Policy

trump-admin-rescinds-controversial-funding-freeze-after-two-days-of-protest

Trump admin rescinds controversial funding freeze after two days of protest

Broadband program still in doubt

As we’ve previously reported, US Senator Ted Cruz (R-Texas) and other Republicans want to overhaul the BEAD funding plans. Cruz accused the NTIA of “technology bias” because the agency decided that fiber networks should be prioritized over other types of technology, and Republicans objected to the Biden administration’s enforcement of a requirement that low-cost plans be offered.

The US law that created BEAD requires Internet providers receiving federal funds to offer at least one “low-cost broadband service option for eligible subscribers,” but also says the NTIA may not “regulate the rates charged for broadband service.” Republicans allege that the NTIA has gone too far in the direction of rate regulation, and Internet providers complained about NTIA guidance that “strongly encouraged” states to set a fixed rate of $30 per month for the low-cost service option.

Cruz, who is chairman of the Senate Commerce Committee, has said that Congress will do a thorough review of the program early in 2025. Levin’s research note said the NTIA was likely to have paused spending even if the Trump administration hadn’t tried to freeze funding.

“Even without the memo, we would not have been surprised to see NTIA informally pause spending while it awaits guidance on how the Trump Administration wishes to proceed with the program,” Levin wrote. New Street Research expects to see changes similar to those proposed by Cruz.

“We expect a pause in BEAD funding, and perhaps USF [Universal Service Fund] funding as well, but further expect that, because the funding largely assists Republican areas, the pause will be relatively short,” Levin wrote. “Still, we acknowledge considerable uncertainty about the timing and constraints on future BEAD spending.”

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ai-haters-build-tarpits-to-trap-and-trick-ai-scrapers-that-ignore-robots.txt

AI haters build tarpits to trap and trick AI scrapers that ignore robots.txt


Making AI crawlers squirm

Attackers explain how an anti-spam defense became an AI weapon.

Last summer, Anthropic inspired backlash when its ClaudeBot AI crawler was accused of hammering websites a million or more times a day.

And it wasn’t the only artificial intelligence company making headlines for supposedly ignoring instructions in robots.txt files to avoid scraping web content on certain sites. Around the same time, Reddit’s CEO called out all AI companies whose crawlers he said were “a pain in the ass to block,” despite the tech industry otherwise agreeing to respect “no scraping” robots.txt rules.

Watching the controversy unfold was a software developer whom Ars has granted anonymity to discuss his development of malware (we’ll call him Aaron). Shortly after he noticed Facebook’s crawler exceeding 30 million hits on his site, Aaron began plotting a new kind of attack on crawlers “clobbering” websites that he told Ars he hoped would give “teeth” to robots.txt.

Building on an anti-spam cybersecurity tactic known as tarpitting, he created Nepenthes, malicious software named after a carnivorous plant that will “eat just about anything that finds its way inside.”

Aaron clearly warns users that Nepenthes is aggressive malware. It’s not to be deployed by site owners uncomfortable with trapping AI crawlers and sending them down an “infinite maze” of static files with no exit links, where they “get stuck” and “thrash around” for months, he tells users. Once trapped, the crawlers can be fed gibberish data, aka Markov babble, which is designed to poison AI models. That’s likely an appealing bonus feature for any site owners who, like Aaron, are fed up with paying for AI scraping and just want to watch AI burn.

Tarpits were originally designed to waste spammers’ time and resources, but creators like Aaron have now evolved the tactic into an anti-AI weapon. As of this writing, Aaron confirmed that Nepenthes can effectively trap all the major web crawlers. So far, only OpenAI’s crawler has managed to escape.

It’s unclear how much damage tarpits or other AI attacks can ultimately do. Last May, Laxmi Korada, Microsoft’s director of partner technology, published a report detailing how leading AI companies were coping with poisoning, one of the earliest AI defense tactics deployed. He noted that all companies have developed poisoning countermeasures, while OpenAI “has been quite vigilant” and excels at detecting the “first signs of data poisoning attempts.”

Despite these efforts, he concluded that data poisoning was “a serious threat to machine learning models.” And in 2025, tarpitting represents a new threat, potentially increasing the costs of fresh data at a moment when AI companies are heavily investing and competing to innovate quickly while rarely turning significant profits.

“A link to a Nepenthes location from your site will flood out valid URLs within your site’s domain name, making it unlikely the crawler will access real content,” a Nepenthes explainer reads.

The only AI company that responded to Ars’ request to comment was OpenAI, whose spokesperson confirmed that OpenAI is already working on a way to fight tarpitting.

“We’re aware of efforts to disrupt AI web crawlers,” OpenAI’s spokesperson said. “We design our systems to be resilient while respecting robots.txt and standard web practices.”

But to Aaron, the fight is not about winning. Instead, it’s about resisting the AI industry further decaying the Internet with tech that no one asked for, like chatbots that replace customer service agents or the rise of inaccurate AI search summaries. By releasing Nepenthes, he hopes to do as much damage as possible, perhaps spiking companies’ AI training costs, dragging out training efforts, or even accelerating model collapse, with tarpits helping to delay the next wave of enshittification.

“Ultimately, it’s like the Internet that I grew up on and loved is long gone,” Aaron told Ars. “I’m just fed up, and you know what? Let’s fight back, even if it’s not successful. Be indigestible. Grow spikes.”

Nepenthes instantly inspires another tarpit

Nepenthes was released in mid-January but was instantly popularized beyond Aaron’s expectations after tech journalist Cory Doctorow boosted a tech commentator, Jürgen Geuter, praising the novel AI attack method on Mastodon. Very quickly, Aaron was shocked to see engagement with Nepenthes skyrocket.

“That’s when I realized, ‘oh this is going to be something,'” Aaron told Ars. “I’m kind of shocked by how much it’s blown up.”

It’s hard to tell how widely Nepenthes has been deployed. Site owners are discouraged from flagging when the malware has been deployed, forcing crawlers to face unknown “consequences” if they ignore robots.txt instructions.

Aaron told Ars that while “a handful” of site owners have reached out and “most people are being quiet about it,” his web server logs indicate that people are already deploying the tool. Likely, site owners want to protect their content, deter scraping, or mess with AI companies.

When software developer and hacker Gergely Nagy, who goes by the handle “algernon” online, saw Nepenthes, he was delighted. At that time, Nagy told Ars that nearly all of his server’s bandwidth was being “eaten” by AI crawlers.

