Policy – Page 12

Delete, Delete, Delete: How FCC Republicans are killing rules faster than ever

brendan carr, direct final rule, FCC, fcc delete delete delete, Features, Policy / Mike M. / September 2, 2025

FCC speeds up rule-cutting, giving public as little as 10 days to file objections.

FCC Chairman Brendan Carr testifies before the House Appropriations Subcommittee on Financial Services and General Government on May 21, 2025 in Washington, DC. Credit: Getty Images | John McDonnell

The Federal Communications Commission’s Republican chairman is eliminating regulations at breakneck speed by using a process that cuts dozens of rules at a time while giving the public only 10 or 20 days to review each proposal and submit objections.

Chairman Brendan Carr started his “Delete, Delete, Delete” rule-cutting initiative in March and later announced he’d be using the Direct Final Rule (DFR) mechanism to eliminate regulations without a full public-comment period. Direct Final Rule is just one of several mechanisms the FCC is using in the Delete, Delete, Delete initiative. But despite the seeming obscurity of regulations deleted under Direct Final Rule so far, many observers are concerned that the process could easily be abused to eliminate more significant rules that protect consumers.

On July 24, the FCC removed what it called “11 outdated and useless rule provisions” related to telegraphs, rabbit-ear broadcast receivers, and phone booths. The FCC said the 11 provisions consist of “39 regulatory burdens, 7,194 words, and 16 pages.”

The FCC eliminated these rules without the “prior notice and comment” period typically used to comply with the US Administrative Procedure Act (APA), with the FCC finding that it had “good cause” to skip that step. The FCC said it would allow comment for 10 days and that rule eliminations would take effect automatically after the 10-day period unless the FCC concluded that it received “significant adverse comments.”

On August 7, the FCC again used Direct Final Rule to eliminate 98 rules and requirements imposed on broadcasters. This time, the FCC allowed 20 days for comment. But it maintained its stance that the rules would be deleted automatically at the end of the period if no “significant” comments were received.

By contrast, FCC rulemakings usually allow 30 days for initial comments and another 15 days for reply comments. The FCC then considers the comments, responds to the major issues raised, and drafts a final proposal that is put up for a commission vote. This process, which takes months and gives both the public and commissioners more opportunity to consider the changes, can apply both to the creation of new rules and the elimination of existing ones.

FCC’s lone Democrat warns of “Trojan horse”

Telecom companies want the FCC to eliminate rules quickly. As we’ve previously written, AT&T submitted comments to the Delete, Delete, Delete docket urging the agency to eliminate rules that can result in financial penalties “without the delay imposed by notice-and-comment proceeding.”

Carr’s use of Direct Final Rule has drawn criticism from advocacy groups, local governments that could be affected by rule changes, and the FCC’s only Democratic commissioner. Anna Gomez, the lone FCC Democrat, told Ars in a phone interview that the rapid rule-cutting method “could be a Trojan horse because what we did, or what the commission did, is it adopted a process without public comment to eliminate any rule it finds to be outdated and, crucially, unwarranted. We don’t define what either of those terms mean, which therefore could lead to a situation that’s ripe for abuse.”

Gomez said she’d “be concerned if we eliminated rules that are meant to protect or inform consumers, or to promote competition, such as the broadband labels. This commission seems to have entirely lost its focus on consumers.”

Gomez told us that she doesn’t think a 10-day comment period is ever appropriate and that Carr seems to be trying “to meet some kind of arbitrary rule reduction quota.” If the rules being eliminated are truly obsolete, “then what’s the rush?” she asked. “If we don’t give sufficient time for public comment, then what happens when we make a mistake? What happens when we eliminate rules and it turns out, in fact, that these rules were important to keep? That’s why we give the public due process to comment on when we adopt rules and when we eliminate rules.”

Gomez hasn’t objected to the specific rules deleted under this process so far, but she spoke out against the method used by Carr both times Direct Final Rule method was used. “I told the chairman that I could support initiating a proceeding to look at how a Direct Final Rule process could be used going forward and including a Notice of Proposed Rulemaking proposing to eliminate the rules the draft order purports to eliminate today. That offer was declined,” she said in her dissenting statement in the July vote.

Gomez said that rules originally adopted under a notice-and-comment process should not be eliminated “without seeking public comment on appropriate processes and guardrails.” She added that the “order does not limit the Direct Final Rule process to elimination of rules that are objectively obsolete with a clear definition of how that will be applied, asserting instead authority to remove rules that are ‘outdated or unwarranted.'”

Local governments object

Carr argued that the Administrative Procedure Act “gives the commission the authority to fast-track the elimination of rules that inarguably fail to serve the public interest. Using this authority, the Commission can forgo the usual prior notice and public comment period before repealing the rules for these bygone regulations.”

Carr justified the deletions by saying that “outdated and unnecessary regulations from Washington often derail efforts to build high-speed networks and infrastructure across the country.” It’s not clear why the specific rule deletions were needed to accelerate broadband deployment, though. As Carr said, the FCC’s first use of Direct Finale Rule targeted regulations for “telegraph services, rabbit-ear broadcast receivers, and telephone booths—technologies that were considered outdated decades ago.”

Carr’s interpretation of the Administrative Procedure Act is wrong, said an August 6 filing submitted by local governments in Maryland, Massachusetts, the District of Columbia, Oregon, Virginia, California, New York, and Texas. Direct Final Rule “is intended for extremely simple, non-substantive decisions,” and the FCC process “is insufficient to ensure that future Commission decisions will fall within the good cause exception of the Administrative Procedure Act,” the filing said.

Local governments argued that “the new procedure is itself a substantive decision” and should be subject to a full notice-and-comment rulemaking. “The procedure adopted by the Commission makes it almost inevitable that the Commission will adopt rule changes outside of any APA exceptions,” the filing said.

The FCC could face court challenges. Gerard Lavery Lederer, a lawyer for the local government coalition, told Ars, “we fully anticipate that Chairman Carr and the FCC’s general counsel will take our concerns seriously.” But he also said local governments are worried about the FCC adopting industry proposals that “violate local government rights as preserved by Congress in the [Communications] Act” or that have “5th Amendment takings implications and/or 10th Amendment overreach issues.”

Is that tech really “obsolete”?

At least some rules targeted for deletion, like regulations on equipment used by radio and TV broadcast stations, may seem too arcane to care about. But a coalition of 22 public interest, civil rights, labor, and digital rights groups argued in a July 17 letter to Carr that some of the rule deletions could harm vulnerable populations and that the shortened comment period wasn’t long enough to determine the impact.

