The FTC has referred its child privacy case against TikTok to the Justice Department

The Federal Trade Commission has referred its complaint against TikTok to the Justice Department after a long-running investigation into the company’s privacy and security practices. “Our investigation found reason to believe that TikTok is violating or about to violate the FTC Act and the Children’s Online Privacy Protection Act (COPPA),” FTC Chair Lina Khan said in a post on X.

In a longer statement shared by the FTC, the regulator noted its investigation into TikTok after a 2019 privacy settlement related to Musical.ly, the app acquired by ByteDance that eventually became TikTok. The FTC “also investigated additional potential violations of COPPA and the FTC Act,” it said. It’s not clear exactly what the FTC turned up, though Politico reported earlier this year that the regulator was also looking into whether TikTok had misled users about whether their personal data was accessible to people in China.

The statement itself is a somewhat unusual move for the FTC, which acknowledged that it doesn't typically publicize its referral decisions. It said it believed doing so in this case “was in the public interest.” The referral is likely to ramp up pressure on TikTok, which is also fighting a legal battle against the US government to avoid a potential ban. Lawmakers and other officials have alleged the app poses a national security threat due to its ties to China.

A TikTok spokesperson told Engadget in a statement that the company was “disappointed” with the FTC’s decision. "We've been working with the FTC for more than a year to address its concerns,” the spokesperson said. “We're disappointed the agency is pursuing litigation instead of continuing to work with us on a reasonable solution. We strongly disagree with the FTC's allegations, many of which relate to past events and practices that are factually inaccurate or have been addressed. We're proud of and remain deeply committed to the work we've done to protect children and we will continue to update and improve our product.”

This article originally appeared on Engadget at https://www.engadget.com/the-ftc-has-referred-its-child-privacy-case-against-tiktok-to-the-justice-department-211542778.html?src=rss

Amazon faces nearly $6 million in fines over California labor law violations

The California Labor Commissioner's office has fined Amazon $5,901,700 for infractions related to a law designed to protect warehouse workers. Under the state's AB-701 law, large companies are required to tell warehouse or distribution center workers in writing what their expected quotas are, including how often they should perform particular tasks, and what consequences they may face for failing to meet those quotas.

This law was a reaction to stories from Amazon workers who said they would skip bathroom breaks or risk injury in order to maximize their output. "The hardworking warehouse employees who have helped sustain us during these unprecedented times should not have to risk injury or face punishment as a result of exploitative quotas that violate basic health and safety," Governor Gavin Newsom said when he signed the bill in 2021.

According to the California Labor Commissioner, Amazon failed to meet those rules at two of its facilities in the cities of Moreno Valley and Redlands, with 59,017 violations logged during the labor office's inspections. It's one of the first big fines levied thanks to AB-701, which took effect in January 2022. The tech giant claimed it did not need to provide written information because it uses a "peer-to-peer system."

"The peer-to-peer system that Amazon was using in these two warehouses is exactly the kind of system that the Warehouse Quotas law was put in place to prevent," Labor Commissioner Lilia García-Brower said in an official statement. "Undisclosed quotas expose workers to increased pressure to work faster and can lead to higher injury rates and other violations by forcing workers to skip breaks."

The AB701 bill was passed by the state in September 2021, headed up by State Assembly rep Lorena Gonzalez. She was also a part of passing California's AB-5 bill in 2019 to seek better protections for gig workers at companies such as Uber and Lyft.

Amazon spokesperson Maureen Lynch Vogel told Engadget, however, that the company disagrees with the allegations made in the citations and have already appealed the fines. "The truth is, we don't have fixed quotas," Vogel continued. "At Amazon, individual performance is evaluated over a long period of time, in relation to how the entire site’s team is performing. Employees can — and are encouraged to — review their performance whenever they wish. They can always talk to a manager if they’re having trouble finding the information."

Update, June 18, 2024, 8:48PM ET: We've updated this post's headline to correct the fine Amazon is facing. We regret the error. We've also added a statement from Amazon. 