Already blocking scraping and attempting to poison AI models through a simpler method, Nagy took his defense method further and created his own tarpit, Iocaine. He told Ars the tarpit immediately killed off about 94 percent of bot traffic to his site, which was primarily from AI crawlers. Soon, social media discussion drove users to inquire about Iocaine deployment, including not just individuals but also organizations wanting to take stronger steps to block scraping.

Iocaine takes ideas (not code) from Nepenthes, but it’s more intent on using the tarpit to poison AI models. Nagy used a reverse proxy to trap crawlers in an “infinite maze of garbage” in an attempt to slowly poison their data collection as much as possible for daring to ignore robots.txt.

Taking its name from “one of the deadliest poisons known to man” from The Princess Bride, Iocaine is jokingly depicted as the “deadliest poison known to AI.” While there’s no way of validating that claim, Nagy’s motto is that the more poisoning attacks that are out there, “the merrier.” He told Ars that his primary reasons for building Iocaine were to help rights holders wall off valuable content and stop AI crawlers from crawling with abandon.

Tarpits aren’t perfect weapons against AI

Running malware like Nepenthes can burden servers, too. Aaron likened the cost of running Nepenthes to running a cheap virtual machine on a Raspberry Pi, and Nagy said that serving crawlers Iocaine costs about the same as serving his website.

But Aaron told Ars that Nepenthes wasting resources is the chief objection he’s seen preventing its deployment. Critics fear that deploying Nepenthes widely will not only burden their servers but also increase the costs of powering all that AI crawling for nothing.

“That seems to be what they’re worried about more than anything,” Aaron told Ars. “The amount of power that AI models require is already astronomical, and I’m making it worse. And my view of that is, OK, so if I do nothing, AI models, they boil the planet. If I switch this on, they boil the planet. How is that my fault?”

Aaron also defends against this criticism by suggesting that a broader impact could slow down AI investment enough to possibly curb some of that energy consumption. Perhaps due to the resistance, AI companies will be pushed to seek permission first to scrape or agree to pay more content creators for training on their data.

“Any time one of these crawlers pulls from my tarpit, it’s resources they’ve consumed and will have to pay hard cash for, but, being bullshit, the money [they] have spent to get it won’t be paid back by revenue,” Aaron posted, explaining his tactic online. “It effectively raises their costs. And seeing how none of them have turned a profit yet, that’s a big problem for them. The investor money will not continue forever without the investors getting paid.”

Nagy agrees that the more anti-AI attacks there are, the greater the potential is for them to have an impact. And by releasing Iocaine, Nagy showed that social media chatter about new attacks can inspire new tools within a few days. Marcus Butler, an independent software developer, similarly built his poisoning attack called Quixotic over a few days, he told Ars. Soon afterward, he received messages from others who built their own versions of his tool.

Butler is not in the camp of wanting to destroy AI. He told Ars that he doesn’t think “tools like Quixotic (or Nepenthes) will ‘burn AI to the ground.'” Instead, he takes a more measured stance, suggesting that “these tools provide a little protection (a very little protection) against scrapers taking content and, say, reposting it or using it for training purposes.”

But for a certain sect of Internet users, every little bit of protection seemingly helps. Geuter linked Ars to a list of tools bent on sabotaging AI. Ultimately, he expects that tools like Nepenthes are “probably not gonna be useful in the long run” because AI companies can likely detect and drop gibberish from training data. But Nepenthes represents a sea change, Geuter told Ars, providing a useful tool for people who “feel helpless” in the face of endless scraping and showing that “the story of there being no alternative or choice is false.”

Criticism of tarpits as AI weapons

Critics debating Nepenthes’ utility on Hacker News suggested that most AI crawlers could easily avoid tarpits like Nepenthes, with one commenter describing the attack as being “very crawler 101.” Aaron said that was his “favorite comment” because if tarpits are considered elementary attacks, he has “2 million lines of access log that show that Google didn’t graduate.”

But efforts to poison AI or waste AI resources don’t just mess with the tech industry. Governments globally are seeking to leverage AI to solve societal problems, and attacks on AI’s resilience seemingly threaten to disrupt that progress.

Nathan VanHoudnos is a senior AI security research scientist in the federally funded CERT Division of the Carnegie Mellon University Software Engineering Institute, which partners with academia, industry, law enforcement, and government to “improve the security and resilience of computer systems and networks.” He told Ars that new threats like tarpits seem to replicate a problem that AI companies are already well aware of: “that some of the stuff that you’re going to download from the Internet might not be good for you.”

“It sounds like these tarpit creators just mainly want to cause a little bit of trouble,” VanHoudnos said. “They want to make it a little harder for these folks to get” the “better or different” data “that they’re looking for.”

VanHoudnos co-authored a paper on “Counter AI” last August, pointing out that attackers like Aaron and Nagy are limited in how much they can mess with AI models. They may have “influence over what training data is collected but may not be able to control how the data are labeled, have access to the trained model, or have access to the Al system,” the paper said.

Further, AI companies are increasingly turning to the deep web for unique data, so any efforts to wall off valuable content with tarpits may be coming right when crawling on the surface web starts to slow, VanHoudnos suggested.

But according to VanHoudnos, AI crawlers are also “relatively cheap,” and companies may deprioritize fighting against new attacks on crawlers if “there are higher-priority assets” under attack. And tarpitting “does need to be taken seriously because it is a tool in a toolkit throughout the whole life cycle of these systems. There is no silver bullet, but this is an interesting tool in a toolkit,” he said.

Offering a choice to abstain from AI training

Aaron told Ars that he never intended Nepenthes to be a major project but that he occasionally puts in work to fix bugs or add new features. He said he’d consider working on integrations for real-time reactions to crawlers if there was enough demand.

Currently, Aaron predicts that Nepenthes might be most attractive to rights holders who want AI companies to pay to scrape their data. And many people seem enthusiastic about using it to reinforce robots.txt. But “some of the most exciting people are in the ‘let it burn’ category,” Aaron said. These people are drawn to tools like Nepenthes as an act of rebellion against AI making the Internet less useful and enjoyable for users.

Geuter told Ars that he considers Nepenthes “more of a sociopolitical statement than really a technological solution (because the problem it’s trying to address isn’t purely technical, it’s social, political, legal, and needs way bigger levers).”

