Court Tosses Libel Suit Brought Against A Legal Doc Site For ‘Failing’ To Report On A Settlement Agreement

Defamation

from the reporting-facts-is-never-defamatory dept

We’ve seen lots of… shall we say… misguided libel lawsuits here at Techdirt. We’ve also seen plenty of lawsuits filed for the sole purpose of bullying someone into silence for reporting inconvenient facts.

This case is more of the “misguided” variety. Someone who clearly doesn’t understand the basics of libel law filed a lawsuit against a legal document site, Leagle. That would be unsurprising if the litigant was representing himself. But he had a lawyer, David Epstein, who apparently didn’t understand the basics of libel law.

John Thomas and his lawyer actually filed a lawsuit in federal court claiming it was defamatory for Leagle to host a copy of a decision by the California Court of Appeals that ruled Thomas had abused the discovery process during a lawsuit where Thomas was the defendant and $1.2 million in damages was awarded to the plaintiff.

This was all factual. This actually happened and was documented in a court decision that Leagle posted to its site. That wasn’t the end of this particular litigation, however. On remand, a settlement was reached.

According to Thomas (and his legal rep), the failure of Leagle to publish the decision noting the settlement was defamatory.

Defendants maintain an internet website that purports to provide information about legal cases. Defendants published and continue to publish information regarding a legal case against plaintiff which left the false impression that judgment was in effect against him, including for fraud, when in fact the case was dismissed. In spite of amicable demand, defendant failed and resumed to remove or correct the information, causing damage to plaintiff’s reputation and business interests.

Yeah… that’s not defamation. Posting one set of facts is factual reporting. That those facts were (sort of) superseded by another set of facts doesn’t make the original posting (which, we must reiterate, was nothing more than the posting of court decision) any less factual. It definitely doesn’t make it libel.

Leagle never responded to the lawsuit and Thomas moved for a default judgment. Despite facing no one and no motions to the contrary, he still loses. And that’s because the law simply does not work the way Thomas would like it to.

This is from the short decision [PDF] dismissing Thomas’ ridiculous libel lawsuit:

Here, Legale’s publication of the trial court order finding Plaintiff liable for civil fraud is unquestionably a “fair and true” reflection of what happened during a judicial proceeding. Although the order that Legale published was reversed, the appellate court’s reversal does not change the fact that Plaintiff was found liable in the trial court, and thus does not alter the accuracy of Legale’s reporting. Thus, Leagle’s reporting is protected by the fair report privilege and the motion should be denied.

The law protects reporters and reporting, the court goes on to say. The public’s interest is served by court reporting, including the publication of court documents. Requiring reporters (and legal doc sites like Leagle) to constantly monitor all courts and all motions, rulings, etc. to ensure every publication is the latest publication would just lead to fewer entities engaging in this important public service.

Requiring reporters to continuously update stories on trial proceedings to account for appellate developments would disincentivize coverage of trial proceedings.

While it does indeed subjectively suck for Thomas to be memorialized on Leagle as someone who committed court fraud, those were the facts at the time Leagle published the ruling. It’s just the way it is, and what Thomas believes is libel is just the way reporting works. What happened actually happened. Leagle cannot possibly defame anyone by publishing court documents. And Thomas should have recognized this fact long before he decided to be taken for a ride by a lawyer who, at the very least, should have recognized this fact and apprised Thomas of his inability to win this lawsuit.

Filed Under: 1st amendment, david epstein, defamation, fair and true, john thomas, journalism, truthful reporting
Companies: leagle

Dumb, Telecom Industry Backed ‘Network Fees’ Drive Twitch Out Of Korea

Broadband

from the please-pay-me-extra-for-no-coherent-reason dept

Twitch has announced that the company is shutting down in Korea after regulators there imposed a ridiculous new regulatory framework that drove the company’s operational costs through the roof.

Basically: Korean telecoms convinced gullible regulators to pass a new regulatory framework wherein edge providers and content companies are forced to pay telecoms additional fees just to have their traffic successfully reach its destination (consumers). It’s in addition to bandwidth costs, and, as we’ve pointed out for a while, it’s a dumb cash grab and the latest extension of the longstanding net neutrality wars.