This article originally appeared on Engadget at https://www.engadget.com/amazon-faces-nearly-6b-in-fines-over-california-labor-law-violations-203238513.html?src=rss

If Clearview AI scanned your face, you may get equity in the company

Controversial facial recognition company Clearview AI has agreed to an unusual settlement to a class action lawsuit, The New York Times reports. Rather than paying cash, the company would provide a 23 percent stake in its company to any Americans in its database. Without the settlement, Clearview could go bankrupt, according to court documents. 

If you live in the US and have ever posted a photo of yourself publicly online, you may be part of the class action. The settlement could amount to at least $50 million according to court documents, It still must be approved by a federal judge. 

Clearview AI, which counts billionaire Peter Thiel as a backer, says it has over 30 billion images in its database. Those can be accessed and cross-referenced by thousands of law enforcement departments including the US FBI and Department of Homeland Security. 

Shortly after its identity was outed, Clearview was hit with lawsuits in Illinois, California, Virginia, New York and elsewhere, which were all brought together as a class action suit in a federal Chicago court. The cost of the litigation was said to be draining the company's reserves, forcing it to seek a creative way to settle the suit.

The relatively small sum divided by the large number of users likely to be in the database means you won't be receiving a windfall. In any case, it would only happen if the company goes public or is acquired, according to the report. Once that occurs, lawyers would take up to 39 percent of the settlement, meaning the final amount could be reduced to about 30 million. If a third of Americans were in the database (about 110 million), each would get about 27 cents. 

That does beg the question of whether it would be worth just over a quarter to see one of the creepiest companies of all time to go bankrupt. To cite a small litany of the actions taken against it (on top of the US class action):

  • It was sued by the ACLU in 2020 (Clearview agreed to permanently halt sales of its biometric database to private companies in the US as part of the settlement.

  • Italy slapped a €20 million fine on the company in 2022 and banned it from using images of Italians in its database

  • Privacy groups in Europe filed complaints against it for allegedly breaking privacy laws (2021)

  • UK's privacy watchdog slapped it with a £7.55 million fine and ordered it to delete data from any UK resident

  • The LAPD banned the use of its software in 2020

  • Earlier this year the EU barred untargeted scraping of faces from the web, effectively blocking Clearview's business model in Europe

This article originally appeared on Engadget at https://www.engadget.com/if-clearview-ai-scanned-your-face-you-may-get-equity-in-the-company-120018460.html?src=rss

Apple hit with lawsuit for allegedly underpaying female employees

A class action lawsuit filed by two women against Apple seeks damages for 12,000 current and former female employees for allegedly underpaying them. The complaint says the tech giant “systematically” paid them a lower wage than their male employees over a four-year period.

The lawsuit filed in a California state court in San Francisco County on Thursday claims Apple’s systematic behavior of sexual discrimination stems from a policy that set employees’ salaries based on their previous employment, according to the Wall Street Journal.

Prior to fall of 2017, the complaint states that Apple used job applicants’ provided prior pay rates to set their starting salaries. The following year, Apple asked applicants for their pay expectations. The lawsuit alleges that both of these practices led to lower pay rates for women in the workplace. It also claims the latter policy of asking prospective employees for their pay expectations is “highly correlated with prior pay; studies show that persons asked for pay expectations generally provide a number slightly higher than the pay at their current or last job.”

The pay policy for job applicants created a pattern of lower pay for female employees, the lawsuit alleges: “Apple’s policy or practice of collecting information about pay expectations and using that information to set starting salary has had the effect of perpetuating past pay disparities and paying women less than men performing substantially similar work.” 

The lawsuit goes even further by suggesting that Apple regularly punishes female employees because of “scored categories” of job performances that drive pay bonuses and increases.

“Apple’s performance evaluation system is biased against women because for scored categories such as teamwork and leadership, men are rewarded and women are penalized for the same behaviors,” the complaint reads.