“For example, the Commission has targeted rules relating to calling cards and telephone booths in the draft Order as ‘obsolete,'” the letter said. “However, calling cards and pay phones remain important technologies for rural areas, immigrant communities, the unhoused, and others without reliable access to modern communications services. The impact on these communities is not clear and will not likely be clear in the short time provided for comment.”

The letter also said the FCC’s new procedure “would effectively eliminate any hope for timely judicial review of elimination of a rule on delegated authority.” Actions taken via delegated authority are handled by FCC bureaus without a vote of the commission.

So far, Carr has held commission votes for his Direct Final Rule actions rather than letting FCC bureau issue orders themselves. But in the July order, the FCC said its bureaus and offices have previously adopted or repealed rules without notice and comment and “reaffirm[ed] that all Bureaus and Offices may continue to take such actions in situations that are exempt from the APA’s notice-and-comment requirements.”

“This is about pushing boundaries”

The advocacy groups’ letter said that delegating authority to bureaus “makes judicial review virtually impossible, even though the order goes into effect immediately.” Parties impacted by actions made on delegated authority can’t go straight to the courts and must instead “file an application for review with the Commission as a prerequisite to any petition for judicial review,” the letter said. The groups argued that “a Chairman that does not wish to permit judicial review of elimination of a rule through DFR may order a bureau to remove the rule, then simply refuse to take action on the application for review.”

The letter was signed by Public Knowledge; Asian Americans Advancing Justice-AAJC; the Benton Institute for Broadband & Society; the Center for Digital Democracy; Common Sense Media; the Communications Workers of America; the Electronic Privacy Information Center; HTTP; LGBT Tech; the Media Access Project; MediaJustice; the Multicultural Media, Telecom and Internet Council; the National Action Network; NBJC; the National Council of Negro Women; the National Digital Inclusion Alliance; the National Hispanic Media Coalition; the National Urban League; New America’s Open Technology Institute (OTI); The Leadership Conference on Civil and Human Rights; the United Church of Christ Media Justice Ministry; and UnidosUS.

Harold Feld, senior VP of consumer advocacy group Public Knowledge, told Ars that the FCC “has a long record of thinking that things are obsolete and then discovering when they run an actual proceeding that there are people still using these things.” Feld is worried that the Direct Final Rule process could be used to eliminate consumer protections that apply to old phone networks when they are replaced by either fiber or wireless service.

“I certainly think that this is about pushing boundaries,” Feld said. When there’s a full notice-and-comment period, the FCC has to “actually address every argument made” before eliminating a rule. When the FCC provides less explanation of a decision, that “makes it much harder to challenge on appeal,” he said.

“Once you have this tool that lets you just get rid of rules without the need to do a proceeding, without the need to address the comments that are raised in that proceeding… it’s easy to see how this ramps up and how hard it is for people to stay constantly alert to look for an announcement where they will then only have 10 days to respond once it gets published,” he said.

What is a “significant” comment?

The FCC says its use of Direct Final Rule is guided by December 2024 recommendations from the Administrative Conference of the United States (ACUS), a government agency. But the FCC didn’t implement Direct Final Rule in the exact way recommended by the ACUS.

The ACUS said its guidance “encourages agencies to use direct final rulemaking, interim final rulemaking, and alternative methods of public engagement to ensure robust public participation even when they rely properly on the good cause exemption.” But the ACUS recommended taking public comment for at least 30 days, while the FCC has used 10- and 20-day periods.

The ACUS also said that agencies should only move ahead with rule deletions “if no significant adverse comments are received.” If such comments are received, the agency “can either withdraw the rule or publish a regular proposed rule that is open for public comment,” the recommendation said.

The FCC said that if it receives comments, “we will evaluate whether they are significant adverse comments that warrant further procedures before changing the rules.” The letter from 22 advocacy groups said it is worried about the leeway the FCC is giving itself in defining whether a comment is adverse and significant:

Although ACUS recommends that the agency revert to standard notice-and-comment rulemaking in the event of a single adverse comment, the draft Order requires multiple adverse comments—at which point the bureau/Commission will consider whether to shift to notice-and-comment rulemaking. If the bureau/Commission decides that adverse comments are not ‘substantive,’ it will explain its determination in a public notice that will not be filed in the Federal Register. The Commission states that it will be guided, but not bound, by the definition of ‘adverse comment’ recommended by ACUS.

Criticism from many corners

TechFreedom, a libertarian-leaning think tank, said it supports Carr’s goals in the “Delete, Delete, Delete” initiative but objected to the Direct Final Rule process. TechFreedom wrote in July comments that “deleting outdated regulations via a Direct Final Rule is unprecedented at the FCC.”

“No such process exists under current FCC rules,” the group said, urging the agency to seek public comment on the process. “If the Commission wishes to establish a new method by which it can eliminate existing regulations without undertaking a full rulemaking proceeding, it should open a docket specific to that subject and seek public comment,” the filing said.

TechFreedom said it is especially important for the FCC to “seek comment as to when the direct final rule procedures should be invoked… What is ‘routine,’ ‘insignificant,’ or ‘inconsequential’ and who is to decide—the Commissioners or the Bureau chiefs?”

The American Library Association and other groups wrote on August 14 that either 10 or 20 days is not long enough for public comment. Moreover, the groups said the two Direct Final Rule actions so far “offer minimal explanation for why the rules are being removed. There is only one sentence describing elimination of many rules and each rule removal is described in a footnote with a parenthetical about the change. It is not enough.”

The Utility Reform Network offered similar objections about the process and said that the FCC declaring technologies to be “obsolete” and markets “outdated” without a detailed explanation “suggests the Commission’s view that these rules are not minor or technical changes but support a larger deregulatory effort that should itself be subject to notice-and-comment rulemaking.”

The National Consumer Law Center and other groups said that “rushing regulatory changes as proposed is likely illegal in many instances, counterproductive, and bad policy,” and that “changes to regulations should be effectuated only through careful, thoughtful, and considered processes.”

We contacted Chairman Carr’s office and did not receive a response.

FCC delegated key decisions to bureaus

Gomez told Ars that Direct Final Rule could serve a purpose “with the right procedures and guardrails in place.” For example, she said the quick rule deletions can be justified for eliminating rules that have become obsolete because of a court reversal or Congressional actions.

“I would argue that we cannot, under the Administrative Procedure Act and the Constitution, simply eliminate rules because we’ve made a judgment call that they are unwarranted,” she said. “That does not meet the good cause exemption to notice-and-comment requirements.”