In a blog post, Twitch CEO Dan Clancy explains that with the addition of these new mandated network fees, the company has found it impossible to turn a profit in Korea and has been forced to close up shop:

“Ultimately, the cost to operate Twitch in Korea is prohibitively expensive and we have spent significant effort working to reduce these costs so that we could find a way for the Twitch business to remain in Korea. First, we experimented with a peer-to-peer model for source quality. Then, we adjusted source quality to a maximum of 720p. While we have lowered costs from these efforts, our network fees in Korea are still 10 times more expensive than in most other countries. Twitch has been operating in Korea at a significant loss, and unfortunately there is no pathway forward for our business to run more sustainably in that country.”

For the better part of the last few decades, global telecom giants have been trying to “double dip.” As in, not only do they charge businesses and consumers an arm and a leg for (often terrible) broadband, but they’ve been trying very hard to institute new regulatory frameworks where consumer and content companies alike pay telecoms huge sums of additional money for no coherent reason.

This idea that big ISPs are inherently owed a cut of the revenues of services traveling over their networks is what launched the net neutrality wars around the world several decades ago, when AT&T insisted Google “wouldn’t ride our pipes for free.” It’s evolved in dumber and dumber ways ever since.

Under Korea’s model, edge providers (like Netflix) are forced to pay “network service fees” to ISPs. Basically, ISPs there have claimed that they’re inherently owed more money if a TV show on Netflix is super popular, claiming they should be compensated for extra bandwidth costs.

Of course, bandwidth provisioning doesn’t really work like that. ISPs are supposed to build networks that can handle any peak capacity spikes caused by normal consumer demand. The origins of those demands are irrelevant. Consumers and edge providers have already paid an arm and a leg for bandwidth, particularly if regional monopolization has driven down any incentive to compete on price.

All they’re really doing here is trying to offload network operations and maintenance costs to someone else. In this case: Korean game streamers or Netflix users.

Demanding that popular companies pay more to telecoms just for being popular is an inherently stupid idea, but it’s been dressed up by telecom lobbyists as serious adult policy under terms such as “sender pays” or sometimes “Sending Party Network Pays” (SPNP). I’ve been dumbfounded by how these proposals have been treated as serious policy.

The efforts always begin with false claims that companies like Google and Netflix are somehow “getting a free ride” on the internet, despite spending billions in bandwidth, CDNs, undersea cables, and cloud infrastructure. From there, they usually involve some flavor of false claim that this model will help expand broadband availability to those in need. But its only real function is to fatten telecoms’ purses.

Like many countries, Korean regulators largely favor just three big major ISPs, which then influence policy determinations to an extremely lopsided degree. This muted competition, combined with regulatory capture, plus the SPNP model, has driven up costs for Korean consumers (see Michael Nelson’s good 2021 piece on this, or this 2022 Techdirt story by Konstantinos Komaitis).

Now, regulatory capture is driving edge companies out of business, and driving up both bandwidth and content costs for consumers. It’s all predatory nonsense created by regulatory capture and corruption, and the telecom policy marionettes pushing the idea aren’t operating in good faith. They’ve hijacked regulators to implement systems that deliver telecoms billions of additional dollars for doing nothing.

And if you think this is only happening in Korea, it’s not. It’s been an ongoing debate in the EU, where telecoms have floated a direct tax on any company that accounts for more than 5 percent of a telco’s average peak traffic. Here in the States, FCC Commissioner Brendan Carr (R, AT&T) has been a big proponent of the idea for several years now.

Again, it’s basically telecoms trying to get paid twice for the same (often substandard) service. That it has been dressed up as a serious policy proposal is embarrassing. California’s net neutrality rules ban such practices, and if they’re worth anything, the FCC’s soon-to-be-restored rules will as well.

