Legal Archive

US investigating AT&T, Verizon over wireless collusion claim

The Justice Department has opened an antitrust investigation into potential coordination by AT&T, Verizon and a telecommunications standards organization to hinder consumers from easily switching wireless carriers, according to six people with knowledge of the inquiry.

In February, the Justice Department issued demands to AT&T, Verizon and the G.S.M.A., a mobile industry standards-setting group, for information on potential collusion to thwart a technology known as eSIM, said two of the people, who spoke on the condition of anonymity because the details are confidential.

The problem, of course, is that in the US, these carriers bribe corrupt politicians to enact laws to hinder competition, for instance by making community broadband initiatives illegal. I doubt investigations like these will do anything to fix the root cause.

But hey, it's a start.

Federal court overturns Oracle v. Google

A US federal court has overturned the jury's decision in favour of Google from 2016.

Google's use of Java shortcuts to develop Android went too far and was a violation of Oracle's copyrights, the U.S. Court of Appeals for the Federal Circuit ruled Tuesday. The case - first filed in 2010 - was remanded to a federal court in California to determine how much the Alphabet Inc. unit should pay. Oracle had been seeking $8.8 billion, though that number could grow. Google expressed disappointment and said it's considering its next steps in the case.

The dispute, which could have far-reaching implications for the entire software industry, has divided Silicon Valley for years between those who develop the code that makes software steps function and those who develop software programs and say their "fair use" of the code is an exception to copyright law.

"It's a momentous decision on the issue of fair use," lawyer Mark Schonfeld of Burns & Levinson in Boston, who's been following the case and isn't involved. "It is very, very important for the software industry. I think it's going to go to the Supreme Court because the Federal Circuit has made a very controversial decision."

This could be one of the absolute worst legal decisions in technology history.

A $1.6 billion Spotify lawsuit is based on player pianos

Spotify is finally gearing up to go public, and the company’s February 28th filing with the SEC offers a detailed look at its finances. More than a decade after Spotify’s launch in 2006, the world’s leading music streaming service is still struggling to turn a profit, reporting a net loss of nearly $1.5 billion last year. Meanwhile, the company has some weird lawsuits hanging over its head, the most eye-popping being the $1.6 billion lawsuit filed by Wixen Publishing, a music publishing company that includes the likes of Tom Petty, The Doors, and Rage Against the Machine.

So, what happened here? Did Spotify really fail to pay artists to the tune of a billion dollars all the while losing money? Is digital streaming just a black hole that sucks up money and spits it out into the cold vacuum of space?

The answer is complicated.

The answer involves something called "player pianos". You can't make this stuff up.

Trump blocks Broadcom’s bid for Qualcomm

President Trump on Monday blocked Broadcom's $117 billion bid for the chip maker Qualcomm, citing national security concerns and sending a clear signal that he was willing to take extraordinary measures to promote his administration’s increasingly protectionist stance.

In a presidential order, Mr. Trump said "credible evidence" had led him to believe that if Singapore-based Broadcom were to acquire control of Qualcomm, it "might take action that threatens to impair the national security of the United States." The acquisition, if it had gone through, would have been the largest technology deal in history.

This US administration would eventually stumble onto doing the right thing - infinite monkeys and all that - so here we are. To explain why this is a good move, Ben Thompson's article about this issue is a fantastic, must-read explainer.

There is a certain amount of irony here: the government is intervening in the private market to stop the sale of a company that is being bought because of government-granted monopolies. Sadly, I doubt it will occur to anyone in government to fix the problem at its root, and Qualcomm would be the first to fight against the precise measures - patent overhaul - that would do more than anything to ensure the company remains independent and incentivized to spend even more on innovation, because its future would depend on innovation to a much greater degree than it does now.

The reality is that technology has flipped the entire argument for patents - that they spur innovation - completely on its head. The very nature of technology - that costs are fixed and best maximized over huge user-bases, along with the presence of network effects - mean there are greater returns to innovation than ever before. The removal of most technology patents would not reduce the incentive to innovate; indeed, given that a huge number of software patents in particular are violated on accident (unsurprising, given that software is ultimately math), their removal would spur more. And, as Qualcomm demonstrates, one could even argue such a shift would be good for national security.

Can the United States search data overseas?

Should the United States government be able to conduct a search of your emails if they are stored on a server in another country, or does the government’s right to examine digital evidence stop at the border?