Gomez also opposes FCC bureaus making significant decisions without a commission vote, which effectively gives Carr more power over the agency’s operations. For example, T-Mobile’s purchase of US Cellular’s wireless operations and Verizon’s purchase of Frontier were approved by the FCC at the Bureau level.

In another instance cited by Gomez, the FCC Media Bureau waived a requirement for broadcast licensees to file their biennial ownership reports for 18 months. “The waiver order, which was done at the bureau level on delegated authority, simply said ‘we find good cause to waive these rules.’ There was no analysis whatsoever,” Gomez said.

Gomez also pointed out that the Carr FCC’s Wireline Competition Bureau delayed implementation of certain price caps on prison phone services. The various bureau-level decisions are a “stretching of the guardrails that we have internally for when things should be done on delegated authority, and when they should be voted by the commission,” Gomez said. “I’m concerned that [Direct Final Rule] is just the next iteration of the same issue.”

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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Texas suit alleging anti-coal “cartel” of top Wall Street firms could reshape ESG

esg, Policy, Science, syndication, Wall Street / Paul Patrick / August 30, 2025

It’s a closely watched test of whether corporate alliances on climate efforts violate antitrust laws.

This article originally appeared on Inside Climate News, a nonprofit, non-partisan news organization that covers climate, energy, and the environment. Sign up for their newsletter here.

Since 2022, Republican lawmakers in Congress and state attorneys general have sent letters to major banks, pension funds, asset managers, accounting firms, companies, nonprofits, and business alliances, putting them on notice for potential antitrust violations and seeking information as part of the Republican pushback against “environmental, social and governance” efforts such as corporate climate commitments.

“This caused a lot of turmoil and stress obviously across the whole ecosystem,” said Denise Hearn, a senior fellow at the Columbia Center on Sustainable Investment. “But everyone wondered, ‘OK, when are they actually going to drop a lawsuit?’”

That came in November, filed by Texas Attorney General Ken Paxton and 10 other Republican AGs, accusing three of the biggest asset managers on Wall Street—BlackRock, Vanguard and State Street—of running “an investment cartel” to depress the output of coal and boosting their revenues while pushing up energy costs for Americans. The Trump administration’s Department of Justice and Federal Trade Commission filed a supporting brief in May.

The overall pressure campaign aimed at what’s known as “ESG” is having an impact.

“Over the past several months, through this [lawsuit] and other things, letters from elected officials, state and federal, there has been a chilling effect of what investors are saying,” said Steven Maze Rothstein, chief program officer of Ceres, a nonprofit that advocates for more sustainable business practices and was among the earliest letter recipients. Still, “investors understand that Mother Nature doesn’t know who’s elected governor, attorney general, president.”

Earlier this month, a US District Court judge in Tyler, Texas, declined to dismiss the lawsuit against the three asset managers, though he did dismiss three of the 21 counts. The judge was not making a final decision in the case, only that there was enough evidence to go to trial.

BlackRock said in a statement: “This case is not supported by the facts, and we will demonstrate that.” Vanguard said it will “vigorously defend against plaintiffs’ claims.” State Street called the lawsuit “baseless and without merit.”

The Texas attorney general’s office did not respond to requests for comment.

The three asset managers built substantial stakes in major US coal producers, the suit alleges, and “announced their common commitment” to cut US coal output by joining voluntary alliances to collaborate on climate issues, including the Net Zero Asset Managers Initiative and, in the case of two of the firms, the Climate Action 100+. (All of them later pulled out of the alliances.)

The lawsuit alleges that the coal companies succumbed to the defendants’ collective influence, mining for less coal and disclosing more climate-related information. The suit claimed that resulted in “cartel-level revenues and profits” for the asset managers.

“You could say, ‘Well, if the coal companies were all colluding together to restrict output, then shouldn’t they also be violating antitrust?’” Hearn asked. But the attorneys general “are trying to say that it was at the behest of these concentrated index funds and the concentrated ownership.”

Index funds, which are designed to mirror the returns of specific market indices, are the most common mode of passive investment—when investors park their money somewhere for long-term returns.

The case is being watched closely, not only by climate alliances and sustainability nonprofits, but by the financial sector at large.

If the three asset managers ultimately win, it would turn down the heat on other climate alliances and vindicate those who pressured financial players to line up their business practices with the Paris agreement goals as well as national and local climate targets. The logic of those efforts: Companies in the financial sector have a big impact on climate change, for good or ill—and climate change has a big impact on those same companies.

If the red states instead win on all counts, that “could essentially totally reconstitute the industry as we understand it,” said Hearn, who has co-authored a paper on the lawsuit. At stake is how the US does passive investing.

The pro-free-market editorial board of The Wall Street Journal in June called the Texas-led lawsuit “misconceived,” its logic “strained” and its theories “bizarre.”

The case breaks ground on two fronts. It challenges collaboration between financial players on climate action. It also makes novel claims around “common ownership,” where a shareholder—in this case, an asset manager—holds stakes in competing firms within the same sector.

“Regardless of how the chips fall in the case, those two things will absolutely be precedent-setting,” Hearn said.

Even though this is the first legal test of the theory that business climate alliances are anti-competitive, the question was asked in a study by Harvard Business School economists that came out in May. That study, which empirically examines 11 major climate alliances and 424 listed financial institutions over 10 years, turned up no evidence of traditional antitrust violations. The study was broad and did not look at particular allegations against specific firms.

“To the extent that there are valid legal arguments that can be made, they have to be tested,” said study co-author Peter Tufano, a Harvard Business School professor, noting that his research casts doubt on many of the allegations made by critics of these alliances.

Financial firms that joined climate alliances were more likely to adopt emissions targets and climate-aligned management practices, cut their own emissions and engage in pro-climate lobbying, the study found.

”The range of [legal] arguments that are made, and the passion with which they’re being advanced, suggests that these alliances must be doing something meaningful,” said Tufano, who was previously the dean of the Saïd Business School at the University of Oxford.

Meanwhile, most of the world is moving the other way.

According to a tally by CarbonCloud, a carbon emissions accounting platform that serves the food industry, at least 35 countries that make up more than half of the world’s gross domestic product now mandate climate-related disclosures of some kind.

In the US, California, which on its own would be the world’s fourth-largest economy, will begin requiring big businesses to measure and report their direct and indirect emissions next year.

