Policy – Page 24

Elon Musk declares “it is war” on ad industry as X sues over “illegal boycott”

elon musk, Policy, x advertising boycott / Kris Guyer / August 6, 2024

Elon vs. advertisers —

“We tried peace for 2 years, now it is war,” Musk writes.

Jon Brodkin – Aug 6, 2024 7: 13 pm UTC

Aurich Lawson | Getty Images

Elon Musk’s X Corp. today sued the World Federation of Advertisers and several large corporations, claiming they “conspired, along with dozens of non-defendant co-conspirators, to collectively withhold billions of dollars in advertising revenue” from the social network formerly known as Twitter.

“We tried peace for 2 years, now it is war,” Musk wrote today, a little over eight months after telling boycotting advertisers to “go fuck yourself.”

X’s lawsuit in US District Court for the Northern District of Texas targets a World Federation of Advertisers initiative called the Global Alliance for Responsible Media (GARM). The other defendants are Unilever PLC; Unilever United States; Mars, Incorporated; CVS Health Corporation; and Ørsted A/S. Those companies are all members of GARM. X itself is still listed as one of the group’s members.

“This is an antitrust action relating to a group boycott by competing advertisers of one of the most popular social media platforms in the United States… Concerned that Twitter might deviate from certain brand safety standards for advertising on social media platforms set through GARM, the conspirators collectively acted to enforce Twitter’s adherence to those standards through the boycott,” the lawsuit said.

The lawsuit seeks treble damages to be calculated based on the “actual damages in an amount to be determined at trial.” X also wants “a permanent injunction under Section 16 of the Clayton Act, enjoining Defendants from continuing to conspire with respect to the purchase of advertising from Plaintiff.”

The lawsuit came several weeks after Musk wrote that X “has no choice but to file suit against the perpetrators and collaborators in the advertising boycott racket,” and called for “criminal prosecution.” Musk’s complaints were buoyed by a House Judiciary Committee report claiming that “the extent to which GARM has organized its trade association and coordinates actions that rob consumers of choices is likely illegal under the antitrust laws and threatens fundamental American freedoms.”

Yaccarino claims “illegal boycott” is stain on industry

We contacted all of the organizations named as defendants in the lawsuit and will update this article if any provide a response.

An advertising industry watchdog group called the Check My Ads Institute, which is not involved in the lawsuit, said that Musk’s claims should fail under the First Amendment. “Advertisers have a First Amendment right to choose who and what they want to be associated with… Elon Musk and X executives have the right, protected by the First Amendment, to say what they want online, even when it’s inaccurate, and advertisers have the right to keep their ads away from it,” the group said.

X CEO Linda Yaccarino posted an open letter to advertisers claiming that the alleged “illegal boycott” is “a stain on a great industry, and cannot be allowed to continue.”

“The illegal behavior of these organizations and their executives cost X billions of dollars… To those who broke the law, we say enough is enough. We are compelled to seek justice for the harm that has been done by these and potentially additional defendants, depending what the legal process reveals,” Yaccarino wrote.

Yaccarino also sought to gain support from X users in a video message. “These organizations targeted our company and you, our users,” she said.

Musk followed up with a post encouraging other companies to sue advertisers and claimed that advertisers could face “criminal liability via the RICO Act.” X previously filed lawsuits against the Center for Countering Digital Hate (CCDH) and Media Matters for America, blaming both for advertising losses.

X doesn’t provide public earnings reports because Musk took the company private after buying Twitter. A recent New York Times article said that “in the second quarter of this year, X earned $114 million in revenue in the United States, a 25 percent decline from the first quarter and a 53 percent decline from the previous year.”

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Illinois changes biometric privacy law to help corporations avoid big payouts

biometric information privacy act, biometric privacy, illinois biometric privacy law, Policy / Mike M. / August 6, 2024

Biometric Information Privacy Act —

Possible damages payments dramatically lowered by change to 2008 Illinois law.

Jon Brodkin – Aug 6, 2024 5: 15 pm UTC

Illustration of a woman's face being scanned for a facial recognition system. — Getty Images | imaginima

Illinois has changed its Biometric Information Privacy Act (BIPA) to dramatically limit the financial penalties faced by companies that illegally obtain or sell biometric identifiers such as eye scans, face scans, fingerprints, and voiceprints.

The 2008 law required companies to obtain written consent for the collection or use of biometric data and allowed victims to sue for damages of $1,000 for each negligent violation and $5,000 for each intentional or reckless violation. But an amendment enacted on Friday states that multiple violations related to a single person’s biometric data will be counted as only one violation.

The amendment, approved by the Illinois Legislature in May and signed by Gov. J.B. Pritzker on August 2, provides “that a private entity that more than once collects or discloses a person’s biometric identifier or biometric information from the same person in violation of the Act has committed a single violation for which the aggrieved person is entitled to, at most, one recovery.”

As Reuters reports, the “changes to the law effectively overturn a 2023 Illinois Supreme Court ruling that said companies could be held liable for each time they misused a person’s private information and not only the first time.” That ruling came in a proposed class action brought against the White Castle restaurant chain by an employee.

Change lowers potential for big settlements

The change to the privacy law “will significantly reduce the potential damages and lower the settlement value of BIPA claims. The amendment also provides that an e-signature satisfies the written requirements for the release,” Squire Patton Boggs lawyer Alan Friel wrote in National Law Review yesterday.

In 2020, Facebook agreed to a $650 million settlement after being sued by users who alleged violations of the Illinois law. Settlement class members received over $400 each.

The Illinois law is unique in letting individuals sue for damages, Friel wrote. “Colorado recently enacted a BIPA-like biometrics law, but like other states except only Illinois, it does not have a privacy right of action and can only be enforced by the state,” he wrote. “However, states are active in enforcing their privacy laws as illustrated by a recent Texas settlement with a social media company for biometric consent claims that included a 9-figure civil penalty payment.”

