Policy

appeals-court-seems-lost-on-how-internet-archive-harms-publishers

Appeals court seems lost on how Internet Archive harms publishers

Deciding “the future of books” —

Appeals court decision potentially reversing publishers’ suit may come this fall.

Appeals court seems lost on how Internet Archive harms publishers

The Internet Archive (IA) went before a three-judge panel Friday to defend its open library’s controlled digital lending (CDL) practices after book publishers last year won a lawsuit claiming that the archive’s lending violated copyright law.

In the weeks ahead of IA’s efforts to appeal that ruling, IA was forced to remove 500,000 books from its collection, shocking users. In an open letter to publishers, more than 30,000 readers, researchers, and authors begged for access to the books to be restored in the open library, claiming the takedowns dealt “a serious blow to lower-income families, people with disabilities, rural communities, and LGBTQ+ people, among many others,” who may not have access to a local library or feel “safe accessing the information they need in public.”

During a press briefing following arguments in court Friday, IA founder Brewster Kahle said that “those voices weren’t being heard.” Judges appeared primarily focused on understanding how IA’s digital lending potentially hurts publishers’ profits in the ebook licensing market, rather than on how publishers’ costly ebook licensing potentially harms readers.

However, lawyers representing IA—Joseph C. Gratz, from the law firm Morrison Foerster, and Corynne McSherry, from the nonprofit Electronic Frontier Foundation—confirmed that judges were highly engaged by IA’s defense. Arguments that were initially scheduled to last only 20 minutes stretched on instead for an hour and a half. Ultimately, judges decided not to rule from the bench, with a decision expected in the coming months or potentially next year. McSherry said the judges’ engagement showed that the judges “get it” and won’t make the decision without careful consideration of both sides.

“They understand this is an important decision,” McSherry said. “They understand that there are real consequences here for real people. And they are taking their job very, very seriously. And I think that’s the best that we can hope for, really.”

On the other side, the Association of American Publishers (AAP), the trade organization behind the lawsuit, provided little insight into how the day went. When reached for comment, AAP simply said, “We thought it was a strong day in court, and we look forward to the opinion.”

Decision could come early fall

According to Gratz, most of the questions for IA focused on “how to think about the situation where a particular book is available” from the open library and also available as an ebook that a library can license. Judges said they did not know how to think about “a situation where the publishers just haven’t come forward with any data showing that this has an impact,” Gratz said.

One audience member at the press briefing noted that instead judges were floating hypotheticals, like “if every single person in the world made a copy of a hypothetical thing, could hypothetically this affect the publishers’ revenue.”

McSherry said this was a common tactic when judges must weigh the facts while knowing that their decision will set an important precedent. However, IA has shown evidence, Gratz said, that even if IA provided limitless loans of digitized physical copies, “CDL doesn’t cause any economic harm to publishers, or authors,” and “there was absolutely no evidence of any harm of that kind that the publishers were able to bring forward.”

McSherry said that IA pushed back on claims that IA behaves like “pirates” when digitally lending books, with critics sometimes comparing the open library to illegal file-sharing networks. Instead, McSherry said that CDL provides a path to “meet readers where they are,” allowing IA to loan books that it owns to one user at a time no matter where in the world they are located.

“It’s not unlawful for a library to lend a book it owns to one patron at a time,” Gratz said IA told the court. “And the advent of digital technology doesn’t change that result. That’s lawful. And that’s what librarians do.”

In the open letter, IA fans pointed out that many IA readers were “in underserved communities where access is limited” to quality library resources. Being suddenly cut off from accessing nearly half a million books has “far-reaching implications,” they argued, removing access to otherwise inaccessible “research materials and literature that support their learning and academic growth.”

IA has argued that because copyright law is intended to provide equal access to knowledge, copyright law is better served by allowing IA’s lending than by preventing it. They’re hoping the judges will decide that CDL is fair use, reversing the lower court’s decision and restoring access to books recently removed from the open library. But Gratz said there’s no telling yet when that decision will come.

“There is no deadline for them to make a decision,” Gratz said, but it “probably won’t happen until early fall” at the earliest. After that, whichever side loses will have an opportunity to appeal the case, which has already stretched on for four years, to the Supreme Court. Since neither side seems prepared to back down, the Supreme Court eventually weighing in seems inevitable.

McSherry seemed optimistic that the judges at least understood the stakes for IA readers, noting that fair use is “designed to ensure that copyright actually serves the public interest,” not publishers’. Should the court decide otherwise, McSherry warned, the court risks allowing “a few powerful publishers” to “hijack the future of books.”

When IA first appealed, Kahle put out a statement saying IA couldn’t walk away from “a fight to keep library books available for those seeking truth in the digital age.”

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scotus-kills-chevron-deference,-giving-courts-more-power-to-block-federal-rules

SCOTUS kills Chevron deference, giving courts more power to block federal rules

Supreme Court Chief Justice John Roberts and Associate Justice Sonia Sotomayor wearing their robes as they arrive for the State of the Union address.

Enlarge / Supreme Court Chief Justice John Roberts and Associate Justice Sonia Sotomayor arrive for President Joe Biden’s State of the Union address on March 7, 2024, in Washington, DC.

Getty Images | Win McNamee

The US Supreme Court today overturned the 40-year-old Chevron precedent in a ruling that limits the regulatory authority of federal agencies. The 6-3 decision in Loper Bright Enterprises v. Raimondo will make it harder for agencies such as the Federal Communications Commission and Environmental Protection Agency to issue regulations without explicit authorization from Congress.

Chief Justice John Roberts delivered the opinion of the court and was joined by Clarence Thomas, Samuel Alito, Neil Gorsuch, Brett Kavanaugh, and Amy Coney Barrett. Justice Elena Kagan filed a dissenting opinion that was joined by Sonia Sotomayor and Ketanji Brown Jackson.

Chevron gave agencies leeway to interpret ambiguous laws as long as the agency’s conclusion was reasonable. But the Roberts court said that a “statutory ambiguity does not necessarily reflect a congressional intent that an agency, as opposed to a court, resolve the resulting interpretive question.”

“Perhaps most fundamentally, Chevron‘s presumption is misguided because agencies have no special competence in resolving statutory ambiguities. Courts do,” the ruling said. “The Framers anticipated that courts would often confront statutory ambiguities and expected that courts would resolve them by exercising independent legal judgment. Chevron gravely erred in concluding that the inquiry is fundamentally different just because an administrative interpretation is in play.”

