Legal Archive

Late last year, Google’s Play Store was ruled to be a monopoly in the US, and today the judge in that case has set out what Google must do to address this situation. Today, Judge James Donato issued his final ruling in Epic v. Google, ordering Google to effectively open up the Google Play app store to competition for three whole years. Google will have to distribute rival third-party app stores within Google Play, and it must give rival third-party app stores access to the full catalog of Google Play apps, unless developers opt out individually. ↫ Sean Hollister at The Verge On top of these rather big changes, Google also cannot mandate the use of Google’s own billing solution, nor can it prohibit developers from informing users of other ways to download and/or pay for an application. Furthermore, Google can’t make sweetheart deals with device makers to entice them to install the Play Store or to block them from installing other stores, and Google can’t pay developers to only use the Play Store or not use other stores. It’s a rather comprehensive set of remedies that will remain in force for three years. Many of these remedies are taken straight from the European Union’s Digital Markets Act, but they will be far less effective since they’re only applied to one company, and only for three years. On top of that, Google can appeal, and the company has already stated that it’s going to ask for an immediate stay on these remedies, and if they get that stay, the remedies won’t have to be implemented any time soon. This legal tussling is far from over, and does very little to protect consumer choice. A clear law that simply prohibits this kind of market abuse, like the DMA, is much fairer to everyone involved, and creates a consistent level playing field for everyone, instead of only affecting random companies based on the whims of something as unpredictable as juries. In other words, I don’t think much is going to change in the United States after this ruling, and we’ll likely be hearing more back and forths in the court room for years to come, all while US consumers are being harmed. It’s better than nothing in lieu of a working Congress actually doing, well, anything, but that’s not saying much.

California Governor Gavin Newsom has signed a law (AB 2426) to combat “disappearing” purchases of digital games, movies, music, and ebooks. The legislation will force digital storefronts to tell customers they’re just getting a license to use the digital media, rather than suggesting they actually own it. When the law comes into effect next year, it will ban digital storefronts from using terms like “buy” or “purchase,” unless they inform customers that they’re not getting unrestricted access to whatever they’re buying. Storefronts will have to tell customers they’re getting a license that can be revoked as well as provide a list of all the restrictions that come along with it. Companies that break the rule could be fined for false advertising. ↫ Emma Roth at The Verge A step in the right direction, but a lot more is definitely needed. This law in particular seems to leave a lot of wiggle room for companies to keep using the “purchase” term while hiding the disclosure somewhere in the very, very small fine print. I would much rather a law like this just straight up ban the use of the term “purchase” and similar terms when all you’re getting is a license. Why allow them to keep lying about the nature of the transaction in exchange for some fine print somewhere? The software industry in particular has been enjoying a free ride when it comes to consumer protection laws, and the kind of malpractice, lack of accountability, and laughable quality control would have any other industry shut down in weeks for severe negligence. We’re taking baby steps, but it seems we’re finally arriving at a point where basic consumer protection laws and rights are being applied to software, too. Several decades too late, but at least it’s something.