Friel was referring to Facebook-owner Meta agreeing to a $1.4 billion settlement with Texas Attorney General Ken Paxton. The Texas AG alleged that Meta “unlawfully captur[ed] the biometric data of millions of Texans without obtaining their informed consent as required by Texas law.” The claim was over Facebook using facial recognition for a feature that makes it easier to tag people in photographs.

The Information Technology and Innovation Foundation, a research group funded by various corporations, said the change to BIPA “makes a bad law slightly better.”

“BIPA is a prime example of privacy legislation gone too far,” ITIF Senior Policy Manager Ash Johnson said. “With steep fines for even minor violations and a private right of action that has gone out of control, with multiple multi-million-dollar settlements. This has led companies to limit the technology available to Illinois consumers or even pull out of the state entirely.”

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Return-to-office mandates hurt employee retention, productivity, survey says

Policy, return-to-office / Rejus Almole / August 6, 2024

RT-Oh No —

Survey of 4,400 US employees who are at least 18 years old.

Scharon Harding – Aug 6, 2024 4: 43 pm UTC

US workers who work remotely are 27 percent more likely to look forward to doing their job, according to a survey of over 4,400 employees aged 18 and older.

The survey from Great Place to Work took place in July 2023, which was “the third year of an ongoing market study of US workplaces,” according to the report entitled “Return-to-Office Mandates and the Future of Work” (PDF). Of the participants, 51 percent were female, 49 percent were male, and less than 1 percent were “non-binary or other gender,” according to Great Place to Work. In terms of roles, half were “individual contributors,” 25 percent were “frontline managers,” 20 percent were mid-level managers, and 5 percent were executives. Eighty-eight percent were full-time workers versus part-time.

The survey also found that remote workers were 23 percent more likely to say they have “a psychologically and emotionally healthy workplace,” 19 percent were more likely to cite “high levels of cooperation,” and 18 percent were more likely to say that people avoid office politics and backstabbing.

Notably, however, survey respondents were unevenly on-site (65 percent) versus people who work remote all the time (16 percent) or sometimes (20 percent). When Ars Technica asked about this, a Great Place to Work spokesperson said that the report uses a confidence interval of 95 percent. They added: “Because of the overall size of our sample with 4,400 responses, we are still able to have statistically significant findings that illustrate the different needs of these two groups.”

The report says:

One explanation for the gap between remote and on-site workers: Employees of color reported finding a reprieve from unconscious bias and code switching when working remotely.

That doesn’t mean that companies must embrace fully remote work to be inclusive. Instead, great workplaces are finding ways to meet the needs of their employees and provide support to all workers regardless of where they work.

A theme of the report is highlighting the benefits of workplaces working with employees to understand their views on remote work and whether remote work options fit specific needs within the company. It’s also important to consider why people want to work remotely; if it’s due to factors like a toxic work environment, there are other ways to address worker concerns besides remote work, the authors said.

Earlier this year, another survey pointed to return-to-office (RTO) mandates hurting company morale. The survey of some companies on the S&P 500 list by University of Pittsburgh researchers found that RTO policies hurt employee satisfaction while failing to boost company value.

RTO mandates hurt employee retention

Great Place to Work’s report encourages companies to ensure that workers without remote work options “find special meaning in their work.” Companies should talk with in-person workers “about how their efforts are delivering on your brand mission” and hold valued in-person activities, the report said. Cisco, which the report notes doesn’t have an RTO mandate, tries to lure people to the office with things like hackathons, career coaching, and team gatherings, for example.

The report also says RTO mandates can hurt employee retention:

When employees have a say in where they work, retention improves.

Employees who report being able to decide where they work are more likely to stay with their company long-term.

More specifically, the report’s authors concluded that employees who are allowed to choose between in-person, remote, or hybrid work are three times more likely to want to stay at their company. They also found that workers who aren’t facing RTO mandates are 14 times less likely to “quit and stay.”

This isn’t the first survey we’ve seen suggesting that RTO mandates have driven workers away. In May, a study published by University of Chicago and University of Michigan researchers examining a reported 260 million résumés from People Data Labs reported that mandates requiring workers to return to the office either full or part-time led to a higher rate of employees, particularly of a senior level, leaving Apple, Microsoft, and SpaceX. (In 2022, numerous prominent Apple staff publicly resigned over RTO mandates.) A March survey of 1,504 full-time employees, including 504 HR workers, found that some firms have issued RTO mandates in the hopes of making people quit.

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Parody site ClownStrike refused to bow to CrowdStrike’s bogus DMCA takedown

Crowdstrike, digital millenium copyright act, DMCA, fair use, parody, parody site, Policy, trademark infringement / Mike M. / August 6, 2024

Doesn’t CrowdStrike have more important things to do right now than try to take down a parody site?

That’s what IT consultant David Senk wondered when CrowdStrike sent a Digital Millennium Copyright Act (DMCA) takedown notice targeting his parody site ClownStrike.

Senk created ClownStrike in the aftermath of the largest IT outage the world has ever seen—which CrowdStrike blamed on a buggy security update that shut down systems and incited prolonged chaos in airports, hospitals, and businesses worldwide.

Although Senk wasn’t personally impacted by the outage, he told Ars he is “a proponent of decentralization.” He seized the opportunity to mock “CrowdStrike’s ability to cause literal billions of dollars of damage” because he viewed this as “collateral from the incredible amount of ‘centralization’ in the tech industry.”

Setting up the parody site at clownstrike.lol on July 24, Senk’s site design is simple. It shows the CrowdStrike logo fading into a cartoon clown, with circus music blasting throughout the transition. For the first 48 hours of its existence, the site used an unaltered version of CrowdStrike’s Falcon logo, which is used for its cybersecurity platform, but Senk later added a rainbow propeller hat to the falcon’s head.

“I put the site up initially just to be silly,” Senk told Ars, noting that he’s a bit “old-school” and has “always loved parody sites” (like this one).