Ceres’ Rothstein notes that good data about companies is necessary for informed investment decisions. “Throughout the world,” he said, “there’s greater recognition and, to be honest, less debate about the importance of climate information.” Ceres is one of the founders of Climate Action 100+, which now counts more than 600 investor members around the world, including Europe, Asia, and Australia.

For companies that operate globally, the American political landscape is in sharp contrast with other major economies, Tufano said, creating “this whipsawed environment where if you get on a plane, a few hours later, you’re in a jurisdiction that’s saying exactly the opposite thing.”

But even as companies and financial institutions publicly retreat from their climate commitments amid US political pressure, in a phenomenon called “greenhushing,” their decisions remain driven by the bottom line. “Banks are going to do what they’re going to do, and they’re going to lend to the most profitable or to the most growth-oriented industries,” Hearn said, “and right now, that’s not the fossil fuel industry.”

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FTC claims Gmail filtering Republican emails threatens “American freedoms”

ftc, Gmail, Google, Policy / Mike M. / August 29, 2025

Ferguson said that “similar concerns have resulted in ongoing litigation against Google in other settings” but did not mention that a judge rejected the Republican claims.

“Hearing from candidates and receiving information and messages from political parties is key to exercising fundamental American freedoms and our First Amendment rights,” Ferguson’s letter said. “Moreover, consumers expect that they will have the opportunity to hear from their own chosen candidates or political party. A consumer’s right to hear from candidates or parties, including solicitations for donations, is not diminished because that consumer’s political preferences may run counter to your company’s or your employees’ political preferences.”

Google: Gmail users marked RNC emails as spam

The RNC’s appeal of its court loss is still pending, with the case proceeding toward oral arguments. Google told the appeals court in April that “the Complaint’s own allegations make it obvious that Gmail presented a portion of RNC emails as spam because they appeared to be spam…. The most obvious reason for RNC emails being flagged as spam is that Gmail users were too frequently marking them as such.”

Google also said that “the RNC’s own allegations confirm that Google was helping the RNC, not scheming against it… The RNC acknowledges, for example, that Google worked with the RNC ‘[f]or nearly a year.’ Those efforts even included Google employees traveling to the RNC’s office to ‘give a training’ on ‘Email Best Practices.’ Less than two months after that training, the last alleged instance of the inboxing issue occurred.”

While the RNC “belittles those efforts as ‘excuses’ to cover Google’s tracks… the district court rightly found that judicial experience and common sense counsel otherwise,” Google said. The Google brief quoted from the District Judge’s ruling that said, “the fact that Google engaged with the RNC for nearly a year and made suggestions that improved email performance is inconsistent with a lack of good faith.”

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Intel details everything that could go wrong with US taking a 10% stake

chipmaker, Chips Act, chips grants, Donald Trump, intel, Policy, semiconductor / Rejus Almole / August 27, 2025

Intel warns investors to brace for losses and uncertainties.

Some investors are not happy that Intel agreed to sell the US a 10 percent stake in the company after Donald Trump attacked Intel CEO Lip-Bu Tan with a demand to resign.

After Intel accepted the deal at a meeting with the president, it alarmed some investors when Trump boasted that his pressure campaign worked, claiming Tan “walked in wanting to keep his job, and he ended up giving us $10 billion for the United States.”

“It sets a bad precedent if the president can just take 10 percent of a company by threatening the CEO,” James McRitchie, a private investor and shareholder activist in California who owns Intel shares, told Reuters. To McRitchie, Tan accepting the deal effectively sent the message that “we love Trump, we don’t want 10 percent of our company taken away.”

McRitchie wasn’t the only shareholder who raised an eyebrow. Kristin Hull, chief investment officer of a California-based activist firm called Nia Impact Capital—which manages shares in Intel for its clients—told Reuters she has “more questions than confidence” about how the deal will benefit investors. To her, the deal seems to blur some lines “between where is the government and where is the private sector.”

As Reuters explains, Intel agreed to convert $11.1 billion in CHIPS funding and other grants “into a 9.9 percent equity stake in Intel.”

Some early supporters of the agreement—including tech giants like Microsoft and Trump critics like Bernie Sanders (I-Vt.)—have praised the deal as allowing the US to profit off billions in CHIPS grants that Intel was awarded under the Biden administration. After pushing for the deal, Commerce Secretary Howard Lutnick criticized Joe Biden for giving away CHIPS funding “for free,” while praising Trump for turning the CHIPS Act grants into “equity for the Trump administration” and “for the American people.”

But to critics of the deal, it seems weird for the US to swoop in and take stake in a company that doesn’t need government assistance. The only recent precedent was the US temporarily taking stake in key companies considered vital to the economy that risked going under during the 2008 financial crisis.

Compare that to the Intel deal, where Tan has made it clear that Intel, while struggling to compete with rivals, “didn’t need the money,” Reuters noted—largely due to SoftBank purchasing $2 billion in Intel shares in the days prior to the US agreement being reached. Instead, the US is incentivized to take the stake to help further Trump’s mission to quickly build up a domestic chip manufacturing supply chain that can keep the US a global technology leader at the forefront of AI innovation.

Investors told Reuters that it’s unusual for the US to take this much control over a company that’s not in crisis, noting that “this level of tractability was not usually associated with relations between businesses and Washington.”

Intel did not immediately respond to Ars’ request to comment on investors’ concerns, but a spokesperson told Reuters that Intel’s board has already approved the deal. In a press release, the company emphasized that “the government’s investment in Intel will be a passive ownership, with no Board representation or other governance or information rights. The government also agrees to vote with the Company’s Board of Directors on matters requiring shareholder approval, with limited exceptions.”

Intel reveals why investors should be spooked

The Trump administration has also stressed that the US stake in Intel does not give the Commerce Department any board seats or any voting or governance rights in Intel. Instead, the terms stipulate that the Commerce Department must “support the board on director nominees and proposals,” an Intel securities filing said.

However, the US can vote “as it wishes,” Intel reported, and experts suggested to Reuters that regulations may be needed to “limit government opportunities for abuses such as insider trading.” That could reassure investors somewhat, Rich Weiss, a senior vice president and chief investment officer of multi-asset strategies for American Century Investments, told Reuters. Without such laws, Weiss noted that “in an unchecked scenario of government direct investing, trading in those companies could be much riskier for investors.”

It also seems possible that the US could influence Intel’s decisions without the government explicitly taking voting control, experts suggested. “Several investors and representatives” told Reuters that the US could impact major decisions regarding things like layoffs or business shifts into foreign markets. At a certain point, Intel may be stuck choosing between corporate and national interests, Robert McCormick, executive director of the Council of Institutional Investors, told Reuters.

