Category Archives: Law

Meta Will Face Antitrust Trial Over Instagram, WhatsApp Acquisitions

Law, Meta

Facebook owner Meta Platforms must face trial in a U.S. Federal Trade Commission lawsuit seeking its break-up over claims that it bought Instagram and WhatsApp to crush emerging competition in social media, a judge in Washington ruled on Wednesday, Reuters reported.

Judge James Boasberg largely defined Meta’s motion to end the case filed against Facebook in 2020, during the Trump administration, alleging that the company acted illegally to maintain its social network monopoly.

Meta, then known as Facebook, overpaid for Instagram in 2012 and WhatsApp in 2024 to eliminate nascent threats instead of competing on its own mobile ecosystem, the FTC claims.

Boasberg let that claim stand, but dismissed the FTC’s allegation that Facebook bolstered its dominance by restricting third-party app developers’ access to the platform unless they agreed not to compete with its core services.

“We are convinced that the evidence at trial will show that the acquisitions of Instagram and WhatsApp have been good for competition and consumers,” a Meta spokesperson said on Wednesday.

FTC spokesperson Douglas Farrar said that the case filed during the Trump administration and refined under Biden “represents a bipartisan effort to curtail Meta’s monopoly power and restore competition to ensure freedom and innovation in the social media ecosystem.”

The Verge reported Meta must face the Federal Trade Commission’s antitrust lawsuit that accuses the company from dominating the social media industry through its acquisitions of Instagram and WhatsApp, a DC District Court Judge ruled on Wednesday.

The FTC filed a lawsuit against Meta in 2020, alleging the company bought up rivals — Instagram and WhatsApp — in an attempt to stifle competition. Judge James Boasberg initially dismissed the FTC’s lawsuit in 2021, but the agency filed an amended complaint, which he ultimately let proceed.

Meta once again asked the court to dismiss the FTC’s case in April. Boasberg has now ruled largely in favor of the FTC, though he dismissed a claim that Meta acted anticompetitively by preventing developers from accessing its API unless they agree not to compete with its apps.

The Hill reported a federal district judge ruled on Wednesday that Meta must face trial in an antitrust case brought by the Federal Trade Commission (FTC) over the social media giant’s acquisitions of Instagram and WhatsApp.

U.S. District Judge James Boasberg in a one-page order denied Meta’s request to drop the FTC case, though the judge did dismiss one portion of the lawsuit, and said he would hold a hearing later this month to discuss a trial date.

A full opinion explaining the judge’s reasoning was not publicly available at of Wednesday morning. Boasberg said it would be made public later in the day after the parties redact confidential business information.

In my opinion, it seems strange that this lawsuit took so long to end up in court. It feels as though the judge is going to hold Meta accountable for their acquisitions of Instagram and WhatsApp.

FTX Is Suing Binance To Recover Nearly $1.8 Billion

Law

The estate of now-defunct crypto exchange FTX has filed a lawsuit against Binance and its former CEO Changpeng Zhao in a bid to recover $1.76 billion, The Verge reported. 

FTX alleges these funds were fraudulently transferred to Binance, Zhao, and other Binance executives in July 2021 as part of a shares repurchase with FTX co-founder Sam Bankman-Fried.

According to the filing, the transaction saw Binance sell back the 20 percent stake it held in FTX’s international unit and 18.4 percent in its US-based entity, which Bankman-Fried paid for using a mix of FTX and Binance-branded cryptocurrencies. The FTX estate alleges the share repurchase deal was conducted unlawfully because — following massive fraud by Bankman-Fried and other executives — FTX and its sister company Alameda were already insolvent at the time, and unable to fund the transaction.

Bankman-Fried, who is serving a 25-year prison sentence, was convicted of fraud last year after using consumer funds to make investments, political donations, and purchase property.

CNBC reported the estate of collapsed crypto exchange FTX has filed a suit against Binance and its former CEO Changpeng Zhao in an effort to wrest back at least $1.76 billion, citing a “fraudulent” share deal.

In a Sunday filing with a Delaware court, FTX cites a 2021 transaction in which Binance, Zhao, and others exited their investment in FTX, selling a 20% stake in the platform and a 18.4% stake in its U.S.-based entity West Realm Shires back to the company.

The FTX estate alleges that the share repurchase was funded by FTX’s Alameda Research division through a combination of the company’s and Binance’s exchange tokens, as well as Binance’s dollar-pegged stablecoin.