It was all fun and games, but on July 31, Senk received a DMCA notice from Cloudflare’s trust and safety team, which was then hosting the parody site. The notice informed Senk that CSC Digital Brand Services’ global anti-fraud team, on behalf of CrowdStrike, was requesting the immediate removal of the CrowdStrike logo from the parody site, or else Senk risked Cloudflare taking down the whole site.

Senk immediately felt the takedown was bogus. His site was obviously parody, which he felt should have made his use of the CrowdStrike logos—altered or not—fair use. He immediately responded to Cloudflare to contest the notice, but Cloudflare did not respond to or even acknowledge receipt of his counter notice. Instead, Cloudflare sent a second email warning Senk of the alleged infringement, but once again, Cloudflare failed to respond to his counter notice.

This left Senk little choice but to relocate his parody site to “somewhere less-susceptible to DMCA takedown requests,” Senk told Ars, which ended up being a Hetzner server in Finland.

Currently on the ClownStrike site, when you click a CSC logo altered with a clown wig, you can find Senk venting about “corporate cyberbullies” taking down “content that they disagree with” and calling Cloudflare’s counter notice system “hilariously ineffective.”

“The DMCA requires service providers to ‘act expeditiously to remove or disable access to the infringing material,’ yet it gives those same ‘service providers’ 14 days to restore access in the event of a counternotice!” Senk complained. “The DMCA, like much American legislation, is heavily biased towards corporations instead of the actual living, breathing citizens of the country.”

Reached for comment, CrowdStrike declined to comment on ClownStrike’s takedown directly. But it seems like the takedown notice probably never should have been sent to Senk. His parody site likely got swept up in CrowdStrike’s anti-fraud efforts to stop bad actors attempting to take advantage of the global IT outage by deceptively using CrowdStrike’s logo on malicious sites.

“As part of our proactive fraud management activities, CrowdStrike’s anti-fraud partners have issued more than 500 takedown notices in the last two weeks to help prevent bad actors from exploiting current events,” CrowdStrike’s statement said. “These actions are taken to help protect customers and the industry from phishing sites and malicious activity. While parody sites are not the intended target of these efforts, it’s possible for such sites to be inadvertently impacted. We will review the process and, where appropriate, evolve ongoing anti-fraud activities.”

Parody site ClownStrike refused to bow to CrowdStrike’s bogus DMCA takedown Read More »

Google loses DOJ’s big monopoly trial over search business

Antitrust law, department of justice, Google, google monopoly trial, google search, Policy / Mike M. / August 5, 2024

Huge loss for Google —

Google’s exclusive deals maintained monopolies in two markets, judge ruled.

Ashley Belanger – Aug 5, 2024 7: 30 pm UTC

Google just lost a massive antitrust trial over its sprawling search business, as US district judge Amit Mehta released his ruling, showing that he sided with the US Department of Justice in the case that could disrupt how billions of people search the web.

“Google is a monopolist, and it has acted as one to maintain its monopoly,” Mehta wrote in his opinion. “It has violated Section 2 of the Sherman Act.”

The verdict will likely come as a shock to Google, which had long argued that punishing Google for being the best in search would be “unprecedented” and frequently pointed to the DOJ’s lack of direct evidence. However, Mehta found the limited direct evidence compelling, especially “Google’s admission that it does not ‘consider whether users will go to other specific search providers (general or otherwise) if it introduces a change to its Search product.'”

“Google’s indifference is unsurprising,” Mehta wrote. “In 2020, Google conducted a quality degradation study, which showed that it would not lose search revenue if were to significantly reduce the quality of its search product. Just as the power to raise price ‘when it is desired to do so’ is proof of monopoly power, so too is the ability to degrade product quality without concern of losing consumers.”

He also wrote that the DOJ’s indirect evidence “easily establishes Google’s monopoly power in search” and concluded that “the fact that Google makes product changes without concern that its users might go elsewhere is something only a firm with monopoly power could do.”

Google didn’t lose every battle in this big fight with the DOJ. Mehta ruled that Google did not have monopoly power in search advertising, agreed that there was no market for general search advertising, and declined to sanction Google for allegedly destroying evidence by “failing to preserve its employees’ chat messages.”

Google’s president of global affairs, Kent Walker, provided a statement to Ars, confirming that Google plans to appeal.

“This decision recognizes that Google offers the best search engine, but concludes that we shouldn’t be allowed to make it easily available,” Walker said. “We appreciate the Court’s finding that Google is ‘the industry’s highest quality search engine, which has earned Google the trust of hundreds of millions of daily users,’ that Google ‘has long been the best search engine, particularly on mobile devices,’ ‘has continued to innovate in search,’ and that ‘Apple and Mozilla occasionally assess Google’s search quality relative to its rivals and find Google’s to be superior.’ Given this, and that people are increasingly looking for information in more and more ways, we plan to appeal. As this process continues, we will remain focused on making products that people find helpful and easy to use.”

Google monopolizes two markets, judge ruled

Mehta ruled that Google spending billions on exclusive distribution agreements with companies like Apple helped the tech giant maintain monopolies in two markets, general search services and general text advertising.

The US government had argued that Google used these exclusive deals to block out competitors like Bing or DuckDuckGo, “by ensuring that all of Android and Apple and mobile users are offered Google, either as the default general search engine or the only general search engine, Google’s deals with Android and Apple clearly have a significant effect in preserving its monopoly.” The DOJ successfully argued that blocks rivals from reaching the “critical level necessary” to “pose a real threat to Google’s monopoly.”

Mehta noted that Google’s dominance had “gone unchallenged for well over a decade,” partly due to a “largely unseen advantage over its rivals: default distribution.” He found that Google’s exclusive distribution deals foreclosed a “substantial share” of the markets and allowed Google to earn more revenues. Google then shared spiking revenues with device and browser developers—spending up to $26 billion in 2021 alone for exclusive deals, the trial revealed.

