He cited the landmark 2002 Internet defamation case Revell v. Lidov quoting the 5th Circuit Court of Appeals’ assertion that “if you are going to pick a fight in Texas, it is reasonable to expect that it be settled there.”

This article originally appeared on Engadget at https://www.engadget.com/social-media/judge-denies-media-matters-motion-to-dismiss-xs-not-libel-lawsuit-204732720.html?src=rss