Wyoming’s Top Court Says It’s OK To For Cops To Steal Money Obtained From Legal Drug Sales

Legal Issues

from the nation's-road-pirates-strike-again! dept

Possibly legally-obtained funds traveling from Point A to Point B? Those belong to the law enforcement middlemen. That’s how Wyoming’s top court explains things, in a decision [PDF] that says money obtained from legal drug sales in other states can be stolen by cops who operate in a state where this drug isn’t legal.

Those who pass through Wyoming with large quantities of cash beware — the state can confiscate cash linked to drug marketing that might be legal elsewhere, but is illegal here.  

Wyoming Supreme Court Justice Keith Kautz penned a Thursday opinion on behalf of the high court, saying that the state can keep $75,000 found in possession of a man who was reportedly transporting the cash and marijuana as he passed through from Illinois to California. The state can keep that money because it was linked to drug transactions that would be illegal if committed in Wyoming.  

Holy hell. That is a bad ruling. There’s an “if” in that sentence, and that “if” draws the line between legality and illegality. That should matter. If the out-of-state transactions were legal in those states (this case involves both California and Illinois — two states that have legalized marijuana in some form), the simple fact that the funds passed through a state that hasn’t legalized marijuana use/purchases shouldn’t matter.

But the court here holds that it does. Even though no crime was committed in Wyoming, the state’s highest court says nothing else matters but the fact that marijuana possession/use/distribution is illegal in Wyoming.

Not that this should surprise anyone. Wyoming’s forfeiture laws, despite recent reforms, still leave a lot to be desired. That any reform actually occurred is something of a miracle, considering the state’s top lawmakers still seem to believe taking money from random people (without prosecuting them for alleged crimes) somehow slows the flow of drugs in (or through) a state no one really considers to be a top destination for narcotics. And they still insist this is true, even when cops do things like take $92,000 from a traveling musician just because he violated the state’s seat belt law.

In this case, $75,000 was at stake. That was enough to push the state attorney general, Bridget Hill (whose office directly benefits from forfeitures) to appeal the lower court’s ruling, which sided with the person who had his money stolen by Wyoming law enforcement officers.

The decision notes there was possible criminal activity afoot when Lorenzo Gallaga was pulled over by state troopers for doing 84 mph in a 75 mph zone on Interstate 80.

On July 29, 2020, a Wyoming highway patrol trooper stopped Mr. Gallaga for speeding while he was driving westbound on Interstate 80 in Laramie County. Mr. Gallaga told the trooper he was traveling from Illinois to California. As they were talking, the trooper smelled raw marijuana; when questioned about the smell, Mr. Gallaga “produced a carton of hemp cigarettes as the explanation for the odor.” The trooper detained Mr. Gallaga to search the vehicle, which yielded $75,000 in U.S. currency and numerouscontrolled substances including marijuana, concentrated tetrahydrocannabinols (THC), and MDMA (otherwise known as Ecstasy). Law enforcement also discovered five cell phones and written records showing transactions involving the sale of marijuana products. Downloads from the cell phones revealed voicemails discussing what law enforcement believed to be marijuana growing and distribution operations.

Now, most of the “controlled” substances (excluding the MDMA) were only “controlled” in Wyoming. They were legal elsewhere, including the two states (California, Illinois) Gallaga referenced during the traffic stop. Not only that, but he provided the most-likely source for the “raw marijuana” the state trooper claimed he smelled. The phones and MDMA weren’t discovered until after Gallaga was arrested and his car was searched more thoroughly before being towed.

At the point the legalized theft occurred, the trooper had nothing more than a speeding ticket and a logical explanation for the origin of the weed odor. The “downloads” obtained later add nothing to the probable cause, seeing as they likely discussed completely legal grow operations and transactions in either California or Illinois.

Sure, criminal charges were brought. But the state DA realized it would be far more profitable (and easy) to pursue this under civil forfeiture, which means the state troopers and the DA could be expected to profit from this unexpected windfall without ever having to prove Gallaga’s money or THC was illegal (or illegally-obtained) in the state of Wyoming.

Consequently, the government opted to move forward with a civil forfeiture, which it believed would be an easy win. Much to its surprise, it suffered a loss in the lower court, even as that court admitted Gallaga’s testimony did not create a credible paper trail for the money or the drugs found in his possession. Even so, the most uncomfortable fact could not be denied: if any criminal activity occurred, it did not occur in Wyoming. (All emphasis mine.)