Google did all this, Mehta said, to ensure that “most devices in the United States come preloaded exclusively with Google” and to force “Google’s rivals to find other ways to reach users.” The DOJ successfully argued that this posed “significant barriers that protect Google’s market dominance in general search,” with rivals having to overcome “high capital costs—”to the tune of billions of dollars,” Mehta wrote—”Google’s control of key distribution channels, brand recognition, and scale.”

Barriers to entry in general text advertising are similarly “high,” Mehta said, with new entrants facing “the same major obstacles as would the developer of a new” search engine.

One of the most scrutinized exclusive deals was between Google and Apple, which was estimated at $20 billion in 2022. “This is nearly double the payment made in 2020,” Mehta noted, suggesting that Google increasingly valued the deal locking its search engine as the default in Safari as a way to shore up its search dominance.

“Google has long recognized that, if Apple were to develop and deploy its own search engine as the default” search tool “in Safari, it would come at great cost to Google,” Mehta wrote. Without the deal, Google “would lose around 65 percent of its revenue, even assuming that it could retain some users without the Safari default” placement. But “Apple has decided not to enter general search,” Mehta said, likely because it “would forego significant revenues” and potentially face user backlash if it stopped partnering with Google. Similarly high revenue loss would occur if “Google were to lose the Android defaults,” Mehta said.

None of the pro-competitive benefits that Google claimed justified the exclusive deals persuaded Mehta, who ruled that “importantly,” Google “exercised its monopoly power by charging supracompetitive prices for general search text ads”—and thus earned “monopoly profits.”

“That Google makes changes to its text ads auctions without considering its rivals’ prices is something that only a firm with monopoly power is able to do,” Mehta wrote. And “Google in fact has profitably raised prices substantially above the competitive level. That makes ‘the existence of monopoly power” “clear.”

Ultimately, Mehta ruled that “Google has no true competitor” in general search and without any “genuine” competition, “over the last decade, Google’s grip on the market has only grown stronger.” Further, he found that “Google understands there is no genuine competition for the defaults because it knows that its partners cannot afford to go elsewhere,” disagreeing with Google’s arguments that the default deals were not exclusive.

“The key question then is this: Do Google’s exclusive distribution contracts reasonably appear capable of significantly contributing to maintaining Google’s monopoly power in the general search services market?” Mehta wrote. “The answer is ‘yes.'”

This is a developing story and is being updated.

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Court blocks net neutrality, says ISPs are likely to win case against FCC

fcc net neutrality, Policy / Rejus Almole / August 5, 2024

FCC Commissioner Jessica Rosenworcel speaks outside in front of a sign that says — Enlarge / Federal Communication Commission Chairwoman Jessica Rosenworcel, then a commissioner, rallies against repeal of net neutrality rules in December 2017.

Getty Images | Chip Somodevilla

The Federal Communications Commission’s hopes of enforcing net neutrality rules was dealt a major setback last week. A panel of appeals court judges blocked the regulations on Thursday in a ruling that said broadband providers are likely to win the case on the merits.

The US Court of Appeals for the 6th Circuit previously issued an administrative stay that delayed enforcement of the rules for a few weeks, which didn’t necessarily indicate much about the judges’ view of the lawsuit. But on Thursday, the judges issued an order that stays the net neutrality rules until the court makes a final ruling, and judges made it clear they believe the Internet service providers have a stronger case than the FCC.

“Because the broadband providers have shown that they are likely to succeed on the merits and that the equities support them, we grant the stay,” a panel of three judges wrote in the unanimous ruling.

The FCC in April voted to revive net neutrality rules that were previously discarded by the Trump-era commission. To get the rules upheld, the FCC must convince judges that it has authority to classify broadband as a telecommunications service, a necessary step for imposing Title II common-carrier regulations.

The FCC’s task got harder when the Supreme Court decision in Loper Bright Enterprises v. Raimondo overturned the 40-year-old Chevron precedent that gave agencies leeway to interpret ambiguous laws as long as the agency’s conclusion was reasonable. Even before that, ISPs were hoping that the Supreme Court’s evolving approach to what are deemed “major questions” would prevent the FCC from defining broadband as telecommunications without explicit instructions from Congress.

ISPs likely to succeed on the merits

The 6th Circuit panel found that broadband providers “are likely to succeed on the merits because the final rule implicates a major question, and the Commission has failed to satisfy the high bar for imposing such regulations.”

Net neutrality, the judges wrote, “is likely a major question requiring clear congressional authorization,” and the “Communications Act likely does not plainly authorize the Commission to resolve this signal question. Nowhere does Congress clearly grant the Commission the discretion to classify broadband providers as common carriers. To the contrary, Congress specifically empowered the Commission to define certain categories of communications services—and never did so with respect to broadband providers specifically or the Internet more generally.”

Although the ISPs now have a clear advantage in the case, net neutrality supporters say there is still hope.

“The grant of a stay definitely gives the edge to the ISPs. That said, the outcome is far from certain. The case goes to a different set of judges, which means that it may get a fresh look,” Andrew Jay Schwartzman, senior counselor for the Benton Institute for Broadband & Society, told Ars today.

The three 6th Circuit judges who ruled against the FCC last week are Chief Judge Jeffrey Sutton, Judge Eric Clay, and Judge Stephanie Dawkins Davis. Sutton was appointed by George W. Bush, while Clay is a Clinton appointee, and Davis was appointed by Biden.

New panel of judges on the way

The current case is Ohio Telecom Association v. FCC. Oral arguments may be held as early as October 28, but a different set of judges will hear the arguments and make a ruling on the merits. “The clerk is directed to schedule this case for oral argument at the court’s fall sitting, October 28-November 1, 2024, so that a randomly drawn merits panel may consider the case,” the Thursday ruling said.

