Policy

sony,-ubisoft-scandals-prompt-calif.-ban-on-deceptive-sales-of-digital-goods

Sony, Ubisoft scandals prompt Calif. ban on deceptive sales of digital goods

consumer protection law, content licenses, digital goods, discovery, Policy, Sony, ubisoft / /

No more now you see it, now you don’t —

New California law reminds us we don’t own games and movies.

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Sony, Ubisoft scandals prompt Calif. ban on deceptive sales of digital goods

California recently became the first state to ban deceptive sales of so-called “disappearing media.”

On Tuesday, Governor Gavin Newsom signed AB 2426 into law, protecting consumers of digital goods like books, movies, and video games from being duped into purchasing content without realizing access was only granted through a temporary license.

Sponsored by Democratic assemblymember Jacqui Irwin, the law makes it illegal to “advertise or offer for sale a digital good to a purchaser with the terms buy, purchase, or any other term which a reasonable person would understand to confer an unrestricted ownership interest in the digital good, or alongside an option for a time-limited rental.”

Moving forward, sellers must clearly mark when a buyer is only receiving a license for—rather than making a purchase of—a digital good. Sellers must also clearly disclose that access to the digital good could be revoked if the seller no longer retains rights to license that good.

Perhaps most significantly, these disclosures cannot be buried in terms of service, but “shall be distinct and separate from any other terms and conditions of the transaction that the purchaser acknowledges or agrees to,” the law says.

An exception applies for goods that are advertised using “plain language” that states that “buying or purchasing the digital good is a license.” And there are also carve-outs for free goods and subscription services providing limited access based on a subscription’s duration. Additionally, it’s OK to advertise a digital good if access isn’t ever revoked, such as when users purchase a permanent download that can be accessed offline, regardless of a seller’s rights to license the content.

Ubisoft, Sony called out for consumer harms

In a press release earlier this month, Irwin noted that the law was drafted to “address the increasingly-common instance of consumers losing access to their digital media purchases through no fault of their own.”

She pointed to Ubisoft revoking licenses for purchases of its video game The Crew last April and Sony stirring backlash by threatening to yank access to Discovery TV shows last year as prominent examples of consumer harms.

Irwin noted that the US has been monitoring this problem since at least 2016, when the Department of Commerce’s Internet Policy Task Force published a white paper concluding that “consumers would benefit from more information on the nature of the transactions they enter into, including whether they are paying for access to content or for ownership of a copy, in order to instill greater confidence and enhance participation in the online marketplace.”

It took eight years for the first state lawmakers to follow through on the recommendation, Irwin said, noting that sellers are increasingly licensing content over selling goods and rarely offer refunds for “disappearing media.”

“As retailers continue to pivot away from selling physical media, the need for consumer protections on the purchase of digital media has become increasingly more important,” Irwin said. “AB 2426 will ensure the false and deceptive advertising from sellers of digital media incorrectly telling consumers they own their purchases becomes a thing of the past.”

In Irwin’s press release, University of Michigan law professor Aaron Perzanowski praised California for trailblazing with a law that clearly labels this practice as false advertising.

“Consumers around the world deserve to understand that when they spend money on digital movies, music, books, and games, those so-called ‘purchases’ can disappear without notice,” Perzanowski said. “There is still important work to do in securing consumers’ digital rights, but AB 2426 is a crucial step in the right direction.”

Sony, Ubisoft scandals prompt Calif. ban on deceptive sales of digital goods Read More »

18-years-for-woman-who-hoped-to-destroy-baltimore-power-grid-and-spark-a-race-war

18 years for woman who hoped to destroy Baltimore power grid and spark a race war

accelerationism, Policy, power grid, Sarah Beth Clendaniel, white supremacist / /
Two photos of a woman. In one, she is wearing tactical gear containing a swastika and holding a rifle. In the other, she stands next to what appears to be a minor holding a firearm.

Enlarge / Photographs included in an FBI affidavit show a woman believed to be Sarah Beth Clendaniel.

FBI

A Maryland woman was sentenced to 18 years in prison and a lifetime of supervised release “for conspiring to destroy the Baltimore region power grid,” the US Justice Department announced yesterday. Sarah Beth Clendaniel, 36, admitted as part of a plea agreement in May to conspiracy to damage energy facilities.

“Sarah Beth Clendaniel sought to ‘completely destroy’ the city of Baltimore by targeting five power substations as a means of furthering her violent white supremacist ideology,” US Attorney General Merrick Garland said. The planned shooting attacks were prevented by law enforcement.

Family members of Clendaniel spoke to the media last year about her beliefs. “She would have no problem saying she’s racist,” her nephew Daniel Clites told the Associated Press. “She wanted to bring attention to her cause.”

Clendaniel and her alleged co-conspirator, Florida resident Brandon Russell, “became acquainted by writing letters to each other beginning in about 2018, when both were serving prison sentences in different institutions,” the plea agreement said. “At some point, they developed a romantic relationship that continued after their respective releases from incarceration.”

The plea agreement’s stipulation of facts that Clendaniel admitted to said she “and Russell espoused a white supremacist ideology and were advocates of a concept known as ‘accelerationism.’ To ‘accelerate’ or to support ‘accelerationism’ is based on a white supremacist belief that the current system is irreparable and without an apparent political solution, and therefore violent action is necessary to precipitate societal and government collapse.”

Defendant is “unrepentant, violent white supremacist”

In a sentencing memorandum, US attorneys said that Clendaniel “engaged in the conspiracy to attack critical infrastructure in Maryland in furtherance of that accelerationist goal. If not thwarted by law enforcement, Clendaniel and her co-conspirator would have permanently destroyed a significant portion of the electrical infrastructure around Baltimore.”

Clendaniel was sentenced in US District Court for the District of Maryland by Judge James Bredar, who accepted the United States government’s recommendation of 18 years. She was also sentenced to 15 years for being a felon in possession of a firearm; the sentences will run concurrently. Clendaniel received credit for time served since entering federal custody in February 2023. She was previously convicted of robberies in 2006 and 2016.