To Geuter, a computer scientist who has been writing about the social, political, and structural impact of tech for two decades, AI is the “most aggressive” example of “technologies that are not done ‘for us’ but ‘to us.'”

“It feels a bit like the social contract that society and the tech sector/engineering have had (you build useful things, and we’re OK with you being well-off) has been canceled from one side,” Geuter said. “And that side now wants to have its toy eat the world. People feel threatened and want the threats to stop.”

As AI evolves, so do attacks, with one 2021 study showing that increasingly stronger data poisoning attacks, for example, were able to break data sanitization defenses. Whether these attacks can ever do meaningful destruction or not, Geuter sees tarpits as a “powerful symbol” of the resistance that Aaron and Nagy readily joined.

“It’s a great sign to see that people are challenging the notion that we all have to do AI now,” Geuter said. “Because we don’t. It’s a choice. A choice that mostly benefits monopolists.”

Tarpit creators like Nagy will likely be watching to see if poisoning attacks continue growing in sophistication. On the Iocaine site—which, yes, is protected from scraping by Iocaine—he posted this call to action: “Let’s make AI poisoning the norm. If we all do it, they won’t have anything to crawl.”

Photo of Ashley Belanger

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

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Senator Ted Cruz is trying to block Wi-Fi hotspots for schoolchildren


Ted Cruz vs. Wi-Fi hotspots

Cruz: Hotspot lending could “censor kids’ exposure to conservative viewpoints.”

Senate Commerce Committee Chairman Ted Cruz (R-Texas) at a hearing on Tuesday, January 28, 2025. Credit: Getty Images | Tom Williams

US Senator Ted Cruz (R-Texas) is trying to block a plan to distribute Wi-Fi hotspots to schoolchildren, claiming it will lead to unsupervised Internet usage, endanger kids, and possibly restrict kids’ exposure to conservative viewpoints. “The government shouldn’t be complicit in harming students or impeding parents’ ability to decide what their kids see by subsidizing unsupervised access to inappropriate content,” Cruz said.

Cruz, chairman of the Commerce Committee, yesterday announced a Congressional Review Act (CRA) resolution that would nullify the hotspot rule issued by the Federal Communications Commission. The FCC voted to adopt the rule in July 2024 under then-Chairwoman Jessica Rosenworcel, saying it was needed to help kids without reliable Internet access complete their homework.

Cruz’s press release said the FCC action “violates federal law, creates major risks for kids’ online safety, [and] harms parental rights.” While Rosenworcel said last year that the hotspot lending could be implemented under the Universal Service Fund’s existing budget, Cruz alleged that it “will increase taxes on working families.”

“As adopted, the Biden administration’s Wi-Fi Hotspot Order unlawfully expanded the Universal Service Fund (USF) to subsidize Wi-Fi hotspots for off-campus use by schoolchildren, despite the Communications Act clearly limiting the Commission’s USF authority to ‘classrooms,'” Cruz’s announcement said. “This partisan order, strongly opposed by then-Commissioner Brendan Carr and Commissioner Nathan Simington, represents an overreach of the FCC’s mandate and poses serious risk to children’s online safety and parental rights.”

Cruz’s press release said that “unlike in a classroom or study hall, off-premises hotspot use is not typically supervised, inviting exposure to inappropriate content, including social media.” Cruz’s office alleged that the FCC program shifts control of Internet access from parents to schools and thus “heightens the risk of censoring kids’ exposure to conservative viewpoints.”

The Cruz resolution to nullify the FCC rule was co-sponsored by Sens. John Thune (R-S.D.), Roger Wicker (R-Miss.), Deb Fischer (R-Neb.), Jerry Moran (R-Kan.), Marsha Blackburn (R-Tenn.), Todd Young (R-Ind.), Ted Budd (R-N.C.), Eric Schmitt (R-Mo.), John Curtis (R-Utah), Tim Sheehy (R-Mont.), Shelley Moore Capito (R-W.Va.), and Cynthia Lummis (R-Wyo.).

The FCC’s plan

Under the CRA, Congress can reverse recent agency actions. The exact deadline isn’t always clear, but the Congressional Research Service estimated “that Biden Administration rules submitted to the House or Senate on or after August 1, 2024” are likely to be subject to the CRA during the first few months of 2025. The FCC hotspot rule was submitted to Congress in August.

The FCC rule expands E-Rate, a Universal Service Fund program that helps schools and libraries obtain affordable broadband. The hotspot order would let schools and libraries use E-Rate funding for “lending programs to loan Wi-Fi hotspots and services that can be used off-premises to the students, school staff, and library patrons with the greatest need,” the FCC says.

The FCC’s hotspot order said “technology has become an integral part of the modern classroom,” and that “neither Congress nor the Commission has defined the term ‘classroom’ or placed any explicit location restrictions on schools or libraries.”

“We conclude that funding Wi-Fi hotspots and services for off-premises use will help enhance access for school classrooms and libraries to the broadband connectivity necessary to facilitate digital learning for students and school staff, as well as library services for library patrons who lack broadband access when they are away from school or library premises,” the FCC order said.

Off-premises use can help “the student who has no way of accessing their homework to prepare for the next day’s classroom lesson, or the school staff member who is unable to engage in parent-teacher meetings or professional trainings that take place after the school day ends, or the library patron who needs to attend a virtual job interview or perform bona fide research after their library’s operating hours,” the FCC said.

The FCC order continued:

Thus, we conclude that by permitting support for the purchase of Wi-Fi hotspots and Internet wireless services that can be used off-premises and by allowing schools and libraries to use this technology to connect the individuals with the greatest need to the resources required to fully participate in classroom assignments and in accessing library services, we will thereby extend the digital reach of schools and libraries for educational purposes and allow schools, teachers, and libraries to adopt and use technology-based tools and supports that require Internet access at home. For these reasons, we conclude that the action adopted today is within the scope of our statutory directive under section 254(h)(2)(A) of the Communications Act to enhance access to advanced telecommunications and information services for school classrooms and libraries.

The FCC order said it would be up to schools and libraries “to make determinations about acceptable use in their communities.” Schools and libraries seeking funding would be “subject to the requirements under the Children’s Internet Protection Act, which requires local educational agencies and libraries to establish specific technical protections before allowing network access,” the FCC said. They also must certify on an FCC form that they have updated and publicly posted acceptable use policies and may be required to provide the policies and evidence of where they are posted to the FCC.