The class action lawsuit seeks payment for damages and “declaratory relief” as well as repayment of low earnings and benefits due to the alleged discrepancies by Apple. The plaintiffs are also asking the court to hold a jury trial to hear their complaint.

In 2022, reporters for the Financial Times talked with several female Apple employees who alleged they were the victims of sexual abuse and bullying on the job. Then when they filed complaints with human resources, they alleged that their cases were either minimized or ignored, or they received retaliation for filing their complaints.

One of the most jarring examples came from Apple’s former legal department director Jayne Whitt who says a colleague hacked into her devices and issued death threats. She filed a complaint with HR and was assured action would be taken. Whitt claims that Apple’s HR team not only failed to even reprimand the employee but they eventually fired her. She blew the whistle on Apple in an online essay describing the situation that prompted a wave of support and similar stories from other female Apple employees.

This article originally appeared on Engadget at https://www.engadget.com/apple-hit-with-lawsuit-for-allegedly-underpaying-female-employees-214538519.html?src=rss

Elon Musk sued for alleged sexual harassment and retaliation by former SpaceX engineers

Eight former SpaceX engineers filed a lawsuit against Elon Musk on Wednesday, accusing the CEO of sexual harassment and retaliation. The same group of fired employees have also filed complaints with the US National Labor Relations Board (NLRB) about SpaceX’s alleged retaliation. Bloomberg first reported on the lawsuit.

“Musk knowingly and purposefully created an unwelcome hostile work environment based upon his conduct of interjecting into the workplace vile sexual photographs, memes, and commentary that demeaned women and/or the LGBTQ+ community,” the eight former employees wrote in Wednesday’s filing.

The former SpaceX engineers said some of them were harassed by other co-workers who “mimicked Musk’s posts,” in an alleged example of mob bullying under the influence of their superior’s behavior. The plaintiffs wrote that this “created a wildly uncomfortable hostile work environment.”

The group worked together on an open letter in 2022, highlighting the Tesla founder’s allegedly problematic behavior. They say they were fired in retaliation for that essay.

According to Bloomberg, the filing says the former SpaceX engineers have reason to believe Musk made the decision to fire them in retaliation for their letter. The complaint claims that when a SpaceX HR official suggested the company conduct a formal investigation before taking any decisive action, Musk replied, “I don’t care — fire them.”

The engineers’ case with the NLRB has been held up by an appeals court injunction despite the board agreeing that SpaceX illegally retaliated against them. SpaceX sued the agency in January, calling its structure “unconstitutional.”

The lawsuit follows a report on Tuesday detailing allegations that Musk had sexual relations with two female employees and asked a third to have his babies.

This article originally appeared on Engadget at https://www.engadget.com/elon-musk-sued-for-sexual-harassment-and-retaliation-by-former-spacex-engineers-190846047.html?src=rss

Whistleblower claims Amazon violated UK sanctions by selling facial recognition tech to Russia

An ex-employee has accused Amazon of breaching UK sanctions by selling facial recognition technology to Moscow following its invasion of Ukraine, The Financial Times reported. 

Charles Forrest alleged that he was unfairly dismissed in 2023 after accusing Amazon of wrongdoing on a number of issues between November 2022 and May 2023, according to the article. The allegations were presented to a London employment tribunal as part of a hearing this week. 

Forrest said that Amazon closed a deal with Russian firm VisionLabs to provide access to its Rekognition facial recognition technology. It did that "through what appears to be a shell company based in the Netherlands," according to the tribunal filings. He also accused the company of breaking its self-imposed moratorium on police use of facial recognition tech implemented after the murder of George Floyd.

Amazon denied the allegations. "We believe the claims lack merit and look forward to demonstrating that through the legal process," a spokesperson told the FT. "Based on available evidence and billing records, AWS did not sell Amazon Rekognition services to VisionLabs."

Forrest was let go for "gross misconduct" after refusing to work his contractual hours and failed to respond to emails or attend meetings, Amazon alleged. It denied that Forrest made the sorts of disclosures that would entitle him to whistleblower protections. 