“Quite simply, the defendant is an unrepentant, violent white supremacist and recidivist who is a true danger to the community,” US attorneys wrote of Clendaniel. “In light of her extensive criminal history, there is no reason to expect that a lighter sentence would have any deterrent or rehabilitative effect upon this defendant.”

Russell was “an active and founding member of a neo-Nazi group,” the Justice Department said in January 2018 when he was sentenced to five years in prison for possessing an unregistered destructive device and for unlawful storage of explosive material. Russell is now awaiting trial on the charge of conspiracy to damage or destroy electrical facilities in Maryland.

The Justice Department said that Clendaniel and Russell used encrypted messaging applications but were caught because, over several weeks in January 2023, they communicated their plans to commit an attack to an informant, referred to as CHS-1 (Confidential Human Source). On February 3, 2023, law enforcement agents executed a search warrant at Clendaniel’s home in Catonsville, Maryland, and found “various firearms and hundreds of rounds of ammunition.”

18 years for woman who hoped to destroy Baltimore power grid and spark a race war Read More »

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DoNotPay has to pay $193K for falsely touting untested AI lawyer, FTC says

ai lawyer, Artificial Intelligence, chatbot, chatgpt, consumer harm, donotpay, ftc, FTC act, openai, Policy, robot lawyer / /
DoNotPay has to pay $193K for falsely touting untested AI lawyer, FTC says

Among the first AI companies that the Federal Trade Commission has exposed as deceiving consumers is DoNotPay—which initially was advertised as “the world’s first robot lawyer” with the ability to “sue anyone with the click of a button.”

On Wednesday, the FTC announced that it took action to stop DoNotPay from making bogus claims after learning that the AI startup conducted no testing “to determine whether its AI chatbot’s output was equal to the level of a human lawyer.” DoNotPay also did not “hire or retain any attorneys” to help verify AI outputs or validate DoNotPay’s legal claims.

DoNotPay accepted no liability. But to settle the charges that DoNotPay violated the FTC Act, the AI startup agreed to pay $193,000, if the FTC’s consent agreement is confirmed following a 30-day public comment period. Additionally, DoNotPay agreed to warn “consumers who subscribed to the service between 2021 and 2023” about the “limitations of law-related features on the service,” the FTC said.

Moving forward, DoNotPay would also be prohibited under the settlement from making baseless claims that any of its features can be substituted for any professional service.

A DoNotPay spokesperson told Ars that the company “is pleased to have worked constructively with the FTC to settle this case and fully resolve these issues, without admitting liability.”

“The complaint relates to the usage of a few hundred customers some years ago (out of millions of people), with services that have long been discontinued,” DoNotPay’s spokesperson said.

The FTC’s settlement with DoNotPay is part of a larger agency effort to crack down on deceptive AI claims. Four other AI companies were hit with enforcement actions Wednesday, the FTC said, and FTC Chair Lina Khan confirmed that the agency’s so-called “Operation AI Comply” will continue monitoring companies’ attempts to “lure consumers into bogus schemes” or use AI tools to “turbocharge deception.”

“Using AI tools to trick, mislead, or defraud people is illegal,” Khan said. “The FTC’s enforcement actions make clear that there is no AI exemption from the laws on the books. By cracking down on unfair or deceptive practices in these markets, FTC is ensuring that honest businesses and innovators can get a fair shot and consumers are being protected.”

DoNotPay never tested robot lawyer

DoNotPay was initially released in 2015 as a free way to contest parking tickets. Soon after, it quickly expanded its services to supposedly cover 200 areas of law—aiding with everything from breach of contract claims to restraining orders to insurance claims and divorce settlements.

As DoNotPay’s legal services expanded, the company defended its innovative approach to replacing lawyers while acknowledging that it was on seemingly shaky grounds. In 2018, DoNotPay CEO Joshua Browder confirmed to the ABA Journal that the legal services were provided with “no lawyer oversight.” But he said that he was only “a bit worried” about threats to sue DoNotPay for unlicensed practice of law. Because DoNotPay was free, he expected he could avoid some legal challenges.

According to the FTC complaint, DoNotPay began charging subscribers $36 every two months in 2019 while making several false claims in ads to apparently drive up subscriptions.

DoNotPay has to pay $193K for falsely touting untested AI lawyer, FTC says Read More »

cox-asks-court-to-block-rhode-island-plan-for-broadband-expansions

Cox asks court to block Rhode Island plan for broadband expansions

access, and Deployment program, Broadband Equity, Cox communications, Policy / /
Both ends of an Ethernet cable sitting on a table

Getty Images | Adrienne Bresnahan

Cox Communications asked a court to block Rhode Island’s plan for distributing $108.7 million in federal funding for broadband deployment. If successful, Cox’s lawsuit could prevent other Internet service providers from obtaining grants to expand into areas that Cox says it already serves with high-speed broadband.

The cable company claims Rhode Island used “flawed Internet speed data” to determine which areas are underserved and that the plan “will benefit wealthy parts of the State already served with high-speed Internet in contravention of the program that it purports to implement.”

Cox filed the lawsuit on Monday in Superior Court in Providence, Rhode Island. It seeks an injunction prohibiting Rhode Island from using the allegedly flawed speed test data to determine where broadband grants should be directed.

The organization overseeing the state’s broadband funding plans quickly issued a response calling Cox’s lawsuit “misleading and unsupported by facts.”

“Let’s be clear about what’s behind Cox’s lawsuit: It is an attempt to prevent the investment of $108.7 million in broadband infrastructure in Rhode Island, likely because it realizes that some, or even all, of that money may be awarded through a competitive process to other Internet service providers,” said the response issued by the Rhode Island Commerce Corporation.

Cox accused of sitting out public process

The Commerce Corporation is a quasi-public agency that is implementing the state’s $108.7 million share of the $42 billion federal Broadband Equity, Access, and Deployment (BEAD) program. It said that Cox is the “state’s leading provider” but “declined to engage in the robust, months-long public planning process on how the Corporation would deploy Rhode Island’s BEAD funds.”