Hotspots were distributed during pandemic

The FCC previously distributed Wi-Fi hotspots and other Internet access technology through the $7.171 billion Emergency Connectivity Fund (ECF), which was authorized by Congress in the American Rescue Plan Act of 2021. But Congress rescinded the program’s remaining funding of $1.768 billion last year.

The Rosenworcel FCC responded by adapting E-Rate to include hotspot lending. Overall E-Rate funding is based on demand and capped at $4.94 billion per year. Actual spending for E-Rate in 2023 was $2.48 billion. E-Rate and other Universal Service Fund programs are paid for through fees imposed on phone companies, which generally pass that cost on to consumers with a “Universal Service” charge on telephone bills.

Carr, who is now FCC chairman, said in his July 2024 dissent that only Congress can decide whether to revive the hotspot lending. “Now that the ECF program has expired, its future is up to Congress,” he said. “The legislative branch retains the power to decide whether to continue funding this Wi-Fi loaner program—or not. But Congress has made clear that the FCC’s authority to fund this initiative is over.”

With the previous temporary program, Congress ensured that Universal Service Fund money wouldn’t be spent on the Wi-Fi hotspots and that “the program would sunset when the COVID-19 emergency ended,” Carr said. But the replacement program doesn’t have the “guardrails” imposed by Congress, he argued.

“The FCC includes no limit on the amount of ratepayer dollars that can be expended in aggregate over the course of years, no limit on the locations at which the hotpots can be used, no sunset date on the program, and no protection against this program increasing consumers’ monthly bills,” Carr said.

Even if Congress doesn’t act on Cruz’s resolution, Carr could start a new FCC proceeding to reverse the previous decision. Carr has said he plans to take actions “to reverse the last administration’s costly regulatory overreach.”

Ex-chair said plan didn’t require budget increase

Rosenworcel said the temporary program “demonstrated what a modern library and school can do to help a community learn without limits and keep connected.”

“Today we have a choice,” she said at the time. “We can go back to those days when people sat in parking lots to get a signal to get online and students struggling with the homework gap hung around fast food places just to get the Internet access they needed to do their schoolwork. Or we can go forward and build a digital future that works for everyone.”

She argued that the FCC has authority because the law “directs the agency to update the definition of universal service, which includes E-Rate, so that it evolves over time,” and “Congress specifically directed the Commission to designate additional services in this program as needed for schools and libraries.”

Cruz’s press release said the FCC “order imposes no overall limit on the amount of federal dollars that can be expended on the hotspots, lacks mean-testing to target children who may not have Internet at home, and allows for duplication of service in areas where the federal government is already subsidizing broadband. As a result, the order could strain the USF while increasing the risk of waste, fraud, and abuse.”

However, Rosenworcel said the program would work “within the existing E-Rate budget” and thus “does not require new universal service funds nor does it come at the cost of the support E-Rate provides to connectivity in schools and libraries.” Addressing the budget, the FCC order pointed out that E-Rate demand has fallen short of the program’s funding cap for many years.

While there wouldn’t be mandatory mean-testing, the FCC program would rely on schools and libraries to determine who should be given access to hotspots. “In establishing a budgeted approach to the lending program mechanism, we expect that the limited number of available Wi-Fi hotspots will more naturally be targeted to students, school staff, or library patrons with the most need,” the FCC order said.

Photo of Jon Brodkin

Jon is a Senior IT Reporter for Ars Technica. He covers the telecom industry, Federal Communications Commission rulemakings, broadband consumer affairs, court cases, and government regulation of the tech industry.

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fcc-chair-helps-isps-and-landlords-make-deals-that-renters-can’t-escape

FCC chair helps ISPs and landlords make deals that renters can’t escape

Lobby groups thank new FCC chair

Housing industry lobby groups praised Carr in a press release issued by the National Multifamily Housing Council (NMHC), National Apartment Association (NAA), and Real Estate Technology and Transformation Center (RETTC). “His decision to withdraw the proposal will ensure that millions of consumers—renters, homeowners and condominium owners—will continue to reap the benefits of bulk billing,” the press release said.

The industry press release claims that bulk billing agreements negotiated between property owners and Internet service providers “typically secur[e] high-speed Internet for renters at rates up to 50 percent lower than standard retail pricing” and remove “barriers to broadband adoption like credit checks, security deposits, equipment rentals, or installation fees.”

“Bulk billing arrangements have made high-speed internet more accessible and affordable for millions of Americans, especially for low-income renters and seniors living in affordable housing,” NMHC President Sharon Wilson Géno said.

While the FCC prohibits deals in which a service provider has the exclusive right to access and serve a building, there are other ways in which competitors can be effectively shut out of buildings. In 2022, the FCC said its existing rules weren’t strong enough and added a ban on exclusive revenue-sharing agreements between landlords and ISPs in multi-tenant buildings. The revenue-sharing ban was approved 4–0, including votes from both Rosenworcel and Carr.

Comcast, Charter, Cox, and cable lobby group NCTA opposed Rosenworcel’s plan for a bulk billing ban, saying that “interfering with the ability of building owners to offer these arrangements to their tenants will result in higher broadband and video prices and other harms for consumers, with questionable and limited benefits.”

Carr issued a statement today, saying, “During the Biden-Harris Administration, FCC leadership put forward a ‘bulk billing’ proposal that could have raised the price of Internet service for Americans living in apartments by as much as 50 percent. This regulatory overreach from Washington would have hit families right in their pocketbooks at a time when they were already hurting from the last administration’s inflationary policies. That is why you saw a broad and bipartisan coalition of groups opposing the plan. After all, seniors, students, and low-income individuals would have been hit particularly hard.” Carr also said that he plans more actions “to reverse the last administration’s costly regulatory overreach.”

FCC chair helps ISPs and landlords make deals that renters can’t escape Read More »

trump’s-reported-plans-to-save-tiktok-may-violate-scotus-backed-law

Trump’s reported plans to save TikTok may violate SCOTUS-backed law


Everything insiders are saying about Trump’s plan to save TikTok.

It was apparently a busy weekend for key players involved in Donald Trump’s efforts to make a deal to save TikTok.

Perhaps the most appealing option for ByteDance could be if Trump blessed a merger between TikTok and Perplexity AI—a San Francisco-based AI search company worth about $9 billion that appears to view a TikTok video content acquisition as a path to compete with major players like Google and OpenAI.