Amazon has denied the contention it provided police with facial recognition technology, and added in a tribunal filing that "a self-imposed moratorium does not amount to a legal obligation."

Update, June 7 2024, 11:14AM ET: An Amazon spokesperson clarified that the company is denying it provided facial recognition capabilities to police, and the last paragraph of this story has been changed to reflect that. The company remains adamant it did not sell that same software to VisionLabs but has declined to provide a statement related to whether VisionLabs obtained those capabilities through an intermediary. 

This article originally appeared on Engadget at https://www.engadget.com/whistleblower-claims-amazon-violated-uk-sanctions-by-selling-facial-recognition-tech-to-russia-125001230.html?src=rss

FTC launches an antitrust probe into Microsoft’s deal with Inflection AI

Microsoft is under investigation by the Federal Trade Commission over its deal with Inflection AI, according to The Wall Street Journal. Back in March, the company hired almost all of Inflection AI's employees, including founders Karén Simonyan and Mustafa Suleyman, who was also a DeepMind cofounder. In addition, Microsoft paid Inflection AI $650 million to license its artificial intelligence technology. Now, the FTC wants to know whether the companies deliberately structured the deal to avoid being the subject of regulatory antitrust review. 

As The Journal notes, companies are required to report any acquisition that's valued at $119 million or more to federal antitrust agencies. The FTC or the Justice Department could then investigate whether the deal stifles competition in the industry and then sue to block the merger or the investment that it deems to be anti-competitive. When companies want to hire all the talent in another firm, they typically buy the other out in an "acquihire." But Microsoft didn't buy Inflection, which denied that the bigger company has any power over it. Ted Shelton, its new COO, told the publication that it still operates as an independent company under new leadership. 

The FTC has already sent out subpoenas to both Microsoft and Inflection, asking for relevant documents over the past two years. If it does determine that the companies entered into an agreement in a way that would give Microsoft control over the other while dodging regulatory review, then Microsoft could be fined, and the transaction could be suspended pending a more in-depth investigation. 

Microsoft provided Engadget with the following statement: "Our agreements with Inflection gave us the opportunity to recruit individuals at Inflection AI and build a team capable of accelerating Microsoft Copilot, while enabling Inflection to continue pursuing its independent business and ambition as an AI studio. We take our legal obligations to report transactions under the HSR Act seriously and are confident that we have complied with those obligations."

US federal agencies have been cracking down on monopolistic practices by the world's largest tech companies over the past few years. To be even more efficient in conducting antitrust investigations involving the current biggest players in artificial intelligence, the agencies have also just struck a deal on how they're dividing their responsibilities. The Justice Department will take the lead in investigations involving NVIDIA, while the FTC will take charge of antitrust probes involving Microsoft and OpenAI.

Update, June 6 2024, 11:46AM ET: This story has been updated to include a statement from Microsoft.

This article originally appeared on Engadget at https://www.engadget.com/ftc-launches-an-antitrust-probe-into-microsofts-deal-with-inflection-ai-130038896.html?src=rss

Samsung sues Oura to block Oura from suing Samsung over the Galaxy Ring

Samsung has filed a lawsuit against Oura to try to head off intellectual property disputes as the Galaxy Ring launch draws near. The suit notes that Oura has used its patent portfolio to sue smaller wearable tech competitors and has hinted it may do the same against the much larger Samsung. Welcome to the weird modern world of mega-corporations suing startups to prevent them from filing suits of their own.

“Oura’s actions and public statements demonstrate that Oura will continue asserting patent infringement against other entrants into the U.S. smart ring market, including Samsung,” the lawsuit, first reported on by The Verge, reads. “Oura’s immediate response to the announcement of the Galaxy Ring was to point to the purported strength of its intellectual property portfolio.”