“Cox did not submit public comments on the design of the BEAD program, did not raise concerns at public Broadband Advisory Council meetings (where they are the sole provider represented), and declined to share its network map information during the 90-day Rhode Island Broadband Map Challenge Process. Our planning process was open and participatory, and Cox did not participate,” the corporation said.

Cox disputed the claim. “For over a year Cox has presented facts and evidence as to why Commerce’s broadband plan is flawed and these arguments have been ignored at every turn,” the company said in a statement provided to Ars. “We have shared our mapping data with Commerce—in fact we have a data sharing agreement with Commerce. To state today that this information hasn’t been conveyed is not factual.”

Cox said its officials “met with [Commerce] Secretary [Elizabeth] Tanner and her staff repeatedly to raise concerns,” and submitted formal comments “through its trade association, the New England Connectivity and Telecommunications Association.”

Rhode Island is one of 44 states and territories that have obtained National Telecommunications and Information Administration (NTIA) approval for an initial plan to distribute funds. The approval, granted in July, “enables Rhode Island to request access to funding and begin implementation of the BEAD program,” the NTIA said.

Ookla speed tests in dispute

Cox’s lawsuit criticized Rhode Island’s use of Ookla speed test data. The Commerce Corporation “layered Ookla speed test data from the past 12 months over the FCC map, and ‘reclassified’ as ‘underserved’ any location which had a speed test result of less than 100Mpbs, and also reclassified some locations as ‘underserved’ within census block groups based on Ookla speed test data that did not pertain to any specific location,” Cox wrote.

The Federal Communications Commission’s broadband map is based on submissions from Internet service providers, which in at least some cases were inaccurate. While the FCC has used a challenge process to periodically improve the map’s accuracy, there continue to be complaints about the map claiming unserved or underserved areas have fast broadband. Under the BEAD process, states can investigate availability locally to determine where funding should be directed.

The Rhode Island Commerce Corporation said its plan is “built on fairness, transparency, and a commitment to maximizing the impact of this historic federal investment… and, contrary to Cox’s assertions, parts of the state are indeed unserved or underserved, including areas that Cox claims are affluent. Whether an area is affluent or not has no bearing on the type of broadband service that is—or is not—available in that area.”

Cox asks court to block Rhode Island plan for broadband expansions Read More »

openai-asked-us-to-approve-energy-guzzling-5gw-data-centers,-report-says

OpenAI asked US to approve energy-guzzling 5GW data centers, report says

ai data center, AI infrastructure, Artificial Intelligence, biden administration, china, microsoft, openai, Policy / /

Great scott! —

OpenAI stokes China fears to woo US approvals for huge data centers, report says.

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OpenAI asked US to approve energy-guzzling 5GW data centers, report says

OpenAI hopes to convince the White House to approve a sprawling plan that would place 5-gigawatt AI data centers in different US cities, Bloomberg reports.

The AI company’s CEO, Sam Altman, supposedly pitched the plan after a recent meeting with the Biden administration where stakeholders discussed AI infrastructure needs. Bloomberg reviewed an OpenAI document outlining the plan, reporting that 5 gigawatts “is roughly the equivalent of five nuclear reactors” and warning that each data center will likely require “more energy than is used to power an entire city or about 3 million homes.”

According to OpenAI, the US needs these massive data centers to expand AI capabilities domestically, protect national security, and effectively compete with China. If approved, the data centers would generate “thousands of new jobs,” OpenAI’s document promised, and help cement the US as an AI leader globally.

But the energy demand is so enormous that OpenAI told officials that the “US needs policies that support greater data center capacity,” or else the US could fall behind other countries in AI development, the document said.

Energy executives told Bloomberg that “powering even a single 5-gigawatt data center would be a challenge,” as power projects nationwide are already “facing delays due to long wait times to connect to grids, permitting delays, supply chain issues, and labor shortages.” Most likely, OpenAI’s data centers wouldn’t rely entirely on the grid, though, instead requiring a “mix of new wind and solar farms, battery storage and a connection to the grid,” John Ketchum, CEO of NextEra Energy Inc, told Bloomberg.

That’s a big problem for OpenAI, since one energy executive, Constellation Energy Corp. CEO Joe Dominguez, told Bloomberg that he’s heard that OpenAI wants to build five to seven data centers. “As an engineer,” Dominguez said he doesn’t think that OpenAI’s plan is “feasible” and would seemingly take more time than needed to address current national security risks as US-China tensions worsen.

OpenAI may be hoping to avoid delays and cut the lines—if the White House approves the company’s ambitious data center plan. For now, a person familiar with OpenAI’s plan told Bloomberg that OpenAI is focused on launching a single data center before expanding the project to “various US cities.”

Bloomberg’s report comes after OpenAI’s chief investor, Microsoft, announced a 20-year deal with Constellation to re-open Pennsylvania’s shuttered Three Mile Island nuclear plant to provide a new energy source for data centers powering AI development and other technologies. But even if that deal is approved by regulators, the resulting energy supply that Microsoft could access—roughly 835 megawatts (0.835 gigawatts) of energy generation, which is enough to power approximately 800,000 homes—is still more than five times less than OpenAI’s 5-gigawatt demand for its data centers.

Ketchum told Bloomberg that it’s easier to find a US site for a 1-gigawatt data center, but locating a site for a 5-gigawatt facility would likely be a bigger challenge. Notably, Amazon recently bought a $650 million nuclear-powered data center in Pennsylvania with a 2.5-gigawatt capacity. At the meeting with the Biden administration, OpenAI suggested opening large-scale data centers in Wisconsin, California, Texas, and Pennsylvania, a source familiar with the matter told CNBC.

During that meeting, the Biden administration confirmed that developing large-scale AI data centers is a priority, announcing “a new Task Force on AI Datacenter Infrastructure to coordinate policy across government.” OpenAI seems to be trying to get the task force’s attention early on, outlining in the document that Bloomberg reviewed the national security and economic benefits its data centers could provide for the US.

In a statement to Bloomberg, OpenAI’s spokesperson said that “OpenAI is actively working to strengthen AI infrastructure in the US, which we believe is critical to keeping America at the forefront of global innovation, boosting reindustrialization across the country, and making AI’s benefits accessible to everyone.”

