Tag Archives: Lawsuit

The Ghost Of Instagram Haunts Microsoft’s Future

Microsoft, , ,

The catchy headline at the top of this blog post was the title Reuters selected for its article. It is an ominous sounding title, indicating that Microsoft will have difficulty with the Federal Trade Commission’s (FTC’s) lawsuit against the company.

Reuters reported that Facebook is Microsoft’s antitrust boogeyman. The U.S. regulatory agency, the Federal Trade Commission, is seeking to block the software titan’s $69 billion deal for gaming giant Activision Blizzard, partly to stop domination of the industry as it evolves. The FTC’s leader Lina Khan might be making up for regulators who waved through Mark Zuckerberg’s $1 billion purchase of Instagram. Though Microsoft’s deal is different, punishment under Khan’s regime seemed inevitable.

According to Reuters, the FTC is concerned that Microsoft, the owner of the Xbox gaming console, will withhold popular games made by Activision, including Call of Duty and World of Warcraft from competing platforms including Sony’s PlayStation and Nintendo’s Switch. Microsoft has tried to appease this concern. This month, the company led by Satya Nadella agreed to offer games to Nintendo and Sony for 10 years.

The New York Times posted an article titled: “Lina Kahn, Aiming to Block Microsoft’s Activision Deal, Faces a Challenge”. This is a more optimistic title than the one Reuters chose. The New York Times reported that Lina Khan has pledged to usher in a new era of trustbusting of America’s corporate giants, recently saying the agency plans to “enforce the antitrust laws to ensure maximal efficacy.”

According to The New York Times, Ms. Khan has staked that ambitious agenda on a case that may be highly challenging for the agency to win. Ms. Khan and the FTC face hurdles in trying to stop the Microsoft-Activision deal, experts said. That’s because courts have been skeptical of challenges to so-called vertical mergers, where the two businesses don’t compete directly. In this case, Microsoft is best known in gaming as the maker of the Xbox console, while Activision is a major publisher of blockbuster titles such as Call of Duty.

The New York Times also reported that Microsoft has vowed to fight the FTCs lawsuit against the Activision purchase. On Thursday, Brad Smith, Microsoft’s president, said the company had “complete confidence in our case and welcome the opportunity to present it in court.” On Friday Microsoft pointed to previous statements that it believes the deal would expand competition and create more opportunities for gamers and game developers.

The Wall Street Journal reported that in the typical antitrust case, the government challenges a horizontal merger, or one involving rivals that compete head-to-head. Such mergers, by removing a competitor from the marketplace, can increase concentration, a factor that can be used to infer harmful effects such as higher prices.

According to The Wall Street Journal, the government has struggled to win cases on vertical mergers because making claims about the potential future harms posed by such deals is less straightforward and can require complex speculation about how market forces might play out.

Personally, I think it is going to take a very long time to sort this situation out in court. This is happening during the holiday season, and I cannot help but wonder if gamers who wanted to buy a console will hold off until they know the outcome of the Microsoft – Activision Blizzard acquisition.

Twitter Faces Class Action Lawsuit Over Layoffs

Twitter, ,

Twitter is being sued for not giving employees advanced written notice of a mass layoff, in violation of worker protection laws including the federal Worker Adjustment and Retraining Notification Act as well as the California WARN Act, both of which require 60 days of advance notice, TechCrunch reported.

Bloomberg first reported the news of the lawsuit, filed on November 3, 2022, in the U.S. District Court in the Northern District of California.

According to TechCrunch, the complaint alleges that Twitter began its layoffs on November 1, when it terminated the plaintiff in the lawsuit, Emmanuel Cornet, without providing the proper written notice in violation of U.S. and California law. Additional plaintiffs, Justine De Caires, Jessica Pan, and Grae Kindel said they were terminated on November 3 by being locked out of their accounts.

Twitter is also enacting widespread layoffs across its workforce today, on November 4, 2022, it stated, adding that California’s Employment Development Department had not received a notice related to the event.

In a new complaint against Twitter, the plaintiffs are asking the court to declare that Twitter has violated the federal and California WARN Acts and certify the case as a class action suit. According to TechCrunch, it’s also asking the court to stop Twitter from having laid-off employees sign documents that would release their claims without informing them of the lawsuit. And it’s seeking a range of relief, including compensatory damages (including wages owed), as well as declaratory relief, pre- and post-judgement interest, plus other attorneys’ fees and costs.

TechCrunch also reported: Twitter hasn’t responded to requests for comment – but that could also be because its comms staff has been included in the layoffs.

The Verge reported that the lawsuit was filed in an attempt to “make sure employees are aware that they should not sign away their rights and that they have an avenue for pursuing their rights,” Shannon Liss-Riordan, the attorney who filed the complaint on Thursday night, told Bloomberg.

The Verge posted a copy of the lawsuit at the end of their article.