That is a central question in United States v. Microsoft, a case scheduled to be argued on Tuesday before the Supreme Court.

Both sides in the case have legitimate concerns. If the court sides with Microsoft and declines to allow searches for data stored in another country, the government will be hampered in investigating crimes like terrorism, child pornography and fraud.

If the court sides with the government and rules that it may demand data stored overseas by American companies, those companies will find it much harder to do business abroad. This is because many foreigners fear that United States warrants authorizing such searches will disregard privacy protections afforded by their country. The government of Germany, a country with stringent privacy laws, has already indicated it will not use any American company for its data services if the court decides to allow searches.

At this point, I feel like it's just safer to assume all data stored online or sent from one device to the next is essentially not secure in the sense that no one will be able to read if they really wanted to. It's not the way it should be, but I don't think there's a whole lot we can do about it - regardless of the outcome of legal cases such as this one.

Eric Lundgren faces prison for trying to extend life span of PCs

Eric Lundgren is obsessed with recycling electronics.

He built an electric car out of recycled parts that far outdistanced a Tesla in a test. He launched what he thinks is the first "electronic hybrid recycling" facility in the United States, which turns discarded cellphones and other electronics into functional devices, slowing the stream of harmful chemicals and metals into landfills and the environment. His California-based company processes more than 41 million pounds of e-waste each year and counts IBM, Motorola and Sprint among its clients.

But an idea Lundgren had to prolong the life of personal computers could land him in prison.

One of those cases that fills any decent human being with rage.

Verizon, Apple continue to lobby against your ‘right to repair’

Third party phone repair shops say that phone makers like Apple and game console makers like Sony and Microsoft have effectively monopolized repair, using their size and power to drive smaller companies out of business.

Verizon and Apple have worked in union to thwart such bills in several states, but traditionally don't like to publicly talk about their lobbying on this front. They now have another state to worry about, with Washington State considering their own right to repair bill, created in the wake of outrage over Apple's decision to throttle the performance of older phones to (Apple insists) protect device integrity in the wake of failing battery performance.

I've said it a million times by now, but I see no reason why computers should be treated any different than cars: PC and phone makers should be forced to publicise the necessary information to allow third-party repair shops to repair their devices, all without voiding warranty.

New bill aims to ban US gov from using Huawei, ZTE phones

US lawmakers have long worried about the security risks posed the alleged ties between Chinese companies Huawei and ZTE and the country's government. To that end, Texas Representative Mike Conaway introduced a bill last week called Defending U.S. Government Communications Act, which aims to ban US government agencies from using phones and equipment from the companies.

Almost all phones and electronics - including most "American" or "European" phones - are made in China. This seems more like a battle in a wider trade war than something related to spying.

The FCC just killed net neutrality

Net neutrality is dead - at least for now. In a 3-2 vote today, the Federal Communications Commission approved a measure to remove the tough net neutrality rules it put in place just two years ago. Those rules prevented internet providers from blocking and throttling traffic and offering paid fast lanes. They also classified internet providers as Title II common carriers in order to give the measure strong legal backing.

Today's vote undoes all of that. It removes the Title II designation, preventing the FCC from putting tough net neutrality rules in place even if it wanted to. And, it turns out, the Republicans now in charge of the FCC really don’t want to. The new rules largely don’t prevent internet providers from doing anything. They can block, throttle, and prioritize content if they wish to. The only real rule is that they have to publicly state that they’re going to do it.

Nobody wanted the FCC to vote like this. Public support for net neutrality is massive. The only reason this is happening is pure, unbridled corruption at the very root of the American political system.

Here are the Russia-linked Facebook ads released by Congress

As part of this week's hearings into how Russia has used social media to influence American opinion, House lawmakers released several Facebook and Instagram ads linked to Kremlin meddling online. Although lawmakers have not yet released the full cache of ads, which includes about 3,000 examples provided to Congress by Facebook, the so-far disclosed ads offer one of the closest looks yet at the Russian operation.

Some of these ads and fake accounts are quite fascinating - they're clearly designed not just to promote Trump, but also to rile up different groups - from the LGBT community to proponents of the US 2nd amendment - against each other. Oh, and also to pitch a fight between Clinton and Jesus.