Big Tech companies and AI startups will likely continue pressuring officials to approve data center expansions, as well as new kinds of nuclear reactors as the AI explosion globally continues. Goldman Sachs estimated that “data center power demand will grow 160 percent by 2030.” To ensure power supplies for its AI, according to the tech news site Freethink, Microsoft has even been training AI to draft all the documents needed for proposals to secure government approvals for nuclear plants to power AI data centers.

OpenAI asked US to approve energy-guzzling 5GW data centers, report says Read More »

caroline-ellison-gets-2-years-for-covering-up-sam-bankman-fried’s-ftx-fraud

Caroline Ellison gets 2 years for covering up Sam Bankman-Fried’s FTX fraud

Alameda Research, caroline ellison, Cryptocurrency, cryptocurrency fraud, fraud, FTX, money laundering, Policy, sam bankman-fried, wire fraud / /
Caroline Ellison, former chief executive officer of Alameda Research LLC, was sentenced Tuesday for helping Sam Bankman-Fried cover up FTX's fraudulent misuse of customer funds.

Enlarge / Caroline Ellison, former chief executive officer of Alameda Research LLC, was sentenced Tuesday for helping Sam Bankman-Fried cover up FTX’s fraudulent misuse of customer funds.

Caroline Ellison was sentenced Tuesday to 24 months for her role in covering up Sam Bankman-Fried’s rampant fraud at FTX—which caused billions in customer losses.

Addressing the judge at sentencing, Ellison started out by explaining “how sorry I am” for concealing FTX’s lies, Bloomberg reported live from the hearing.

“I participated in a criminal conspiracy that ultimately stole billions of dollars from people who entrusted their money with us,” Ellison reportedly said while sniffling. “The human brain is truly bad at understanding big numbers,” she added, and “not a day goes by” that she doesn’t “think about all of the people I hurt.”

Assistant US Attorney Danielle Sassoon followed Ellison, remarking that the government recommended a lighter sentence because it was important for the court to “distinguish between the mastermind and the willing accomplice.” (Bankman-Fried got 25 years.)

US District Judge Lewis Kaplan noted that he is allowed to show Ellison leniency for providing “substantial assistance to the government.” He then confirmed that he always considered the maximum sentence she faced of 110 years to be “absurd,” considering that Ellison had no inconsistencies in her testimony and fully cooperated with the government throughout their FTX probe.

“I’ve seen a lot of cooperators in 30 years,” Kaplan said. “I’ve never seen one quite like Ms. Ellison.”

However, although Ellison was brave to tell the truth about her crimes, Ellison is “by no means free of culpability,” Kaplan said. He called Bankman-Fried her “Kryptonite” because the FTX co-founder so easily exploited such a “very strong person.” Noting that nobody gets a “get out of jail free card,” he sentenced Ellison to two years and required her to forfeit about $11 billion, Bloomberg reported.

The judge said that Ellison “can serve the sentence at a minimum-security facility,” Bloomberg reported.

Ellison was key to SBF’s quick conviction

Ellison could have faced a maximum sentence of 110 years, for misleading customers and investors as the former CEO of the cryptocurrency trading firm linked to the FTX exchange, Alameda Research. But after delivering devastatingly detailed testimony key to exposing Bankman-Fried’s many lies, the probation office had recommended a sentence of time served with three years of supervised release.

Kaplan’s sentence went further, making it likely that other co-conspirators who cooperated with the government probe will also face jail time.

Both Ellison and the US government had requested substantial leniency due to her “critical” cooperation that allowed the US to convict Bankman-Fried in record time for such a complex criminal case.

Partly because Ellison was romantically involved with Bankman-Fried and partly because she “drafted some of the most incriminating documents in the case,” US attorney Damian Williams wrote in a letter to Kaplan, she was considered “crucial to the Government’s successful prosecution of Samuel Bankman-Fried for one of the largest financial frauds in history,” Williams wrote.

Williams explained that Ellison went above and beyond to help the government probe Bankman-Fried’s fraud. Starting about a month after FTX declared bankruptcy, Ellison began cooperating with the US government’s investigation. She met about 20 times with prosecutors, digging through thousands of documents to identify and interpret key evidence that convicted her former boss and boyfriend.

“Parsing Alameda Research’s poor internal records was complicated by vague titles and unlabeled calculations on any documents reflecting misuse of customer funds,” Ellison’s sentencing memo said. Without her three-day testimony at trial, the jury would likely not have understood “Alameda’s intentionally cryptic records,” Williams wrote. Additionally, because Bankman-Fried systematically destroyed evidence, she was one of the few witnesses able to contradict Bankman-Fried’s lies by providing a timeline for how Bankman-Fried’s scheme unfolded—and she was willing to find the receipts to back it all up.

“As Alameda’s nominal CEO and Bankman-Fried’s former girlfriend, Ellison was uniquely positioned to explain not only the what and how of Bankman-Fried’s crimes, but also the why,” Williams wrote. “Ellison’s testimony was critical to indict and convict Bankman-Fried, and to understanding both the timeline of the fraud schemes, and the various layers of wrongdoing.”

Further, where Bankman-Fried tried to claim that he was “well-meaning but hapless” in causing FTX’s collapse, Ellison admitted her guilt before law enforcement ever got involved, then continually “expressed genuine shame and remorse” for the harms she caused, Williams wrote.

A lighter sentence, Ellison’s sentencing memo suggested, “would incentivize people involved in a fraud to do what Caroline did: publicly disclose a fraud, immediately accept responsibility, and cooperate immediately with civil and criminal authorities.”

Williams praised Ellison as exceptionally forthcoming, even alerting the government to criminal activity that they didn’t even know about yet. He also credited her for persevering as a truth-teller “despite harsh media and public scrutiny and Bankman-Fried’s efforts to publicly weaponize her personal writings to discredit and intimidate her.”

“The Government cannot think of another cooperating witness in recent history who has received a greater level of attention and harassment,” Williams wrote.