Which three judges will decide the case on the merits hasn’t been announced. Even after that panel rules, the losing side could seek an en banc rehearing with all the court’s judges, and the case could eventually go to the Supreme Court.

Schwartzman, who is involved in the 6th Circuit case on the pro-net neutrality side, told Ars that there are “some factual mistakes in the stay order; once they are properly explained, the merits panel might see things differently.” The judges who granted the stay “seem to think [of] ISPs’ offering of DNS and caching as essential elements of their offerings; that was true in 2005, but not today,” Schwartzman said.

Schwartzman was referring to a passage in the ruling that said “broadband providers offer data processing and storage to users through DNS and caching services.” The judges’ panel said that because DNS and caching “provide users with a comprehensive capability for manipulating information,” broadband seems to be more accurately described as an information service than a telecommunications service.

Court blocks net neutrality, says ISPs are likely to win case against FCC Read More »

Elon Musk sues OpenAI, Sam Altman for making a “fool” out of him

agi, AI, AI safety, Artificial Intelligence, chatbot, elon musk, existential risks, generative ai, GPT-4, GPT-4o, grok, microsoft, openai, Policy / Paul Patrick / August 5, 2024

“Altman’s long con” —

Elon Musk asks court to void Microsoft’s exclusive deal with OpenAI.

Ashley Belanger – Aug 5, 2024 5: 49 pm UTC

Elon Musk and Sam Altman share the stage in 2015, the same year that Musk alleged that Altman's — Enlarge / Elon Musk and Sam Altman share the stage in 2015, the same year that Musk alleged that Altman’s “deception” began.

After withdrawing his lawsuit in June for unknown reasons, Elon Musk has revived a complaint accusing OpenAI and its CEO Sam Altman of fraudulently inducing Musk to contribute $44 million in seed funding by promising that OpenAI would always open-source its technology and prioritize serving the public good over profits as a permanent nonprofit.

Instead, Musk alleged that Altman and his co-conspirators—”preying on Musk’s humanitarian concern about the existential dangers posed by artificial intelligence”—always intended to “betray” these promises in pursuit of personal gains.

As OpenAI’s technology advanced toward artificial general intelligence (AGI) and strove to surpass human capabilities, “Altman set the bait and hooked Musk with sham altruism then flipped the script as the non-profit’s technology approached AGI and profits neared, mobilizing Defendants to turn OpenAI, Inc. into their personal piggy bank and OpenAI into a moneymaking bonanza, worth billions,” Musk’s complaint said.

Where Musk saw OpenAI as his chance to fund a meaningful rival to stop Google from controlling the most powerful AI, Altman and others “wished to launch a competitor to Google” and allegedly deceived Musk to do it. According to Musk:

The idea Altman sold Musk was that a non-profit, funded and backed by Musk, would attract world-class scientists, conduct leading AI research and development, and, as a meaningful counterweight to Google’s DeepMind in the race for Artificial General Intelligence (“AGI”), decentralize its technology by making it open source. Altman assured Musk that the non-profit structure guaranteed neutrality and a focus on safety and openness for the benefit of humanity, not shareholder value. But as it turns out, this was all hot-air philanthropy—the hook for Altman’s long con.

Without Musk’s involvement and funding during OpenAI’s “first five critical years,” Musk’s complaint said, “it is fair to say” that “there would have been no OpenAI.” And when Altman and others repeatedly approached Musk with plans to shift OpenAI to a for-profit model, Musk held strong to his morals, conditioning his ongoing contributions on OpenAI remaining a nonprofit and its tech largely remaining open source.

“Either go do something on your own or continue with OpenAI as a nonprofit,” Musk told Altman in 2018 when Altman tried to “recast the nonprofit as a moneymaking endeavor to bring in shareholders, sell equity, and raise capital.”

“I will no longer fund OpenAI until you have made a firm commitment to stay, or I’m just being a fool who is essentially providing free funding to a startup,” Musk said at the time. “Discussions are over.”

But discussions weren’t over. And now Musk seemingly does feel like a fool after OpenAI exclusively licensed GPT-4 and all “pre-AGI” technology to Microsoft in 2023, while putting up paywalls and “failing to publicly disclose the non-profit’s research and development, including details on GPT-4, GPT-4T, and GPT-4o’s architecture, hardware, training method, and training computation.” This excluded the public “from open usage of GPT-4 and related technology to advance Defendants and Microsoft’s own commercial interests,” Musk alleged.

Now Musk has revived his suit against OpenAI, asking the court to award maximum damages for OpenAI’s alleged fraud, contract breaches, false advertising, acts viewed as unfair to competition, and other violations.

He has also asked the court to determine a very technical question: whether OpenAI’s most recent models should be considered AGI and therefore Microsoft’s license voided. That’s the only way to ensure that a private corporation isn’t controlling OpenAI’s AGI models, which Musk repeatedly conditioned his financial contributions upon preventing.

“Musk contributed considerable money and resources to launch and sustain OpenAI, Inc., which was done on the condition that the endeavor would be and remain a non-profit devoted to openly sharing its technology with the public and avoid concentrating its power in the hands of the few,” Musk’s complaint said. “Defendants knowingly and repeatedly accepted Musk’s contributions in order to develop AGI, with no intention of honoring those conditions once AGI was in reach. Case in point: GPT-4, GPT-4T, and GPT-4o are all closed source and shrouded in secrecy, while Defendants actively work to transform the non-profit into a thoroughly commercial business.”

Musk wants Microsoft’s GPT-4 license voided

Musk also asked the court to null and void OpenAI’s exclusive license to Microsoft, or else determine “whether GPT-4, GPT-4T, GPT-4o, and other OpenAI next generation large language models constitute AGI and are thus excluded from Microsoft’s license.”

It’s clear that Musk considers these models to be AGI, and he’s alleged that Altman’s current control of OpenAI’s Board—after firing dissidents in 2023 whom Musk claimed tried to get Altman ousted for prioritizing profits over AI safety—gives Altman the power to obscure when OpenAI’s models constitute AGI.