This is especially critical “when the ambiguity is about the scope of an agency’s own power—perhaps the occasion on which abdication in favor of the agency is least appropriate,” the court said. The Roberts opinion also said the Administrative Procedure Act “specifies that courts, not agencies, will decide ‘all relevant questions of law’ arising on review of agency action—even those involving ambiguous laws,” and “prescribes no deferential standard for courts to employ in answering those legal questions.”

Kagan: SCOTUS majority now “administrative czar”

The Loper Bright case involved a challenge to a rule enforced by the National Marine Fisheries Service. Lower courts applied the Chevron framework when ruling in favor of the government.

Kagan’s dissent said that Chevron “has become part of the warp and woof of modern government, supporting regulatory efforts of all kinds—to name a few, keeping air and water clean, food and drugs safe, and financial markets honest.”

Ambiguities should generally be resolved by agencies instead of courts, Kagan wrote. “This Court has long understood Chevron deference to reflect what Congress would want, and so to be rooted in a presumption of legislative intent. Congress knows that it does not—in fact cannot—write perfectly complete regulatory statutes. It knows that those statutes will inevitably contain ambiguities that some other actor will have to resolve, and gaps that some other actor will have to fill. And it would usually prefer that actor to be the responsible agency, not a court,” the dissent said.

The Roberts court ruling “flips the script: It is now ‘the courts (rather than the agency)’ that will wield power when Congress has left an area of interpretive discretion,” Kagan wrote. “A rule of judicial humility gives way to a rule of judicial hubris.”

Kagan wrote that the court in recent years “has too often taken for itself decision-making authority Congress assigned to agencies,” substituting “its own judgment on workplace health for that of the Occupational Safety and Health Administration; its own judgment on climate change for that of the Environmental Protection Agency; and its own judgment on student loans for that of the Department of Education.”

Apparently deciding those previous decisions were “too piecemeal,” the court “majority today gives itself exclusive power over every open issue—no matter how expertise-driven or policy-laden—involving the meaning of regulatory law,” Kagan wrote. “As if it did not have enough on its plate, the majority turns itself into the country’s administrative czar. It defends that move as one (suddenly) required by the (nearly 80-year-old) Administrative Procedure Act. But the Act makes no such demand. Today’s decision is not one Congress directed. It is entirely the majority’s choice.”

The unanimous 1984 SCOTUS ruling in Chevron U.S.A. Inc. v. Natural Resources Defense Council involved the Environmental Protection Agency and air pollution rules. Even with Chevron deference in place, the EPA faced limits to its regulatory power. A Supreme Court ruling earlier this week imposed a stay on rules meant to limit the spread of ozone-generating pollutants across state lines.

Consumer advocacy group Public Knowledge criticized today’s ruling, saying that it “grounds judicial superiority over the legislative and executive branches by declaring that the Constitution requires judges to unilaterally decide the meaning of statutes written by Congress and entrusted to agencies.”

Public Knowledge Senior VP Harold Feld argued that after today’s ruling, “no consumer protection is safe. Even if Congress can write with such specificity that a court cannot dispute its plain meaning, Congress will need to change the law for every new technology and every change in business practice. Even at the best of times, it would be impossible for Congress to keep up. Given the dysfunction of Congress today, we are at the mercy of the whims of the Imperial Court.”

SCOTUS kills Chevron deference, giving courts more power to block federal rules Read More »

tesla-says-model-3-that-burst-into-flames-in-fatal-tree-crash-wasn’t-defective

Tesla says Model 3 that burst into flames in fatal tree crash wasn’t defective

Tesla says Model 3 that burst into flames in fatal tree crash wasn’t defective

Tesla has denied that “any defect in the Autopilot system caused or contributed” to the 2022 death of a Tesla employee, Hans von Ohain, whose Tesla Model 3 burst into flames after the car suddenly veered off a road and crashed into a tree.

“Von Ohain fought to regain control of the vehicle, but, to his surprise and horror, his efforts were prevented by the vehicle’s Autopilot features, leaving him helpless and unable to steer back on course,” a wrongful death lawsuit filed in May by von Ohain’s wife, Nora Bass, alleged.

In Tesla’s response to the lawsuit filed Thursday, the carmaker also denied that the 2021 vehicle had any defects, contradicting Bass’ claims that Tesla knew that the car should have been recalled but chose to “prioritize profits over consumer safety.”

As detailed in her complaint, initially filed in a Colorado state court, Bass believes the Tesla Model 3 was defective in that it “did not perform as safely as an ordinary consumer would have expected it to perform” and “the benefits of the vehicle’s design did not outweigh the risks.”

Instead of acknowledging alleged defects and exploring alternative designs, Tesla marketed the car as being engineered “to be the safest” car “built to date,” Bass’ complaint said.

Von Ohain was particularly susceptible to this marketing, Bass has said, because he considered Tesla CEO Elon Musk to be a “brilliant man,” The Washington Post reported. “We knew the technology had to learn, and we were willing to be part of that,” Bass said, but the couple didn’t realize how allegedly dangerous it could be to help train “futuristic technology,” The Post reported.

In Tesla’s response, the carmaker defended its marketing of the Tesla Model 3, denying that the company “engaged in unfair and deceptive acts or practices.”

“The product in question was not defective or unreasonably dangerous,” Tesla’s filing said.

Insisting in its response that the vehicle was safe when it was sold, Tesla again disputed Bass’ complaint, which claimed that “at no time after the purchase of the 2021 Tesla Model 3 did any person alter, modify, or change any aspect or component of the vehicle’s design or manufacture.” Contradicting this, Tesla suggested that the car “may not have been in the same condition at the time of the crash as it was at the time when it left Tesla’s custody.”

The Washington Post broke the story about von Ohain’s fatal crash, reporting that it may be “the first documented fatality linked to the most advanced driver assistance technology offered” by Tesla. In response to Tesla’s filing, Bass’ attorney, Jonathan Michaels, told The Post that his team is “committed to advocating fiercely for the von Ohain family, ensuring they receive the justice they deserve.”

Michaels told The Post that perhaps as significant as alleged autonomous driving flaws, the Tesla Model 3 was also allegedly defective “because of the intensity of the fire that ensued after von Ohain hit the tree, which ultimately caused his death.” According to the Colorado police officer looking into the crash, Robert Madden, the vehicle fire was among “the most intense” he’d ever investigated, The Post reported.