In her sentencing memo, Ellison’s lawyers asked for no prison time, insisting that Ellison had been punished enough. Not only will she recover “nothing” from the FTX bankruptcy proceedings that she’s helping to settle, but she also is banned from working in the only industries she’s ever worked in, unlikely to ever repeat her crimes in finance and cryptocurrency sectors. She also is banned from running any public company and “has been rendered effectively unemployable in the near term by the notoriety arising from this case.”

“The reputational harm is not likely to abate any time soon,” Ellison’s sentencing memo said. “These personal, financial, and career consequences constitute substantial forms of punishment that reduce the need for the Court to order her incarceration.”

Kaplan clearly disagreed, ordering her to serve 24 months and forfeit $11 billion.

Caroline Ellison gets 2 years for covering up Sam Bankman-Fried’s FTX fraud Read More »

calif.-governor-vetoes-bill-requiring-opt-out-signals-for-sale-of-user-data

Calif. Governor vetoes bill requiring opt-out signals for sale of user data

Policy, privacy opt-out / /

Newsom opts out of signing bill —

Gavin Newsom said he opposes mandate on mobile operating system developers.

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A closeup photo of California Governor Gavin Newsom's face

Enlarge / California Governor Gavin Newsom at a press conference in San Francisco on September 19, 2024.

Getty Images | Anadolu

California Gov. Gavin Newsom vetoed a bill that would have required makers of web browsers and mobile operating systems to let consumers send opt-out preference signals that could limit businesses’ use of personal information.

The bill approved by the State Legislature last month would have required an opt-out signal “that communicates the consumer’s choice to opt out of the sale and sharing of the consumer’s personal information or to limit the use of the consumer’s sensitive personal information.” It would have made it illegal for a business to offer a web browser or mobile operating system without a setting that lets consumers “send an opt-out preference signal to businesses with which the consumer interacts.”

In a veto message sent to the Legislature Friday, Newsom said he would not sign the bill. Newsom wrote that he shares the “desire to enhance consumer privacy,” noting that he previously signed a bill “requir[ing] the California Privacy Protection Agency to establish an accessible deletion mechanism allowing consumers to request that data brokers delete all of their personal information.”

But Newsom said he is opposed to the new bill’s mandate on operating systems. “I am concerned, however, about placing a mandate on operating system (OS) developers at this time,” the governor wrote. “No major mobile OS incorporates an option for an opt-out signal. By contrast, most Internet browsers either include such an option or, if users choose, they can download a plug-in with the same functionality. To ensure the ongoing usability of mobile devices, it’s best if design questions are first addressed by developers, rather than by regulators. For this reason, I cannot sign this bill.”

Vetoes can be overridden with a two-thirds vote in each chamber. The bill was approved 59–12 in the Assembly and 31–7 in the Senate. But the State Legislature hasn’t overridden a veto in decades.

“Industry worked overtime to squash bill”

The opt-out bill would have built on the California Consumer Privacy Act (CCPA) of 2018 and California Privacy Rights Act of 2020. Google, which recently nixed a plan to turn off tracking cookies by default in Chrome, urged Newsom to veto the bill, reports by Bloomberg and Politico said.

“It’s troubling the power that companies such as Google appear to have over the governor’s office,” said Justin Kloczko, tech and privacy advocate for Consumer Watchdog, a nonprofit group in California. “What the governor didn’t mention is that Google Chrome, Apple Safari and Microsoft Edge don’t offer a global opt-out and they make up for nearly 90 percent of the browser market share. That’s what matters. And people don’t want to install plug-ins. Safari, which is the default browsers on iPhones, doesn’t even accept a plug-in.”

Consumer Reports Policy Analyst Matt Schwartz said that “industry worked overtime to squash this bill, as it empowered Californians to better protect their privacy, undermining the commercial surveillance business model of these tech companies. We strongly disagree with the idea expressed in the governor’s veto statement that it should be left to operating systems to provide privacy choices for consumers. They’ve shown time and again they won’t meaningfully do so until forced.”

Consumer Reports is one of the groups behind Global Privacy Control (GPC), an opt-out signal that creators hope will become legally binding under the CCPA or other privacy laws. Makers of Global Privacy Control say it is superior to the older Do Not Track (DNT) signal because the California attorney general “determined that the AG could not require businesses to comply with DNT requests because the requests do not clearly convey users’ intent to opt out of the sale of their data.”

“The California AG has determined that businesses must honor two methods of submitting opt-outs. GPC is meant to provide users with an additional option for objecting to the sale of their data, and it functions identically to clicking a ‘Do Not Sell My Personal Information’ link provided by a business,” the GPC website says.

GPC is available on Firefox, Brave, DuckDuckGo, and several other browsers, but not Google’s Chrome, Microsoft’s Edge, and Apple’s Safari. The Do Not Track signal is still an option in Chrome and Edge. Chrome, Edge, and Safari also each have features that limit websites’ ability to track users.

Calif. Governor vetoes bill requiring opt-out signals for sale of user data Read More »

cloudflare-moves-to-end-free,-endless-ai-scraping-with-one-click-blocking

Cloudflare moves to end free, endless AI scraping with one-click blocking

ai content deals, ai scraping, AI training data, Artificial Intelligence, cloudflare, LLMs, Policy / /
Cloudflare moves to end free, endless AI scraping with one-click blocking

Cloudflare announced new tools Monday that it claims will help end the era of endless AI scraping by giving all sites on its network the power to block bots in one click.

That will help stop the firehose of unrestricted AI scraping, but, perhaps even more intriguing to content creators everywhere, Cloudflare says it will also make it easier to identify which content that bots scan most, so that sites can eventually wall off access and charge bots to scrape their most valuable content. To pave the way for that future, Cloudflare is also creating a marketplace for all sites to negotiate content deals based on more granular AI audits of their sites.

These tools, Cloudflare’s blog said, give content creators “for the first time” ways “to quickly and easily understand how AI model providers are using their content, and then take control of whether and how the models are able to access it.”

That’s necessary for content creators because the rise of generative AI has made it harder to value their content, Cloudflare suggested in a longer blog explaining the tools.

Previously, sites could distinguish between approving access to helpful bots that drive traffic, like search engine crawlers, and denying access to bad bots that try to take down sites or scrape sensitive or competitive data.