Facebook, Google, Twitter spread Russian-backed propaganda

Top officials from Facebook, Google, and Twitter told a congressional panel Tuesday that their platforms hosted a disinformation campaign carried out over their networks by Russian state actors. The propaganda centered on the presidential election, immigration, gun rights, gay rights, and racial issues, the companies said. None of the three organizations said they supported proposed legislation requiring them to disclose who is buying political advertisements on their platforms, although these Web companies promised more public transparency about who is buying ads on their networks.

All political spending must be disclosed in some form or another in most countries, so I see no reason why ad spending on Facebook or Twitter should be any different. I also like the idea to make it illegal - or impossible - for foreign entities to buy ad space for political content; as in, a French entity would not be able to buy political ads in The Netherlands. It's already illegal in, say, the US for foreign entities to donate or spend money on candidates, so there's definitely precedent.

The real issue, however, is that it might be hard, though, to define what is a political ad, and what isn't.

Samsung CEO to resign citing ‘unprecedented crisis’

Kwon Oh-hyun, Samsung Electronics' CEO, vice chairman, and the head of its hugely successful components business, has announced his resignation. He will step down from the CEO role, as well as his positions on the board and as CEO of Samsung Display, in March 2018.

"It is something I had been thinking long and hard about for quite some time. It has not been an easy decision, but I feel I can no longer put it off," Kwon said in a letter sent to employees. "As we are confronted with unprecedented crisis inside out, I believe that time has now come for the company start anew, with a new spirit and young leadership to better respond to challenges arising from the rapidly changing IT industry."

The unnamed "crisis" in Kwon's letter no doubt includes the imprisonment of Lee Jae-yong, the de facto leader of the entire Samsung group, on corruption charges. While Lee didn't take a hands-on role in Samsung Electronics' regular business, Kwon's resignation is the first sign that the scandal could have a major impact on the company's operations and culture.

South Korea are a bunch of amateurs. Everybody knows real freedom-loving countries legalise corruption and rebrand it as Lobbyingâ„¢ so that companies like Apple, Google, and others can legally bribe politicians and buy political favours without fear of being imprisoned.

Get with the program, South Korea.

EU finds Luxembourg gave illegal tax benefits to Amazon

The European Commission has concluded that Luxembourg granted undue tax benefits to Amazon of around €250 million. This is illegal under EU State aid rules because it allowed Amazon to pay substantially less tax than other businesses. Luxembourg must now recover the illegal aid.

Remember when Tim Cook lied about the EU only going after Apple because Apple is big? Apple's illegal deal with Ireland is just one on a long, long list of illegal deals the EU is cracking down on.

Anyway, speaking of the 13 billion euro Apple stole from EU citizens:

The European Commission has decided to refer Ireland to the European Court of Justice for failing to recover from Apple illegal State aid worth up to €13 billion, as required by a Commission decision.

Today, more than one year after the Commission's decision, Ireland has still not recovered any of the illegal aid. Furthermore, although Ireland has made progress on the calculation of the exact amount of the illegal aid granted to Apple, it is only planning to conclude this work by March 2018 at the earliest.

The crackdown on these illegal tax deals hopefully only represents the first step in cracking down on the grotesquely questionable conduct of large technology (and other sectors) companies. Backroom deals between governments and powerful corporations so they can effectively avoid paying any taxes while the rest of us do our civic duty by paying our taxes to pay for our schools, roads, hospitals, police, firefighters, and so on are a travesty.

If Apple, Amazon, Google, and others want to make use of the juicy fruits of European welfare states, they better start paying their fair share.

Apple and Qualcomm’s billion-dollar war over an $18 part

Within a matter of weeks, Qualcomm, which had been valued at more than $100 billion in December 2016, had lost a quarter of its market capitalization, an outcome that Qualcomm executives say was Apple's intent all along. "Apple's game plan is to squeeze people until they finally say, 'OK, the pressure's too hard. I'll just take a deal,'" said Derek Aberle, then Qualcomm's president and the company's chief negotiator, in an interview in July. Apple, on the other hand, presents the dispute as a matter of fairness. "It's not that we can't pay," Sewell says. "It's that we shouldn't have to pay."

The case, which could go to trial in a San Diego federal court as early as next year, could have a profound impact on the mobile phone business. A Qualcomm win would hamper Apple’s efforts to cut costs and preserve margins that have allowed it to capture most of the profits generated by smartphone makers worldwide. If Apple wins and succeeds in ending the Qualcomm tax, that could marginalize one of the most powerful American technology companies and upend the balance of power in the semiconductor industry.