Lawyers for Bass and Tesla did not immediately respond to Ars’ request for comment.

Tesla says Model 3 that burst into flames in fatal tree crash wasn’t defective Read More »

brussels-explores-antitrust-probe-into-microsoft’s-partnership-with-openai

Brussels explores antitrust probe into Microsoft’s partnership with OpenAI

still asking questions —

EU executive arm drops merger review into US tech companies’ alliance.

EU competition chief Margrethe Vestager said the bloc was looking into practices that could in effect lead to a company controlling a greater share of the AI market.

Enlarge / EU competition chief Margrethe Vestager said the bloc was looking into practices that could in effect lead to a company controlling a greater share of the AI market.

Brussels is preparing for an antitrust investigation into Microsoft’s $13 billion investment into OpenAI, after the European Union decided not to proceed with a merger review into the most powerful alliance in the artificial intelligence industry.

The European Commission, the EU’s executive arm, began to explore a review under merger control rules in January, but on Friday announced that it would not proceed due to a lack of evidence that Microsoft controls OpenAI.

However, the commission said it was now exploring the possibility of a traditional antitrust investigation into whether the tie-up between the world’s most valuable listed company and the best-funded AI start-up was harming competition in the fast-growing market.

The commission has also made inquiries about Google’s deal with Samsung to install a modified version of its Gemini AI system in the South Korean manufacturer’s smartphones, it revealed on Friday.

Margrethe Vestager, the bloc’s competition chief, said in a speech on Friday: “The key question was whether Microsoft had acquired control on a lasting basis over OpenAI. After a thorough review we concluded that such was not the case. So we are closing this chapter, but the story is not over.”

She said the EU had sent a new set of questions to understand whether “certain exclusivity clauses” in the agreement between Microsoft and OpenAI “could have a negative effect on competitors.” The move is seen as a key step toward a formal antitrust probe.

The bloc had already sent questions to Microsoft and other tech companies in March to determine whether market concentration in AI could potentially block new companies from entering the market, Vestager said.

Microsoft said: “We appreciate the European Commission’s thorough review and its conclusion that Microsoft’s investment and partnership with OpenAI does not give Microsoft control over the company.”

Brussels began examining Microsoft’s relationship with the ChatGPT maker after OpenAI’s board abruptly dismissed its chief executive Sam Altman in November 2023, only to be rehired a few days later. He briefly joined Microsoft as the head of a new AI research unit, highlighting the close relationship between the two companies.

Regulators in the US and UK are also scrutinizing the alliance. Microsoft is the biggest backer of OpenAI, although its investment of up to $13 billion, which was expanded in January 2023, does not involve acquiring conventional equity due to the startup’s unusual corporate structure. Microsoft has a minority interest in OpenAI’s commercial subsidiary, which is owned by a not-for-profit organization.

Antitrust investigations tend to last years, compared with a much shorter period for merger reviews, and they focus on conduct that could be undermining rivals. Companies that are eventually found to be breaking the law, for example by bundling products or blocking competitors from access to key technology, risk hefty fines and legal obligations to change their behavior.

Vestager said the EU was looking into practices that could in effect lead to a company controlling a greater share of the AI market. She pointed to a practice called “acqui-hires,” where a company buys another one mainly to get its talent. For example, Microsoft recently struck a deal to hire most of the top team from AI start-up Inflection, in which it had previously invested. Inflection remains an independent company, however, complicating any traditional merger investigation.

The EU’s competition chief said regulators were also looking into the way big tech companies may be preventing smaller AI models from reaching users.

“This is why we are also sending requests for information to better understand the effects of Google’s arrangement with Samsung to pre-install its small model ‘Gemini nano’ on certain Samsung devices,” said Vestager.

Jonathan Kanter, the top US antitrust enforcer, told the Financial Times earlier this month that he was also examining “monopoly choke points and the competitive landscape” in AI. The UK’s Competition and Markets Authority said in December that it had “decided to investigate” the Microsoft-OpenAI deal when it invited comments from customers and rivals.

© 2024 The Financial Times Ltd. All rights reserved. Please do not copy and paste FT articles and redistribute by email or post to the web.

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shopping-app-temu-is-“dangerous-malware,”-spying-on-your-texts,-lawsuit-claims

Shopping app Temu is “dangerous malware,” spying on your texts, lawsuit claims

“Cleverly hidden spyware” —

Temu “surprised” by the lawsuit, plans to “vigorously defend” itself.

A person is holding a package from Temu.

Enlarge / A person is holding a package from Temu.

Temu—the Chinese shopping app that has rapidly grown so popular in the US that even Amazon is reportedly trying to copy it—is “dangerous malware” that’s secretly monetizing a broad swath of unauthorized user data, Arkansas Attorney General Tim Griffin alleged in a lawsuit filed Tuesday.

Griffin cited research and media reports exposing Temu’s allegedly nefarious design, which “purposely” allows Temu to “gain unrestricted access to a user’s phone operating system, including, but not limited to, a user’s camera, specific location, contacts, text messages, documents, and other applications.”

“Temu is designed to make this expansive access undetected, even by sophisticated users,” Griffin’s complaint said. “Once installed, Temu can recompile itself and change properties, including overriding the data privacy settings users believe they have in place.”

Griffin fears that Temu is capable of accessing virtually all data on a person’s phone, exposing both users and non-users to extreme privacy and security risks. It appears that anyone texting or emailing someone with the shopping app installed risks Temu accessing private data, Griffin’s suit claimed, which Temu then allegedly monetizes by selling it to third parties, “profiting at the direct expense” of users’ privacy rights.

“Compounding” risks is the possibility that Temu’s Chinese owners, PDD Holdings, are legally obligated to share data with the Chinese government, the lawsuit said, due to Chinese “laws that mandate secret cooperation with China’s intelligence apparatus regardless of any data protection guarantees existing in the United States.”

Griffin’s suit cited an extensive forensic investigation into Temu by Grizzly Research—which analyzes publicly traded companies to inform investors—last September. In their report, Grizzly Research alleged that PDD Holdings is a “fraudulent company” and that “Temu is cleverly hidden spyware that poses an urgent security threat to United States national interests.”