But now, “Large Language Models (LLMs) and other generative tools created a murkier third category” of bots, Cloudflare said, that don’t perfectly fit in either category. They don’t “necessarily drive traffic” like a good bot, but they also don’t try to steal sensitive data like a bad bot, so many site operators don’t have a clear way to think about the “value exchange” of allowing AI scraping, Cloudflare said.

That’s a problem because enabling all scraping could hurt content creators in the long run, Cloudflare predicted.

“Many sites allowed these AI crawlers to scan their content because these crawlers, for the most part, looked like ‘good’ bots—only for the result to mean less traffic to their site as their content is repackaged in AI-written answers,” Cloudflare said.

All this unrestricted AI scraping “poses a risk to an open Internet,” Cloudflare warned, proposing that its tools could set a new industry standard for how content is scraped online.

How to block bots in one click

Increasingly, creators fighting to control what happens with their content have been pushed to either sue AI companies to block unwanted scraping, as The New York Times has, or put content behind paywalls, decreasing public access to information.

While some big publishers have been striking content deals with AI companies to license content, Cloudflare is hoping new tools will help to level the playing field for everyone. That way, “there can be a transparent exchange between the websites that want greater control over their content, and the AI model providers that require fresh data sources, so that everyone benefits,” Cloudflare said.

Today, Cloudflare site operators can stop manually blocking each AI bot one by one and instead choose to “block all AI bots in one click,” Cloudflare said.

They can do this by visiting the Bots section under the Security tab of the Cloudflare dashboard, then clicking a blue link in the top-right corner “to configure how Cloudflare’s proxy handles bot traffic,” Cloudflare said. On that screen, operators can easily “toggle the button in the ‘Block AI Scrapers and Crawlers’ card to the ‘On’ position,” blocking everything and giving content creators time to strategize what access they want to re-enable, if any.

Beyond just blocking bots, operators can also conduct AI audits, quickly analyzing which sections of their sites are scanned most by which bots. From there, operators can decide which scraping is allowed and use sophisticated controls to decide which bots can scrape which parts of their sites.

“For some teams, the decision will be to allow the bots associated with AI search engines to scan their Internet properties because those tools can still drive traffic to the site,” Cloudflare’s blog explained. “Other organizations might sign deals with a specific model provider, and they want to allow any type of bot from that provider to access their content.”

For publishers already playing whack-a-mole with bots, a key perk would be if Cloudflare’s tools allowed them to write rules to restrict certain bots that scrape sites for both “good” and “bad” purposes to keep the good and throw away the bad.

Perhaps the most frustrating bot for publishers today is the Googlebot, which scrapes sites to populate search results as well as to train AI to generate Google search AI overviews that could negatively impact traffic to source sites by summarizing content. Publishers currently have no way of opting out of training models fueling Google’s AI overviews without losing visibility in search results, and Cloudflare’s tools won’t be able to get publishers out of that uncomfortable position, Cloudflare CEO Matthew Prince confirmed to Ars.

For any site operators tempted to toggle off all AI scraping, blocking the Googlebot from scraping and inadvertently causing dips in traffic may be a compelling reason not to use Cloudflare’s one-click solution.

However, Prince expects “that Google’s practices over the long term won’t be sustainable” and “that Cloudflare will be a part of getting Google and other folks that are like Google” to give creators “much more granular control over” how bots like the Googlebot scrape the web to train AI.

Prince told Ars that while Google solves its “philosophical” internal question of whether the Googlebot’s scraping is for search or for AI, a technical solution to block one bot from certain kinds of scraping will likely soon emerge. And in the meantime, “there can also be a legal solution” that “can rely on contract law” based on improving sites’ terms of service.

Not every site would, of course, be able to afford a lawsuit to challenge AI scraping, but to help creators better defend themselves, Cloudflare drafted “model terms of use that every content creator can add to their sites to legally protect their rights as sites gain more control over AI scraping.” With these terms, sites could perhaps more easily dispute any restricted scraping discovered through Cloudflare’s analytics tools.

“One way or another, Google is going to get forced to be more fine-grained here,” Prince predicted.

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Elon Musk’s X gives up fight in Brazil, starts complying with judge’s demands

elon musk, elon musk brazil, Policy, x brazil / /

Xed out in Brazil —

X announces reversal but must prove compliance before it can be reinstated.

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Photo illustration shows the X logo displayed on a smartphone screen with a flag of Brazil in the background.

Getty Images | SOPA Images

Elon Musk is apparently conceding defeat in his fight with Brazil Supreme Court Judge Alexandre de Moraes, as the X social platform has started complying with the judge’s demands in an attempt to get the service un-blocked in the country.

X previously refused to suspend dozens of accounts accused of spreading disinformation. Internet service providers have been blocking X under orders from the government since early September, and De Moraes seized $2 million from a Starlink bank account and $1.3 million from an X account to collect on fines issued to X.

X has claimed the orders violate Brazil’s own laws. “Unlike other social media and technology platforms, we will not comply in secret with illegal orders. To our users in Brazil and around the world, X remains committed to protecting your freedom of speech,” the company said in late August.

But in a reversal detailed in a court filing on Friday night, “X’s lawyers said the company had done exactly what Mr. Musk vowed not to: take down accounts that a Brazilian justice ordered removed because the judge said they threatened Brazil’s democracy,” The New York Times reported. “X also complied with the justice’s other demands, including paying fines and naming a new formal representative in the country, the lawyers said.” (X said last month that its previous legal representative in Brazil resigned after de Moraes threatened her with imprisonment.)

X has to prove compliance

According to Reuters, “It was not immediately clear which were the accounts X has been ordered to block, as the probe is confidential.” But it has been reported that many of the accounts belonged to supporters of former President Jair Bolsonaro, who was accused of instigating the January 8, 2023, attack on the Brazilian Congress after his election loss. Some of the accounts reportedly belonged to users accused of threatening federal police officers involved in a probe of Bolsonaro.

De Moraes acknowledged X’s about-face in an order issued Saturday and said that X must submit documents proving its compliance before it can be reinstated. X had an estimated 22 million users in Brazil before the suspension. Bluesky and Meta’s Threads gained users in the country after X was blocked by ISPs.

