Category Archives: Law

Germany Shuts Down Illegal Data Center in Former NATO Bunker



The Associated Press reported that German investigators arrested seven people in connection with an illegal data processing center that was installed in a former NATO bunker. It was located in Traben-Trarbach, a town that is located near the Mosel River in western Germany.

According to the Associated Press, the German investigators believe the facility served a number of dark web sites. Among them were “Wall Street Market” (drugs, hacking tools, financial-theft wares), “Cannabis Road” (drugs), and “Orange Chemicals” (synthetic drugs). The authorities believe that a botnet attack on German telecommunications company Deutsche Telekom, that happened in 2016, came from this data center.

Krebs on Security posted a drawing of the bunker. According to Krebs on Security, German police reportedly seized $41 million worth of funds allegedly tied to the markets (mentioned above), and more than 200 servers that were operating throughout the underground temperature controlled, ventilated and closely guarded facility. Krebs on Security also reported that German authorities seized at least two Web domains in the raid.

Deutsche Welle reported that in Germany, service providers cannot be prosecuted for hosting illegal websites unless it can be proven that they are aware of and supporting the illegal activity.

From what I’ve been reading about this, it appears that some of the people who were arrested, and some who are being investigated, are allegedly connected to other crimes beyond the illegal data processing center. If so, it seems likely that many people involved will end up with some legal consequences.


California Bill AB5 Turns Contract Workers into Employees



California’s Assembly Bill 5 (AB5) will reclassify many contract workers in California into full employees with benefits. It doesn’t cover all types of contract workers, and is anticipated to affect companies like Uber and Lyft the most.

The New York Times reported that AB5 passed the California State Senate in a 29 to 11 vote. California’s Governor, Gavin Newsom, endorsed the bill this month and is expected to sign it. If signed, the measure will go into effect on January 1, 2020. State Senator Maria Elena Durazo (Democrat – Los Angeles) authored the bill.

The bill redefines “employee” using an existing law that includes an “ABC” test to establish whether a worker is an independent contractor or an employee. It says a worker is an employee if the worker’s tasks are performed under a company’s control; those tasks are central to that company’s business; and the worker does not have an independent enterprise in that trade.

Those who are considered employees under this bill will have access to basic protections such as a minimum wage, unemployment insurance, and perhaps access to health insurance coverage.

Personally, I am an independent contract worker – not an employee. None of the work I do for a living could be considered “central to that company’s business”. That said, people who are part of the gig economy and who drive for companies who produce ride-hailing apps, could be considered employees. They are doing the work that is central to the the business of Uber, Lyft, and DoorDash.

According to The New York Times, Uber and Lyft have “repeatedly warned that they will have to start scheduling drivers in advance if they are employees, reducing drivers’ ability to work when and where they want”. But, this is nonsense. There is absolutely nothing in AB5 that requires companies to “schedule drivers in advance”. It is possible that Uber and/or Lyft will retaliate by raising the prices for rides – but this will ultimately backfire because public transit is always going to be less expensive.

There are lists of professions who are exempt from AB5. Those professions include: doctors, dentists, psychologists, insurance agents, stockbrokers, lawyers, accountants, engineers, direct sellers, real estate agents, hairstylists, commercial fisherman, travel agents, and graphic designers.


U.S. Department of Justice Announced Antitrust Review of Big Tech



The United States Department of Justice announced that the Department’s Antitrust Division is reviewing whether and how market-leading platforms have achieved market power and are engaging in practices that have reduced competition, stifled innovation, or otherwise harmed consumers.

The Department’s review will consider the widespread concerns that consumers, businesses, and entrepreneurs have expressed about search, social media, and some retail services online. The Department’s Antitrust Division is conferring with and seeking information from the public, including industry participants who have direct insight into competition in online platforms, as well as others.

The Wall Street Journal reported that the inquiry by the Justice Department add “a new Washington threat for companies such as Facebook Inc., Google, Amazon.com Inc., and Apple Inc.”