Filed Under: fcc, lobbying, net neutrality, open internet, regulators, sender pays, sening party network pays, south korea, spnp, streaming, telecom
Companies: amazon, twitch

Daily Deal: Apple Watch Portable USB Charger

Deals

from the good-deals-on-cool-stuff dept

This Apple Watch Portable USB Charger allows you to charge anytime, anywhere. With a built-in magnetic adsorption module, you can charge your watch immediately after contact. This charger has the ability to charge your watch within 2 to 3 hours fully. It’s lightweight and portable, so you can charge your watch while traveling, when working or when you’re at home. Compatible with any Apple Watch of different sizes. It’s on sale for $15.

Note: The Techdirt Deals Store is powered and curated by StackCommerce. A portion of all sales from Techdirt Deals helps support Techdirt. The products featured do not reflect endorsements by our editorial team.

Filed Under: daily deal

Even If You Hate Both AI And Section 230, You Should Be Concerned About The Hawley/Blumenthal Bill To Remove 230 Protections From AI

Policy

from the a-blumenthal/hawley-specialty dept

Over the past few days I’ve been hearing lots of buzz claiming that either today or tomorrow Senator Josh Hawley is going to push to “hotline” the bill he and Senator Richard Blumenthal introduced months back to explicitly exempt AI from Section 230. Hotlining a bill is basically an attempt to move the bill quickly by seeking unanimous consent (i.e., no one objecting) to a bill.

Let me be extremely explicit: this bill would be a danger to the internet. And that’s even if you hate both AI and Section 230. We’ve discussed this bill before, and I explained its problems then, but let’s do this again, since there’s a push to sneak it through.

First off, there remains an ongoing debate over whether or not Section 230 actually protects the output of generative AI systems. Many people say it should not, arguing that the results are from the company in question, and thus not third party speech. Lawyer Jess Miers made the (to me) extremely convincing case as to why this was wrong.

In short, the argument is that courts have already determined that algorithmic output derived from content provided by others is protected by Section 230. This has been true in cases involving things like automatically generated search snippets or things like autocomplete. And that’s kind of important or we’d lose algorithmically generated summaries of search results.

From there, you now have to somehow distinguish “generative AI output” from “algorithmically generated summaries” and there’s simply no limiting principle here. You’re just arbitrarily declaring some algorithmically generated content “AI” and some of it… not?

I remain somewhat surprised that Section 230’s authors, Ron Wyden and Chris Cox, have enthusiastically supported the claim that 230 shouldn’t protect AI output. It seems wrong on the law and wrong on the policy as noted above.

Still, Senators Hawley and Blumenthal introduced this bill that would make a mess of everything, because it’s drafted so stupidly and so poorly that it should never have been introduced, let alone be considered for moving forward.

First of all, if Wyden and Cox and those who argue 230 doesn’t apply are right, then this bill isn’t even needed in the first place, because the law already wouldn’t apply.

But, more importantly, the way the law is drafted would basically end Section 230, but in the dumbest way possible. First the bill defines generative AI extremely broadly:

GENERATIVE ARTIFICIAL INTELLIGENCE.—The term ‘generative artificial intelligence’ means an artificial intelligence system that is capable of generating novel text, video, images, audio, and other media based on prompts or other forms of data provided by a person.’

That’s the entirety of the definition. And that could apply to all sorts of technology. Does autocomplete meet that qualification? Probably. Arguably, spellchecking and grammar checking could as well.

But, again, even if you could tighten up that definition, you’d still run into problems. Because the bill’s exemption is insanely broad:

‘‘(6) NO EFFECT ON CLAIMS RELATED TO GENERATIVE ARTIFICIAL INTELLIGENCE.—Nothing in this section (other than subsection (c)(2)(A)) shall be construed to impair or limit any claim in a civil action or charge in a criminal prosecution brought under Federal or State law against the provider of an interactive computer service if the conduct underlying the claim or charge involves the use or provision of generative artificial intelligence by the interactive computer service.’’;

We need to break down the many problems with this. Note that the exemption from 230 here is not just on the output of generative AI. It’s if the conduct “involves the use or provision” of generative AI. So, if you write a post, and an AI grammar/spellchecker suggests edits, then the company is no longer protected by Section 230?