Based upon its findings of fact, the district court concluded the State “proved by clear and convincing evidence that, on and prior to July 29, 2020, [Mr.] Gallaga was actively engaged in the cultivation, promotion, use, sale, and distribution of controlled substances” in other states, specifically California and Illinois. Nevertheless, it ruled the $75,000 was not subject to forfeiture because the State did not “prove any date or location of any purported or intended exchange” of money for controlled substances, “no dollar amount of such an exchange, no specific quantity of controlled substance, and no identified participant other than [Mr.] Gallaga.”

According to the court, the State did not prove Mr. Gallaga “intended to, or did, business of any sort in Wyoming” or that the currency “was furnished in exchange for a controlled substance in violation of the Wyoming Controlled Substances Act[.]” Instead, Mr. Gallaga merely “pass[ed]-through” Wyoming with the currency. In other words, the district court concluded Mr. Gallaga had not violated the Wyoming Controlled Substances Act.

The higher court says none of this matters. What matters is whether or not it’s easy to steal stuff in the supposed furtherance of enforcing state and federal drug laws. The state does not need to prove Gallaga is guilty of violating state law. All it needs to show is (at a standard much lower than probable cause) that the money might have been obtained by actions that are illegal in Wyoming, but not necessarily illegal in Gallaga’s home state or destination state (Illinois and California). If you drive through Wyoming to conduct legal drug business in other states, I guess you should probably leave your money at home.

The State also proved the $75,000 was proceeds of, or used to facilitate, a conspiracy to cultivate and distribute marijuana, as required for forfeiture under § 35-7-1049(a)(viii). Contrary to the district court’s conclusion, the State was not required to show the currency was proceeds from a specific transaction or exchange of controlled substances so long as it proved a connection between the currency and the conspiracy to engage in conduct which would violate the Wyoming Controlled Substances Act.

Well, that’s fucked up. No government at any level will bring criminal charges (or extremely weak criminal allegations) against people conspiring to commit a completely legal act. But this decision says Wyoming’s law enforcement is more than welcome to do this, especially if it allows people to walk away from dismissed charges but only if they do so without their personal property that has been seized by opportunistic law enforcement officers.

Lots of things “would” violate law. But they only violate law when they actually violate law. In this case, drug transactions taking place in two states where such drug transactions are legal has nothing to do with Wyoming law, which only governs activity that takes place within the borders of Wyoming.

Having ignored all logic, the state Supreme Court comes to this conclusion:

The State met its burden of proving by clear and convincing evidence the $75,000 seized from Mr. Gallaga was traceable to the exchange of controlled substances or otherwise used to facilitate activities which, if undertaken in this state, would violate the Wyoming Controlled Substances Act.

And there it is. The state’s highest court says things that violate state law allow officers to seize property and bring criminal charges even if the state can’t demonstrate — at any level — the illegal activity took place within the state’s borders.

This is an insane holding. Even if just restrict ourselves to traffic violations, this means Wyoming cops can cite people for not having a front license plate (even if it’s not required in their home state) or for emissions violations (even if the driver’s home state has no such emissions requirement). This makes everyone who passes through Wyoming subject to the particularities of its laws, even when drivers aren’t residents, aren’t expected to know the local laws, and would be — in the other 49 states — fully compliant with state regulations.

State laws apply to state residents. For everything else, federal law and the Constitution control. This decision says what might be illegal in Wyoming controls the activities of people who just happening to be using its roads temporarily. This is a bullshit decision backed by bullshit reasoning. The lower court had it right: Gallaga did not commit criminal activity within Wyoming’s borders. Everything that followed his stop was just law enforcement enriching itself at the expense of someone just passing through.

Filed Under: asset forfeiture, civil asset forfeiture, legalized theft, lorenzo gallaga, wyoming

Daily Deal: Kodak Slide N Scan Film & Slide Scanner

Deals

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

Embrace the evolution of image scanning technology with the Kodak Slide N Scan Digital Film Scanner. This state-of-the-art device is designed to digitally preserve and enhance your cherished memories, ensuring they stay vivid for years to come. The Slide N Scan Digital Film Scanner can effortlessly scan color and B&W negatives (135, 110, 126) and 50 mm slides (135, 110, 126). With integrated controls, this scanner lets you adjust color, rotate images, and more, truly bringing your treasured memories back to life. It’s on sale for $180 and use code KODAK at checkout to get an extra $10 off.