“Alameda was insolvent at the time of the share repurchase and could not afford the transaction,” the suit claims, labeling the deal agreed with FTX co-founder Sam Bankman Fried — who’s now serving a 25-year sentence over fraud linked to the downfall of his exchange — a “constructive fraudulent transfer.”

ArsTechnica reported the bankruptcy estate of collapsed cryptocurrency exchange FTX has sued the company’s forerunner rival Binance in an attempt to recover $1.76 billion or more. The lawsuit seeks “at least $1.76 billion that was fraudulently transferred to Binance and its executives at the FTX creditors’ expense, as well as compensatory and punitive damaged to be determined at trial.

The complaint filed yesterday in US Bankruptcy Court in Delaware names Binance and co-founder and former CEO Changpeng Zhao among the defendants. FTX founder Sam Bankman-Fried sold 20 percent of his crypto exchange to Binance in November 2019, but Binance exited that investment in 2021, the lawsuit said.

In my opinion, it sounds like some shenanigans have been going on between FTX and Binance. It is unclear to me how this situation can be resolved.

Internet Archive Forced To Remove 500,000 Books

Law

As a result of book publishers successfully suing the Internet Archive (IA) last year, the free online library that strives to keep growing online access to books recently shrank by about 500,000 titles, ArsTechnica reported.

IA reported in a blog post this month that publishers abruptly forcing these takedowns triggered a “devastating loss” for readers who depend on IA to access books that are otherwise impossible or difficult to access.

After publishers won an injunction stopping IA’s digital lending, which “limits what we can do with our digitized books,” IA’s help page said, the open library started shrinking. While “removed books are still available to patrons with print disabilities,” everyone else has been cut off, causing many books in IA’s collection to show up as “Borrow Unavailable.”

Internet Archive posted on their website “Let Readers Read”. It was written by Chris Freeland, a librarian at the Internet Archive.

“… The lawsuit against our library — Hachette v. Internet Archive – is fast approaching the oral argument stage of its appeal in on June 28. I’ve been reflecting on our ongoing, four-year experience with this litigation and on the outcome we’re hoping for. Our position is straightforward; we just want to let our library patrons borrow and read the books we own, like any other library.

We purchase and acquire books — yes, physical, paper books – and make them available for one person at a time to check out and read online. This work is important for readers and authors alike, as many younger and low-income readers can only read if books are free to borrow, and many authors’ books will only be discovered or preserved through the work of librarians. We use industry-standard technology to prevent our books from being downloaded and redistributed — the same technology used by corporate publishers.

But the publishers suing our library say we shouldn’t be allowed to lend the books we own. They have forced us to remove more than half a million books from our library, and that’s why we are appealing.

…In appealing the district court’s decision, our goal is simply to let these readers continue on their journey. We envision a world in which Wikipedia’s can verify facts by following citations to information contained only in our printed history; where libraries can serve their communities with collections financed through public investment; and above all, where library patrons are free to read without fear of corporate or government surveillance…

TechDirt reported: If you found out that 500,000 books had been removed from your local public library, at the demands of big publishers who refused to let them buy and lend new copies, and were further suing the library for damages, wouldn’t you think that would be a major news story? Wouldn’t you think many people would be up in arms about it?

…And yet, for all the benefits of such a system in enabling more people to be able to access information, without changing the basic economies of how libraries have always worked, the big publishers all sued the Internet Archive. The publishers won the first round of that lawsuit. And while the court (somewhat surprisingly) did not order the immediate closure of the Open Library, it did require the Internet Archive to remove any books upon request from publishers (though only if the publishers made those books available as eBooks elsewhere.)

In my opinion, making the Internet Archive remove 500,000 books will cause a lot of harm to the Internet Archive itself, and also the readers who have been relying upon it, due to lack of a nearby library. It certainly feels like the publishers are getting greedy.

California Right To Repair Signed Into Law

Law, ,

IFixit wrote: Today (October 10) marks a monumental step forward in the Right to Repair movement. We’re elated to announce that Governor Gavin Newsom has officially signed the California Right to Repair Act, SB 244, into law. This groundbreaking legislation passed the legislature almost unanimously last month.

It has been championed by state Senator Susan Talamantes Eggman and is cosponsored by iFixit, along with our colleagues in the more-fixable-stuff fight. CALPRIG (the California Public Interest Research Group), and Californians Against Waste.

