Category Archives: Legal

The Battle Between Epic Games and Apple Continues

Today, 9To5Mac reported a significant update to the legal battle between Apple and Epic Games – “Project Liberty”.

According to Apple, Epic Games hired PR firms in 2019 to work on a media strategy called “Project Liberty” aimed at portraying Apple “as the bad guy.” In October 2020, Judge Yvonne Rogers had concerns that Epic knew exactly what they were doing with the controversial Fortnite update, so this doesn’t come as a surprise.

Here is a quote from Apple:

Epic’s monopoly maintenance claim is premised on the notion that the antitrust laws preclude Apple from imposing conditions on the licensed use of its intellectual property, and impose on Apple a duty to deal with Epic on the terms preferred by Epic – to the detriment of other developers and consumers alike. But Apple has no obligation to license its intellectual property, aside from a limited exception not applicable here, businesses are free to choose the parties with whom they will deal, as well as the prices, terms and conditions of that dealing.

CNBC provided a summary of what Apple, and Epic, will argue in court. The case could be heard on May 3, 2021, (but the date could change due to the pandemic).

Apple will argue:

  • Its 30% commission is essentially the same as other online software stores like Google Play or stores for video game consoles and Apple’s fee has decreased over time.
  • It faces competition both for iPhones as well as other platforms to play games.
  • Its App Store policies have led to a boom in the software industry and result in greater safety and security for users.
  • The App Store is a core, integrated feature of the iPhone, and that using Apple payments for digital purchases is a key feature.

Epic will argue:

  • Apple forces consumers to bear high switching costs to stop using Apple products, locking them in.
  • As Apple has accumulated more customers and locked them in, the importance of selling software to Apple customers has grown.
  • Apple controls the only way to install software on an iPhone through the App Store.
  • Apple uses its App Review process, which manually screens individual apps, for anti-competitive purposes, removing apps for business reasons under the pretext of security.
  • Because some developers have chosen to raise iPhone software prices because of Apple’s 30% fee, it causes consumers to pay more, and Fortnite is an example.

Sky Global CEO Indicted by Grand Jury

The U.S. Department of Justice (DOJ) posted an immediate release in which they stated that a federal grand jury returned an indictment against the CEO of Sky Global and an associate. They are facing federal Racketeer Influenced Corrupt Organizations Act (RICO) charges.

Part of the immediate release states:

…According to the indictment, Sky Global’s devices are specifically designed to prevent law enforcement from actively monitoring the communications between members of transnational criminal organizations involved in drug trafficking and money laundering. As part of its services, Sky Global guarantees that messages stored on its devices can and will be remotely deleted by the company if the device is seized by law enforcement or otherwise compromised…

The indictment also alleges that Sky Global installs sophisticated encryption in iPhone, Google Pixel, Blackberry, and Nokia handsets. Sky Global device users communicate with each other in a closed network, and Sky Global routes these communications through encrypted servers located in Canada and France.

Interestingly, the indictment alleged that Sky Global employees used digital currencies (including Bitcoin) to “facilitate illegal transactions from the firm’s website, to protect its customers’ anonymity, and to facilitate the laundering of customers’ ill-gotten gains”. There apparently were also shell companies involved.

Encryption on phones is not illegal. Gizmodo reported (in 2017) that Apple had been encrypting data on phone and macOS for years. Not long after that, Android devices were also encrypted. The encryption is there to prevent people who are not you from accessing whatever is on your phone.

It seems to me that the problem Sky Global is having is not about their encryption. It is about allegedly allowing “criminal organizations involved in drug trafficking and money laundering” to use that encryption in an effort to avoid getting caught and having to face legal consequences.

France Wants Changes to EU Tech Regulations

France is pushing for changes to the EU’s legislation that would force big tech companies to pay for the news, Financial Times reported. It appears France wants changes that would allow member states to wield more power to punish bad behavior and police more types of content.

French officials want to see changes to the EU’s Digital Service Act, which sets out the responsibilities of Big Tech companies when it comes to policing the web.

Paris wants every member state to have the right to fine tech platforms and force them to remove illegal content. Currently, only countries where tech companies have their headquarters can enforce the EU’s laws.

As a result, Ireland and Luxembourg, where Apple, Google, Facebook and Amazon are based, have disproportionate responsibilities in regulating Big Tech.