Kim Carver, a legislator in the US state of Louisiana, added a provision to a child safety bill forcing Apple and Google to enforce age restrictions on downloads in their application stores. In other words, it would force Apple to make sure minors could not download gambling and casino applications – i.e., 99% of mobile games – that make up the vast majority of Apple’s services revenue. It would also make application stores play a role in enforcing age restrictions on social media applications, which makes sense because Apple and Google know the age of every one of their users. Well, it turns out Apple was not happy. They sent out an absolute army of lobbyists – including a guy known for lobbying on behalf of truck-stop casinos, in case you were wondering about the type of people Apple uses for lobbying – to kill this specific provision. Carver’s provision would have breezed through the Louisiana senate, but it needed a key committee approval before being put up for a vote. And it’s this committee that Apple started heavily influencing and pressuring. Carver began hearing rumblings that Apple was making inroads with the committee—his amended bill might be in trouble. Uncertain on how to proceed, he approached the chairwoman of the committee, Sen. Beth Mizell, for advice. He declined to describe the substance of the conversation to The Wall Street Journal, but in the end, he promised not to object if she removed the app store provisions or support restoring them on the Senate floor. “I made the choice to take the win that we could get,” Carver said. ↫ Jeff Horwitz and Aaron Tilley at The Wall Street Journal This is not the first time Apple has pressured legislatures to drop bills it didn’t like. A famous case is the state if Georgia, which intended to pass a number of application store bills to open up the App Store in much the same way the European Union did with the DMA. Apple went absolutely mental in Georgia, including threatening to cancel “a $25 million investment in a historically Black college in Atlanta”. Apple won. The way these sleazebag companies get away with such blatant corruption is by using third-party lobbyists, which technically are not employed by the companies in question, so no matter how low and sleazy these lobbyists go, the companies they lobby for can wash their hands in innocence and absolve themselves from any responsibility for the various financial and legal threats levied at underfunded, understaffed local legislatures. Spending a few millions on a local development project or whatever is peanuts for Apple, but a massive boon for a small community somewhere, so Apple pulling out means nothing to Apple, but would massively affect such a community. It’s not surprising local legislatures fold. Circling back to the age restriction provision itself – telling stores what they can and cannot sell is an entirely normal thing to do, and happens all the time all over the world. It’s why in, say, The Netherlands, supermarkets are only allowed to sell “light” alcohol like beer and wine, with hard alcohol moved to separate liquor stores that have to be separate from the supermarket, so age restrictions are easier to enforce. There’s also just an infinite number of things you’re just not allowed to sell, period. As always, Silicon Valley believes it’s a very special snowflake to whom regular, normal, widely accepted rules do not apply. Why shouldn’t a store selling gambling applications and similarly addictive and damaging applications have to do the absolute bare minimum to protect minors? Imagine the massive outcry if a Costco or Walmart was found to sell massive amounts of hard liquor to children – why should Silicon Valley companies be treated any differently?

In its antitrust case against Google, the Federal Government filed a list of chats it had obtained that show Google employees explicitly asking each other to turn off a chat history feature to discuss sensitive subjects, showing repeatedly that Google workers understood they should try to avoid creating a paper trail of some of their activities.  The filing came following a hearing in which judge Leonie Brinkema ripped Google for “destroyed” evidence while considering a filing from the Department of Justice asking the court to find “adverse interference” against Google, which would allow the court to assume it purposefully destroyed evidence. Previous filings, including in the Epic Games v Google lawsuit and this current antitrust case, have also shown Google employees purposefully turning history off. ↫ Seamus Hughes The fact that corporations break the law, and lie, cheat, and scam their way to the top is not something particularly shocking, nor will it surprise anyone. I can barely even get angry about it anymore – birds gotta eat, fish gotta swim, corpos gotta break the law, that sort of thing. It’s just an inevitability of reality, a law of nature. You know it, I know it, the whole world knows it. No, what really upsets me is just how easily they get away with it, and even if they do get punished, any fines or other forms of punishment are so utterly disproportionately mild compared to the crimes committed. It’s incredibly rare for anyone responsible for corporate crime to ever face any serious punishment, let alone jail time, and even in the rare cases where they do, they usually have some stock options or whatever left over from their employment contract that will ensure a lavishly wealthy lifestyle. Fines levied against corporations as a whole are usually so low they’re just a minor cost of doing business, to the point where one has to wonder why they’re even being levied at all. Compare this to us normal folks, and the differences couldn’t be more stark. Whenever we’re accidentally late on some small bill, we get fined automatically, with very little recourse. We get a speeding ticket automatically in the mail because we drove 5 km/h over the speed limit. Our tax agencies are stupidly effective and efficient at screwing you over for that small side hustle selling crap on eBay. And rarely do we have any effective, efficient recourse. And these things can quickly spiral out of control when you’re already living paycheck to paycheck – being poor is really, really expensive. And let’s not even get into how much worse any of this is if you’re part of a minority, like being black in the US, or of North-African descent in Europe. In this case, the illegal activities of Google and its executies and employees is on such clear display, and yet, few, if any, will suffer any consequences for them. If you ever wonder why so many regular people flock to political extremes, it’s exactly this kind of deep unfairness and inequality that lies at its roots. It’s dispiriting, demoralising, and disheartening, and primes the pumps for disenfranchisement with society, and thus the search for alternatives, upon which extremists pray. We either stop our continual slide into corporatism, or our societies will fall.