On Sunday, Perplexity AI submitted a revised merger proposal to TikTok-owner ByteDance, reviewed by CNBC, which sources told AP News included feedback from the Trump administration.

If the plan is approved, Perplexity AI and TikTok US would be merged into a new entity. And once TikTok reaches an initial public offering of at least $300 billion, the US government could own up to 50 percent of that new company, CNBC reported. In the proposal, Perplexity AI suggested that a “fair price” would be “well north of $50 billion,” but the final price will likely depend on how many of TikTok’s existing investors decide to cash out following the merger.

ByteDance has maintained a strong resistance to selling off TikTok, especially a sale including its recommendation algorithm. Not only would this option allow ByteDance to maintain a minority stake in TikTok, but it also would leave TikTok’s recommendation algorithm under ByteDance’s control, CNBC reported. The deal would also “allow for most of ByteDance’s existing investors to retain their equity stakes,” CNBC reported.

But ByteDance may not like one potential part of the deal. An insider source told AP News that ByteDance would be required to allow “full US board control.”

According to AP News, US government ownership of a large stake in TikTok would include checks to ensure the app doesn’t become state controlled. The government’s potential stake would apparently not grant the US voting power or a seat on the merged company’s board.

A source familiar with Perplexity AI’s proposal confirmed to Ars that the reporting from CNBC and AP News is accurate.

Trump denied Oracle’s involvement in talks

Over the weekend, there was also a lot of speculation about Oracle’s involvement in negotiations. NPR reported that two sources with direct knowledge claimed that Trump was considering “tapping software company Oracle and a group of outside investors to effectively take control of the app’s global operations.”

That would be a seemingly bigger grab for the US than forcing ByteDance to divest only TikTok’s US operations.

“The goal is for Oracle to effectively monitor and provide oversight with what is going on with TikTok,” one source told NPR. “ByteDance wouldn’t completely go away, but it would minimize Chinese ownership.”

Oracle apparently met with the Trump administration on Friday and has another meeting scheduled this week to discuss Oracle buying a TikTok stake “in the tens of billions,” NPR reported.

But Trump has disputed that, saying this past weekend that he “never” spoke to Oracle about buying TikTok, AP News reported.

“Numerous people are talking to me. Very substantial people,” Trump said, confirming that he would only make a deal to save TikTok “if the United States benefits.”

All sources seemed to suggest that no deal was close to being finalized yet. Other potential Big Tech buyers include Microsoft or even possibly Elon Musk (can you imagine TikTok merged with X?). On Saturday, Trump suggested that he would likely announce his decision on TikTok’s future in the next 30 days.

Meanwhile, TikTok access has become spotty in the US. Google and Apple dropped TikTok from their app stores when the divest-or-ban law kicked in, partly because of the legal limbo threatening hundreds of billions in fines if Trump changes his mind about enforcement. That means ByteDance currently can’t push updates to US users, and anyone who offloads TikTok or purchases a new device can’t download the app in popular distribution channels.

“If we can save TikTok, I think it would be a good thing,” Trump said.

Could Trump’s plan violate divest-or-ban law?

The divest-or-ban law is formally called the Protecting Americans from Foreign Adversary Controlled Applications Act. For months, TikTok was told in court that the law required either a sale of TikTok US operations or a US ban, but now ByteDance seems to believe there’s another option to keep TikTok in the US without forcing a sale.

It remains unclear if lawmakers will approve Trump’s plan if it doesn’t force a sale of TikTok. US Representative Raja Krishnamoorthi (D-Ill.), who co-sponsored the law, issued a statement last week insisting that “ByteDance divesting remains the only real solution to protect our national security and guarantee Americans access to TikTok.”

Krishnamoorthi declined Ars’ request to comment on whether leaked details of Trump’s potential deal to save TikTok could potentially violate the divest-or-ban law. But debate will likely turn on how the law defines “qualified divestiture.”

Under the law, qualified divestiture could be either a “divestiture or similar transaction” that meets two conditions. First, the transaction is one that Trump “determines, through an interagency process, would result in the relevant foreign adversary controlled application no longer being controlled by a foreign adversary.” Second, the deal blocks any foreign adversary-controlled entity or affiliate from interfering in TikTok US operations, “including any cooperation” with foreign adversaries “with respect to the operation of a content recommendation algorithm or an agreement with respect to data sharing.”

That last bit seems to suggest that lawmakers might clash with Trump over ByteDance controlling TikTok’s algorithm, even if a company like Oracle or Perplexity serves as a gatekeeper to Americans’ data safeguarding US national security interests.

Experts told NPR that ByteDance could feasibly maintain a minority stake in TikTok US under the law, with Trump seeming to have “wide latitude to interpret” what is or is not a qualified divestiture. One congressional staffer told NPR that lawmakers might be won over if the Trump administration secured binding legal agreements “ensuring ByteDance cannot covertly manipulate the app.”

The US has tried to strike just such a national security agreement with ByteDance before, though, and it ended in lawmakers passing the divest-or-ban law. During the government’s court battle with TikTok over the law, the government repeatedly argued that prior agreement—also known as “Project Texas,” which ensured TikTok’s US recommendation engine was stored in the Oracle cloud and deployed in the US by a TikTok US subsidiary—was not enough to block Chinese influence. Proposed in 2022, the agreement was abruptly ended in 2023 when the Committee on Foreign Investment in the United States (CFIUS) determined only divestiture would resolve US concerns.

CFIUS did not respond to Ars’ request for comment.

The key problem at that point was ByteDance maintaining control of the algorithm, the government successfully argued in a case that ended in a Supreme Court victory.

“Even under TikTok’s proposed national security agreement, the source code for the recommendation engine would originate in China,” the government warned.

That seemingly leaves a vulnerability that any Trump deal allowing ByteDance to maintain control of the algorithm would likely have to reconcile.

“Under Chinese national-security laws, the Chinese government can require a China-based company to ‘surrender all its data,'” the US argued. That ultimately turned TikTok into “an espionage tool” for the Chinese Communist Party.

There’s no telling yet if Trump’s plan can set up a better version of Project Texas or convince China to sign off on a TikTok sale. Analysts have suggested that China may agree to a TikTok sale if Trump backs down on tariff threats.

ByteDance did not respond to Ars’ request for comment.