I have zero sympathy for either of these two companies. I literally cannot find a single fournication to give.

The dystopia we signed up for

The world has become like an eerily banal dystopian novel. Things look the same on the surface, but they are not. With no apparent boundaries on how algorithms can use and abuse the data that's being collected about us, the potential for it to control our lives is ever-growing.

Our drivers' licenses, our keys, our debit and credit cards are all important parts of our lives. Even our social media accounts could soon become crucial components of being fully functional members of society. Now that we live in this world, we must figure out how to maintain our connection with society without surrendering to automated processes that we can neither see nor control.

Data of 143 million Americans stolen from Equifax

Equifax Inc. today announced a cybersecurity incident potentially impacting approximately 143 million U.S. consumers. Criminals exploited a U.S. website application vulnerability to gain access to certain files. Based on the company's investigation, the unauthorized access occurred from mid-May through July 2017. The company has found no evidence of unauthorized activity on Equifax's core consumer or commercial credit reporting databases.

Names, social security numbers, birthdays, addresses, driver's license numbers, credit card numbers - this is a very big breach.

Interestingly enough, three executives of the credit reporting agency sold their shares in the company days after the breach was discovered.

EC hits Google with record 2.42 billion EUR fine

The European Commission has fined Google €2.42 billion for breaching EU antitrust rules. Google has abused its market dominance as a search engine by giving an illegal advantage to another Google product, its comparison shopping service.

The company must now end the conduct within 90 days or face penalty payments of up to 5% of the average daily worldwide turnover of Alphabet, Google's parent company.

The two core offences as noted by the European Comission are as follows:

From 2008, Google began to implement in European markets a fundamental change in strategy to push its comparison shopping service. This strategy relied on Google's dominance in general internet search, instead of competition on the merits in comparison shopping markets:

  • Google has systematically given prominent placement to its own comparison shopping service: when a consumer enters a query into the Google search engine in relation to which Google's comparison shopping service wants to show results, these are displayed at or near the top of the search results.
  • Google has demoted rival comparison shopping services in its search results: rival comparison shopping services appear in Google's search results on the basis of Google's generic search algorithms. Google has included a number of criteria in these algorithms, as a result of which rival comparison shopping services are demoted. Evidence shows that even the most highly ranked rival service appears on average only on page four of Google's search results, and others appear even further down. Google's own comparison shopping service is not subject to Google's generic search algorithms, including such demotions.

As a result, Google's comparison shopping service is much more visible to consumers in Google's search results, whilst rival comparison shopping services are much less visible.

Much like Apple's and Ireland's illegal tax deal, fines like this can be easily avoided: respect the laws regarding doing business in the EU. I don't expect the current (or the previous, for that matter) US administration to keep these incredibly powerful tech giants in check, so I guess it's up to the EU.

Website used Zillow photos to mock bad design; Zillow may sue

Cyrus Farivar, for Ars:

An architecture blogger has temporarily disabled her website, McMansionHell.com, after receiving a demand letter from Zillow and posting it on Twitter.

On Monday, Zillow threatened to sue Kate Wagner, saying that that she was violating its terms of use, copyright law, and possibly the Computer Fraud and Abuse Act because she took images from the company's website without permission. However, on each of her posts, she acknowledged that the images came from Zillow and were posted under the fair use doctrine, as she was providing (often humorous) commentary on various architectural styles. Her website was featured on the design podcast 99% Invisible in October 2016.

Confusingly, Zillow does not even own the images in question. Instead, Zillow licenses them from the rights holders. As such, it remains unclear why the company would have standing to bring a lawsuit against Wagner.

Her website is incredibly entertaining, and you'd think such use of photos falls squarely under fair use. It sucks that she had to shutdown her website, and I'm hoping Zillow loses this case hard.

Trump administration approves social media checks

The Trump administration has rolled out a new questionnaire for U.S. visa applicants worldwide that asks for social media handles for the last five years and biographical information going back 15 years.

Under the new procedures, consular officials can request all prior passport numbers, five years' worth of social media handles, email addresses and phone numbers and 15 years of biographical information including addresses, employment and travel history.

While the new questions are voluntary, the form says failure to provide the information may delay or prevent the processing of an individual visa application.

This surely won't affect the countless incredibly smart scientists and engineers wanting to work in the US and contribute to the US economy.