Financial Times reported that France is also pushing for the DSA to widen beyond illegal content to the policing of harmful content and disinformation. Apparently, EU officials have concerns that France’s proposals will erode the EU’s single market.

The EU has begun working on two landmark draft European digital regulations: The Digital Services Act (DSA) and the Digital Markets Act (DMA).

The DSA creates a common set of rules on intermediaries’ obligations and accountability across the single market that will open up opportunities to provide digital services across borders while ensuring user protection. It also establishes criteria for qualifying a large online program as a “gatekeeper”. The DMA includes fines of up to 10% of the “gatekeeper” platform’s total worldwide annual turnover, periodic payments of up to 5% of the average daily turnover, or additional remedies.

In short, it means that companies like Facebook and Google will have to pay news organizations for the news that the platforms post. Both companies used scare tactics to sway the opinion of Australians when their government made a similar law. I expect they will do the same to the EU law.

EU Wants Google and Facebook to Pay for News

Financial Times reported that the EU has created legislation that would force big tech companies to pay for news. This comes after a similar Code of Conduct was proposed in Australia that would require companies like Google and Facebook to share revenue with the Australian news organizations.

The EU is working on two landmark draft European digital regulations: The Digital Services Act (DSA) and the Digital Markets Act (DMA).

The DSA is a common set of rules on intermediaries’ obligations and accountability across the single market that will open up opportunities to provide digital services across borders, while ensuring a high level of protection to all users, no matter where they live in the EU. The DMA establishes a set of narrowly defined objective criteria for qualifying a large online platform as a so-called “gatekeeper”. This allows the DMA to remain well targeted to the problem that it aims to tackle as regards large, systemic online platforms.

Consequences of non-compliance to the DMA include: fines of up to 10% of the company’s total worldwide annual turnover, periodic penalty payments of up to 5% of the average daily turnover, and additional remedies imposed in the case of systematic infringements of the DMA.

Facebook rejected the proposal by the Australian Competition & Consumer Commission (ACCC). According to The Guardian, Facebook said “If there were no news content available on Facebook in Australia, we are confident the impact on Facebook’s community metrics and revenues in Australia would not be significant”.

In August of 2020, Google started targeting Australians with pop-up ads that linked to an open letter. The letter had a bright yellow caution sign at the top. In my opinion, the letter was intended as a scare tactic to sway Australians against the Code of Conduct. The chair of the ACCC stated that Google’s letter “contains misinformation.”

Based on those responses to the ACCC, I suspect that both Facebook, and Google, are going to issue thinly veiled threats (and, potentially, misinformation) at consumers who live in the EU in an effort to persuade people to turn against the EU’s Digital Services Act. When big companies resort to scare tactics to avoid regulation – it emphasizes just how badly those platforms need to be regulated. They clearly have the money to pay news organizations for their work.

Canadian Authorities Decided Clearview AI is Illegal in Canada

The Office of the Privacy Commissioner of Canada released a report of findings regarding Clearview AI. They sought to determine whether Clearview AI Inc.’s collection, use and disclosure of personal information by means of facial recognition tool complied with federal and provincial privacy laws applicable to the private sector.

Here are some of their conclusions:

  • They found that Clearview engaged in the collection, use and disclosure of personal information through the development and provision of its facial recognition application, without requisite consent.
  • They found that Clearview’s collection, use and disclosure of personal information through the provision of its facial recognition application was for a purpose that a reasonable person would find to be inappropriate.
  • They found that Clearview does not comply with sections of the law by using biometric information for identification purposes without the express consent of individuals concerned by and that Clearview IA did not disclose its database of biometric characteristics and measurements to the Commission.
  • As a result, the Commissioner recommended that Clearview “cease offering the facial recognition services that have been the subject of this investigation to clients in Canada.” Clearview must also cease the collection, use and disclosure of images and biometric facial arrays collected from individuals in Canada and must also delete images and biometric facial arrays collected from individuals in Canada from its possession.

If Clearview refuses to adhere to those recommendations, the Office of the Privacy Commissioner of Canada “will pursue other actions available to us under our respected Acts to bring Clearview into compliance with federal and provincial privacy laws applicable to the public sector.”