As Griffin sees it, Temu baits users with misleading promises of discounted, quality goods, angling to get access to as much user data as possible by adding addictive features that keep users logged in, like spinning a wheel for deals. Meanwhile hundreds of complaints to the Better Business Bureau showed that Temu’s goods are actually low-quality, Griffin alleged, apparently supporting his claim that Temu’s end goal isn’t to be the world’s biggest shopping platform but to steal data.

Investigators agreed, the lawsuit said, concluding “we strongly suspect that Temu is already, or intends to, illegally sell stolen data from Western country customers to sustain a business model that is otherwise doomed for failure.”

Seeking an injunction to stop Temu from allegedly spying on users, Griffin is hoping a jury will find that Temu’s alleged practices violated the Arkansas Deceptive Trade Practices Act (ADTPA) and the Arkansas Personal Information Protection Act. If Temu loses, it could be on the hook for $10,000 per violation of the ADTPA and ordered to disgorge profits from data sales and deceptive sales on the app.

Temu “surprised” by lawsuit

The company that owns Temu, PDD Holdings, was founded in 2015 by a former Google employee, Colin Huang. It was originally based in China, but after security concerns were raised, the company relocated its “principal executive offices” to Ireland, Griffin’s complaint said. This, Griffin suggested, was intended to distance the company from debate over national security risks posed by China, but because the majority of its business operations remain in China, risks allegedly remain.

PDD Holdings’ relocation came amid heightened scrutiny of Pinduoduo, the Chinese app on which Temu’s shopping platform is based. Last year, Pinduoduo came under fire for privacy and security risks that got the app suspended from Google Play as suspected malware. Experts said Pinduoduo took security and privacy risks “to the next level,” the lawsuit said. And “around the same time,” Apple’s App Store also flagged Temu’s data privacy terms as misleading, further heightening scrutiny of two of PDD Holdings’ biggest apps, the complaint noted.

Researchers found that Pinduoduo “was programmed to bypass users’ cell phone security in order to monitor activities on other apps, check notifications, read private messages, and change settings,” the lawsuit said. “It also could spy on competitors by tracking activity on other shopping apps and getting information from them,” as well as “run in the background and prevent itself from being uninstalled.” The motivation behind the malicious design was apparently “to boost sales.”

According to Griffin, the same concerns that got Pinduoduo suspended last year remain today for Temu users, but the App Store and Google Play have allegedly failed to take action to prevent unauthorized access to user data. Within a year of Temu’s launch, the “same software engineers and product managers who developed Pinduoduo” allegedly “were transitioned to working on the Temu app.”

Google and Apple did not immediately respond to Ars’ request for comment.

A Temu spokesperson provided a statement to Ars, discrediting Grizzly Research’s investigation and confirming that the company was “surprised and disappointed by the Arkansas Attorney General’s Office for filing the lawsuit without any independent fact-finding.”

“The allegations in the lawsuit are based on misinformation circulated online, primarily from a short-seller, and are totally unfounded,” Temu’s spokesperson said. “We categorically deny the allegations and will vigorously defend ourselves.”

While Temu plans to defend against claims, the company also seems to potentially be open to making changes based on criticism lobbed in Griffin’s complaint.

“We understand that as a new company with an innovative supply chain model, some may misunderstand us at first glance and not welcome us,” Temu’s spokesperson said. “We are committed to the long-term and believe that scrutiny will ultimately benefit our development. We are confident that our actions and contributions to the community will speak for themselves over time.”

Shopping app Temu is “dangerous malware,” spying on your texts, lawsuit claims Read More »

t-mobile-users-enraged-as-“un-carrier”-breaks-promise-to-never-raise-prices

T-Mobile users enraged as “Un-carrier” breaks promise to never raise prices

Illustration of T-Mobile customers protesting price hikes

Aurich Lawson

In 2017, Kathleen Odean thought she had found the last cell phone plan she would ever need. T-Mobile was offering a mobile service for people age 55 and over, with an “Un-contract” guarantee that it would never raise prices.

“I thought, wow, I can live out my days with this fixed plan,” Odean, a Rhode Island resident who is now 70 years old, told Ars last week. Odean and her husband switched from Verizon to get the T-Mobile deal, which cost $60 a month for two lines.

Despite its Un-contract promise, T-Mobile in May 2024 announced a price hike for customers like Odean who thought they had a lifetime price guarantee on plans such as T-Mobile One, Magenta, and Simple Choice. The $5-per-line price hike will raise her and her husband’s monthly bill from $60 to $70, Odean said.

As we’ve reported, T-Mobile’s January 2017 announcement of its “Un-contract” for T-Mobile One plans said that “T-Mobile One customers keep their price until THEY decide to change it. T-Mobile will never change the price you pay for your T-Mobile One plan. When you sign up for T-Mobile One, only YOU have the power to change the price you pay.”

T-Mobile contradicted that clear promise on a separate FAQ page, which said the only real guarantee was that T-Mobile would pay your final month’s bill if the company raised the price and you decided to cancel. Customers like Odean bitterly point to the press release that made the price guarantee without including the major caveat that essentially nullifies the promise.

“I gotta tell you, it really annoys me”

T-Mobile’s 2017 press release even blasted other carriers for allegedly being dishonest, saying that “customers are subjected to a steady barrage of ads for wireless deals—only to face bill shock and wonder what the hell happened when their Verizon or AT&T bill arrives.”

T-Mobile made the promise under the brash leadership of CEO John Legere, who called the company the “Un-carrier” and frequently insulted its larger rivals while pledging that T-Mobile would treat customers more fairly. Legere left T-Mobile in 2020 after the company completed a merger with Sprint in a deal that made T-Mobile one of three major nationwide carriers alongside AT&T and Verizon.

Then-CEO of T-Mobile John Legere at the company's Un-Carrier X event in Los Angeles on Tuesday, Nov. 10, 2015.

Enlarge / Then-CEO of T-Mobile John Legere at the company’s Un-Carrier X event in Los Angeles on Tuesday, Nov. 10, 2015.

Getty Images | Bloomberg

After being notified of the price hike, Odean filed complaints with the Federal Communications Commission and the Rhode Island attorney general’s office. “I can afford it, but I gotta tell you, it really annoys me because the promise was so absolutely clear… It’s right there in writing: ‘T-Mobile will never change the price you pay for your T-Mobile One plan.’ It couldn’t be more clear,” she said.