The lawsuit claims the Galaxy Ring doesn’t infringe on Oura’s patents. However, in justifying its suit, it lays out a pattern of what it frames as aggressive IP protection by the Finnish startup. It lists cases where Oura sued smaller competitors like Ultrahuman, Circular and RingConn “as soon as, or even before, they entered the U.S. market.”

The document also cites Oura embarking on a media tour immediately following the Galaxy Ring announcement, touting the company’s “over 150 patents.” It specifically calls out patent-related quotes published by TechCrunch and a CNBC interview where Oura CEO Tom Hale hinted the company may use its IP portfolio against Samsung.

The third-generation Oura Ring sitting on a wooden table.
Daniel Cooper for Engadget

Samsung’s legal filing essentially tries to paint Oura as a patent troll, claiming many of the Finnish company’s patent disputes have been for features common to the entire category of smart rings, like electronics, sensors, a battery and scores that weigh health metrics. That approach conjures memories of Samsung’s old patent disputes with Apple. A common theme in those decade-old courtroom battles was Samsung accusing the iPhone maker of holding bogus patents that should never have been granted because they used obvious technologies or methods shared by the entire industry. (It worked with mixed results in those cases.)

Samsung filed its new lawsuit against Oura in the Northern District of California, San Francisco Division. Oura is based in Finland but has a US wing of its operations based in Delaware, including offices in San Francisco with more than 50 employees.

The lawsuit reveals extra detail about Samsung’s Galaxy Ring, which the company first showed off in a render in January before revealing physical models at the Mobile World Congress in February. The document says Samsung only finalized the Galaxy Ring’s design in “mid-May 2024” and plans to enter mass production in mid-June.

It adds that the Galaxy Ring will arrive in the US “in or around August of this year,” which aligns with expectations that the company will launch it at a summer Unpacked event.

This article originally appeared on Engadget at https://www.engadget.com/samsung-sues-oura-to-block-oura-from-suing-samsung-over-the-galaxy-ring-203353759.html?src=rss

The TikTok ban law will be argued in court this September

TikTok will face off with the Justice Department this fall in its bid to stop a law that could lead to a ban of the app in the United States. The US Court of Appeals for the District of Columbia set a September date for oral arguments in two cases challenging a law that requires ByteDance to sell the app or face a ban.

TikTok filed a lawsuit claiming that the law was unconstitutional earlier this month. The company has said that divesting from ByteDance is “simply not possible” and that it had already negotiated with the US government to address national security concerns. Separately, a group of TikTok creators are also challenging the law. They claim that the law violates their First Amendment rights because they would lose their ability to communicate on the platform. TikTok is reportedly paying the creators’ legal fees in the case.

In September, the appeals court will hear challenges in both cases, which have been consolidated. As Reuters notes, the September date lines up with TikTok’s desire for a “fast-track” schedule in the case, which could eventually end up before the Supreme Court.

This article originally appeared on Engadget at https://www.engadget.com/the-tiktok-ban-law-will-be-argued-in-court-this-september-185025724.html?src=rss

The TikTok ban law will be argued in court this September

TikTok will face off with the Justice Department this fall in its bid to stop a law that could lead to a ban of the app in the United States. The US Court of Appeals for the District of Columbia set a September date for oral arguments in two cases challenging a law that requires ByteDance to sell the app or face a ban.

TikTok filed a lawsuit claiming that the law was unconstitutional earlier this month. The company has said that divesting from ByteDance is “simply not possible” and that it had already negotiated with the US government to address national security concerns. Separately, a group of TikTok creators are also challenging the law. They claim that the law violates their First Amendment rights because they would lose their ability to communicate on the platform. TikTok is reportedly paying the creators’ legal fees in the case.

In September, the appeals court will hear challenges in both cases, which have been consolidated. As Reuters notes, the September date lines up with TikTok’s desire for a “fast-track” schedule in the case, which could eventually end up before the Supreme Court.

This article originally appeared on Engadget at https://www.engadget.com/the-tiktok-ban-law-will-be-argued-in-court-this-september-185025724.html?src=rss