The New York Times reported the following:

Clearview scraped more than three billion photos from social media networks and other public websites in order to build a facial recognition app that is now used by over 2,400 U.S. law enforcement agencies, according to the company. When an officer runs a search, the app provides links to sites on the web where the person’s face has appeared. The scope of the company’s reach and law enforcement application was first reported by The New York Times in January of 2020.

According to The New York Times, Hoan Ton-That, the chief executive of Clearview AI, said Wednesday that the company stopped operating in Canada last July – because of the inquiry. The company had no plans to proactively delete Canadians from its database. The New York Times also reported that authorities in Australia and the United Kingdom are jointly pursuing an inquiry of their own.

Personally, I think it should be illegal to gather up people’s personal information – including photos of their faces – without first receiving permission to specifically do that. There is no valid reason for companies to secretly harvest random people’s photos and hand them over to law enforcement, especially when there is no evidence that the people have committed any crimes.

Judge Grants Uber and Lyft a Temporary Stay

The ongoing battle between ride-sharing companies Lyft and Uber,and the state of California, continues with an appeals judge extending a temporary stay, CNBC reported. This gives Uber and Lyft more time in which to comply with an order requiring the companies to reclassify their drivers as employees.

The situation began with a California law called AB5, when went into affect on January 1, 2020. It requires companies that hire independent contractors to reclassify them as employees.

On August 10, 2020, California Superior Court Judge Ethan Schulman ordered Uber and Lyft to reclassify their contract drivers as employees with the same protections and benefits as other staffers. Those workers would be entitled to workers comp, unemployment, paid sick and family leave, and health insurance.

AB5 allows independent contractors to be classified as employees if the employers can verify that that the worker performs work that is outside the usual course of the hiring entity’s business (among other things).

It seems to me that Uber and Lyft, both of whom are ride-sharing companies, are going to have a difficult time trying to convince a judge that their workers are performing work that is outside the usual course the hiring entity’s business. The workers are driving their own vehicles and picking up and dropping off passengers. That’s literally the main purpose of ride-sharing companies!

Both Lyft and Uber posted blogs that can be summarized as a threat to users of their services. Each made it clear that they would shut down service in California. The blog posts also push people to vote for Proposition 22 which, if it gets enough votes, would reverse AB5. Lyft later updated their blog post to note that rideshare is back on, thanks to the stay.

As a person who lives in California, and who is also disabled, I think Lyft and Uber should not have threatened users with a stoppage of service. I rely on them to get me to and from appointments with health care providers. It feels like Uber and Lyft never bothered to consider how an abrupt stoppage of service could become a huge difficulty for people who cannot drive.

The Guardian reported that Proposition 22 has millions of dollars in backing from Uber and Lyft as well as other gig economy firms that are affected by the law. It appears that Lyft and Uber have plenty of money to fund Proposition 22 – which directly benefits them and harms their workers. They should use that money to do the right thing and comply with AB5.

Pro-Vision Trademark of Bodycam Demand Letter

On Friday of last week, I received a certified letter in the mail from the law firm of Price Heneveld LLP representing Pro Vision Inc. on the use of the word Bodycam which Pro-Vision holds a registered trademark in reference to a single article on Geek News Central from 2015 which covered the introduction of the PMD-901V by Marantz which they had a issue with me refering to the product as a Body Cam.

This is the first time I have received a demand letter over using someones trademark in an review article and asked that it be changed. It is obvious that Pro-Vision Inc. is doing their best to suppress and minimize companies like Marantz who have a competing camera product from being found in Google by going after sites like mine and demanding we change the editorial content.

Personally I am of the opinion that Pro-Vision should have never been given that mark, and am actually surprised that the Trademark office actually approved their Trademark back in 2014 as the use of the word Bodycam has been used by the media for a very long time.  Sending demand letters to sites like mine must keep their law firm busy, and able to submit a lot of billable hours. Good on Price Heneveld LLP for securing this legal representation.

I fully understand a companies right to protect their Trademark, it just surprised me that they would be so aggressive. I checked on the Marantz Site, and they must have also received the same letter some time ago as they now refer to their product as a wearable camera. For those interested I have scanned and linked the legal firms demand letter of my Marantz PMD-901V story.

Demand Letter from Pro-Vision Inc Legal Firm over Trademark of BodyCam