The European Union’s Digital Markets Act is the gift that keeps on giving. This time, it’s Facebook’s turn to be slapped on the fingers with a ruler – a metric ruler, of course – because of its malicious compliance with the DMA. Today, the Commission has informed Meta of its preliminary findings that its “pay or consent” advertising model fails to comply with the Digital Markets Act (DMA). In the Commission’s preliminary view, this binary choice forces users to consent to the combination of their personal data and fails to provide them a less personalised but equivalent version of Meta’s social networks. ↫ European Commission press release The European Commission’s preliminary conclusion takes issue with Facebook’s binary choice between “pay for zero ads” and “full-on tracking and all the ads”. According to the DMA, Facebook must offer users the option of an equivalent experience with less tracking, and the company doesn’t offer such an option to users. In addition, Facebook’s proposal does not allow users to “exercise their right to freely consent to the combination of their personal data”. It’s important to note that this is not some sort of definitive ruling of finding; it’s preliminary, and Facebook now has the opportunity to state its case and formulate its arguments. If the eventual ruling is that Facebook does not comply, the company is liable for fines up to 10% of its yearly worldwide turnover, which can rise up to 20% for repeated infractions.

To lock subscribers into recurring monthly payments, Adobe would typically pre-select by default its most popular “annual paid monthly” plan, the FTC alleged. That subscription option locked users into an annual plan despite paying month to month. If they canceled after a two-week period, they’d owe Adobe an early termination fee (ETF) that costs 50 percent of their remaining annual subscription. The “material terms” of this fee are hidden during enrollment, the FTC claimed, only appearing in “disclosures that are designed to go unnoticed and that most consumers never see.” ↫ Ashley Belanger at Ars Technica There’s a sucker for every corporation, but I highly doubt there’s anyone out there who would consider this a fair business practice. This is so obviously designed to hide costs during sign-up, and then unveil them when the user considers quitting. If this is deemed legal or allowed, you can expect everyone to jump on this bandwagon to scam users out of their money. It goes further than this, though. According to the FTC, Adobe knew this practice was shady, but continued it anyway because altering it would negatively affect the bottom line. The FTC is actually targeting two Adobe executives directly, which is always nice to hear – it’s usually management that pushes such illegal practices through, leaving the lower ranks little choice but to comply or lose their job. Stuff like this is exactly why confidence in the major technology companies is at an all-time low.

Brussels is set to charge Apple over allegedly stifling competition on its mobile app store, the first time EU regulators have used new digital rules to target a Big Tech group. The European Commission has determined that the iPhone maker is not complying with obligations to allow app developers to “steer” users to offers outside its App Store without imposing fees on them, according to three people with close knowledge of its investigation. ↫ Javier Espinoza and Michael Acton This was always going to happen for as long as Apple’s malicious compliance kept dragging on. The rules in the Digital Markets Act are quite clear and simple, and despite the kind of close cooperation with EU lawmakers no normal EU citizen is ever going to get, Apple has been breaking this law from day one without any intent to comply. European Union regulators have given Apple far, far more leeway and assistance than any regular citizen of small business would get, and that has to stop. The possible fines under the DMA are massive. If Apple is found guilty, they could be fined for up to 10% of its global revenue, or 20% for repeated violations. This is no laughing matters, and this is not one of those cases where a company like Apple could calculate fines as a mere cost of doing business – this would have a material impact on the company’s numbers, and shareholders are definitely not going to like it if Apple gets fined such percentages. As these are preliminary findings, Apple could still implement changes, but if past behaviour is any indication, any possibly changes will just be ever more malicious compliance.