Considering that AI is currently being built into basically everything, this “exemption” will basically eat the entire law, because increasingly all content produced online will involve “the use or provision” of generative AI, even if the content itself has nothing to do with the service provider.

In short, this bill doesn’t just strip 230 protections from AI output, in effect it strips 230 from any company that offers AI in its products. Which is basically a set of internet companies rapidly approaching “all of them.” At the very least, plaintiffs will sue and claim that the content had some generative AI component just to avoid a 230 dismissal and drag the case out.

Then, because you can tell an AI-based systems to do something that violates the law, you can automatically remove all 230 protections from the company. Over at R Street, they give an example where they deliberately convince ChatGPT to defame Tony Danza.

And, under this law, doing so would open up OpenAI to liability, even though all it was doing was following the instructions of the users.

Then there’s a separate problem here. It creates a massive state law loophole. As we’ve discussed for years, for very good reasons, Section 230 preempts any state laws that would undermine it. This is to prevent states from burdening the internet with vexatious liability as a punishment (something that is increasingly popular across the political spectrum as both major political parties seek to punish companies for ideological reasons).

But, notice that this exemption deliberately carves out “state law.” That would open the floodgates to terrible state laws that introduce liability for anything related to AI, and again help to effectively strip any protections from companies that offer any product that has AI. It would enable a ton of mischief from politically motivated states.

The end result would harm a ton of internet speech, because when you add liability, you get less of the thing you add liability to. Companies would be way less open to hosting any kind of content, especially content that has any algorithmic component, as it opens them up to liability under this law.

It would also make so many tools too risky to offer. Again, this could include things as simple as spelling and grammar checkers, as such tools might strip the companies and the content from any kind of 230 protections.

I mean, you could even see scenarios like: if someone were to post a defamatory post that includes an unrelated generative AI image to Facebook, the defamed party could now sue Meta, rather than the person doing the defamation. Because the use of generative AI in the post would strip Meta of the 230 protections.

So, basically, under this law, anyone who wants to get any website in legal trouble just has to post something defamatory and include some generative AI content with it, and the company loses all 230 protections for that content. At the very least, this would lead companies to be quite concerned about allowing any content that is partially generated by AI on their sites, but it’s difficult to see how one would even police that?

Thus, really, you’re just adding liability and stripping 230 from the entire internet.

Again, even if you think AI is problematic and 230 needs major reform, this is not the way to do that. This is not a narrowly targeted piece of legislation. It’s a poorly drafted sledgehammer to the open internet, at least in the US. Section 230 was the key to the US becoming a leader in the original open internet. American companies lead the internet economy, in large part because of Section 230. As we enter the generative AI era, this law would basically be handing the next technology revolution to any other country that wants it, by adding ruinous liability to companies operating in the US.

Filed Under: generative ai, josh hawley, liability, richard blumenthal, section 230

Congressional Incompetence Could Doom Key Low-Income Broadband Program

Broadband

from the dysfunction-junction dept

Americans pay some of the highest prices in the developed world for broadband due to consolidated monopoly power and feckless regulators. It’s a problem the U.S. government lacks the competence or political integrity to fix. So what we usually get are strange Band-Aids that treat the symptoms of the underlying problem (unchecked corporate power muting competition).

Case in point: during the peak of the pandemic, the FCC launched the Emergency Broadband Benefit (EBB program), giving lower income Americans a $50 ($75 for those in tribal lands) discount off of their broadband bill. Under the program, the government gave money to ISPs, which then doled out discounts to low income users if they qualified.

The EBB was rebranded the Affordable Connectivity Program (ACP) as part of the Infrastructure Bill (the payout was dropped to $30 a month). 22 million Americans are currently receiving the discount; but bumbling incompetence in Congress means the program is at risk of not being renewed, notes Gigi Sohn (whose FCC nomination was recently demolished by a telecom industry smear campaign):

“Congress is on the verge of letting the program run out of money if swift action is not taken to extend ACP funding,” Sohn said. “I urge Congress to meet the moment and invest at least $6 billion to keep this program funded through 2024, giving policymakers time to find ACP funding a permanent home,” Sohn’s statement said.