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

Indian Court Orders Reuters To Take Down Investigative Report Regarding A ‘Hack-For-Hire’ Company

Failures

from the huh,-will-you-look-at-that dept

Over the years we’ve written about plenty of “cyberespionge” companies. Some engage in spyware or surveillance ware. Others actively hack devices. Almost all of these eventually get exposed through dogged investigative reporting.

A few people reached out to point to this rather concerning Editor’s note that was posted to Reuters this week:

Reuters has temporarily removed the article “How an Indian startup hacked the world” to comply with a preliminary court order issued on Dec. 4, 2023, in a district court in New Delhi, India.

Reuters stands by its reporting and plans to appeal the decision.

The article, published Nov. 16, 2023, was based on interviews with hundreds of people, thousands of documents, and research from several cybersecurity firms.

The order was issued amid a pending lawsuit brought against Reuters in November 2022. As set forth in its court filings, Reuters disputes those claims.

I had missed the original article, now that the court has forced Reuters to take it down, it seems likely to get much more attention. You can find archives of it in multiple places. Though who knows if those will remain up. You can also find articles building on Reuters’ investigative reporting.

The basic summary of the Reuters report is that an Indian firm, Appin Software Security, has been offering what is effectively “hack for hire” services for over a decade.

Notably, Reuters reporters handed over the data they found to SentinelOne who did their own analysis of what was found, and it’s pretty damning. Notably, the SentinelOne report appears to still be online.

Appin is considered the original hack-for-hire company in India, offering an offensive security training program alongside covert hacking operations since at least 2009. Their past employees have since spread to form newer competitors and partners, evolving the Appin brand to include new names, while some have spread into cybersecurity defense industry vendors. Appin was so prolific that a surprising amount of current Indian APT activity still links back to the original Appin group of companies in one form or another. Campaigns conducted by Appin have revealed a noteworthy customer base of government organizations, and private businesses spread globally.

Our analysis and observations corroborate the June 2022 reporting from Reuters noting some of Appin’s customers tied to major litigation battles. The group has conducted hacking operations against high value individuals, governmental organizations, and other businesses involved in specific legal disputes. Appin’s hacking operations and overall organization appear at many times informal, clumsy, and technically crude; however, their operations proved highly successful for their customers, impacting world affairs with significant success.

Of course, I might never have heard about this at all if a court in New Delhi hadn’t ordered Reuters to delete the story. And it’s possible that you wouldn’t have heard about it either.

Someone should come up with a name for that sorta situation.

I will note that in the original Reuters article, they note that the company’s US legal representatives is the law firm Clare Locke, which we’ve spoken about before. They’re the lawyers who often appear to brag about how their aggressive tactics are known to get stories killed in the media. Their website literally lists all the major media outlets they’ve gone after in the past.

So I guess it’s little surprise that the firm would seek to suppress the story about them.

But the data and the report seen by SentinelOne are pretty damning.

The cybersecurity firm’s exhaustive analysis of data that Reuters journalists collected showed near-conclusive links between Appin and numerous data theft incidents. These included theft of email and other data by Appin from Pakistani and Chinese government officials. SentinelOne also found evidence of Appin carrying out defacement attacks on sites associated with the Sikh religious minority community in India and of at least one request to hack into a Gmail account belonging to a Sikh individual suspected of being a terrorist.

“The current state of the organization significantly differs from its status a decade ago,” says Tom Hegel, principal threat researcher at SentinelLabs. “The initial entity, ‘Appin,’ featured in our research, no longer exists but can be regarded as the progenitor from which several present-day hack-for-hire enterprises have emerged,” he says.

Factors such as rebranding, employee transitions, and the widespread dissemination of skills contribute to Appin being recognized as the pioneering hack-for-hire group in India, he says. Many of the company’s former employees have gone on to create similar services that are currently operational.

Reuters’ report and SentinelOne’s review have cast fresh light on the shadowy world of hack-for-hire services — a market niche that others have highlighted with some concern as well.

And the demand that the Reuters piece get removed only should draw that much attention towards Appin’s behavior.

Filed Under: espionage, hack for hire, india, reporting, streisand effect, takedown
Companies: appin, clare locke, reuters, sentinelone

Senator Markey Sends Automakers A Letter Criticizing Their Nonexistent Privacy Standards

Privacy

from the what-if-we-passed-a-privacy-law dept

Back in September Mozilla released a scathing report showing how modern vehicles are a privacy shitshow. After studying vehicle systems for over 600 hours, researchers found that most cars hoover up vast swaths of sensitive location and other information on consumers, then, like most companies, sell access to that data to pretty much any nitwit with a nickel.