The Guardian reported that the lawsuit cited a similar situation with sackings at Musk’s other company, Tesla, where the company sought to obtain full release from its obligations under the Warn Act by offering severance of one or two weeks’ pay instead.

To me, this sounds like a pattern. I’m not surprised that the Tesla layoffs would be brought up in court, considering how similar they sound to the Twitter layoffs. It is unclear to me if Elon Musk was unaware of the labor laws or if he simply hoped he would get away with firing workers this way.

RNC Sues Google Claiming Spam Filter Blocks Email

google, , ,

The Republican National Committee (RNC) has filed a lawsuit against Google in a U.S. district court in California for allegedly putting its campaign emails in the spam folders of its millions of users, Axios reported.

The lawsuit alleges that Google “has relegated millions of RNC emails in masse to potential donors’ and supporters’ spam folders during pivotal points in election fundraising and community building.”

Axios explains that last month, Google launched a pilot program to keep campaign emails out of spam. But the RNC has been criticizing the program, arguing it doesn’t help enough with political email filtering. Axios first reported that Google was launching the program in June. It was later approved by the Federal Election Commission and launched last month.

In that article, Axios reported that Google asked the Federal Election Commission if a program that would let campaigns emails bypass spam filters, instead of giving users the option to move them to spam first, would be legal under campaign finance laws. According to Axios, despite hundreds of negative comments submitted to the FEC arguing against it, the FEC approved the program in August. Eligible committees, abiding by security requirements and best practices as outlined by Google, could register to participate.

In the current article, Axios posted a quite from Google spokesperson José Castañeda:

“Gmail’s spam filter reflects users’ actions. We provide training and guidelines to campaigns, we recently launched an FEC-approved pilot for political senders, and we continue to work to maximize email deliverability while minimizing unwanted spam.”

According to Axios, the RNC argues in the lawsuit that despite discussing the email issue with Google for more than nine months, it remains unresolved, alleging Google is sending emails to spam on purpose due to political bias. Axios reported that the RNC is not enrolled in Google’s email pilot program meant to alleviate these issues (per a source familiar with the situation.)

The Verge reported that the RNC’s lawsuit was filed in California’s Eastern District Court, and that the RNC accuses Google of “throttling its email messages because of the RNC’s political affiliation and views.”

According to The Verge, to address the RNC’s concerns, Google rolled out a pilot program in September that was supposed to help prevent political emails from getting marked as spam. However, according to The Verge’s Makena Kelly, Republicans haven’t been taking advantage of the program which would have required it to follow security requirements and best practices standards when sending out emails in bulk.

As noted by the lawsuit, the RNC claims Google has continued to send RNC emails “en masse” to users’ spam folders during “pivotal points” for gaining supporters and fundraising for the upcoming midterm elections. It goes on to state that Google’s alleged filtering occurs “at approximately the same time at the end of each month,” and that the end of October is one of the most crucial fundraising periods for Republicans, who have been struggling to meet their fundraising goals in the months leading up to the midterm elections, The Verge reported.

In my opinion, it sounds like the RNC could have avoided having its political emails sent to people’s spam folders simply by choosing to join Google’s program. If they had done that, this entire problem could potentially have been avoided. That said, if you are a person who wants to donate to Republican candidates – you might find those emails in your spam folder.

Texas Sues Google Over Use Of Facial Recognition

google,

The Texas attorney general sued Alphabet Inc.’s Google on Thursday, alleging the search giant violated state laws by collecting biometric data on face and voice features without seeking the full consent of users, The Wall Street Journal reported.

According to The Wall Street Journal, Texas alleged Google’s data-collection practices stretched back to 2015 and afflicted millions of the state’s residents, according to a complaint filed in the state district court in Midland Country, Texas.

The case follows a similar suit Texas brought against Facebook parent Meta Platforms Inc. in February. Meta, which discontinued use of facial-recognition technology last year, said the claims were without merit.

In the latest complaint, Texas alleged Google had used features in Google Photos and Google Assistant, as well as its Nest smart-home products, to collect and store facial-and voice recognition data without obtaining proper consent.

According to The Wall Street Journal, Texas is leading a coalition of states suing Google for allegedly anticompetitive behavior in online advertising markets. Google has fought the claims and called some of them misleading. A federal judge last month denied the bulk of Google’s motion to dismiss the lawsuit.

The New York Times reported that the Texas attorney general filed a privacy lawsuit against Google on Thursday, accusing the internet company of collecting Texans’ facial and voice recognition information without their explicit consent.

According to The New York Times, Texas attorney general Ken Paxton said Google had violated a state consumer protection law that requires companies to inform citizens and get their consent before capturing their biometric identifiers, including fingerprints, voiceprints, and a “record of hand or face geometry.”