“A government stake in an otherwise private entity potentially creates a conflict between what’s right for the company and what’s right for the country,” McCormick suggested.

Further, Intel becoming partly state-controlled risks disrupting Intel’s non-US business, subjecting the company to “additional regulations, obligations or restrictions, such as foreign subsidy laws or otherwise, in other countries,” Intel’s filing said.

In the filing, Intel confirmed directly to investors that they have good cause to be spooked by the US stake. Offering a bulleted list, the company outlined “a number of risks and uncertainties” that could “adversely impact” shareholders due to “the US Government’s ownership of significant equity interests in the company.”

Perhaps most alarming in the short term, Intel admitted that the deal will dilute investors’ stock due to the discounted shares issued to Trump. And their shares could suffer additional dilutions if certain terms of the deal are “triggered” or “exercised,” Intel noted.

In the long term, investors were told that the US stake may limit the company’s eligibility for future federal grants while leaving Intel shareholders dwelling in the uncertainty of knowing that terms of the deal could be voided or changed over time, as federal administration and congressional priorities shift.

Additionally, Intel forecasted potential legal challenges over the deal, which Intel anticipates could come from both third parties and the US government.

The final bullet point in Intel’s risk list could be the most ominous, though. Due to the unprecedented nature of the deal, Intel fears there’s no way to anticipate myriad other challenges the deal may trigger.

“It is difficult to foresee all the potential consequences,” Intel’s filing said. “Among other things, there could be adverse reactions, immediately or over time, from investors, employees, customers, suppliers, other business or commercial partners, foreign governments or competitors. There may also be litigation related to the transaction or otherwise and increased public or political scrutiny with respect to the Company.”

Meanwhile, it’s hard to see what Intel truly gains from the deal other than maybe getting Trump off its back for a bit. A Fitch Ratings research note reported that “the deal does not improve Intel’s BBB credit rating, which sits just above junk status” and “does not fundamentally improve customer demand for Intel chips” despite providing “more liquidity,” Reuters reported.

Intel’s filing, in addition to rattling investors, likely also serves as a warning sign to other companies who may be approached by the Trump administration to strike similar deals. So far, the administration has confirmed that the US is not eyeing a stake in Nvidia and seems unlikely to seek a stake in the Taiwan Semiconductor Manufacturing Company. While Lutnick has said he plans to push to make more deals, any chipmakers committing to increasing investments in the US, sources told the Wall Street Journal, will supposedly be spared from pressure to make a similar deal.

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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Ars Live: Consumer tech firms stuck scrambling ahead of looming chip tariffs

ars live, consumer tech, Donald Trump, game console prices, laptop prices, Policy, smartphone prices, tariffs, us-china trade war / Kris Guyer / August 26, 2025

And perhaps the biggest confounding factor for businesses attempting to align supply chain choices with predictable tariff costs is looming chip tariffs. Trump has suggested those could come in August, but nearing the end of the month, there’s still no clarity there.

As tech firms brace for chip tariffs, Brzytwa will share CTA’s forecast based on a survey of industry experts, revealing the unique sourcing challenges chip tariffs will likely pose. It’s a particular pain point that Trump seems likely to impose taxes not just on imports of semiconductors but of any downstream product that includes a chip.

Because different electronics parts are typically assembled in different countries, supply chains for popular products have suddenly become a winding path, with potential tariff obstacles cropping up at any turn.

To Trump, complicating supply chains seems to be the point, intending to divert entire supply chains into the country to make the US a tech manufacturing hub, supposedly at the expense of his prime trade war target, China—which today is considered a world manufacturing “superpower.”

However, The New York Times this week suggested that Trump’s bullying tactics aren’t working on China, and experts suggest that now his chip tariffs risk not just spiking prices but throttling AI innovation in the US—just as China’s open source AI models shake up markets globally.

Brzytwa will share CTA research showing how the trade war has rattled, and will likely continue to rattle, tech firms into the foreseeable future. He’ll explain why tech firms can’t quickly or cheaply divert chip supply chains—and why policy that neglects to understand tech firms’ positions could be a lose-lose, putting Americans in danger of losing affordable access to popular tech without achieving Trump’s goal of altering China’s trade behavior.

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Senator castigates federal judiciary for ignoring “basic cybersecurity”

Biz & IT, CM/ECF, federal courts, hacking, PACER, Policy, Security / Kris Guyer / August 26, 2025

US Senator Ron Wyden accused the federal judiciary of “negligence and incompetence” following a recent hack, reportedly by hackers with ties to the Russian government, that exposed confidential court documents.

The breach of the judiciary’s electronic case filing system first came to light in a report by Politico three weeks ago, which went on to say that the vulnerabilities exploited in the hack were known since 2020. The New York Times, citing people familiar with the intrusion, said that Russia was “at least partly responsible” for the hack.

A “severe threat” to national security

Two overlapping filing platforms—one known as the CM/ECF (Case Management/Electronic Case Files) and the other PACER—were breached in 2020 in an attack that closely resembled the most recently reported one. The second compromise was first detected around July 5, Politico reported, citing two unnamed sources who weren’t authorized to speak to reporters. Discovery of the hack came a month after Michael Scudder, a judge chairing the Committee on Information Technology for the federal courts’ national policymaking body, told members of the House Judiciary Committee that the federal court system is under constant attack by increasingly sophisticated hackers.

The CM/ECF allows parties in a federal case to file pleadings and other court documents electronically. In many cases, those documents are public. In some circumstances, the documents are filed under seal, usually when they concern ongoing criminal investigations, classified intelligence, or proprietary information at issue in civil cases. Wyden, a US senator from Oregon, said in a letter to Chief Supreme Court Justice John Roberts—who oversees the federal judiciary—that the intrusions are exposing sensitive information that puts national security at risk. He went on to criticize the judiciary for failing to follow security practices that are standard in most federal agencies and private industry.

“The federal judiciary’s current approach to information technology is a severe threat to our national security,” Wyden wrote. “The courts have been entrusted with some of our nation’s most confidential and sensitive information, including national security documents that could reveal sources and methods to our adversaries, and sealed criminal charging and investigative documents that could enable suspects to flee from justice or target witnesses.”

Senator castigates federal judiciary for ignoring “basic cybersecurity” Read More »

Trump says US will take 10% stake in Intel because CEO wants to “keep his job”

Chips Act, Donald Trump, intel, Policy, semiconductors, TSMC / Rejus Almole / August 23, 2025

Intel has agreed to sell the US a 10 percent stake in the company, Donald Trump announced at a news conference Friday.