The problem is particularly severe if you routinely attach your phone to your vehicle via Bluetooth, something that required an entirely different report showcasing how automakers also recklessly collect data from your mobile device and monetize it. Often without getting permission. And often with zero transparency as to security and encryption standards.

Mozilla’s report got the attention of Senator Ed Markey, who this week penned a letter to the auto industry asking for more details:

“These practices are unacceptable. Although certain data collection and sharing practices may have real benefits, consumers should not be subject to a massive data collection apparatus, with any disclosures hidden in pages-long privacy policies filled with legalese. Cars should not—and cannot—become yet another venue where privacy takes a backseat.”

The data collected stems from location data (down to the meter), to even biometric data collected on drivers (pulse rate, breathing patterns). As with everything else you now do online, that data is then “anonymized” (a useless term) and sold to a rotating crop of barely regulated data brokers, who in turn merge this data with other datasets to build vast profiles on every consumer alive.

The potential for abuse is obvious in the post-Roe authoritarian dipshit era, yet Congress still hasn’t managed to pass even a baseline privacy law or regulate data brokers. In part because of lobbyist-induced apathy, but also because the U.S. government has grown fat and comfortable buying this kind of data to bypass warrants.

Whether Congress will do more than chirp after Markey receives the data he’s looking for (he gave automakers until December 21 to answer numerous questions about their data collection practices) is unclear, but if history’s any indication this probably ends with zero substantive reform whatsoever.

It’s not clear what kind of scandal will be required for Congress to shake off its legislative, lobbyist-induced apathy (aka corruption) on privacy, but it’s clearly going to require the kind of massive scandal that makes the ugly problems we’ve seen so far look like child’s play by comparison.

Filed Under: automakers, carmakers, cars, consumer rights, ed markey, mozilla, privacy, security

Colorado Becomes 2nd State To Strike ‘Excited Delirium’ From The Law Enforcement Vernacular

Legal Issues

from the time-to-start-thinking-up-a-new-excuse dept

In October, California became the first state in the nation to ban “excited delirium” as an official cause of death. While this was a positive development, the question remains: why did it take so long?

“Excited delirium” was never a real thing. It has always been a convenient excuse for deaths at the hands of law enforcement officers. Almost without exception, “excited delirium” diagnoses only occur after officers have killed someone.

That’s why it’s not recognized by any medical association as an actual medical condition. The last holdout — the American College of Emergency Physicians — withdrew its paper supporting the diagnosis the same month the California government enacted its ban.

The term became part of the mainstream thanks to Taser (now Axon). The stun gun company’s lawyers needed something to distance it from the deaths caused by its devices. It landed on “excited delirium” and urged officers (and their lawyers) to push this as a cause of death. Law enforcement complied and “excited delirium” began to appear pretty much anywhere someone had been choked, suffocated, beaten, or Tased to death by police officers.

The change in California law doesn’t mean cops will stop killing people. It just means they’ll have to be a bit more creative when blaming victims for their own deaths. The same thing will now be happening in Colorado, although this is a result of police action, rather than legislation.

Colorado’s law enforcement officers will no longer recognize “excited delirium” after a state regulatory board voted to strike the controversial diagnosis on Friday from all training documents starting in January.

The move, which was passed at the state Peace Officers Standards and Training board meeting unanimously and without debate, comes as two Aurora paramedics face felony charges for giving Elijah McClain, an unarmed, innocent Black man, an overdose of ketamine, in part, because they believed he was suffering from the condition.

You may notice this involves felony charges against two paramedics. But they didn’t act alone. The entire chain of events was set into motion by Aurora police officers, who brutalized McClain before handing him over to EMTs, along with a narrative about the now-brain-dead man’s superhuman feats of strength.

McClain, a 23-year-old massage therapist, was walking home from a convenience store in August 2019 when three Aurora police officers stopped him after receiving a call about a suspicious person. He was forcibly taken to the ground, given two carotid holds, which cut blood flow off to his brain, and handcuffed while he was vomiting into the mask he was wearing and inhaling it. 

When paramedics arrived, he was given, involuntarily,  500mg of the powerful sedative ketamine, which was too large a dose for his body weight.

McClain was catatonic and not speaking at that time, but law enforcement officers can be heard on body-worn cameras telling the medics that he was exhibiting “crazy” strength and that he nearly did a push-up with all three officers holding him down at one time.