Violators of the law face fines of up to $25,000 per violation. Mr. Paxton said Google had millions of users in Texas who were potentially affected.

José Castañeda, a Google spokesman, said in a statement to The New York Times that Mr. Paxton “is once again mischaracterizing our products in another breathless lawsuit.” He added, “We will set the record straight in court.”

The New York Times also reported that the complaint targets the Google Photos app, which allows people to search for photos they took of a particular person; Google’s Nest camera, which can send alerts when it recognizes (or fails to recognize) a visitor at the door; and the voice-activated Google Assistant, which can learn to recognize up to six users’ voices to give them personalized answers to their questions.

Mr. Paxton said the products violated the rights of both users and nonusers, whose faces and voices were scanned or processed without their understanding or consent.

This whole thing stems from a Texas biometric privacy law that was passed in 2009, with Illinois and Washington passing similar laws around that time. Illinois’ law allows individuals to sue companies directly, but Texas must sue companies on consumers’ behalf.

Personally, I’m not a fan of most of the legislation that comes from Texas. However, I feel like there is something important about having the right to opt-out of being tracked or recorded by the products of big companies. I haven’t read the Texas law, and have no idea how a judge will decide the outcome of this case.

California Attorney General Sues Amazon For Blocking Price Competition

amazon, ,

California Attorney General Rob Bonta announced a lawsuit against Amazon alleging that the company stifled competition and caused increased prices across California through anticompetitive contracting practices in violation of California’s Unfair Competition Law and Cartwright Act.

Further information includes:

In order to avoid competing on prices with other online e-commerce sites, Amazon requires merchants to enter into agreements that severely penalize them if their products are offered for a lower price off-Amazon. In today’s lawsuit, Attorney General Bonta alleges that these agreements thwart the ability of other online retailers to compete, contributing to Amazon’s dominance in the online retail marketplace and harming merchants and consumers through inflated fees and higher prices.

“For years, California consumers have paid more for their online purchases because of Amazon’s anticompetitive contracting practices,” said Attorney General Bonta. “Amazon coerces merchants into agreement that keep prices artificially high, knowing full well they can’t afford to say no. With other e-commerce platforms unable to compete on price, consumers turn to Amazon as a one-stop shop for all their purchases. This perpetuates Amazon’s market dominance, allowing the company to make increasingly untenable demands on its merchants and costing consumers more at checkout across California…”

The Attorney General provided information about the lawsuit against Amazon and requested relief:

The Attorney General’s lawsuit seeks an order from the San Francisco Superior Court that stops Amazon’s anticompetitive behavior and recovers the damages to California consumers and the California economy. Specifically, the lawsuit asks the Court to:

  • Prohibit Amazon from entering into and enforcing its anticompetitive contracts that harm price competition;
  • Require Amazon to affirmatively notify vendors that it does not require sellers to offer prices on par with off-Amazon prices;
  • Appoint a Court-approved monitor, to ensure Amazon’s compliance with the Court’s order;
  • Order damages to compensate for the harms to consumers through increased prices; and
  • Order Amazon to return its ill-gotten gains and pay penalties to serve as a deterrent to other companies contemplating similar actions.

The Wall Street Journal reported that the suit is the result of an investigation the began in early 2020. It seeks unspecified damages for harm to the state economy and $2,500 for each violation of the state’s civil and professional code proved at trial.

According to The Wall Street Journal, the lawsuit represents the biggest legal challenge to date in the U.S. for Amazon, which was previously sued by the District of Columbia and is being investigated by the Federal Trade Commission, the European Union, and a congressional committee. Because California is the nation’s most populous state and biggest economy, its business regulations have long swayed how companies operate across the country, The Wall Street Journal reported.

If things work out the way Attorney General Bonta wants them to, I think it will could cause other states to create similar lawsuits against Amazon. The result could potentially make it less expensive for people to buy products from Amazon.

Judge Rejects Elon Musk’s “Absurdly Broad” Twitter Data Request

Twitter, ,

A Delaware judge called Elon Musk’s request for years of data about Twitter Inc.’s spam and fake accounts “absurdly broad” but ordered the social-media company to provide a subset of the information in the continuing legal battle over the billionaire’s soured $44 billion takeover, The Wall Street Journal reported.

Chancellor Kathaleen McCormick said in a decision Thursday that the request by Mr. Musk’s legal team to compel the company to produce “trillions upon trillions of data points” for more than 200 million users was overly burdensome and “no one in their right mind has ever tried to undertake such an effort.”

According to The Wall Street Journal, the judge ordered Twitter to produce a narrower section of the data requested, including a historical snapshot of accounts that were reviewed by the company to determine the number of spam and fake accounts on its platform, an issue central to the dispute over Mr. Musk’s effort to terminate the merger agreement and substantiate his counterclaim of fraud.