“This is a victory for consumers and the planet, and it just makes sense,” said Jenn Engstron, state director of CALPRIG. “Right now, we mine the planet’s precious minerals, use them to make amazing phones and other electronics, ship these products across the world, and then toss them away after just a few years’ use. What a waste. We should make stuff that lasts and be able to fix our stuff when it breaks, and now thanks to years of advocacy, Californian’s will finally be able to, with the Right to Repair.”

The tech revolution started here in California, IFixit wrote, so it’s appropriate that we’re working to fix the problems of Big Tech here, too. With access to original parts, tools, and documentation, independent repair shops will be able to compete again. And Californians across the state – accounting for 1 out of every 8 Americans – will be able to fix things however they see fit.

With California’s new law, the Golden State joins Minnesota and New York, representing nearly 20% of the US population, in guaranteeing people more control over their electronic devices. The bill goes above and beyond those laws, mandating manufacturers to keep repair materials available for up to seven years, ensuring the longevity of products and reducing electronic waste.

Covered products: all electronic and appliance products that cost $50 or more sold in California after July 1, 2021 (everything in Section 9801 of the Business and Professions code, which was just updated this session in another bill, SB 814)

Effective date: July 1, 2024

Difference from other states: includes 3 years of parts, tools, and documentation support for products that cost $50-$99.99; 7 years for products $100+

Exemptions: game consoles, alarm systems, agricultural and forestry equipment

The Verge reported California Governor Gavin Newsom has signed SB 244, or the Right to Repair Act, into law, making it easier for owners to repair devices themselves or to take them to independent repair shops. Because California is one of the world’s largest economies, this iFixit-cosponsored bill may make it easier for people all over the US to repair their devices.

According to The Verge, California is home to a number of device makers, most notably Apple, which came out in support of the bill after initially trying to stall it. As a practical matter, the California law may benefit consumers in places without such laws. For instance, Google, also headquartered in California, recently confirmed that the Pixel 8 series will get seven years of spare parts – the same number the California bill mandates.

As a Californian, I think the Right to Repair law is going to significantly help people who need to fix, swap out parts, or otherwise tinker with their devices. My hope is that this will cause the repair shops (some of which have closed) to start back up again.

Senators Introduced a Bill to Limit Section 230 Protections

Law

Senators Mark Warner, Mazie Hirono, and Amy Klobuchar introduced a bill called the SAFE TECH Act. The full name of the Act is “Safeguarding Against Fraud, Exploitation, Threats, Extremism, and Consumer Harms Act”. All three of the Senators who introduced the bill are from the Democratic Party. It appears that no Republican Senators took part in this bill.

The purpose of the SAFE TECH ACT is “to amend section 230 of the Communications Act of 1934 to reaffirm civil rights, victims’ rights, and consumer protections.” The bill has not yet been voted on by the full Senate.

Senator Mark Warner said, in a statement: “When Section 230 was enacted in 1996, the internet looked very different than it does today. A law meant to encourage service providers to develop tools and policies to support effective moderation has instead conferred sweeping immunity on online service providers even when they do nothing to address foreseeable, obvious, and repeated misuse of their products and services to cause harm.”

The SAFE TECH Act would make clear that Section 230:

Doesn’t apply to ads or other paid content – ensuring that platforms cannot continue to profit as their services are used to target vulnerable consumers with ads enabling frauds and scams;

Doesn’t bar injunctive relief – allowing victims to seek court orders where misuse of a provider’s services is likely to cause irreparable harm;

Doesn’t impair enforcement of civil rights laws – maintaining the vital and hard-fought protections from discrimination even when activities or services are mediated by internet platforms.

Doesn’t interfere with laws that address stalking/cyber-stalking or harassment and intimidation on the basis of protected classes – ensuring that victims of abuse and targeted harassment can hold platforms accountable when they directly enable harmful activity;

Doesn’t bar wrongful death actions – allowing family of a decedent to bring suit against platforms where they may have directly contributed to a loss of life;

Doesn’t bar suits under the Allen Tort Claims Act – potentially allowing victims of platform-enabled human rights violations abroad (like the survivors of the Rohingya genocide) to seek redress in U.S. courts against U.S. – based platforms.

Gizmodo reported that the SAFE TECH Act was widely endorsed upon announcement by several groups working to curb hate and extremism online, including the Anti-Defamation League and the Center for Countering Digital Hate. The Hill reported that that the NAACP Legal Defense also supported the bill.