The new Windows on ARM Copilot+ PC thing, running on Qualcomm’s Snapdragon X Elite and Pro chips, isn’t even out the door yet, and we’re already dealing with legal proceedings. But the main conversation among conference attendees was over how a contract dispute between Arm Holdings and Qualcomm, which work together to make the chips powering these new laptops, could abruptly halt the shipment of new PCs that industry leaders expect will make Microsoft and its partners billions of dollars. ↫ Max A. Cherney at Reuters The basic gist of the story is as follows. Qualcomm acquired a company named Nuvia, founded by former Apple processor engineers, in order to gain new technology to build its Snapdragon X Elite and Pro chips. Nuvia was planning on developing ARM chips for servers, but after the acquisition, Qualcomm changed their plans and repurposed their technology for use in laptops – the new X chips. ARM claims that Nuvia was only granted a license for server use, and not laptop use. Qualcomm, meanwhile, argued that it has a broad license to use ARM for pretty much anything, and as such, that any possible restrictions Nuvia had are irrelevant. While this all sounds like very rich corporations having a silly legal slapfight, it could have real consequences. If the legal case goes very, very wrong for Qualcomm, it could halt the sale of devices powered by the Snapdragon X chips well before they’re even shipping. I doubt it’ll get that far – it rarely does, and there’s some big names and big reputations at play here – but it does highlight the absurdity of how the ARM ecosystem works. Speaking of the ARM ecosystem, Qualcomm isn’t the only ARM chip makers dying to break into the PC market. Qualcomm currently has a weird exclusivity agreement with Microsoft where it’s the only ARM chip supplier for PCs, but that agreement is running out soon. Another player that’s ready to storm this market once that happens is MediaTek, who is also developing a chip geared towards Microsoft’s Copilot+ specifications, with a release target of 2025. Let’s hope MediaTek will be as forthcoming with Linux support as Qualcomm surprisingly has been, but I have my sincerest doubt.

The US Justice Department and Federal Trade Commission reportedly plan investigations into whether Nvidia, Microsoft, and OpenAI are snuffing out competition in artificial intelligence technology. The agencies struck a deal on how to divide up the investigations, The New York Times reported yesterday. Under this deal, the Justice Department will take the lead role in investigating Nvidia’s behavior while the FTC will take the lead in investigating Microsoft and OpenAI. ↫ Jon Brodkin at Ars Technica Even if there’s no findings of wrongdoing, these kinds of investigations are incredibly important, if only to let the megaocorporations know we’ve got our eyes on them. Artificial intelligence is a whole new world of potential monopolistic and other forms of abuse, and I’d like the various competition authorities to be on top of it right from the beginning for once, so we don’t end up with a fait accompli like we have in so many other parts of the technology sector.

OpenAI’s efforts to produce less factually false output from its ChatGPT chatbot are not enough to ensure full compliance with European Union data rules, a task force at the EU’s privacy watchdog said. “Although the measures taken in order to comply with the transparency principle are beneficial to avoid misinterpretation of the output of ChatGPT, they are not sufficient to comply with the data accuracy principle,” the task force said in a report released on its website on Friday. ↫ Tassilo Hummel at Reuters I’m glad at least some authorities are taking the wildly inaccurate nonsense outputs of many “AI” tools seriously. I’m not entirely sure when a tool like ChatGPT can be considered “accurate”, but whatever it is now, is not it.

A bill that would force China-based company ByteDance to sell TikTok — or else face a US ban of the platform — is all but certain to become law after the Senate passed a foreign aid package including the measure. It now heads to President Joe Biden, who already committed to signing the TikTok legislation should it make it through both chambers of Congress. The House passed the foreign aid package that includes the TikTok bill on Saturday. ↫ Lauren Feiner at The Verge I hope the EU follows.