I’m of dual minds about the program.

On one hand, government is basically throwing millions of dollars at regional telecom monopolies and duopolies to temporarily lower prices that wouldn’t be high in the first place if these exact same companies hadn’t spent the last 30 years undermining all competition and lobbying government oversight into a pathetic and purposeless goo.

On the other hand, more than 22 million low income Americans (it’s projected to be closer to 25 million by April) are currently subscribed to the program. And ripping it out from underneath their feet doesn’t seem fair to those families. Especially in context of the billions of dollars we routinely throw at industry in exchange for half-completed networks or a giant bucket of layoffs.

Ideally, you’d have lawmakers and regulators with the courage to tackle the real cause of expensive U.S. broadband: monopoly power, unchecked corporate political influence (corruption), and a lack of meaningful competition. Breaking the monopoly logjam by supporting things like publicly-owned open access fiber networks would go a long way to driving competition to market.

We don’t have public officials like that (again, please see the coordinated industry smear campaign against Gigi Sohn to understand why), so instead we get programs like the ACP. Or efforts by the FCC to apply “nutrition labels” to broadband, which demand that big telecom monopolies are transparent about how they rip you off, but, again, do nothing about the underlying cause of high prices in the first place.

This kind of regulatory theater is often kind of silly. But in this case it resulted in a program that’s genuinely helping low-income Americans, even if it’s probably going about it the wrong way. The program is poised to run out of funding by April if Congress can’t get its act together. And despite bipartisan approval for renewal, it remains entirely unclear if that’s going to happen.

If it doesn’t, millions of Americans getting temporary relief from telecom monopolization in the form of monthly discounts will suddenly be thrown right back into the fire.

Filed Under: Affordable Connectivity Program, affordable internet, broadband, fcc, high speed internet, low income, telecom

You Still Don’t Own What You Bought: Purchased TV Shows From PS Store Go Bye Bye

Culture

from the you-bought-the-right-to-be-disappointed dept

Thank you for joining us for your latest lesson in how you don’t actually own the things you buy when you buy them digitally. Over a year ago, we discussed a story out of Germany and Austria where a deal expired between Sony and movie distributor StudioCanal, which resulted in 100s of movies being delisted and deleted, both from the PlayStation Store and from the PlayStations of those who bought them. Yup! People bought a thing, got a thing, and then had that thing clawed back from them once the licensing agreement wasn’t renewed. You can guess for yourself whether members of the public who “bought” these movies had any idea that them disappearing long after purchase was even a possibility, but don’t overthink it, you know the answer.

But maybe you thought, “Sucks for Germany, but that wouldn’t happen here in America.” Well, turns out it sucks for some of us, too, as the exact same thing happened here, only with shows and content produced by Discovery and purchased through the PlayStation Store.

The latest pothole in the road to an all-digital future was discovered via a warning Sony recently sent out to PlayStation users who purchased TV shows made by Discovery, the reality TV network that recently merged with Warner Bros. in one of the most brutal and idiotic corporate maneuvers of our time. “Due to our content licensing arrangements with content providers, you will no longer be able to watch any of your previously purchased Discovery content and the content will be removed from your video library,” read a copy of the email that was shared with Kotaku.

It linked to a page on the PlayStation website listing all of the shows impacted. As you might imagine, given Discovery’s penchant for pumping out seasons of relatively cheap to produce but popular reality TV and documentary-based shows, there are a lot of them. They include, but are not limited to, hits such as: Say Yes to the Dress, Shark Week, Cake Boss, Long Island Medium, Deadly Women, and many, many more.

And MythBusters, too, which feels like that show missed an opportunity to bust the myth that you own what you bought when you purchase something digitally. The reality is that there is no good way to actually retain these shows in cases like this. Some that “bought” Discovery content are freaking out, understandably.