The US stake is worth $10 billion, Trump said, confirming that the deal was inked following his talks with Intel CEO Lip-Bu Tan.

Trump had previously called for Tan to resign, accusing the CEO of having “concerning” ties to the Chinese Communist Party. During their meeting, the president claimed that Tan “walked in wanting to keep his job and he ended up giving us $10 billion for the United States.”

“I said, ‘I think it would be good having the United States as your partner.’ He agreed, and they’ve agreed to do it,” Trump said. “And I think it’s a great deal for them.”

Sources have suggested that Commerce Secretary Howard Lutnick pushed the idea of the US buying large stakes in various chipmakers like Intel in exchange for access to CHIPS Act funding that had already been approved. Earlier this week, Senator Bernie Sanders (I-Vt.) got behind the plan, noting that “if microchip companies make a profit from the generous grants they receive from the federal government, the taxpayers of America have a right to a reasonable return on that investment.”

However, Trump apparently doesn’t plan to seek a stake in every company that the US has awarded CHIPS funding to. Instead, he likely plans to only approach chipmakers that won’t commit to increasing their investments in the US. For example, a government official, speaking anonymously, told The Wall Street Journal Friday that “the administration isn’t looking to own equity in companies like TSMC that are increasing their investments” in the US.

Trump says US will take 10% stake in Intel because CEO wants to “keep his job” Read More »

Developer gets 4 years for activating network “kill switch” to avenge his firing

cybercrime, developer, kill switch, malicious code, Policy / Tim Belzer / August 23, 2025

“The defendant breached his employer’s trust by using his access and technical knowledge to sabotage company networks, wreaking havoc and causing hundreds of thousands of dollars in losses for a U.S. company,” Galeotti said.

Developer loses fight to avoid prison time

After his conviction, Lu moved to schedule a new trial, asking the court to delay sentencing due to allegedly “surprise” evidence he wasn’t prepared to defend against during the initial trial.

The DOJ opposed the motion for the new trial and the delay in sentencing, arguing that “Lu cannot establish that the interests of justice warrant a new trial” and insisting that evidence introduced at trial was properly disclosed. They further claim that rebuttal evidence that Lu contested was “only introduced to refute Lu’s perjurious testimony and did not preclude Lu from pursuing the defenses he selected.”

In the end, the judge denied Lu’s motion for a new trial, rejecting Lu’s arguments, siding with the DOJ in July, and paving the way for this week’s sentencing. Giving up the fight for a new trial, Lu had asked for an 18-month sentence, arguing that a lighter sentence was appropriate since “the life Mr. Lu knew prior to his arrest is over, forever.”

“He is now a felon—a label that he will be forced to wear for the rest of his life. His once-promising career is over. As a result of his conduct, his family’s finances have been devastated,” Lu’s sentencing memo read.

According to the DOJ, Lu will serve “four years in prison and three years of supervised release for writing and deploying malicious code on his then-employer’s network.” The DOJ noted that in addition to sabotaging the network, Lu also worked to cover up his crimes, possibly hoping his technical savvy would help him evade consequences.

“However, the defendant’s technical savvy and subterfuge did not save him from the consequences of his actions,” Galeotti said. “The Criminal Division is committed to identifying and prosecuting those who attack US companies whether from within or without, to hold them responsible for their actions.”

Developer gets 4 years for activating network “kill switch” to avenge his firing Read More »

4chan refuses to pay UK Online Safety Act fines, asks Trump admin to intervene

4chan, Policy, uk online safety act / Tim Belzer / August 23, 2025

4chan’s law firms, Byrne & Storm and Coleman Law, said in a statement on August 15 that “4chan is a United States company, incorporated in Delaware, with no establishment, assets, or operations in the United Kingdom. Any attempt to impose or enforce a penalty against 4chan will be resisted in US federal court. American businesses do not surrender their First Amendment rights because a foreign bureaucrat sends them an e-mail.”

4chan seeks Trump admin’s help

4chan’s lawyers added that US “authorities have been briefed on this matter… We call on the Trump administration to invoke all diplomatic and legal levers available to the United States to protect American companies from extraterritorial censorship mandates.”

The US Federal Trade Commission appears to have a similar concern. FTC Chairman Andrew Ferguson yesterday sent letters to over a dozen social media and technology companies warning them that “censoring Americans to comply with a foreign power’s laws, demands, or expected demands” may violate US law.

Ferguson’s letters directly referenced the UK Online Safety Act. The letters were sent to Akamai, Alphabet, Amazon, Apple, Cloudflare, Discord, GoDaddy, Meta, Microsoft, Signal, Snap, Slack, and X.

“The letters noted that companies might feel pressured to censor and weaken data security protections for Americans in response to the laws, demands, or expected demands of foreign powers,” the FTC said. “These laws include the European Union’s Digital Services Act and the United Kingdom’s Online Safety Act, which incentivize tech companies to censor worldwide speech, and the UK’s Investigatory Powers Act, which can require companies to weaken their encryption measures to enable UK law enforcement to access data stored by users.”

Wikipedia is meanwhile fighting a court battle against a UK Online Safety Act provision that could force it to verify the identity of Wikipedia users. The Wikimedia Foundation said the potential requirement would be burdensome to users and “could expose users to data breaches, stalking, vexatious lawsuits or even imprisonment by authoritarian regimes.”

Separately, the Trump administration said this week that the UK dropped its demand that Apple create a backdoor for government security officials to access encrypted data. The UK made the demand under its Investigatory Powers Act.

4chan refuses to pay UK Online Safety Act fines, asks Trump admin to intervene Read More »

Is it illegal to not buy ads on X? Experts explain the FTC’s bizarre ad fight.

antitrust, elon musk x, federal trade commission, First Amendment, online advertising, Policy, twitter ad boycott, x ad boycott / Mike M. / August 22, 2025

Here’s the “least silly way” to wrap your head around the FTC’s war over X ads.

Credit: Aurich Lawson | Getty Images

After a judge warned that the Federal Trade Commission’s probe into Media Matters for America (MMFA) should alarm “all Americans”—viewing it as a likely government retaliation intended to silence critical reporting from a political foe—the FTC this week appealed a preliminary injunction blocking the investigation.