Photo of Ashley Belanger

Ashley is a senior policy reporter for Ars Technica, dedicated to tracking social impacts of emerging policies and new technologies. She is a Chicago-based journalist with 20 years of experience.

Trump’s reported plans to save TikTok may violate SCOTUS-backed law Read More »

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Couple allegedly tricked AI investors into funding wedding, houses

To further the alleged scheme, he “often described non-existent revenue, inflated cash balances,” and “otherwise exaggerated customer relationships,” the US Attorney’s Office said, to convince investors to spend millions. As Beckman’s accomplice, Lau allegedly manipulated documents, including documents allegedly stolen from the venture capital firm that employed her while supposedly hiding her work for GameOn.

The scheme apparently also included forging audits and bank statements, as well as using “the names of at least seven real people—including fake emails and signatures—without their permission to distribute false and fraudulent GameOn financial and business information and documents with the intent to defraud GameOn and its investors,” the US Attorney’s Office said.

At perhaps the furthest extreme, Lau allegedly falsified account statements, including once faking a balance of over $13 million when that account only had $25 in it. The FBI found that GameOn’s revenues never exceeded $1 million in any year, while Beckman allegedly inflated sales to investors, including claiming that sales in one quarter in 2023 got as high as $72 million.

Beckman and Lau allegedly went to great lengths to hide the scheme while diverting investor funds to their personal accounts. While GameOn employees allegedly sometimes went without paychecks, Beckman and Lau allegedly stole funds to buy expensive San Francisco real estate and pay for their wedding in 2023. If convicted, they may be forced to forfeit a $4.2 million house, a Tesla Model X, and other real estate and property purchased with their allegedly ill-gotten gains, the indictment said.

It took about five years for the cracks to begin to show in Beckman’s scheme. Beginning in 2023, Beckman increasingly started facing “questions about specific customers and specific revenue from those customers,” the indictment said. By February 2024, Beckman at last “acknowledged to at least one GameOn consultant” that a flagged audit report “did not contain accurate financial information,” but allegedly, he “attempted to shift blame to others for the inaccuracies.”

Couple allegedly tricked AI investors into funding wedding, houses Read More »

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ISP failed to comply with New York’s $15 broadband law—until Ars got involved


New York’s affordable broadband law

Optimum wasn’t ready to comply with law, rejected low-income man’s request twice.

Credit: Getty Images | imagedepotpro

When New York’s law requiring $15 or $20 broadband plans for people with low incomes took effect last week, Optimum customer William O’Brien tried to sign up for the cheap Internet service. Since O’Brien is in the Supplemental Nutrition Assistance Program (SNAP), he qualifies for one of the affordable plans that Internet service providers must offer New Yorkers who meet income eligibility requirements.

O’Brien has been paying Optimum $111.20 a month for broadband—$89.99 for the broadband service, $14 in equipment rental fees, a $6 “Network Enhancement Fee,” and $1.21 in tax. He was due for a big discount under the New York Affordable Broadband Act (ABA), which says that any ISP with over 20,000 customers must offer either a $15 plan with download speeds of at least 25Mbps or a $20 plan with at least 200Mbps speeds, and that the price must include “any recurring taxes and fees such as recurring rental fees for service provider equipment required to obtain broadband service and usage fees.”

Despite qualifying for a low-income plan under the law’s criteria, O’Brien’s request was denied by Optimum. He reached out to Ars, just like many other people who have read our articles about bad telecom customer service. Usually, these problems are fixed quickly after we reach out to an Internet provider’s public relations department on the customer’s behalf.

That seemed to be the way it was going, as Optimum’s PR team admitted the mistake and told us that a customer relations specialist would reach out to O’Brien and get him on the right plan. But O’Brien was rejected again after that.

We followed up with Optimum’s PR team, and they had to intervene a second time to make sure the company gave O’Brien what he’s entitled to under the law. The company also updated its marketing materials after we pointed out that its Optimum Advantage Internet webpage still said the low-income plan wasn’t available to current customers, former users who disconnected less than 60 days ago, and former customers whose accounts were “not in good standing.” The New York law doesn’t allow for those kinds of exceptions.

O’Brien is now on a $14.99 plan with 50Mbps download and 5Mbps upload speeds. He was previously on a 100Mbps download plan and had faster upload speeds, but from now on he’ll be paying nearly $100 less a month.

Obviously, telecom customers shouldn’t ever have to contact a news organization just to get a basic problem solved. But the specter of media coverage usually causes an ISP to take quick action, so it was surprising when O’Brien was rejected a second time. Here’s what happened.

“We don’t have that plan”

O’Brien contacted Optimum (which used to be called Cablevision and is now owned by Altice USA) after learning about the New York law from an Ars article. “I immediately got on Optimum’s website to chat with live support but they refused to comply with the act,” O’Brien told us on January 15, the day the law took effect.

A transcript of O’Brien’s January 15 chat with Optimum shows that the customer service agent told him, “I did check on that and according to the policy we don’t have that credit offer in Optimum right now.” O’Brien provided the agent a link to the Ars article, which described the New York law and mentioned that Optimum offers a low-income plan for $15.

“After careful review, I did check on that, it is not officially from Optimum and in Optimum we don’t have that plan,” the agent replied.

O’Brien provided Ars with documents showing that he is in SNAP and thus qualifies for the low-income plan. We provided this information to the Optimum PR department on the morning of January 17.

“We have escalated this exchange with our teams internally to ensure this issue is rectified and will be reaching out to the customer directly today to assist in getting him on the right plan,” an Optimum spokesperson told us that afternoon.

A specialist from Optimum’s executive customer relations squad reached out to O’Brien later on Friday. He missed the call, but they connected on Tuesday, January 21. She told O’Brien that Optimum doesn’t offer the low-income plan to existing customers.

“She said their position is that they offer the required service but only for new customers and since I already have service I’m disqualified,” O’Brien told us. “I told her that I’m currently on food stamps and that I used to receive the $30 a month COVID credit but this did not matter. She claimed that since Optimum offers a $15, 50Mbps service… that they are in compliance with the law.”

Shortly after the call, the specialist sent O’Brien an email reiterating that he wasn’t eligible, which he shared with Ars. “As discussed prior to this notification, Optimum offers a low-income service for $15.00. However, we were unable to change the account to that service because it is an active account with the service,” she wrote.