Elon Musk sues OpenAI, Sam Altman for making a “fool” out of him Read More »

Data centers demand a massive amount of energy. Here’s how some states are tackling the industry’s impact.

data centers, Policy, Science, syndication / Rejus Almole / August 4, 2024

rethinking incentives —

States that offer tax exemptions to support the industry are reconsidering their approach.

Lulu Ramadan and Sydney Brownstone, The Seattle Times – Aug 4, 2024 11: 01 am UTC

A Google data center in Douglas County, Georgia.

This article was produced for ProPublica’s Local Reporting Network in partnership with The Seattle Times. Sign up for Dispatches to get stories like this one as soon as they are published.

When lawmakers in Washington set out to expand a lucrative tax break for the state’s data center industry in 2022, they included what some considered an essential provision: a study of the energy-hungry industry’s impact on the state’s electrical grid.

Gov. Jay Inslee vetoed that provision but let the tax break expansion go forward. As The Seattle Times and ProPublica recently reported, the industry has continued to grow and now threatens Washington’s effort to eliminate carbon emissions from electricity generation.

Washington’s experience with addressing the power demand of data centers parallels the struggles playing out in other states around the country where the industry has rapidly grown and tax breaks are a factor.

Virginia, home to the nation’s largest data center market, once debated running data centers on carbon-emitting diesel generators during power shortages to keep the lights on in the area. (That plan faced significant public pushback from environmental groups, and an area utility is exploring other options.)

Dominion Energy, the utility that serves most of Virginia’s data centers, has said that it intends to meet state requirements to decarbonize the grid by 2045, but that the task would be more challenging with rising demands driven largely by data centers, Inside Climate News reported. The utility also has indicated that new natural gas plants will be needed.

Some Virginia lawmakers and the state’s Republican governor have proposed reversing or dramatically altering the clean energy goals.

A northern Virginia lawmaker instead proposed attaching strings to the state’s data center tax break. This year, he introduced legislation saying data centers would only qualify if they maximized energy efficiency and found renewable resources. The bill died in Virginia’s General Assembly. But the state authorized a study of the industry and how tax breaks impact the grid.

“If we’re going to have data centers, which we all know to be huge consumers of electricity, let’s require them to be as efficient as possible,” said state Delegate Richard “Rip” Sullivan Jr., the Democrat who sponsored the original bill. “Let’s require them to use as little energy as possible to do their job.”

Inslee’s 2022 veto of a study similar to Virginia’s cited the fact that Northwest power planners already include data centers in their estimates of regional demand. But supporters of the legislation said their goal was to obtain more precise answers about Washington-specific electricity needs.

Georgia lawmakers this year passed a bill to halt the state’s data center tax break until data center power use could be analyzed. In the meantime, according to media reports, the state’s largest utility said it would use fossil fuels to make up an energy shortfall caused in part by data centers. Georgia Gov. Brian Kemp then vetoed the tax break pause in May.

Lawmakers in Connecticut and South Carolina have also debated policies to tackle data center power usage in the past year.

“Maybe we want to entice more of them to come. I just want to make sure that we understand the pros and the cons of that before we do it,” South Carolina’s Senate Majority Leader Shane Massey said in May, according to the South Carolina Daily Gazette.

Countries such as Ireland, Singapore, and the Netherlands have at times forced data centers to halt construction to limit strains on the power grid, according to a report by the nonprofit Tony Blair Institute for Global Change. The report’s recommendations for addressing data center power usage include encouraging the private sector to invest directly in renewables.

Sajjad Moazeni, a University of Washington professor who studies artificial intelligence and data center power consumption, said states should consider electricity impacts when formulating data center legislation. Moazeni’s recent research found that in just one day, ChatGPT, a popular artificial intelligence tool, used roughly as much power as 33,000 U.S. households use in a year.

“A policy can help both push companies to make these data centers more efficient and preserve a cleaner, better environment for us,” Moazeni said. “Policymakers need to consider a larger set of metrics on power usage and efficiency.”

Eli Sanders contributed research while a student with the Technology, Law and Public Policy Clinic at the University of Washington School of Law.

Data centers demand a massive amount of energy. Here’s how some states are tackling the industry’s impact. Read More »

Memo to the Supreme Court: Clean Air Act targeted CO2 as climate pollutant, study says

air pollution, climate change, Massachusetts v. EPA, Policy, Science, syndication / Rejus Almole / August 3, 2024

The exterior of the US Supreme Court building during daytime. — Getty Images | Rudy Sulgan

This article originally appeared on Inside Climate News, a nonprofit, independent news organization that covers climate, energy, and the environment. It is republished with permission. Sign up for its newsletter here.

Among the many obstacles to enacting federal limits on climate pollution, none has been more daunting than the Supreme Court. That is where the Obama administration’s efforts to regulate power plant emissions met their demise and where the Biden administration’s attempts will no doubt land.

A forthcoming study seeks to inform how courts consider challenges to these regulations by establishing once and for all that the lawmakers who shaped the Clean Air Act in 1970 knew scientists considered carbon dioxide an air pollutant, and that these elected officials were intent on limiting its emissions.

The research, expected to be published next week in the journal Ecology Law Quarterly, delves deep into congressional archives to uncover what it calls a “wide-ranging and largely forgotten conversation between leading scientists, high-level administrators at federal agencies, members of Congress” and senior staff under Presidents Lyndon Johnson and Richard Nixon. That conversation detailed what had become the widely accepted science showing that carbon dioxide pollution from fossil fuels was accumulating in the atmosphere and would eventually warm the global climate.

The findings could have important implications in light of a legal doctrine the Supreme Court established when it struck down the Obama administration’s power plant rules, said Naomi Oreskes, a history of science professor at Harvard University and the study’s lead author. That so-called “major questions” doctrine asserted that when courts hear challenges to regulations with broad economic and political implications, they ought to consider lawmakers’ original intent and the broader context in which legislation was passed.