“Is there a way I can save this content?” asked one panicked PlayStation user on Reddit. “I use PS4…But I have bought many seasons of shows such as Dual Survival that I do not wish to lose. I was actually under the impression since I owned it, I wouldn’t ever lose it…”

Whatever else is true, it’s obvious that platforms aren’t doing nearly enough to actually inform customers of what they’re buying, leasing, renting, whatever. It would be one thing if this content was ripped away and everyone on all sides realized that was a possibility. That just isn’t the case.

And just as in the Germany instance, there’s no chance that any of this comes with any refunds or givebacks. Well-meaning customers who paid money for this content simply don’t have it anymore. And it just isn’t like having a Netflix account or something like that, where the product catalogue is constantly in flux. It’s people who are buying a show, or the season of a show. But they’re really not. They’re renting it until some combination of Sony and the licensee decides they’re not.

And that just isn’t a tenable future.

Filed Under: culture, licensing, ownership, playstation, tv shows
Companies: sony, warner bros. discovery

Indiana’s Lawsuit Against TikTok Fails As Well

Legal Issues

from the tiktok-china-bad-is-not-a-legitimate-legal-claim dept

Last week we wrote about how Montana’s ridiculous TikTok ban was blocked by a judge for being fairly obviously unconstitutional. But in the rush of the moral panic over TikTok coming from all over, I had missed that Indiana had sued the company. The argument was that TikTok had violated “child safety laws,” and in some ways appears to have some similarities with the recent state lawsuits against Meta.

If you want a preview of how that might go, well, a judge has dismissed the lawsuit.

The case was in local court, not federal court (TikTok tried to move it to federal court, but for procedural reasons it went back to the state court), but the reasoning for the dismissal is pretty straightforward: basically, wtf does any of this have to do with Indiana?

Here, the Amended Complaint does not allege facts sufficient to establish this Court’s jurisdiction over Defendants. The Amended Complaint does not allege that Defendants made any of their allegedly deceptive statements or omissions in Indiana, nor does it allege that those statements or omissions were specifically directed at Indiana users. The statements and alleged omissions are found in multiple sources, all of which can be characterized as directed to the U.S. market as whole. Some of these places include letters and testimony to legislators, interviews with news outlets, and statements on TikTok’s website.

While the Amended Complaint alleges that the TikTok platform is available to Hoosiers through third-party app stores, this is insufficient to establish specific jurisdiction because the State does not allege that TikTok specifically targeted Indiana. See Wolf’s Marine, N.E.3d at 17 (“If the defendant merely operates website, even ‘highly interactive’ website, that is accessible from, but does not target, the forum state, then the defendant may not be haled into court in that state without offending the Constitution”) (quoting be2 LLC v. Ivanov, 642 F.3d 555, 559 (7th Cir. 2011)).

Moreover, it is well-established that the unilateral act of third party such as Hoosier downloading and using TikTok, or third-party app store offering TikTok in Indiana cannot establish specific jurisdiction. See, e.g., Walden, 571 U.S. at 28586. As the Seventh Circuit has observed, if having an interactive website were enough in situations like this one, there is no limiting principle and plaintiff could sue everywhere. Adv. Tactical Ordnance Sys., LLC v. Real Action Paintball, lnc., 751 F.3d 796, 803 (7th Cir. 2014).

Still, the court looks at whether or not TikTok’s conduct here would have violated the state’s Deceptive Consumer Sales Act and finds that… no… it would not. First, downloading a free app is not a sale or transaction, so the law doesn’t actually apply:

As the downloading of the free TikTok app is not consumer transaction, the State has failed to state claim under the DCSA and TikTok is entitled to dismissal of the State’s Amended Complaint under Trial Rule 12(B)(6).

Furthermore, the court notes that it does not appear that TikTok made any “deceptive acts or omissions” that were related to any consumer transaction.

There are no allegations that Indiana users even heard these alleged misstatements, let alone relied on them. when deciding to download and use the TikTok platform. ln the absence of such allegations, the State has not asserted claim under the DCSA and TikTok’s Motion to Dismiss shall be granted.