The Republican-led FTC’s determined to keep pressure on the nonprofit—which is dedicated to monitoring conservative misinformation—ever since Elon Musk villainized MMFA in 2023 for reporting that ads were appearing next to pro-Nazi posts on X. Musk claims that reporting caused so many brands to halt advertising that X’s revenue dropped by $1.5 billion, but advertisers have suggested there technically was no boycott. They’ve said that many factors influenced each of their independent decisions to leave X—including their concerns about Musk’s own antisemitic post, which drew rebuke from the White House in 2023.

For MMFA, advertisers, agencies, and critics, a big question remains: Can the FTC actually penalize advertisers for invoking their own rights to free expression and association by refusing to deal with a private company just because they happened to agree on a collective set of brand standards to avoid monetizing hate speech or offensive content online?

You’re not alone if you’re confused by the suggestion, since advertisers have basically always cautiously avoided associations that could harm their brands. After Elon Musk sued MMFA—then quickly expanded the fight by also suing advertisers and agencies—a running social media joke mocked X as suing to force people to buy its products and the billionaire for seeming to believe it should be illegal to deprive him of money.

On a more serious note, former FTC commissioner Alvaro Bedoya, who joined fellow Democrats who sued Trump for ejecting them from office, flagged the probe as appearing “bizarrely” politically motivated to protect Musk, an ally who donated $288 million to Trump’s campaign.

The FTC did not respond to Ars’ request to comment on its investigation. But seemingly backing Musk’s complaints without much evidence, the FTC continues to amplify his conspiracy theory that sharing brand safety standards harms competition in the ad industry. So far, the FTC has alleged that sharing such standards allows advertisers, ad buyers, and nonprofit advocacy groups to coordinate attacks on revenue streams in supposed bids to control ad markets and censor conservative platforms.

Legal experts told Ars that these claims seem borderline absurd. Antitrust claims usually arise out of concerns that collaborators are profiting by reducing competition, but it’s unclear how advertisers financially gain from withholding ads. Somewhat glaringly in the case of X, it seems likely that at least some advertisers actually increased costs by switching from buying cheaper ads on the increasingly toxic X to costlier platforms deemed safer or more in line with brands’ values.

X did not respond to Ars’ request to comment.

The bizarre logic of the FTC’s ad investigation

In a blog post, Walter Olson, a senior fellow at the Cato Institute’s Robert A. Levy Center for Constitutional Studies, picked apart the conspiracy theory, trying to iron out the seemingly obvious constitutional conflicts with the FTC’s logic.

He explained that “X and Musk, together with allies in high government posts, have taken the position that for companies or ad agencies to decline to advertise with X on ideological grounds,” that “may legally violate its rights, especially if they coordinate with other entities in doing so.”

“Perhaps the least silly way of couching that idea is to say that advertisers are combining in restraint of trade to force [X] to improve the quality of its product as an ad environment, which you might analogize to forcing it to offer better terms to advertisers,” Olson said.

Pointing to a legal analysis weighing reasons why the FTC’s antitrust claims might not hold up in court, Olson suggested that the FTC is unlikely to overcome constitutional protections and win its ad war on the merits.

For one, he noted that it’s unusual to mingle “elements of anticompetitive conduct with First Amendment expression,” For another, “courts have been extremely protective of the right to boycott for ideological reasons, even when some effects were anti-competitive.” As Olson emphasized to Ars, courts are cautious that infringing First Amendment rights for even a brief period of time can irreparably harm speakers, including causing a chilling effect on speech broadly.

It seems particularly problematic that the FTC is attempting to block so-called boycotts from advertisers and agencies that “are specifically deciding how to spend money on speech itself,” Olson wrote. He noted that “the decision to advertise, the rejection of a platform for ideological reasons, and communication with others on how to turn these speech decisions into a maximum statement are all forms of expression on matters of public concern.”

Olson agrees with critics who suspect that the FTC doesn’t care about winning legal battles in this war. Instead, experts from Public Knowledge, a consumer advocacy group partly funded by big tech companies, told Ars that, seemingly for the FTC, “capitulation is the point.”

Why Media Matters’ fight may matter most

Public Knowledge Policy Director Lisa Macpherson told Ars that “the investigation into Media Matters is part of a larger pattern” employed by the FTC, which uses “the technical concepts of antitrust to further other goals, which are related to information control on behalf of the Trump administration.”

As one example, she joined Public Knowledge’s policy counsel focused on competition, Elise Phillips, in criticizing the FTC for introducing “unusual terms” into a merger that would create the world’s biggest advertising agency. To push the merger through, ad agencies were asked to sign a consent agreement that would block them from “boycotting platforms because of their political content by refusing to place their clients’ advertisements on them.”

Like social media users poking fun at Musk and X, it struck Public Knowledge as odd that the FTC “appears to be demanding that these ad agencies—and by extension, their clients—support media channels that may spread disinformation, hate speech, and extreme content as a condition for a merger.”

“The specific scope of the consent order seems to indicate that it does not reflect focus on the true impacts of diminished ad buying competition on advertisers, consumers, or labor, but instead the political impact of decreased revenue flows to publishers hosting content favorable to the Trump administration,” Public Knowledge experts suggested.

The demand falls in line with other Trump administration efforts to control information, Public Knowledge said, such as the FCC requiring a bias monitor for CBS to approve the Paramount-Skydance merger. It’s “all in service of controlling the flow of information about the administration and its policies,” Public Knowledge suggested. And the Trump administration depending on “the lack of a legal challenge due to industry financial interests” is creating “the biggest risk to First Amendment protections right now,” Phillips said.

Olson agreed with Public Knowledge experts that the agencies likely could have fought to remove the terms as unconstitutional and won, but instead, the CEO of the acquiring agency, Omnicom, appeared to indicate that the company was willing to accept the terms to push the merger through.

It seems possible that Omnicom didn’t challenge the terms because they represent what Public Knowledge suggested in a subsequent blog was the FTC’s fundamental misunderstanding of how ad placements work online. Due to the opaque nature of ad tech like Google’s, advertisers started depending on ad agencies to set brand safety standards to help protect their ad placements (the ad tech was ruled anti-competitive, and the Department of Justice is currently figuring out how to remedy market harms). But even as they adapted to an opaque ad environment, advertisers, not their agencies, have always maintained control over where ads are placed.

Even if Omnicom felt that the FTC terms simply maintained the status quo—as the FTC suggested it would—Public Knowledge noted that Omnicom missed an opportunity to challenge how the terms impacted “the agency’s rights of association and perfectly legal, independent refusals to deal by private companies.” The seeming capitulation could “cause a chilling effect” not just impacting placements from Omnicom’s advertiser clients but also those at other ad agencies, Public Knowledge’s experts suggested.