Fight for the Future posted a link to a Google Doc that shows a letter which includes a long list of groups that are against the SAFE TECH Act. In a tweet Fight For the Future stated that 70+ human rights groups have sent the letter to Congress and the Biden-Harris Administration warning lawmakers against gutting Section 230.

Techdirt has a long and very detailed post about the SAFE TECH Act. They are very clearly against it.

One paragraph says: “A key thing to recognize is that it’s obvious that the drafters of this bill believe the myth that 230 protects “big” tech companies. The bill is written as if its only talking about Facebook, YouTube, and Twitter. Warner handwaves away the idea that the bill would destroy smaller companies in his announcement by ridiculously (and against all evidence to the contrary) saying that all startups are too small to sue, so it would only be used against larger companies.”

Personally, I believe that more should be done to prevent people from being harassed or cyber-stalked online. Social media platforms should be required to do more to uphold civil rights laws. Based on everything I’ve read, it does not appear that the SAFE TECH Act is the solution to these problems.

CDT Filed Lawsuit Against Trump’s Executive Order

Law

The Center for Democracy & Technology (CDT) has filed a lawsuit against President Trump’s “Executive Order on Preventing Online Censorship”. The suit argues that the executive order violates the First Amendment by curtailing and chilling the constitutionally protected speech of online platforms and individuals. CDT is represented by the law firm of Mayer Brown.

Electronic Frontier Foundation (EFF) has a good explanation of Section 230 of the Communications Decency Act, (which President Trump’s executive order targets). In short, Section 230 says: “No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another information content provider.” It protects social media companies (such as Twitter and Facebook) from being held legally responsible for what users post on their platforms.

The lawsuit was filed in the U.S. District Court for the District of Columbia. The plaintiff is Center for Democracy & Technology and the defendant is President Donald Trump. In the 28-page lawsuit, CDT details the ways in which President Trump’s executive order is “retaliatory motivation and his goal of chilling future protected speech that is inconsistent with his views render the Executive Order violative of the First Amendment”.

CDT President & CEO Alexandra Givens has some quotes on their website, including this one:

“The Executive Order is designed to deter social media services from fighting misinformation, voter suppression, and the stoking of violence on their platforms. Access to accurate information about the voting process and the security of our elections infrastructure is the lifeblood of democracy. The President has made clear that his goal is to use threats of retaliation and future regulation to intimidate intermediaries into changing how they moderate content, essentially ensuring that the dangers of voter suppression and disinformation will grow unchecked in an election year.”

The New York Times reported that CDT’s lawsuit asks the court to invalidate the executive order. The New York Times states that this lawsuit, “…is indicative of the pushback that the president is likely to face as he escalates his fight with social media companies, which he has accused of bias against conservative voices.”

Court Rules Turning on Phone Qualifies as Search

Law,

A judge has ruled that the act of looking at a phone’s lock screen requires a warrant – in some circumstances. This ruling was made by the Honorable John C. Coughenour in the United States District Court Western District of Washington at Seattle. It seems to me that this ruling requires the FBI to have a warrant before they can look at the lock screen on someone’s phone.

The case is United States of America v. Joseph Sam. It is regarding a motion filed by Mr. Sam’s lawyer arguing that the evidence obtained from looking at the lock screen should not have been sought without a warrant and should be suppressed.

There were two things to consider in this case: the actions taken by the police when they arrested Mr. Sam, and the actions of the FBI taken later. The Court saw these actions as two separate things.

In regards to the actions of the FBI, Judge John C. Coughenour pointed out that the Fourth Amendment protects people from “unreasonable searches and seizures” of “their persons, houses, papers, and effects.” The FBI powered on Mr. Sam’s phone in order to take a picture of the lock screen. In short, the FBI needed a warrant in order to do that, and did not have a warrant. Based on this, the Judge determined that this search was unconstitutional. Mr. Sam’s motion to suppress the evidence the FBI gathered during this search was granted.

Things get a little cloudy in regards to the actions of the police at the time of Mr. Sam’s arrest. It was unclear to the Court why the police “felt it was necessary to power on or manipulate Mr. Sam’s cell phone to properly inventory the phone”.

It was also unclear if that police department procedures require officers to power on every cell phone that they inventory, or whether the police searched the phone. As such, the Judge could not resolve Mr. Sam’s motion to suppress the evidence found during the police’s examination of his phone.

To me, it sounds like the FBI needs to obtain a warrant to power on someone’s phone, and to take a photo of the lock screen, beforehand. Pushing the buttons on a phone in order to activate it counts as a search.