Now, T-Mobile is “acting like, oh, well, we gave ourselves a way out,” Odean said. But the caveat that lets T-Mobile raise prices whenever it wants, “as far as I can tell, was never mentioned to the customers… I don’t care what they say in the FAQ,” she said.

T-Mobile users enraged as “Un-carrier” breaks promise to never raise prices Read More »

scotus-tears-down-sacklers’-immunity,-blowing-up-opioid-settlement

SCOTUS tears down Sacklers’ immunity, blowing up opioid settlement

Not immune —

Majority of justices ruled on meaning of legal code; dissenters called it “ruinous”

Grace Bisch holds a picture of stepson Eddie Bisch who died as a result of an overdose on outside of the U.S. Supreme Court on December 4, 2023  in Washington, DC. The Supreme Court heard arguments regarding a nationwide settlement with Purdue Pharma, the manufacturer of OxyContin.

Enlarge / Grace Bisch holds a picture of stepson Eddie Bisch who died as a result of an overdose on outside of the U.S. Supreme Court on December 4, 2023 in Washington, DC. The Supreme Court heard arguments regarding a nationwide settlement with Purdue Pharma, the manufacturer of OxyContin.

In a 5-4 ruling, the US Supreme Court on Thursday rejected an opioid settlement plan worth billions over the deal’s stipulation that the billionaire Sackler family would get lifetime immunity from further opioid-related litigation.

While the ruling may offer long-sought schadenfreude over the deeply despised Sackler family, it is a heavy blow to the over 100,000 people affected by opioid epidemic who could have seen compensation from the deal. With the high court’s ruling, the settlement talks will have to begin again, with the outcome and possible payouts to plaintiffs uncertain.

Between 1999 and 2019, as nearly 250,000 Americans died from prescription opioid overdoses, members of the Sackler family siphoned approximately $11 billion from the pharmaceutical company they ran, Purdue Pharma, maker of OxyContin, a highly addictive and falsely marketed pain medication. In 2007, amid the nationwide epidemic of opioid addiction and overdoses, Purdue affiliates pleaded guilty in federal court to falsely branding OxyContin as less addictive and less abusive than other pain medications. Out of fear of future litigation, the Sacklers began a “milking program,” the high court noted, draining Purdue of roughly 75 percent of its assets.

An “appropriate” deal

In 2019, Purdue filed for Chapter 11 bankruptcy, leading to negotiations for a massive consolidated settlement plan that took years. As part of the resulting deal, the Sacklers—who did not file for bankruptcy and had detached themselves from the company—agreed to return up to $6 billion to Purdue, but only in exchange for immunity. The bankruptcy court approved the controversial condition, while a district court later overturned it and a yet higher court reinstated it.

In today’s majority opinion from the Supreme Court, Justices Gorsuch, Thomas, Alito, Barrett, and Jackson found that the lower courts that approved the Sackers’ immunity condition had erred in interpreting Chapter 11 bankruptcy code. “No provision of the code authorizes that kind of relief,” they court ruled. The explanation boiled down to a single sentence in a catchall provision. While the code speaks solely about responsibilities of a debtors—which in this case is Purdue, not the Sacklers—the catchall provision allows “for any other appropriate provision” not otherwise outlined.

The erring lower courts, the high court wrote, had interpreted the word “appropriate” far too broadly. Based on the context, any additional “appropriate” arrangements in a settlement that was not explicitly outlined would apply only to the debtor (in this case, Purdue) not to nondebtors (the Sacklers). The provision cannot be read, the justices wrote, “to endow a bankruptcy court with the ‘radically different’ power to discharge the debts of a nondebtor.”

“Ruinous” ruling

Justices Kavanaugh, Sotomayor, Kagan, and Roberts disagreed. In a minority opinion penned by Kavanaugh and joined by Sotomayor and Kagan, the justices blasted the ruling, calling it “wrong on the law and devastating for more than 100,000 opioid victims and their families.”

“The text of the Bankruptcy Code does not come close to requiring such a ruinous result,” Kavanaugh wrote, noting that such deals granting immunity to “nondebtors” is a longstanding practice used to secure just settlements. Neither legal structure, context, nor history necessitate today’s ruling, Kavanaugh continued. “Nor does hostility to the Sacklers—no matter how deep: ‘Nothing is more antithetical to the purpose of bankruptcy than destroying estate value to punish someone,” he wrote, citing a legal essay on Chapter 11 for mass torts.

The opioid victims and others will “suffer greatly in the wake of today’s unfortunate and destabilizing decision,” the dissenting justices wrote. “Only Congress can fix the chaos that will now ensue. The Court’s decision will lead to too much harm for too many people for Congress to sit by idly without at least carefully studying the issue.”

SCOTUS tears down Sacklers’ immunity, blowing up opioid settlement Read More »

scotus-nixes-injunction-that-limited-biden-admin-contacts-with-social-networks

SCOTUS nixes injunction that limited Biden admin contacts with social networks

SCOTUS nixes injunction that limited Biden admin contacts with social networks

On Wednesday, the Supreme Court tossed out claims that the Biden administration coerced social media platforms into censoring users by removing COVID-19 and election-related content.

Complaints alleging that high-ranking government officials were censoring conservatives had previously convinced a lower court to order an injunction limiting the Biden administration’s contacts with platforms. But now that injunction has been overturned, re-opening lines of communication just ahead of the 2024 elections—when officials will once again be closely monitoring the spread of misinformation online targeted at voters.

In a 6–3 vote, the majority ruled that none of the plaintiffs suing—including five social media users and Republican attorneys general in Louisiana and Missouri—had standing. They had alleged that the government had “pressured the platforms to censor their speech in violation of the First Amendment,” demanding an injunction to stop any future censorship.

Plaintiffs may have succeeded if they were instead seeking damages for past harms. But in her opinion, Justice Amy Coney Barrett wrote that partly because the Biden administration seemingly stopped influencing platforms’ content policies in 2022, none of the plaintiffs could show evidence of a “substantial risk that, in the near future, they will suffer an injury that is traceable” to any government official. Thus, they did not seem to face “a real and immediate threat of repeated injury,” Barrett wrote.

“Without proof of an ongoing pressure campaign, it is entirely speculative that the platforms’ future moderation decisions will be attributable, even in part,” to government officials, Barrett wrote, finding that an injunction would do little to prevent future censorship.