It’s only the paramedics currently facing charges. Two officers were charged and acquitted. The third officer was convicted of criminally negligent homicide. If the paramedics weren’t thinking “excited delirium” as they drove to the medical emergency, they were certainly thinking it after hearing the officers’ attempt to explain why they had nearly killed McClain. The ketamine, however, finished McClain off.

In defense of their actions, the paramedics chose the go-to excuse for cops:

Cooper and Cichuniec, who are amid their trial now as co-defendants, followed their protocol for “excited delirium” in 2019, their attorneys said in opening statements, which calls for use of chemical sedation.

Fortunately, this will no longer be an option, at least for the state’s law enforcement officers. Presumably, the medical community in Colorado will be making its own changes to strike this term from its lists of credible diagnoses, as well as terminating any protocols that suggest paramedics should treat anyone at all for any reason with lethal amounts of sedatives.

Sure, this means officers will have to be a bit more creative when attempting to separate themselves from deaths they’ve caused. The good news is the POST board has already taken a couple more exonerative terms off the table:

State officials also voted to strike other terms from law enforcement training manuals, including “cocaine psychosis” and “sudden in custody death.”

It’s good to see a law enforcement entity take the initiative to remove a few go-to terms from cops’ mouths. Whether this will ultimately result in better handling of people suffering actual medical/mental crises remains to be seen. And as much as I’d like to believe this alone would deter a certain amount of police violence, the rot in cop culture runs too deep to be rooted out by removing some convenient excuses for killings committed by officers. Still, it’s a positive step. Hopefully, we see more of this elsewhere in the near future.

Filed Under: colorado, excited delirium

No, Trademark Squatting On Anti-Israel Phrase Won’t Keep It From Use

Trademark

from the not-gonna-work dept

For some reason, there are enough people who are ignorant enough about trademark law such that every once in a while you get people who don’t like a thing trying to trademark that thing thinking they can prevent that thing from being done or used. It’s a form of trademark squatting. Confused? An example would be one man who thought he could keep the NFL’s Raiders in Oakland merely by applying for a trademark on “San Antonio Raiders,” where the team was rumored to relocate to. Stuff like that doesn’t work, primarily because you have to actually show a use of the trademark in commerce, or at least a valid intent to use it. You don’t get to go out and trademark something merely to sit on it and prevent someone else from using it.

Which brings us to the war between Israel and Hamas. The brutal conflict is raging once more, as are various political discussions around it. One phrase you are likely to have heard at some point is: “From the river to the sea, Palestine shall be free.” To be clear, that phrase is a hateful, anti-Israel rallying cry that calls for the abolition of the state of Israel. That isn’t to say that there shouldn’t be a Palestinian state, of course, but to pretend like that statement calls for anything less than the destruction of Israel as a state is silly.

Equally silly is two Jewish men in America somehow thinking that they’re going to control the use of the phrase merely by trying to trademark it.

Two Jewish American men have submitted separate trademark applications for the expression “from the river to the sea,” triggering a flurry of reactions. A prominent legal expert has cautioned that the move might have unintended consequences for both the Jewish community and Israel.

Joel Ackerman and Oron Rosenkrantz filed trademark applications for the phrase that refers to the geographic area between the Jordan River and the Mediterranean Sea, encompassing Israel and the Palestinian territories. 

This is pointless at best, and potentially counterproductive to the goal at worst. It’s pointless for a number of reasons. For starters, it’s very unlikely that either trademark application will be approved at all. It’s a widely used political phrase that does nothing to serve as a source identifier of a good. But even if it were granted, it would be for an extremely limited type of goods, such as t-shirts and hats. No such mark would prevent the phrase from being said, chanted, written, nor used on all sorts of other products. It’s simply not going to stifle any real use of the phrase, so what’s the point?

“We don’t know for sure what the outcome will be, but the chances [of their receiving these trademarks] is not that good,” Katzenelson said. “Since it only applies to hats and shirts, stopping its use on other services and goods would be very difficult.”

The counterproductive piece is somewhat akin to the Streisand Effect. Whatever contact the general public has had with this anti-Israel message, now that message is being written and talked about all the more thanks to this attempt to trademark it. And there’s certainly no guarantee that those who come across the message, thanks to all of this, will take the same view of it as these two gentlemen.

Now, again, I don’t expect that these applications will be approved at all. But the point is that there was no reason to attempt any of this to begin with.

Filed Under: from the river to the sea, hamas, israel, palestine, trademark, trademark abuse, trademark squatting

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.

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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