The Washington Post reported that Musk had been angling to exit the deal since he terminated his agreement in July, after agreeing to purchase the social media giant for $44 billion in April. Twitter sued shortly after, followed by a countersuit from Musk.

According to The Washington Post, Musk’s team had been seeking information that could more deeply reveal Twitter’s internal methodologies and understanding of the bot issue. Musk’s lawyers referenced a whistleblower complaint obtained by The Washington Post during a Wednesday hearing, in which former head of security Peiter Zatko alleges Twitter was not incentivized to accurately count bots and spam.

The Verge reported that Musk’s lawyers wanted “all of the data Twitter might possibly store for each of the approximately 200 million accounts included in its mDAU count every day for nearly three years,” covering trillions of data points, McCormick wrote in her ruling “Plaintiff [Twitter] has difficulty quantifying the burden of responding to that request because no one in their right mind has ever tried to undertake such an effort. It suffices to say, Plaintiff has demonstrated that such a request is overly burdensome.”

Personally, I think this push for “all the data Twitter might possibly store” for three years is a tactic being used by Musk’s lawyers in an effort to get out of the $44 billon agreement that he signed with Twitter. I believe that Elon Musk is very likely going to be willing to spend whatever it takes to sever himself from the deal that he signed with Twitter – and then changed his mind about. In this situation, it appears Musk and his lawyers want to be as annoying as possible – until Musk gets what he wants.

According to The Verge, however, the judge partially agreed to Twitter’s request for documents from Musk’s side as Twitter pursues information on data analysis Musk performed before he attempted to exit the deal. “At a minimum, Defendants must produce the Analyses,” writes [Judge] McCormick, as well as identification of related information on a privilege log so that Twitter’s lawyers could request access to specific documents.

FTC Agrees To Remove Zuckerberg From Antitrust Suit

Meta, ,

The Federal Trade Commission said it will remove Mark Zuckerberg, the Chief Executive of Meta, from a lawsuit to block the company’s acquisition of Within Unlimited, an artificial intelligence start-up, The New York Times reported.

According to The New York Times, the FTC said in a court filing that it agreed to drop Mr. Zuckerberg as a defendant after Meta, formerly known as Facebook, promised he would not try to personally purchase Within Unlimited. Meta had asked the agency to remove Mr. Zuckerberg as a defendant.

Within Unlimited, Inc., is a virtual reality (VR) media and technology company. Bloomberg reported that Within Unlimited, Inc. develops advanced technology for telling stories in immersive media. Within Unlimited serves customers in the State of California.

The Within Unlimited website states that their flagship product is Supernatural, a complete fitness center service for Oculus Quest that is designed with the sole purpose of giving people the time of their lives working out, so that taking on a healthy lifestyle is easy and full of joy. Within Unlimited also has Wonderscope, an iOS app for kids that uses augmented reality to transform ordinary spaces into extraordinary stories.

To me, it seems very clear that Meta’s interest in Within Unlimited is to boost its Oculus VR device. It sounds like if Meta is allowed to acquire Within Unlimited, that would remove an independent VR company into Meta’s product line.

According to The New York Times, the FTC filed its complaint with U.S. District Court for the Northern District of California, to prevent Meta and Mr. Zuckerberg from acquiring Within. The FTC included Mr. Zuckerberg as a defendant in the suit and accused him and Meta of planning to buy Within to dominate the nascent virtual-reality market and violate antitrust laws.

Politico reported that Meta only found out about the filing of the FTC’s lawsuit against it via Twitter. Politico also reported that the FTC is betting that early regulatory action will prevent Meta from holding deterministic power in the VR market.

The Federal Trade Commission posted information “Meta Platforms Inc./ Mark Zuckerberg / Within Unlimited, FTC v.” It was updated on August 19, 2022. Here is the Case Study portion:

“The Federal Trade Commission authorized a lawsuit in federal court to block the proposed merger between virtual reality (VR) giant Meta and Within Unlimited, the VR studio that markets Supernatural, a leading VR fitness app. Formerly known as Facebook, Inc., Meta sells the most widely used VR headset, operates a widely used VR app store, and already owns many popular VR apps, including Beat Saber, reportedly one of the best-selling VR apps of all time, which it markets for fitness use.

“The agency alleges that Meta’s proposed acquisition of Within would stifle competition and dampen innovation in the dynamic, rapidly growing U.S. markets for fitness and dedicated-fitness VR apps. A federal court complaint and request for preliminary relief was filed in U.S. District Court for the Northern District of California to halt the transaction.”

Personally, I’m in favor of preventing huge companies from grabbing up smaller ones for the purpose of making the smaller company’s products only accessible inside the bigger company’s “walled garden”. If the FTC wins their lawsuit it would be good for consumers – especially those who don’t want to sign up to Meta (or other “walled gardens”) to access a product or game that they were playing before the big company tried to acquire it.