X briefly became accessible in Brazil last week after the company started routing traffic through Cloudflare, but Brazil’s telecom regulatory agency said that Cloudflare subsequently made changes that let ISPs resume their blocking of X without affecting other websites that use Cloudflare. (Cloudflare CEO Matthew Prince later denied working with the Brazilian government to implement any such changes.) While X said it was merely “an inadvertent and temporary service restoration to Brazilian users,” de Moraes announced a new daily fine of more than $900,000 for failing to comply with the order suspending X operations in Brazil.

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European leadership change means new adversaries for Big Tech

big tech, EU, European Commission, Policy, syndication, Thierry Breton / /

A new sheriff in town —

“Legislation has been adopted and now needs to be enforced.”

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European leadership change means new adversaries for Big Tech

If the past five years of EU tech rules could take human form, they would embody Thierry Breton. The bombastic commissioner, with his swoop of white hair, became the public face of Brussels’ irritation with American tech giants, touring Silicon Valley last summer to personally remind the industry of looming regulatory deadlines.

Combative and outspoken, Breton warned that Apple had spent too long “squeezing” other companies out of the market. In a case against TikTok, he emphasized, “our children are not guinea pigs for social media.”  

His confrontational attitude to the CEOs themselves was visible in his posts on X. In the lead-up to Musk’s interview with Donald Trump, Breton posted a vague but threatening letter on his account reminding Musk there would be consequences if he used his platform to amplify “harmful content.” Last year, he published a photo with Mark Zuckerberg, declaring a new EU motto of “move fast to fix things”—a jibe at the notorious early Facebook slogan. And in a 2023 meeting with Google CEO Sundar Pichai, Breton reportedly got him to agree to an “AI pact” on the spot, before tweeting the agreement, making it difficult for Pichai to back out.

Yet in this week’s reshuffle of top EU jobs, Breton resigned—a decision he alleged was due to backroom dealing between EU Commission president Ursula von der Leyen and French president Emmanuel Macron.

“I’m sure [the tech giants are] happy Mr. Breton will go, because he understood you have to hit shareholders’ pockets when it comes to fines,” says Umberto Gambini, a former adviser at the EU Parliament and now a partner at consultancy Forward Global.

Breton is to be effectively replaced by the Finnish politician Henna Virkkunen, from the center-right EPP Group, who has previously worked on the Digital Services Act.

“Her style will surely be less brutal and maybe less visible on X than Breton,” says Gambini. “It could be an opportunity to restart and reboot the relations.”

Little is known about Virkkunen’s attitude to Big Tech’s role in Europe’s economy. But her role has been reshaped to fit von der Leyen’s priorities for her next five-year term. While Breton was the commissioner for the internal market, Virkkunen will work with the same team but operate under the upgraded title of executive vice president for tech sovereignty, security and democracy, meaning she reports directly to von der Leyen.

The 27 commissioners, who form von der Leyen’s new team and are each tasked with a different area of focus, still have to be approved by the European Parliament—a process that could take weeks.

“[Previously], it was very, very clear that the commission was ambitious when it came to thinking about and proposing new legislation to counter all these different threats that they had perceived, especially those posed by big technology platforms,” says Mathias Vermeulen, public policy director at Brussels-based consultancy AWO. “That is not a political priority anymore, in the sense that legislation has been adopted and now has to be enforced.”

Instead Virkkunen’s title implies the focus has shifted to technology’s role in European security and the bloc’s dependency on other countries for critical technologies like chips. “There’s this realization that you now need somebody who can really connect the dots between geopolitics, security policy, industrial policy, and then the enforcement of all the digital laws,” he adds. Earlier in September, a much anticipated report by economist and former Italian prime minister Mario Draghi warned that Europe would risk becoming “vulnerable to coercion” on the world stage if it did not jump-start growth. “We must have more secure supply chains for critical raw materials and technologies,” he said.

Breton is not the only prolific Big Tech adversary to be replaced this week—in a planned exit. Gone, too, is Margrethe Vestager, who had garnered a reputation as one of the world’s most powerful antitrust regulators after 10 years in the post. Last week, Vestager celebrated a victory in a case forcing Apple to pay $14.4 billion in back taxes to Ireland, a case once referred to by Apple CEO Tim Cook as “total political crap”.

Vestager—who vied with Breton for the reputation of lead digital enforcer (technically she was his superior)—will now be replaced by the Spanish socialist Teresa Ribera, whose role will encompass competition as well as Europe’s green transition. Her official title will be executive vice-president-designate for a clean, just and competitive transition, making it likely Big Tech will slip down the list of priorities. “[Ribera’s] most immediate political priority is really about setting up this clean industrial deal,” says Vermuelen.

Political priorities might be shifting, but the frenzy of new rules introduced over the past five years will still need to be enforced. There is an ongoing legal battle over Google’s $1.7 billion antitrust fine. Apple, Google, and Meta are under investigation for breaches of the Digital Markets Act. Under the Digital Services Act, TikTok, Meta, AliExpress, as well as Elon Musk’s X are also subject to probes. “It is too soon for Elon Musk to breathe a sigh of relief,” says J. Scott Marcus, senior fellow at think tank Bruegel. He claims that Musk’s alleged practices at X are likely to run afoul of the Digital Services Act (DSA) no matter who the commissioner is.

“The tone of the confrontation might become a bit more civil, but the issues are unlikely to go away.”

This story originally appeared on wired.com.

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Starlink imposes $100 “congestion charge” on new users in parts of US

Policy, starlink congestion charge / /

Starlink congestion charge —

One-time $100 fee in congested areas, and $100 credit in excess-capacity areas.

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A Starlink satellite dish sitting on the ground outdoors.

Enlarge / Starlink satellite dish.

Starlink

New Starlink customers have to pay a $100 “congestion charge” in areas where the satellite broadband network has limited capacity.

“In areas with network congestion, there is an additional one-time charge to purchase Starlink Residential services,” a Starlink FAQ says. “This fee will only apply if you are purchasing or activating a new service plan. If you change your Service address or Service Plan at a later date, you may be charged the congestion fee.”