CNBC reported: “The move is the strongest by Attorney General William Barr towards Big Tech, which faces increased scrutiny from both political parties because of the expanded market power the companies have and the tremendous amount of consumer data they control”.

CNBC also reported that shares of Facebook, Alphabet, and Amazon all fell more than 1% immediately after the announcement and that Apple’s stock also dropped.

This follows the European Commission’s antitrust investigation to assess whether Amazon’s use of sensitive data from independent retailers who sell on Amazon’s marketplace is in breach of EU competition rules.

There have been several investigations, by other countries, regarding questionable practices made by the big technology companies.

It seems to me that the more investigations that happen, the less likely it is that all of these big tech companies will come away from this without facing penalties, fines, or requirements that they make changes.


California Law Bans Bots from Pretending to be Real People



California has passed a law that went into effect on July 1, 2019. It amends part of the state’s existing Business and Professions Code. The purpose of the amendment is to require bots to make it clear that they are not a human.

The “Bots: disclosure” amendment includes the following:

It shall be unlawful for any person to use a bot to communicate with or interact with another person in California online, with the intent to mislead the other person about its artificial identity for the purpose of knowingly deceiving the person about the content of the communication in order to incentivize a purchase or sale of goods or services in a commercial transaction or to influence a vote in an election. A person using a bot shall not be liable under this section if the person discloses that it is a bot.

A “bot” is defined as: “an automated online account where all or substantially all of the actions or posts of that account are not the result of a person.”

A “person” is defined as: “a natural person, corporation, limited liability company, partnership, joint venture, association, estate, trust, government, governmental subdivision or agency, or other legal entity or any combination thereof.”

According to The New Yorker “Violators could face fines under the statutes related to unfair competition.” The article points out that California is “testing society’s resolve to get our (virtual) house in order after more than two decades of a runaway Internet.”

The legislation is a California state law. This means that the person behind a bot will have to disclose itself as a bot if it communicates with people who live in California. That said, those who are running bots will, by default, likely have to disclose that they are a bot to everyone on social media in order to avoid being fined by California’s law.


Two Senators Introduced Bill to Ban “Dark Patterns”



Two U.S. Senators, Mark Warner (Democrat – Virginia) and Deb Fischer (Republican – Nevada), have introduced a bill that, if passed into law, would prohibit large online platforms from using deceptive user interfaces, known as “dark patterns” to trick consumers into handing over their personal data.

The Deceptive Experiences To Online Users Reduction (DETOUR) Act would ban online social media companies, such as Facebook and Twitter, from tricking consumers into giving up their personal data.

The bill also would ban online platforms with more than 100 million monthly users from designing addicting games or other websites for children under age of 13.

A press release from both Senators includes a description of dark patterns:

Dark patterns can take various forms, often exploiting the power of defaults to push users onto agreeing to terms stacked in the favor of the service provider. Some examples include: a sudden interruption during the middle of a task repeating until the user agrees to consent; a deliberate obscuring of alternative choices or settings through design or other means; or the use of privacy settings that push users to ‘agree’ as the default option, while users looking for more privacy-friendly options often must click through a much longer process, detouring though multiple screens. Other times, users cannot find the alternative option, if it exists at all, and simply give up looking.

The DETOUR Act does the following:

  • Enables the creation of a professional standards body, which can register with the FTC to focus on best practices surrounding user design for large online operators. It would act as a regulatory body, providing updated guidance to platforms on practices that impair user autonomy, decision-making, or choice, and positioning the FTC to act as a regulatory backstop.
  • Prohibits segmenting consumers for the purpose of behavioral experiments, unless with a consumer’s informed consent. This includes routine disclosures for large online operators, not less than once every 90 days on any behavioral or psychological experiments to users and the public.
  • Prohibits user design intended to create compulsive usage among children under 13 years old.