Instead, plaintiffs’ claims “depend on the platforms’ actions,” Barrett emphasized, “yet the plaintiffs do not seek to enjoin the platforms from restricting any posts or accounts.”

“It is a bedrock principle that a federal court cannot redress ‘injury that results from the independent action of some third party not before the court,'” Barrett wrote.

Barrett repeatedly noted “weak” arguments raised by plaintiffs, none of which could directly link their specific content removals with the Biden administration’s pressure campaign urging platforms to remove vaccine or election misinformation.

According to Barrett, the lower court initially granting the injunction “glossed over complexities in the evidence,” including the fact that “platforms began to suppress the plaintiffs’ COVID-19 content” before the government pressure campaign began. That’s an issue, Barrett said, because standing to sue “requires a threshold showing that a particular defendant pressured a particular platform to censor a particular topic before that platform suppressed a particular plaintiff’s speech on that topic.”

“While the record reflects that the Government defendants played a role in at least some of the platforms’ moderation choices, the evidence indicates that the platforms had independent incentives to moderate content and often exercised their own judgment,” Barrett wrote.

Barrett was similarly unconvinced by arguments that plaintiffs risk platforms removing future content based on stricter moderation policies that were previously coerced by officials.

“Without evidence of continued pressure from the defendants, the platforms remain free to enforce, or not to enforce, their policies—even those tainted by initial governmental coercion,” Barrett wrote.

Judge: SCOTUS “shirks duty” to defend free speech

Justices Clarence Thomas and Neil Gorsuch joined Samuel Alito in dissenting, arguing that “this is one of the most important free speech cases to reach this Court in years” and that the Supreme Court had an “obligation” to “tackle the free speech issue that the case presents.”

“The Court, however, shirks that duty and thus permits the successful campaign of coercion in this case to stand as an attractive model for future officials who want to control what the people say, hear, and think,” Alito wrote.

Alito argued that the evidence showed that while “downright dangerous” speech was suppressed, so was “valuable speech.” He agreed with the lower court that “a far-reaching and widespread censorship campaign” had been “conducted by high-ranking federal officials against Americans who expressed certain disfavored views about COVID-19 on social media.”

“For months, high-ranking Government officials placed unrelenting pressure on Facebook to suppress Americans’ free speech,” Alito wrote. “Because the Court unjustifiably refuses to address this serious threat to the First Amendment, I respectfully dissent.”

At least one plaintiff who opposed masking and vaccines, Jill Hines, was “indisputably injured,” Alito wrote, arguing that evidence showed that she was censored more frequently after officials pressured Facebook into changing their policies.

“Top federal officials continuously and persistently hectored Facebook to crack down on what the officials saw as unhelpful social media posts, including not only posts that they thought were false or misleading but also stories that they did not claim to be literally false but nevertheless wanted obscured,” Alito wrote.

While Barrett and the majority found that platforms were more likely responsible for injury, Alito disagreed, writing that with the threat of antitrust probes or Section 230 amendments, Facebook acted like “a subservient entity determined to stay in the good graces of a powerful taskmaster.”

Alito wrote that the majority was “applying a new and heightened standard” by requiring plaintiffs to “untangle Government-caused censorship from censorship that Facebook might have undertaken anyway.” In his view, it was enough that Hines showed that “one predictable effect of the officials’ action was that Facebook would modify its censorship policies in a way that affected her.”

“When the White House pressured Facebook to amend some of the policies related to speech in which Hines engaged, those amendments necessarily impacted some of Facebook’s censorship decisions,” Alito wrote. “Nothing more is needed. What the Court seems to want are a series of ironclad links.”

“That is regrettable,” Alito said.

SCOTUS nixes injunction that limited Biden admin contacts with social networks Read More »

tesla-announces-third-and-fourth-cybertruck-recalls

Tesla announces third and fourth Cybertruck recalls

Cybertruck recalls —

Wiper motor may stop working and cosmetic applique may detach while driving.

A Tesla Cybertruck with the passenger door open is displayed in a convention center.

Enlarge / A Tesla Cybertruck at the Viva Technology show at Parc des Expositions Porte de Versailles on May 24, 2024 in Paris, France.

Getty Images | Chesnot

Tesla has announced two more recalls of the Cybertruck, both of which affect over 11,000 vehicles produced since the car first became available late last year. Cybertruck owners will need to bring their cars in for service because of faulty windshield wiper motors and a cosmetic piece that could come off the vehicle while it’s being driven.

Tesla previously recalled the Cybertruck in April over a faulty accelerator pedal assembly and in January for a software problem in which the font size of brake, park, and antilock brake system visual warning indicators were too small. The January recall also affected Tesla Model 3, S, X, and Y.

A new recall notice says, “the front windshield wiper motor controller may stop functioning due to electrical overstress to the gate driver component. A non-functioning windshield wiper may reduce visibility in certain operating conditions, which may increase the risk of a collision.”

The wiper motors have a gate driver that “may have been damaged due to electrical overstress during functional testing,” the notice said. The fix is to “replace the windshield wiper motor with a wiper motor that has a properly functioning gate driver component.”

The wiper motor recall affects 11,688 cars. While it is estimated that 2 percent of cars have the defect, the notice said the “recall population includes all Model Year 2024 Cybertruck vehicles manufactured from November 13, 2023, to June 6, 2024.”

Tesla said it is not aware of any crashes, injuries, or deaths related to the wiper motor problem. Newly manufactured Cybertrucks shouldn’t have the problem because “the supplier introduced a functional test using a lower current to prevent damage and ensure integrity of the gate driver,” the notice said.

Cosmetic applique may not stay on the car

The other new recall notice describes a problem “with a cosmetic applique along the exterior of the trunk bed trim, known as the sail applique, which is affixed to the vehicle with adhesive.” The applique or adhesion was not installed correctly on some cars, “which may cause the sail applique to become loose or separate from the vehicle.”

“If the applique separates from the vehicle while in drive, it could create a road hazard for following motorists and increase their risk of injury or a collision,” the recall notice said. The fix is to “replace or rework the sail applique such that the assembly meets specifications and ensures sufficient adhesion between the applique and the vehicle’s deck rail.”

It’s estimated that 1 percent of vehicles have the applique defect, and the “recall population includes all Model Year 2024 Cybertruck vehicles manufactured from November 13, 2023, to May 26, 2024.” That amounts to 11,383 Cybertrucks. Customers will not be charged for the fixes to the wiper motor and applique.