“The Supreme Court has implied that there’s no way that the Clean Air Act could really have been intended to apply to carbon dioxide because Congress just didn’t really know about this issue at that time,” Oreskes said. “We think that our evidence shows that that is false.”

The work began in 2013 after Oreskes arrived at Harvard, she said, when a call from a colleague prompted the question of what Congress knew about climate science in the 1960s as it was developing Clean Air Act legislation. She had already co-authored the book Merchants of Doubt, about the efforts of industry-funded scientists to cast doubt about the risks of tobacco and global warming, and was familiar with the work of scientists studying climate change in the 1950s. “What I didn’t know,” she said, “was how much they had communicated that, particularly to Congress.”

Oreskes hired a researcher to start looking, and what they both found surprised her. The evidence they uncovered includes articles cataloged by the staff of the act’s chief architect, proceedings of scientific conferences attended by members of Congress, and correspondence with constituents and scientific advisers to Johnson and Nixon. The material included documents pertaining not only to environmental champions but also to other prominent members of Congress.

“These were people really at the center of power,” Oreskes said.

When Sen. Edmund Muskie, a Maine Democrat, introduced the Clean Air Act of 1970, he warned his colleagues that unchecked air pollution would continue to “threaten irreversible atmospheric and climatic changes.” The new research shows that his staff had collected reports establishing the science behind his statement. He and other senators had attended a 1966 conference featuring discussion of carbon dioxide as a pollutant. At that conference, Wisconsin Sen. Gaylord Nelson warned about carbon dioxide pollution from fossil fuel combustion, which he said “is believed to have drastic effects on climate.”

The paper also cites a 1969 letter to Sen. Henry “Scoop” Jackson of Washington from a constituent who had watched the poet Allen Ginsberg warning of melting polar ice caps and widespread global flooding on the Merv Griffin Show. The constituent was skeptical of the message, called Ginsberg “one of America’s premier kooks” and sought a correction of the record from the senator: “After all, quite a few million people watch this show, people of widely varying degrees of intelligence, and the possibility of this sort of charge—even from an Allen Ginsberg—being accepted even in part, is dangerous.”

Memo to the Supreme Court: Clean Air Act targeted CO2 as climate pollutant, study says Read More »

DOJ sues TikTok, alleging “massive-scale invasions of children’s privacy”

children's privacy, COPPA, coppa rule, data privacy, department of justice, online child safety, Online Privacy, Policy, tiktok / Rejus Almole / August 3, 2024

The US Department of Justice sued TikTok today, accusing the short-video platform of illegally collecting data on millions of kids and demanding a permanent injunction “to put an end to TikTok’s unlawful massive-scale invasions of children’s privacy.”

The DOJ said that TikTok had violated the Children’s Online Privacy Protection Act of 1998 (COPPA) and the Children’s Online Privacy Protection Rule (COPPA Rule), claiming that TikTok allowed kids “to create and access accounts without their parents’ knowledge or consent,” collected “data from those children,” and failed to “comply with parents’ requests to delete their children’s accounts and information.”

The COPPA Rule requires TikTok to prove that it does not target kids as its primary audience, the DOJ said, and TikTok claims to satisfy that “by requiring users creating accounts to report their birthdates.”

However, even if a child inputs their real birthdate, the DOJ said, TikTok does nothing to stop them from restarting the process and using a fake birthdate. Dodging TikTok’s age gate has been easy for millions of kids, the DOJ alleged, and TikTok knows that, collecting their information anyway and neglecting to delete information even when child users “identify themselves as children.”

“The precise magnitude” of TikTok’s violations “is difficult to determine,” the DOJ’s complaint said. But TikTok’s “internal analyses show that millions of TikTok’s US users are children under the age of 13.”

“For example, the number of US TikTok users that Defendants classified as age 14 or younger in 2020 was millions higher than the US Census Bureau’s estimate of the total number of 13- and 14-year-olds in the United States, suggesting that many of those users were children younger than 13,” the DOJ said.

TikTok seemingly risks huge fines if the DOJ proves its case. The DOJ has asked a jury to agree that damages are owed for each “collection, use, or disclosure of a child’s personal information” that violates the COPPA Rule, with likely multiple violations spanning millions of children’s accounts. And any recent violations could cost more, as the DOJ noted that the FTC Act authorizes civil penalties up to $51,744 “for each violation of the Rule assessed after January 10, 2024.”

A TikTok spokesperson told Ars that TikTok plans to fight the lawsuit, which is part of the US’s ongoing battle with the app. Currently, TikTok is fighting a nationwide ban that was passed this year, due to growing political tensions with its China-based owner and lawmakers’ concerns over TikTok’s data collection and alleged repeated spying on Americans.

“We disagree with these allegations, many of which relate to past events and practices that are factually inaccurate or have been addressed,” TikTok’s spokesperson told Ars. “We are proud of our efforts to protect children, and we will continue to update and improve the platform. To that end, we offer age-appropriate experiences with stringent safeguards, proactively remove suspected underage users, and have voluntarily launched features such as default screentime limits, Family Pairing, and additional privacy protections for minors.”

The DOJ seems to think damages are owed for past as well as possibly current violations. It claimed that TikTok already has more sophisticated ways to identify the ages of child users for ad-targeting but doesn’t use the same technology to block underage sign-ups because TikTok is allegedly unwilling to dedicate resources to widely police kids on its platform.

“By adhering to these deficient policies, Defendants actively avoid deleting the accounts of users they know to be children,” the DOJ alleged, claiming that “internal communications reveal that Defendants’ employees were aware of this issue.”