To me, it sounds like the DETOUR bill was written with Facebook in mind. In 2014, Facebook apologized for conducting secret psychological tests on its nearly 700,000 users in 2012. I also think the DETOUR bill could potentially be used to prevent large video game companies and platforms from using dark patterns.


UK Online Harms White Paper Could Fine Senior Tech Managers



The BBC reported that the Department for Culture, Media and Sport has proposed an independent watchdog and a code of practice that tech companies would have to follow. Senior managers of social media platforms and other websites would be held liable for breaches, with a possible fine.

The Online Harms White Paper covers a range of issues. The Guardian reported that those issues include: child abuse, terrorist acts, revenge pornography, cyber bullying, spreading disinformation and encouraging self-harm. Senior social media executives could be held personally liable for failure to remove such content from their platforms.

The new laws will apply to any company that allows users to share or discover user-generated content or interact with each other online, including social media platforms, file hosting sites, public discussion forums, messaging services, and search engines.

Other proposals in the Online Harms White Paper:

  • Government powers to direct the regulator on specific issues such as terrorist activity or child sexual exploitation
  • Annual transparency reports from social media companies, disclosing the prevalence of harmful content on their platforms and what they are doing to combat it
  • Co-operation with police and other enforcement agencies on illegal harms, such as incitement of violence and the sale of illegal weapons
  • Companies will be asked to comply with a code of practice, setting out what steps they are taking to ensure that they meet the duty of care – including by designing products and platforms to make them safer, and pointing users who have suffered harm towards support.

The Online Harms White Paper comes after the Australian government passed legislation to crack down on violent videos on social media. It is called the Sharing of Abhorrent Violent Material bill.

The Australian bill creates new offenses for content service providers and hosting services that fail to notify the Australian federal police about or fail to expeditiously remove videos depicting “abhorrent violent conduct”, which is defined as videos depicting terrorist acts, murders, attempted murders, torture, rape or kidnap.

Personally, I believe that social media (and similar websites) truly do need some regulation. The specific issues listed in Australia’s bill and in the UK bill are things that reasonable people would immediately recognize as things that do not belong online.

It is abundantly clear that social media sites, and other websites that allow users to post content, are failing at self-regulation. Growth and interaction is valued by those companies over the health and safety of users. I suspect that when social media managers are fined by governments – for failure to clean up their websites – the cost will eventually get high enough for those companies to do the right thing.


Elizabeth Warren Wants to Break Up Tech Industry Giants



Senator Elizabeth Warren said that if she is elected president in 2020, her administration will break up the giants of the tech industry. This was announced at SXSW in Austin, and in a detailed post on Medium. In that post, Senator Warren mentioned Amazon, Google, and Facebook.

Senator Warren’s plan would classify any company that runs a marketplace and makes more than $25 billion a year in revenue as a “platform utility”, and will prohibit those companies from using those platforms to selling their own products.

The Verge interviewed Senator Warren. Her plan includes Apple – which was not mentioned in the Medium post. Senator Warren wants to break Apple apart from their App Store. As far as I can tell, the plan also calls for Google to split from Google Play. Personally, I’d like to see more specific information from Senator Warren about how that change will affect how apps are distributed.

In part of the interview, Senator Warren said:

The problem is that’s not competition. That’s just using market dominance, not because they had a better product or because they were somehow more customer-friendly or in a better place. It’s just using market dominance. So, my principle is exactly the same: what was applied to the railroad companies more than a hundred years ago, we need to now look at those tech platforms the same way.

In short, the plan would prevent Amazon from selling Amazon Basics products on the Amazon retail store. It would stop Google from promoting its own products in Google Search. And, it would require Facebook to split apart from Instagram and Whatsapp. It is a strong push for antitrust enforcement of an industry that has been untouched by those laws.

Personally, I would like to see Facebook and Instagram split apart. I’m not a fan of Facebook (and stopped using it years ago). Instagram brings me joy, but I am conflicted about continuing to use it because it belongs to Facebook. I’d also like to see YouTube separated from Google.