Second try

We contacted Optimum’s PR team again after getting this update from O’Brien. On Tuesday evening, the specialist from executive customer relations emailed O’Brien to say, “The matter was reviewed, and I was advised that I could upgrade the account.”

After another conversation with the specialist on Wednesday, O’Brien had the $15 plan. O’Brien told us that he “asked why I had to fight tooth and nail for this” and why he had to contact a news organization to get it resolved. “I claimed that it’s almost like no one there has read the legislation, and it was complete silence,” he told us.

On Wednesday this week, the Optimum spokesperson told us that “it seems that there has been some confusion among our care teams on the implementation of the ABA over the last week and how it should be correctly applied to our existing low-cost offers.”

Optimum has offered its low-cost plan for several years, with the previously mentioned restrictions that limit it to new customers. The plan website wasn’t updated in time for the New York law, but now says that “new and existing residential Internet customers in New York” qualify. The new-customer restriction still applies elsewhere.

“Our materials have been updated, including all internal documents and trainings, in addition to our external website,” Optimum told us on Wednesday this week.

Law was in the works for years

Broadband lobby groups convinced a federal judge to block the New York affordability law in 2021, but a US appeals court reversed the ruling in April 2024. The Supreme Court decided not to hear the case in mid-December, allowing the law to take effect.

New York had agreed to delay enforcement until 30 days after the case’s final resolution, which meant that it took effect on January 15. The state issued an order on January 9 reminding ISPs that they had to comply.

“We have been working as fast as we can to update all of our internal and external materials since the ABA was implemented only last week—there was quite a fast turnaround between state officials notifying us of the intended implementation date and pushing this live,” Optimum told Ars.

AT&T decided to completely stop offering its 5G home Internet service in New York instead of complying with the state law. The law doesn’t affect smartphone service, and AT&T doesn’t offer wired home Internet in New York.

Optimum told us it plans to market its low-income plan “more broadly and conduct additional outreach in low-income areas to educate customers and prospects of this offer. We want to make sure that those eligible for this plan know about it and sign up.”

O’Brien was disappointed that he couldn’t get a faster service plan. As noted earlier, the New York law lets ISPs comply with either a $15 plan with download speeds of at least 25Mbps or a $20 plan with at least 200Mbps speeds. ISPs don’t have to offer both.

“I did ask about 200Mbps service, but they said they are not offering that,” he said. Optimum offers a $25 plan with 100Mbps speeds for low-income users. But even in New York, that one still isn’t available to customers who were already subscribed to any other plan.

Failure to comply with the New York law can be punished with civil penalties of up to $1,000 per violation. The state attorney general can sue Internet providers to enforce the law. O’Brien said he intended to file a complaint against Optimum with the AG and is still hoping to get a 200Mbps plan.

We contacted Attorney General Letitia James’ office on Wednesday to ask about plans for enforcing the law and whether the office has received any complaints so far, but we haven’t gotten a response.

Photo of Jon Brodkin

Jon is a Senior IT Reporter for Ars Technica. He covers the telecom industry, Federal Communications Commission rulemakings, broadband consumer affairs, court cases, and government regulation of the tech industry.

ISP failed to comply with New York’s $15 broadband law—until Ars got involved Read More »

all-federal-agencies-ordered-to-terminate-remote-work—ideally-within-30-days

All federal agencies ordered to terminate remote work—ideally within 30 days

Exceptions may be granted

Ezell’s memo expanded criticism of the Biden administration’s approach to remote work, suggesting that it enabled federal unions’ alleged attempts “to abuse the collective-bargaining process to guarantee full-time telework into the indefinite future and forestall any requirement to return to the office.”

Suspecting that the “rampant use of telework is likely underreported,” the committee’s report concluded that “even the reported levels are excessive, there is little evidence that it is enhancing productivity or addressing recruitment and retention gaps, and there is evidence it is harming agency missions and citizen-facing services.”

To overcome these supposed deficiencies, the committee recommended that remote work policies be linked to performance metrics, rather than “employee preferences or union demands.” Any remote work that is granted should be tracked through automated systems, the report further prescribed, and any attempts for federal agencies to compete for talent using remote work perks should not be tolerated.

This will allow the government to alleviate the “national embarrassment” of empty offices and “dispose of unneeded property and terminate unnecessary leases,” the report said.

While some employees may be eligible for RTO exemptions—either to accommodate a disability or qualifying medical condition, or for some “other compelling reason certified by the agency head and the employee’s supervisor”—Ezell’s memo insisted that a general return-to-office push was necessary. He said that Trump’s presidential memo reflected “a simple reality” that “the only way to get employees back to the office is to adopt a centralized policy requiring return-to-work for all agencies across the federal government.”

“Seeking to cajole individual agencies to try to get employees to return to the worksite has not succeeded,” Ezell said.

Although Trump’s memo set no deadline for RTO efforts to begin, Ezell gave federal agency heads rather short notice to fall in line. All agencies must submit their RTO plans by 5 pm ET on Friday, January 24, Ezell’s memo said.

Those plans should specify “the date that the agency will be in full compliance with the new telework policy,” with a recommended deadline of 30 days to comply, Ezell said.

All federal agencies ordered to terminate remote work—ideally within 30 days Read More »

trump-can-save-tiktok-without-forcing-a-sale,-bytedance-board-member-claims

Trump can save TikTok without forcing a sale, ByteDance board member claims

TikTok owner ByteDance is reportedly still searching for non-sale options to stay in the US after the Supreme Court upheld a national security law requiring that TikTok’s US operations either be shut down or sold to a non-foreign adversary.

Last weekend, TikTok briefly went dark in the US, only to come back online hours later after Donald Trump reassured ByteDance that the US law would not be enforced. Then, shortly after Trump took office, he signed an executive order delaying enforcement for 75 days while he consulted with advisers to “pursue a resolution that protects national security while saving a platform used by 170 million Americans.”

Trump’s executive order did not suggest that he intended to attempt to override the national security law’s ban-or-sale requirements. But that hasn’t stopped ByteDance, board member Bill Ford told World Economic Forum (WEF) attendees, from searching for a potential non-sale option that “could involve a change of control locally to ensure it complies with US legislation,” Bloomberg reported.

It’s currently unclear how ByteDance could negotiate a non-sale option without facing a ban. Joe Biden’s extended efforts through Project Texas to keep US TikTok data out of China-controlled ByteDance’s hands without forcing a sale dead-ended, prompting Congress to pass the national security law requiring a ban or sale.