Was TikTok deceptive? Well, the court doesn’t think the state presented any such evidence:

But notably absent from the State’s allegations is the “how” of the fraudin other words, the “identity of what was procured by fraud.” Cont’l Basketball Ass’n, /nc., 669 N.E.2d at 132; see also Himan v. Thor Indus, lnc., 2022 WL 683650, at 14 (N.D. Ind. Mar. 8, 2022). In particular, the Amended Complaint does not assert that TikTok’s alleged statements or omissions “led [consumers] to” download the TikTok platform, “which [they] would not have otherwise done if [they] had been fully informed.” Himan, 2022 WL 683650, at 14. This is dispositive and requires dismissal of the Amended Complaint…..

Similarly, the Amended Complaint does not allege facts establishing that TikTok’s alleged misrepresentations were material, or that TikTok acted with an “intent to defraud,” as required to state claim of incurable deceptive acts.

Even more to the point, regarding Indiana’s arguments that TikTok users were deceived and unaware that ByteDance employees in China might be able to access their data, well, the company has been kinda public about that?

First, the State’s allegations establish that TikTok disclosed to TikTok users the ways in which their data may be accessed and with whom it may be shared. TikTok users in the United States are subject to TikTok’s Privacy Policy, which is available on TikTok |nc.’s website. The Privacy Policy states that the TikTok platform “is supported by certain entities within our corporate group, which are given limited remote access to Information We Collect,” and that “entities with whom TikTok may share [user] data may be located outside of the United States.” Relying on the Privacy Policy, the Amended Complaint alleges that “current and recent versions of TikTok’s privacy policy state that it may share data it collects with its parent company ByteDance or other affiliates, or certain entities, within its corporate group, many of whom are subject to Chinese law.” Additionally, the Amended Complaint alleges that in 2020 former executive stated: “TikTok relies on China-based ByteDance personnel for certain engineering functions that require them to access encrypted TikTok user data.” Similarly, the Amended Complaint alleges that in “a June 2022 letter to multiple U.S. senators, TikTok acknowledged that ‘[e]mployees outside the U.S., including China:based employees, can have access to TikTok U.S. user data subject to series of robust cybersecurity Controls….

ln light of these alleged disclosures, TikTok cannot be held liable under the DCSA for not “alert[ing] Indiana consumers to the ability of TikTok to share their data with individuals or entities located in China, or for individuals or entities located in China to access that data.”

Indiana tried to argue that TikTok isn’t totally forthcoming about its relationship to ByteDance, but that’s not enough for a cause of action, especially since there’s no clear standard for what is the “appropriate” disclosure regarding the relationship:

Third, the allegations that TikTok downplays the “influence and control” that “ByteDance has over TikTok” are not actionable. The Amended Complaint does not allege that TikTok’s statements about TikTok lnc.’s relationship with ByteDance are false. Instead, the State argues that TikTok does not disclose “the full extent of ByteDance’s control over TikTok” and thereby paints “a picture for Indiana consumers that TikTok is an independent company and that the risk of consumers’ data being accessed and exploited by the Chinese Government or the Chinese Communist Party is minimal to nonexistent.”

These allegations do not state claim under the DCSA. The “extent of ByteDance’s control over TikTok” is not fact capable of being proven true or false, and is “too general” and subjective to support claim under the statute.

Look, we get it. Politicians (including Attorneys General) are going to grandstand about “evil social media” and TikTok in particular. But just saying “gee, this is scary” does not a credible legal claim make. And, really, if you’re filing bogus lawsuits to distract from the latest ethics investigation against you as Attorney General, it seems like a generally poor strategy.

Filed Under: child safety, china, deceptive practices, indiana, todd rokita
Companies: tiktok

Activists Call On FTC To Craft Tougher ‘Right To Repair’ Rules, Repairability Scoring System

Policy

from the fix-your-own-shit dept

On one hand, the Lina Khan FTC has been the toughest agency in history when it comes to “right to repair” reform — or efforts to let you affordably repair your own tech. On the other hand, given past regulatory actions have been minimal, that’s not historically saying much.