The charge is unwelcome for anyone wanting Starlink service in a congested area, but it could help prevent the capacity crunch from getting worse by making people think twice about signing up. The SpaceX-owned Internet service provider also seems to anticipate that people who sign up for service in congested areas may change their minds after trying it out for a few weeks.

“Our intention is to no longer charge this fee to new customers as soon as network capacity improves. If you’re not satisfied with Starlink and return it within the 30-day return window, the charge will be refunded,” the company said.

There is some corresponding good news for people in areas with more Starlink capacity. Starlink “regional savings,” introduced a few months ago, provides a $100 service credit in parts of the US “where Starlink has abundant network availability.” The credit is $200 in parts of Canada with abundant network availability.

Starlink speeds

The congestion charge was reported by PCMag on September 13, after being noticed by users of the Starlink subreddit. “The added fee appears to pop up in numerous states, particularly in the south and eastern US, such as Texas, Florida, Kansas, Ohio and Virginia, among others, which have slower Starlink speeds due to the limited network capacity,” PCMag noted.

Speed test data showed in 2022 that Starlink speeds dropped significantly as more people signed up for the service, a fact cited by the Federal Communications Commission when it rejected $886 million worth of broadband deployment grants for the company.

This isn’t the first time Starlink has varied pricing based on regional congestion. In February 2023, Starlink decided that people in limited-capacity areas would pay $120 a month, and people in excess-capacity areas would pay $90 a month.

Despite the new $100 charge, this isn’t necessarily a bad time to order Starlink service. The ISP is currently offering the standard dish for $299 instead of the usual $499. People in excess-capacity areas of the US also get the $100 regional savings credit and a $90 monthly service rate.

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How breaking up Google could lower your online shopping bill

Antitrust law, Google, google ad tech, google ad tech monopoly, google monopoly, Policy, us department of justice / /

Eliminating junk ads and a “Google tax” —

A DOJ win in Google’s ad tech monopoly trial could benefit everyone, experts say.

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How breaking up Google could lower your online shopping bill

Aurich Lawson

As the US Department of Justice aims to break up Google’s alleged ad tech monopoly, experts say that remedies sought in the antitrust trial could potentially benefit not just advertisers and publishers but also everyone targeted by ads online.

So far, the DOJ has argued that through acquisitions, Google allegedly monopolizes the ad server market, taking a substantial cut of every online ad sale by tying together products on the buyer and seller sides. Locking publishers into using its seller-side platform to access its large advertiser demand, Google also allegedly shut out rivals by pushing advertisers into a corner, then making it hard for publishers to switch platforms.

This scheme also allegedly set Google up to charge higher “monopoly” fees, the DOJ argued, allegedly putting some publishers out of business and raising costs for advertisers.

But while the harms to publishers and advertisers have been outlined at length, there’s been less talk about the seemingly major consequences for consumers perhaps harmed by the alleged monopoly. Those harms include higher costs of goods, less privacy, and increasingly lower-quality ads that frequently bombard their screens with products nobody wants.

By overcharging by as much as 5 or 10 percent for online ads, Google allegedly placed a “Google tax” on the price of “everyday goods we buy,” Tech Oversight’s Sacha Haworth explained during a press briefing Thursday, where experts closely monitoring the trial shared insights.

“When it comes to lowering costs on families,” Haworth said, “Google has overcharged advertisers and publishers by nearly $2 billion. That’s just over the last four years. That has inflated the price of ads, it’s increased the cost of doing business, and, of course, these costs get passed down to us when we buy things online.”

But while it’s unclear if destroying Google’s alleged monopoly would pass on any savings to consumers, Elise Phillips, policy counsel focused on competition and privacy for Public Knowledge, outlined other benefits in the event of a DOJ win.

She suggested that Google’s conduct has diminished innovation, which has “negatively” affected “the quality diversity and even relevancy of the advertisements that consumers tend to see.”

Were Google’s ad tech to be broken up and behavioral remedies sought, more competition might mean that consumers have more control over how their personal data is used in targeted advertising, Phillips suggested, and ultimately, lead to a future where everyone gets fed higher-quality ads.

That could happen if, instead of Google’s ad model dominating the Internet, less invasive ad targeting models could become more widely adopted, experts suggested. That could enhance privacy and make online ads less terrible after The New York Times declared a “junk ad epidemic” last year.

The thinking goes that if small businesses and publishers benefited from potentially reduced costs, increased revenues, and more options, consumers might start seeing a wider, higher-quality range of ads online, experts suggested.

Better ad models “are already out there,” Open Markets Institute policy analyst Karina Montoya said, such as “conceptual advertising” that uses signals that, unlike Google’s targeting, don’t rely on “gigantic, massive data sets that collect every single thing that we do in all of our devices and that don’t ask for our consent.”

But any emerging ad models are seemingly “crushed and flattened by this current dominant business model that’s really arising” from Google’s tight grip on the ad tech markets that the DOJ is targeting, Montoya said. Those include markets “for publisher ad servers, advertiser ad networks, and the ad exchanges that connect the two,” Reuters reported.

At the furthest extreme, loosening Google’s grip on the online ad industry could even “revolutionize the Internet,” Haworth suggested.

One theory posits that if publishers’ revenues increased, consumers would also benefit from more information potentially becoming available on the open web—as less content potentially gets stuck behind paywalls as desperate publishers seek ways to make up for lost ad revenue.

Montoya—who also is a reporter for the Center for Journalism & Liberty, which monitors how media outlets can thrive in today’s digital economy—noted that publishers depending on reader funding through subscriptions or donations is not sustainable if society wants to “have an open in free market where everybody can access information that they deserve and have a right to access.” By reducing Google’s control, the DOJ argues that publishers would be more financially stable, and Montoya hopes the public is starting to understand how that could benefit the open web.

“The trial is really allowing the public to see a full display of Google’s pattern of retaliatory behavior, really just to protect its monopoly power,” Montoya sad. “This idea that innovation and ways to monetize journalistic content has to come only from Google is wrong and this is really their defense.”

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