That sticks advertisers in a challenging spot where the FTC seemingly hopes to keep them squirming, experts suggested. Without agencies to help advise on whether certain ad placements may risk harming their brands, advertisers who don’t want their “stuff to be shown against Nazis” are “going to have to figure out how” to tackle brand safety on their own, Public Knowledge’s blog said. And as long as the ad industry is largely willing to bend to the FTC’s pressure campaign, it’s less likely that legal challenges will be raised to block what appears to be the quiet erosion of First Amendment protections, experts fear.

That may be why the Media Matters fight, which seems like just another front with a tangential player in the FTC’s bigger battle, may end up mattering the most. Whereas others directly involved in the ad industry may be tempted to make a deal like Omnicon’s to settle litigation, MMFA refuses to capitulate to Musk or the FTC, vowing to fight both battles to the bitter end.

“It has been a recurring strategy of the Trump administration to pile up the pressure on targets so that they cannot afford to hold out for vindication at trial, even if their chances there seem good,” Olson told Ars. “So they settle.”

It’s harder than usual in today’s political climate to predict the outcome of the FTC’s appeal, Olson told Ars. Macpherson told Ars she’s holding out hope “that the DC court would take the same position that the current judge did,” which is that “this is likely vindictive behavior on the part of the FTC and that, importantly, advertisers’ First Amendment rights should make the FTC’s sweeping investigation invalid.”

Perhaps the FTC’s biggest hurdle, apart from the First Amendment, may be a savvy judges who see through their seeming pressure campaign. In a notable 1995 case, a US judge, Richard Posner, “took the view that a realistic court should be ready to recognize instances where litigation can be employed to generate intense pressure on targets to settle regardless of the merits,” Olson said.

While that case involved targets of litigation, the appeals court judge—or even the Supreme Court if MMFA’s case gets that far—could rule that “targets of investigation could be under similar pressure,” Olson suggested.

In a statement to Ars, MMFA President Angelo Carusone confirmed that MMFA’s resolve has not faded in the face of the FTC’s appeal and was instead only strengthened by the US district judge being “crystal clear” that “FTC’s wide-ranging fishing expedition was a ‘retaliatory act’ that ‘should alarm all Americans.'”

“We will continue to fight this blatant attack on our First Amendment rights because if this Administration succeeds, so can any Administration target anyone who disagrees,” Carusone said. “The law here is clear, and we are optimistic that the Circuit Court will see through this appeal for what it is: an attempt to do an end run around constitutional law in an effort to silence political critics.”

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.

Is it illegal to not buy ads on X? Experts explain the FTC’s bizarre ad fight. Read More »

Deeply divided Supreme Court lets NIH grant terminations continue

doge, Grant funding, NIH, Policy, Science, science funding, Supreme Court / Tim Belzer / August 22, 2025

The dissents

The primary dissent was written by Chief Justice Roberts, and joined in part by the three Democratic appointees, Jackson, Kagan, and Sotomayor. It is a grand total of one paragraph and can be distilled down to a single sentence: “If the District Court had jurisdiction to vacate the directives, it also had jurisdiction to vacate the ‘Resulting Grant Terminations.’”

Jackson, however, chose to write a separate and far more detailed argument against the decision, mostly focusing on the fact that it’s not simply a matter of abstract law; it has real-world consequences.

She notes that existing law prevents plaintiffs from suing in the Court of Federal Claims while the facts are under dispute in other courts (something acknowledged by Barrett). That would mean that, as here, any plaintiffs would have to have the policy declared illegal first in the District Court, and only after that was fully resolved could they turn to the Federal Claims Court to try to restore their grants. That’s a process that could take years. In the meantime, the scientists would be out of funding, with dire consequences.

Yearslong studies will lose validity. Animal subjects will be euthanized. Life-saving medication trials will be abandoned. Countless researchers will lose their jobs. And community health clinics will close.

Jackson also had little interest in hearing that the government would be harmed by paying out the grants in the meantime. “For the Government, the incremental expenditure of money is at stake,” she wrote. “For the plaintiffs and the public, scientific progress itself hangs in the balance along with the lives that progress saves.”

With this decision, of course, it no longer hangs in the balance. There’s a possibility that the District Court’s ruling that the government’s policy was arbitrary and capricious will ultimately prevail; it’s not clear, because Barrett says she hasn’t even seen the government make arguments there, and Roberts only wrote regarding the venue issues. In the meantime, even with the policy stayed, it’s unlikely that anyone will focus grant proposals on the disfavored subjects, given that the policy might be reinstated at any moment.

And even if that ruling is upheld, it will likely take years to get there, and only then could a separate case be started to restore the funding. Any labs that had been using those grants will have long since moved on, and the people working on those projects scattered.

Deeply divided Supreme Court lets NIH grant terminations continue Read More »

Bank forced to rehire workers after lying about chatbot productivity, union says

AI, Artificial Intelligence, australia, openai, Policy / Paul Patrick / August 21, 2025

As banks around the world prepare to replace many thousands of workers with AI, Australia’s biggest bank is scrambling to rehire 45 workers after allegedly lying about chatbots besting staff by handling higher call volumes.

In a statement Thursday flagged by Bloomberg, Australia’s main financial services union, the Finance Sector Union (FSU), claimed a “massive win” for 45 union members whom the Commonwealth Bank of Australia (CBA) had replaced with an AI-powered “voice bot.”

The FSU noted that some of these workers had been with CBA for decades. Those workers in particular were shocked when CBA announced last month that their jobs had become redundant. At that time, CBA claimed that launching the chatbot supposedly “led to a reduction in call volumes” by 2,000 a week, FSU said.

But “this was an outright lie,” fired workers told FSU. Instead, call volumes had been increasing at the time they were dismissed, with CBA supposedly “scrambling”—offering staff overtime and redirecting management to join workers answering phones to keep up.

To uncover the truth, FSU escalated the dispute to a fair work tribunal, where the union accused CBA of failing to explain how workers’ roles were ruled redundant. The union also alleged that CBA was hiring for similar roles in India, Bloomberg noted, which made it appear that CBA had perhaps used the chatbot to cover up a shady pivot to outsource jobs.

While the dispute was being weighed, CBA admitted that “they didn’t properly consider that an increase in calls” happening while staff was being fired “would continue over a number of months,” FSU said.

“This error meant the roles were not redundant,” CBA confirmed at the tribunal.

Bank forced to rehire workers after lying about chatbot productivity, union says Read More »