Independent browser companies in the European Union are seeing a spike in users in the first month after EU legislation forced Alphabet’s Google, Microsoft and Apple to make it easier for users to switch to rivals, according to data provided to Reuters by six companies. The early results come after the EU’s sweeping Digital Markets Act, which aims to remove unfair competition, took effect on March 7, forcing big tech companies to offer mobile users the ability to select from a list of available web browsers from a “choice screen.” ↫ Supantha Mukherjee and Foo Yun Chee I can’t believe this is even remotely surprising. A lot of especially Apple fans and people from outside of the European Union complained left, right, and centre about the choice screen and how it was ugly, unnecessary, and would just confuse users. These are interesting claims, considering the fact that setting up a modern smartphone such as the iPhone takes the user through 40-50 setup screens chockful of confusing choices to make, so adding one more surely wouldn’t make a difference. Of course giving users the option to choose a different default browser would lead to an increase in browsers other than Safari (iOS) or Chrome (Android) being set as the default. I’m pretty sure quite a few users learned, through the choice screen, for the first time, that there even are different browsers to choose from, and that some of those might offer features and benefits they didn’t even know they could enjoy. That’s the whole point of this endeavour: informing users that they have a choice, something Apple, Google, and others would rather you either do not have, or at least not know about. It’s far too early to tell if these spikes are a one-off thing, or if the rise in browsers other than Safari on iOS and Chrome on Android is more structural. I wouldn’t be surprised if it’s the latter, and even if the numbers remain in the single digits or low double digits, it will still lead to an increase in competition, and a more vibrant mobile browser market. Good news, regardless.

It turns out Apple, Facebook, and Google were not as clever with their malicious compliance with the European Union’s DMA as they thought they were, as the European Commission has opened investigations into their compliance plans. Especially Apple, who has been most public about its malicious compliance, seems to be the target. Today, the Commission has opened non-compliance investigations under the Digital Markets Act (DMA) into Alphabet’s rules on steering in Google Play and self-preferencing on Google Search, Apple’s rules on steering in the App Store and the choice screen for Safari and Meta’s “pay or consent model”. The Commission suspects that the measures put in place by these gatekeepers fall short of effective compliance of their obligations under the DMA. In addition, the Commission has launched investigatory steps relating to Apple’s new fee structure for alternative app stores and Amazon’s ranking practices on its marketplace. Finally, the Commission has ordered gatekeepers to retain certain documents to monitor the effective implementation and compliance with their obligations. ↫ European Commission press release This is entirely unsurprising. Google’s and Facebook’s compliance plans were less scrutinised in the press, but all still raised questions about whether they would pass mustard. Apple’s plans, meanwhile, were universally seen as deeply malicious and not compliant, and it seems the European Commission agrees. Apple’s continuous wild, flailing attacks on the EU and the DMA certainly aren’t helping, either. There’s no denying Apple’s behaviour has been deeply unprofessional and anti-European Union, which contrasts strongly with how Apple and Tim Cook operate in China, where they face much stricter rules than they do in the EU. Tim Cook is currently in China praising and buttering up to the Chinese totalitarian regime, while the company has been attacking the European Union and DMA almost non-stop for months now. It really shows where Apple’s priorities lie. Meanwhile, Facebook’s pay-for-privacy model was always going to be a hard sell at €10 a month, and as such, the company already announced it was going to cut that cost in half. Google’s plans are a bit more nebulous, since it’s a bit more difficult to see tangible results from things like search rankings, but it seems here, too, the European Commission has its worries about compliance. The European Commission intends to complete its investigations within a year, and if found in violation of the law, companies can be fined for up to 10% of their worldwide turnover, which can grow up to 20% for repeated infringements.

The Department of Justice’s antitrust division has come into its own, having filed its third tech monopoly lawsuit in four years. The accumulated experience shows up in the complaint, according to antitrust experts who spoke with The Verge about the complaint filed Thursday accusing Apple of violating antitrust law. The DOJ describes a sweeping arc of behaviors by Apple, arguing that it adds up to a pattern of illegal monopoly maintenance. Rather than focusing on two or three illegal acts, the complaint alleges that Apple engages in a pattern of behaviors that further entrench consumers into their ecosystem and make it harder to switch, even in the face of high prices and degraded quality. ↫ Lauren Feiner at The Verge It’s been somewhat entertaining seeing Apple fanatics claim the complaint is bad, horrible, has no merit, has no chance in court, and that the DoJ has zero clue what it’s doing – while actual experts are actually positively surprised by how the complaint seems better than they expected. I wonder whose judgement to trust more.