The problem was discovered in December 2023 when “an undelivered Cybertruck with a single missing applique arrived at a Tesla delivery center after being transported on a vehicle hauler,” the notice said. The problem was found a second time in May 2024 on a customer vehicle, and then on more cars when “Tesla surveyed and assessed the retention of sail appliques on vehicles in the field.”

Tesla said it is not aware of any crashes, injuries, or deaths related to the applique problem. On newly manufactured Cybertrucks, “quality control improvements to the adhesive application” should keep the piece attached to the car.

Separately, one Cybertruck owner recently alleged that his car crashed into a neighbor’s house despite him holding down the brake pedal. The driver claimed that Tesla told him, “We have reviewed logs and due to the terrain the accelerator may or may not disengage when the brake is depressed.”

We contacted Tesla about the alleged braking problem today and will provide an update if the company responds. There is video of the accident, and the driver says the incident left skid marks for about 50 feet, “almost like one motor was accelerating while the other set of wheels locked.”

Tesla announces third and fourth Cybertruck recalls Read More »

verizon-screwup-caused-911-outage-in-6-states—carrier-agrees-to-$1m-fine

Verizon screwup caused 911 outage in 6 states—carrier agrees to $1M fine

That’ll teach ’em —

Verizon initially failed to remove a flawed update file that caused two outages.

A Verizon logo on top of a black background.

Verizon Wireless agreed to pay a $1,050,000 penalty to the US Treasury and implement a compliance plan because of a 911 outage in December 2022 that was caused by a botched update, the Federal Communications Commission announced today.

A consent decree explains that the outage was caused by “the reapplication of a known flawed security policy update file.” During the outage, lasting one hour and 44 minutes, Verizon failed to deliver hundreds of 911 calls in Alabama, Florida, Georgia, North Carolina, South Carolina, and Tennessee, the FCC said.

“The [FCC] Enforcement Bureau takes any potential violations of the Commission’s 911 rules extremely seriously. Sunny day outages, as occurred here, can be especially troubling because they occur when the public and 911 call centers least expect it,” Bureau Chief Loyaan Egal said.

The flawed update file was involved in another outage that happened two months earlier, in October 2022. After the October incident, Verizon “implemented a wide range of audits and technical system updates designed to protect against future recurrences of configuration and one-way audio issues,” the consent decree said.

Even before the December outage, Verizon knew that the problematic update file “was related to the root cause of the outage that occurred in October,” the FCC said. “Due to insufficient naming convention protocols and a failure to follow then-current implementation protocols, the flawed security policy update file was reintroduced into the Verizon Wireless network. This resulted in the [December] outage, however without the one-way audio issues.”

Verizon failed to remove flawed update file

The December outage happened when the flawed update file was re-applied by a Verizon Wireless employee. But the fault lies with more than one person, the FCC said:

Despite this prior outage and Verizon Wireless’s understanding that the flawed security policy update file resulted in that prior outage, Verizon Wireless did not remove that security policy update file from the inventory of available security policies, which enabled personnel to select and reapply the flawed security policy update file to the Verizon Wireless network. Additionally, Verizon Wireless admits its employees failed to comply with its “business-as-usual” operating and implementation procedures, which procedures required additional oversight prior to the implementation of the type of security policy update that caused the December Outage.

Verizon admitted in the consent decree that the FCC’s description is “a true and accurate description of the facts underlying the Investigation.” The agreed-upon compliance plan includes processes to prevent the reoccurrence of firewall and one-way audio problems, enhanced processes for implementing security policy updates, testing before significant network changes, risk assessments, a compliance training program for employees, and more.

Verizon must file four compliance reports over the next three years and “report any material noncompliance” with 911 rules and the consent decree terms to the FCC. In a statement provided to Ars, Verizon said the December 2022 outage “was a highly unusual occurrence. We understand the critical importance of maintaining a robust and reliable 911 network, and we’re committed to ensuring that our customers can always rely on our services in times of need.”

Verizon has 30 days to pay the $1.05 million fine. Verizon’s wireless service revenue was $19.5 billion in the first quarter of 2024. The entire company’s quarterly operating revenue was $33 billion, and net income was $4.7 billion.

Verizon isn’t the only major carrier to have a big outage caused by a faulty update. In February 2024, a major AT&T wireless outage caused by a botched network update led to warnings that 911 access could be disrupted. The FCC was investigating that outage.

There was also a statewide 911 outage for two hours in Massachusetts this month, but that one was caused by a faulty firewall used by the state’s 911 vendor.

Verizon screwup caused 911 outage in 6 states—carrier agrees to $1M fine Read More »

microsoft-risks-huge-fine-over-“possibly-abusive”-bundling-of-teams-and-office

Microsoft risks huge fine over “possibly abusive” bundling of Teams and Office

A screen shows a virtual meeting with Microsoft Teams at a conference on January 30, 2024 in Barcelona, Spain.

Enlarge / A screen shows a virtual meeting with Microsoft Teams at a conference on January 30, 2024 in Barcelona, Spain.

Microsoft may be hit with a massive fine in the European Union for “possibly abusively” bundling Teams with its Office 365 and Microsoft 365 software suites for businesses.

On Tuesday, the European Commission (EC) announced preliminary findings of an investigation into whether Microsoft’s “suite-centric business model combining multiple types of software in a single offering” unfairly shut out rivals in the “software as a service” (SaaS) market.

“Since at least April 2019,” the EC found, Microsoft’s practice of “tying Teams with its core SaaS productivity applications” potentially restricted competition in the “market for communication and collaboration products.”

The EC is also “concerned” that the practice may have helped Microsoft defend its dominant market position by shutting out “competing suppliers of individual software” like Slack and German video-conferencing software Alfaview. Makers of those rival products had complained to the EC last year, setting off the ongoing probe into Microsoft’s bundling.

Customers should have choices, the EC said, and seemingly at every step, Microsoft sought instead to lock customers into using only its software.

“Microsoft may have granted Teams a distribution advantage by not giving customers the choice whether or not to acquire access to Teams when they subscribe to their SaaS productivity applications,” the EC wrote. This alleged abusive practice “may have been further exacerbated by interoperability limitations between Teams’ competitors and Microsoft’s offerings.”