Still, the FTC under Khan’s leadership has taken consistent aim at companies that unfairly claim that using third party parts and repair services violate warranties. The Khan FTC also crafted a useful report debunking many of the dumber industry excuses for efforts to monopolize repair (such as claims that affordable, easier repair poses a serious security and privacy risk to consumers).

Still, activists say there’s a lot more the FTC could be doing if the agency crafted slightly tougher rules. So organizations like iFixit are calling on the FTC to beef up their rules to include the industry’s use of things like proprietary screws and parts pairing software blocks (both things Apple is a big fan of).

They’re also calling on the FTC to implement a repairability score system to better educate customers, similar to systems already deployed in France:

“We also are suggesting that they develop a repairability scoring system, which in the case of appliances covered by the FTC-administered Energy Guide program, could go on that yellow label that appliances must have. After all, the energy impact of an appliance has at least as much to do with how long it lasts (and how easily it can be repaired) as with its energy consumption during use.”

The FTC has consistently had its funding, staffing, and authority stripped away by industry lobbying under the well-documented pretense that zero government oversight of industry results in Utopian outcomes. The agency also consistently has a tiny sliver of the staff of overseas regulators when it comes to major issues like privacy, much less smaller reform efforts like right to repair.

Whether the FTC heeds the calls of activists and doubles down on right to repair enforcement remains to be seen. But as ongoing legislative victories in states like Maine indicate, the widespread, bipartisan support for such reform shows no sign of slowing down.

Filed Under: consumer protection, environmental waste, ftc, lina khan, repair monopoly, right to repair, warranties

Google Caves In Canada: Agrees To Pay $100m News Bribe To Avoid Direct Link Tax

Journalism

from the the-only-principle-is-money dept

It seems that every other day or so we get another story of big tech companies tossing principles out the window and caving to ridiculous government demands. The latest is Google, yet again, which has cut a deal with the Canadian government to bribe news orgs with $100 million to pay them off to avoid a more specific link tax. It’s the worst kind of corruption.

As we had detailed, almost everything about the Canadian Online News Act (C-18) was a corrupt monstrosity. Link taxes, themselves, are a fundamentally bad idea, that do real harm to both the open internet and the media.

I’ve seen lots of people on both sides “claiming victory” here. The Canadian government is claiming victory because they got the corporate welfare program they wanted, forcing Google to hand cash over to news organizations (the same news organizations that endorse politicians). Google and some of its supporters are claiming victory, because the structure of the deal more or less ignores the actual Online News Act for a side agreement that says “Google gives $100 million in exchange for Canada ignoring the actual law they passed.”

That is, the agreement is that Google forks over this money (close to half of what the government had claimed the company “owed” news orgs) and doesn’t have to negotiate with different news orgs, but with a single party that will distribute the money to news orgs.

Of course, we know how that setup works, because we’ve seen it before in other industries, like the music industry, and it always ends up a corrupt mess. The big news orgs will get some cash via this program, and be forever compromised in their coverage of Google. The smaller news orgs will get shafted. Down in Australia, which has a similar setup, despite the grand promises of everyone involved, smaller news orgs have suffered.

Michael Geist points out that this deal is more or less what Google had offered pre-C-18, but which the government had rejected. Further, he notes that this money will simply replace money that Google had already been giving to Canadian news orgs through other programs like Google Showcase.

Either way, while the deal isn’t a complete victory for the Canadian government, it’s still a loss to the open internet. As with Australia’s News Bargaining Code (and a similar deal by Google and Meta there), it only serves to inspire other countries to pass similar “bribe us too!” laws.

And anyone who thinks this is going to stop at news providers is not paying attention. Others are going to start demanding free cash from successful tech companies via government lobbying. Why wouldn’t you?

I had hoped that Google would actually stand by its principles on this one, but increasingly we’ve seen that Google has no problem compromising on those principles to cut deals with governments. Meta, for now, is still standing strong, but it caved in Australia and it’s probably only a matter of time until it caves here too.

Filed Under: canada, journalism, link tax
Companies: google