DOJ sues TikTok, alleging “massive-scale invasions of children’s privacy” Read More »

Sam Altman accused of being shady about OpenAI’s safety efforts

AI risks, AI safety, chuck grassley, existential risks, openai, Policy, sam altman, Securities and Exchange Commission, whistleblowers / Paul Patrick / August 2, 2024

Enlarge / Sam Altman, chief executive officer of OpenAI, during an interview at Bloomberg House on the opening day of the World Economic Forum (WEF) in Davos, Switzerland, on Tuesday, Jan. 16, 2024.

OpenAI is facing increasing pressure to prove it’s not hiding AI risks after whistleblowers alleged to the US Securities and Exchange Commission (SEC) that the AI company’s non-disclosure agreements had illegally silenced employees from disclosing major safety concerns to lawmakers.

In a letter to OpenAI yesterday, Senator Chuck Grassley (R-Iowa) demanded evidence that OpenAI is no longer requiring agreements that could be “stifling” its “employees from making protected disclosures to government regulators.”

Specifically, Grassley asked OpenAI to produce current employment, severance, non-disparagement, and non-disclosure agreements to reassure Congress that contracts don’t discourage disclosures. That’s critical, Grassley said, so that it will be possible to rely on whistleblowers exposing emerging threats to help shape effective AI policies safeguarding against existential AI risks as technologies advance.

Grassley has apparently twice requested these records without a response from OpenAI, his letter said. And so far, OpenAI has not responded to the most recent request to send documents, Grassley’s spokesperson, Clare Slattery, told The Washington Post.

“It’s not enough to simply claim you’ve made ‘updates,’” Grassley said in a statement provided to Ars. “The proof is in the pudding. Altman needs to provide records and responses to my oversight requests so Congress can accurately assess whether OpenAI is adequately protecting its employees and users.”

In addition to requesting OpenAI’s recently updated employee agreements, Grassley pushed OpenAI to be more transparent about the total number of requests it has received from employees seeking to make federal disclosures since 2023. The senator wants to know what information employees wanted to disclose to officials and whether OpenAI actually approved their requests.

Along the same lines, Grassley asked OpenAI to confirm how many investigations the SEC has opened into OpenAI since 2023.

Together, these documents would shed light on whether OpenAI employees are potentially still being silenced from making federal disclosures, what kinds of disclosures OpenAI denies, and how closely the SEC is monitoring OpenAI’s seeming efforts to hide safety risks.

“It is crucial OpenAI ensure its employees can provide protected disclosures without illegal restrictions,” Grassley wrote in his letter.

He has requested a response from OpenAI by August 15 so that “Congress may conduct objective and independent oversight on OpenAI’s safety protocols and NDAs.”

OpenAI did not immediately respond to Ars’ request for comment.

On X, Altman wrote that OpenAI has taken steps to increase transparency, including “working with the US AI Safety Institute on an agreement where we would provide early access to our next foundation model so that we can work together to push forward the science of AI evaluations.” He also confirmed that OpenAI wants “current and former employees to be able to raise concerns and feel comfortable doing so.”

“This is crucial for any company, but for us especially and an important part of our safety plan,” Altman wrote. “In May, we voided non-disparagement terms for current and former employees and provisions that gave OpenAI the right (although it was never used) to cancel vested equity. We’ve worked hard to make it right.”

In July, whistleblowers told the SEC that OpenAI should be required to produce not just current employee contracts, but all contracts that contained a non-disclosure agreement to ensure that OpenAI hasn’t been obscuring a history or current practice of obscuring AI safety risks. They want all current and former employees to be notified of any contract that included an illegal NDA and for OpenAI to be fined for every illegal contract.

Sam Altman accused of being shady about OpenAI’s safety efforts Read More »

US probes Nvidia’s acquisition of Israeli AI startup

AI, Justice Department, NVIDIA, Policy, run:ai, syndication / Rejus Almole / August 2, 2024

“monopoly choke points” —

Justice Department has increased scrutiny of the chipmaker’s power in the emerging sector.

Stefania Palma, Financial Times – Aug 2, 2024 5: 03 pm UTC

The US Department of Justice is investigating Nvidia’s acquisition of Run:ai, an Israeli artificial intelligence startup, for potential antitrust violations, said a person familiar with discussions the government agency has had with third parties.

The DoJ has asked market participants about the competitive impact of the transaction, which Nvidia announced in April. The price was not disclosed but a report from TechCrunch estimated it at $700 million.

The scope of the probe remains unclear, the person said. But the DoJ has inquired about matters including whether the deal could quash emerging competition in the up-and-coming sector and entrench Nvidia’s dominant market position.

Nvidia on Thursday said the company “wins on merit” and “scrupulously adher[es] to all laws.”

“We’ll continue to support aspiring innovators in every industry and market and are happy to provide any information regulators need,” it added.

Run:ai did not immediately respond to a request for comment. The DoJ declined to comment.

The investigation comes as US regulators and enforcers have heightened scrutiny of anti-competitive behavior in AI, particularly where it dovetails with big tech groups such as Nvidia.

Jonathan Kanter, head of the DoJ’s antitrust division, told the Financial Times in June that he was examining “monopoly choke points” in areas including the data used to train large language models as well as access to essential hardware such as graphics processing unit chips. He added that the GPUs needed to train LLMs had become a “scarce resource.”

Nvidia dominates sales of the most advanced GPUs. Run:ai, which had an existing collaboration with the tech giant, has developed a platform that optimizes the use of GPUs.

As part of the probe, which was first reported by Politico, the DoJ is seeking information on how Nvidia decides the allocation of its chips, the person said.

Government lawyers are also inquiring about Nvidia’s software platform, Cuda, which enables chips originally designed for graphics to speed up AI applications and is seen by industry figures as one of Nvidia’s most critical tools.

The DoJ and the US Federal Trade Commission, a competition regulator, in June reached an agreement that divided antitrust oversight of critical AI players. The DoJ will spearhead probes into Nvidia, while the FTC will oversee the assessment of Microsoft and OpenAI, the startup behind ChatGPT.

US probes Nvidia’s acquisition of Israeli AI startup Read More »