For Microsoft, the EC’s findings are likely not entirely unexpected, although Tuesday’s announcement must be disappointing. The company had been hoping to avoid further scrutiny by introducing some major changes last year. Most drastically, Microsoft began “offering some suites without Teams,” the EC said, but even that wasn’t enough to appease EU regulators.

“The Commission preliminarily finds that these changes are insufficient to address its concerns and that more changes to Microsoft’s conduct are necessary to restore competition,” the EC said, concluding that “the conduct may have prevented Teams’ rivals from competing, and in turn innovating, to the detriment of customers in the European Economic Area.”

Microsoft will now be given an opportunity to defend its practices. If the company is unsuccessful, it risks a potential fine up to 10 percent of its annual worldwide turnover and an order possibly impacting how the leading global company conducts business.

In a statement to Ars, Microsoft President Brad Smith confirmed that the tech giant would work with the commission to figure out a better solution.

“Having unbundled Teams and taken initial interoperability steps, we appreciate the additional clarity provided today and will work to find solutions to address the commission’s remaining concerns,” Smith said.

The EC’s executive vice-president in charge of competition policy, Margrethe Vestager, explained in a statement why the commission refuses to back down from closely scrutinizing Microsoft’s alleged unfair practices.

“We are concerned that Microsoft may be giving its own communication product Teams an undue advantage over competitors by tying it to its popular productivity suites for businesses,” Vestager said. “And preserving competition for remote communication and collaboration tools is essential as it also fosters innovation” in these markets.

Changes coming to EU antitrust law in 2025

The EC initially launched its investigation into Microsoft’s allegedly abusive Teams bundling last July. Its probe came after Slack and Alfaview makers complained that Microsoft may be violating Article 102 of the Treaty on the Functioning of the European Union (TFEU), “which prohibits the abuse of a dominant market position.”

Nearly one year later, there’s no telling when the EC’s inquiry into Microsoft Teams will end. Microsoft will have a chance to review all evidence of infringement gathered by EU regulators to form its response. After that, the EC will review any additional evidence before making its decision, and there is no legal deadline to complete the antitrust inquiry, the EC said.

It’s possible that the EC’s decision may come next year when the EU is preparing to release new guidance to more “vigorously” and effectively enforce TFEU.

Last March, the EC called for stakeholder feedback after rolling out “the first major policy initiative in the area of abuse of dominance rules.” The initiative sought to update TFEU for the first time since 2008 based on reviewing relevant case law.

“A robust enforcement of rules on abuse of dominance benefits both consumers and a stronger European economy,” Vestager said at that time. “We have carefully analyzed numerous EU court judgments on the application of Article 102, and it is time for us to start working on guidelines reflecting this case law.”

Microsoft risks huge fine over “possibly abusive” bundling of Teams and Office Read More »

julian-assange-to-plead-guilty-but-is-going-home-after-long-extradition-fight

Julian Assange to plead guilty but is going home after long extradition fight

Plea deal —

“Julian is free!” wife wrote after Assange struck deal with US government.

Julian Assange in an airplane seat, looking out the window.

Enlarge / Julian Assange in an airplane in a photo posted by WikiLeaks on June 25, 2024.

WikiLeaks founder Julian Assange has agreed to plead guilty to a single criminal charge, ending a long extradition battle with the United States government. Assange will reportedly avoid further jail time and be allowed to return to his home country of Australia.

Assange won’t have to travel to the continental United States. He is scheduled to plead guilty tomorrow in US District Court for the Northern Mariana Islands, a US territory in the western Pacific Ocean.

In a court filing in Saipan, the US government said:

We appreciate the Court accommodating these plea and sentencing proceedings on a single day at the joint request of the parties, in light of the defendant’s opposition to traveling to the continental United States to enter his guilty plea and the proximity of this federal US District Court to the defendant’s country of citizenship, Australia, to which we expect he will return at the conclusion of the proceedings.

During the Wednesday hearing, “we anticipate that the defendant will plead guilty to the charge in the Information of conspiring to unlawfully obtain and disseminate classified information relating to the national defense of the United States, in violation of 18 U.S.C. § 793(g), and be sentenced by the Court for that offense,” the US said.

Assange on a plane

Assange was flying to Saipan today, according to his wife, Stella Assange. “Saipan is a remote US overseas territory. He will be entering the United States. Julian won’t be safe until he lands in Australia,” she wrote.

Stella Assange wrote in an earlier post that “Julian is free!!!!” and thanked his supporters. She also announced a fundraising campaign to cover $520,000 “which he is obligated to pay back to the Australian government,” saying that he “was not permitted to fly commercial airlines or routes to Saipan and onward to Australia.”

The US unsealed a 2018 indictment against Assange in 2019, right after British police arrested him on behalf of US authorities. Assange went into hiding in the Ecuadorian Embassy in London in 2012, but the Ecuadorian government revoked his asylum after seven years.

The New York Times reported that Assange “is expected to be sentenced to about five years, the equivalent of the time he has already served in Britain.” The NYT cited a law enforcement official who is familiar with the terms of the deal.

Failed extradition attempts

In 2010, Assange’s WikiLeaks released classified documents leaked by Chelsea Manning. As Bloomberg wrote yesterday, “Assange was charged with encouraging and assisting Manning in obtaining around 750,000 classified or sensitive documents, one of the largest leaks of state secrets in US history. The original charges—17 related to espionage and one to computer misuse—carried a maximum penalty of 175 years in prison if he was found guilty on all counts in the US, although sentences for federal crimes are typically less than that.”

In 2021, a British judge rejected the US government’s request to extradite Assange, saying that he would be at greater risk of suicide in the American prison system. The US won an appeal of that ruling but legal proceedings continued. In March 2024, Assange was granted another reprieve by the High Court in London.

“Negotiations toward a plea agreement heated up in recent months after US President Joe Biden said he was considering a request from the Australian government to strike a deal that would allow Assange to return home,” Bloomberg wrote.

Stella Assange said she will seek a pardon for her husband after his guilty plea. “The fact that there is a guilty plea under the Espionage Act in relation to obtaining and disclosing national defense information is obviously a very serious concern for journalists and national security journalists in general,” she said, according to Reuters.

Australian Prime Minister Anthony Albanese wrote, “The Australian Government has consistently said that Mr. Assange’s case has dragged on for too long and that there is nothing to be gained by his continued incarceration. We want him brought home to Australia.”

Julian Assange to plead guilty but is going home after long extradition fight Read More »