At the WEF, Ford said that the ByteDance board is “optimistic we will find a solution” that avoids ByteDance giving up a significant chunk of TikTok’s operations.

“There are a number of alternatives we can talk to President Trump and his team about that are short of selling the company that allow the company to continue to operate, maybe with a change of control of some kind, but short of having to sell,” Ford said.

Trump can save TikTok without forcing a sale, ByteDance board member claims Read More »

court-rules-fbi’s-warrantless-searches-violated-fourth-amendment

Court rules FBI’s warrantless searches violated Fourth Amendment

“Certainly, the Court can imagine situations where obtaining a warrant might frustrate the purpose of querying, particularly where exigency requires immediate querying,” DeArcy Hall wrote. “This is why the Court does not hold that querying Section 702-acquired information always requires a warrant.”

Ruling renews calls for 702 reforms

While digital rights groups like the EFF and the American Civil Liberties Union (ACLU) cheered the ruling as providing much-needed clarity, they also suggested that the ruling should prompt lawmakers to go back to the drawing board and reform Section 702.

Section 702 is set to expire on April 15, 2026. Over the years, Congress has repeatedly voted to renew 702 protections, but the EFF is hoping that DeArcy Hall’s ruling will perhaps spark a sea change.

“In light of this ruling, we ask Congress to uphold its responsibility to protect civil rights and civil liberties by refusing to renew Section 702 absent a number of necessary reforms, including an official warrant requirement for querying US persons data and increased transparency,” the EFF wrote in a blog.

A warrant requirement could help truly end backdoor searches, the EFF suggested, and ensure “that the intelligence community does not continue to trample on the constitutionally protected rights to private communications.”

The ACLU warned that reforms are especially critical now, considering that unconstitutional backdoor searches have been “used by the government to conduct warrantless surveillance of Americans, including protesters, members of Congress, and journalists.”

Patrick Toomey, the deputy director of the ACLU’s National Security Project, dubbed 702 “one of the most abused provisions of FISA.”

“As the court recognized, the FBI’s rampant digital searches of Americans are an immense invasion of privacy and trigger the bedrock protections of the Fourth Amendment,” Toomey said. “Section 702 is long overdue for reform by Congress, and this opinion shows why.”

Court rules FBI’s warrantless searches violated Fourth Amendment Read More »

trump’s-fcc-chair-gets-to-work-on-punishing-tv-news-stations-accused-of-bias

Trump’s FCC chair gets to work on punishing TV news stations accused of bias

Carr has made it clear that he wants the FCC to punish news broadcasters that he perceives as being unfair to Trump or Republicans in general. He claimed that NBC putting Harris on Saturday Night Live before the election was “a clear and blatant effort to evade the FCC’s Equal Time rule,” even though NBC gave Trump two free 60-second messages in order to comply with the rule.

Carr also told Fox News that he is interested in investigating the complaint against CBS when the FCC reviews a pending deal involving Skydance and Paramount, which owns and operates 28 local broadcast TV stations of the CBS Television Network. “I’m pretty confident that news distortion complaint over the CBS 60 Minutes transcript is something that is likely to arise in the context of the FCC’s review of that transaction,” Carr said.

Carr “intends to weaponize the FCC”

After Rosenworcel dismissed the complaints, the Center for American Rights said it would keep fighting. “We fundamentally believe that several actions taken by the three major networks were partisan, dishonest and designed to support Vice President Harris in her bid to become President,” the group said in a statement provided to Ars last week. “We will continue to pursue avenues to ensure the American public is protected from media manipulation of our Republic. The First Amendment does not protect intentional misrepresentation or fraud.”

In a statement applauding Carr’s reversal today, the group said that Rosenworcel’s “last-minute actions were political, not based on a principled defense of the First Amendment.”

Networks have denied allegations of bias. “Former President Donald Trump is accusing 60 Minutes of deceitful editing of our Oct. 7 interview with Vice President Kamala Harris. That is false,” CBS said. “60 Minutes gave an excerpt of our interview to Face the Nation that used a longer section of her answer than that on 60 Minutes. Same question. Same answer. But a different portion of the response.”

Rosenworcel last week also rejected a petition to deny a license renewal for WTXF-TV in Philadelphia, a station owned and operated by Fox. The Media and Democracy Project petition alleged that Fox willfully distorted news with false reports of fraud in the 2020 election that Trump lost.

Rosenworcel said the complaints and petition she dismissed “come from all corners—right and left—but what they have in common is they ask the FCC to penalize broadcast television stations because they dislike station behavior, content, or coverage.” Yesterday, advocacy group Public Knowledge said that “in reinstating just those complaints that suit his partisan agenda, Chairman Carr has made it plain he intends to weaponize the FCC to threaten political speech and news coverage he disagrees with.”

Trump’s FCC chair gets to work on punishing TV news stations accused of bias Read More »

uk-opens-probe-into-google’s-and-apple’s-mobile-platforms

UK opens probe into Google’s and Apple’s mobile platforms

Last week, the CMA opened its first such case, reviewing Google’s dominance in search and advertising.

The CMA is already in the process of probing Google and Apple in a separate investigation into mobile web browsers and cloud gaming, which has provisionally found the two companies were “holding back competition” in browsers.

“Android’s openness has helped to expand choice, reduce prices, and democratize access to smartphones and apps. It’s the only example of a successful and viable open source mobile operating system,” said Oliver Bethell, Google’s senior director of competition.

“We favor a way forward that avoids stifling choice and opportunities for UK consumers and businesses alike, and without risk to UK growth prospects,” he added.

Apple, which says its app platform supports hundreds of thousands of UK jobs, said it would “continue to engage constructively” with the CMA.

“Apple believes in thriving and dynamic markets where innovation can flourish,” the company said. “We face competition in every segment and jurisdiction where we operate, and our focus is always the trust of our users.”

The CMA’s probe will add to the worldwide scrutiny that both companies are already facing over their dominance of the smartphone market.

Apple clashed with Brussels several times last year over the implementation of the Digital Markets Act, making changes to its platform after the European Commission accused the iPhone maker of failing to comply with its “online gatekeeper” rules.

If designated, the UK’s “strategic market status” lasts for a five-year period, and companies can be fined up to 10 percent of global turnover for breaching conduct rules.

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UK opens probe into Google’s and Apple’s mobile platforms Read More »