Potentially Big News: Top CEOs Realizing That 'Maximizing Shareholder Value' Isn't A Great Idea

from the well-look-at-that dept

For the better part of two years, I've been noodling on a post (I've half written it a bunch of times) talking about how perhaps the biggest problem with so much of what we see today can be tied up in two related concepts: "fiduciary duty to shareholers" and the idea of "maximizing shareholder value." I talked a little about this a few weeks back in highlighting how almost all of the problems that people talk about when they complain about big tech can really be traced back to Wall Street and this idea of maximizing shareholder value.

Conceptually, maximizing shareholder value makes some sense, but only if you don't think about it for more than a few minutes. Because the whole thing falls apart as soon as you ask "over what time frame?" I first wrote about this back in 2006, in what I called the "time function of profits," in trying to understand why so many people were claiming that Craigslist's approach to grow slowly (but massively) by leaving most of their site free and not doing all sorts of icky stuff, was seen by some as "leaving money on the table" or even being anti-capitalist. As I pointed out then, that only made sense if you thought in the very short-term. Taking a longer term view suggests that "maximizing" profits in the short run is likely to create significant problems in the long run, whether it be competition or customers annoyed at you and the like. In a follow up post I did in 2008, I pointed out that maximizing profits shouldn't mean screwing your customers. The real issue is the time frame. If you want to maximize profits for just this quarter, then, yes, screwing over your customers is a viable strategy.

However, if it's more long term, then the incentives should change quite a bit. It's just like the Prisoner's Dilemma. If you are playing that game once, the incentives are heavily weighted towards cheating. However, if you're playing it many, many times, the incentive structure changes, and it should move to a more cooperative model. For some reason, however, this hasn't happened that much in real life. Many businesses (and many folks on Wall Street) assume that having a "fiduciary duty" to "maximize shareholder value" or "shareholder profits" means squeezing out every penny of profits right away, with no concern for the future.

Perhaps stating this backwards thought process most clearly was former big record label exec Dick Morris who once famously told Wired magazine that if someone is asking you to give up some money now to make more later, it means that "someone, somewhere, is taking advantage of you." And, of course, one of the foremost proponents of this theory was Milton Friedman, who argued that the only responsibility of a company is to its shareholders, and that companies need to maximize the return to those shareholders. Friedman trashed the idea of social responsibility for corporations, but he, himself, didn't seem to recognize how the long term played against the short term here. Ignoring any sense of social responsibility, in favor of short term maximization, would lead not just to long term social harms, but also to limits on the long term value for shareholders.

In recent years, we've started to see some pushback on these ideas. A few months ago, there was the announcement of a new Long Term Stock Exchange, designed to respond to these challenges, by giving companies more time to accomplish stuff than the usual quarterly heartbeat. But perhaps much bigger news is that the Business Roundtable, a gathering of top CEOs, has now put out a letter saying that shareholder value cannot and should not be the only focus of a corporation.

I'd argue that the letter is not that well-written, and given the signatories, I'm sure it went through millions of dollars worth of lawyering before anyone agreed to sign onto it. However, it does set up a much more thorough framework for thinking about all of the stakeholders that a company should consider in doing business: customers, employees, suppliers, communities, and shareholders. It's signed by a bunch of big company CEOs (the letter itself is one page, then there are 11 more with signatures).

Of course, it pays to be cynical about such things. It's one thing to say all of this, another thing altogether to actually walk the walk. And, certainly, some of the signatures come from CEOs who run companies who don't exactly have a strong history of paying attention to most of the stakeholders listed above. Indeed, if you want to find some of the worst behaving companies -- especially towards customers, employees, and communities -- this is a ready-made list (I mean, AT&T's and Comcast's CEOs, Randall Stephenson and Brian Roberts, both signed on to this). So, no one should take this as a real commitment to change.

That's only going to come if the companies are seen to be putting this into action, and that's where the public (and the media) need to come into play. When companies -- especially those who signed onto this document -- are seen behaving badly, it should be called out, and this letter should be referenced. Yes, it's quite probable that many signed onto this thinking that it's a good PR effort to pretend to be good corporate citizens for a day or two. But if we want to enact real change, and have companies get past the short term view of screwing over everyone to "maximize shareholder value," it's only going to happen if these execs are held to the very standards they claim to support.

Filed Under: business roundtable, maximizing shareholder value, priorities, profits, shareholder value, shareholders, stakeholders

California Police Officers Are Handing Out Free Doorbell Cameras In Exchange For Testimony In Court

from the underbidding-Crime-Stoppers-and-raising-propriety-questions-in-court dept

Snitches no longer get stitches. In the year of our lord two-thousand-nineteen, snitches get street surveillance gear from Amazon.

Amazon's Ring doorbell -- which sports a handy camera to catch all those package thieves -- has swallowed up more than 200 police departments with its charm offensive. Cops get doorbell cams at a discount and hand them out for free to locals with the assumption residents will repay the favor by granting officers warrant-free access to footage any time they ask.

To decrease friction, Ring -- which has final edit approval on police publicity efforts -- nudges people towards its snitch app, Neighbors, which encourages users to post any suspicious footage they capture. Ring also nudges law enforcement towards more social media interaction with Ring users to blur the line between sharing with neighbors and sharing with government employees.

The push continues. Amazon sees a market worth cornering and cops see a handy way to turn multiple doorsteps into extensions of their existing surveillance network. Win-win for all involved, I guess, except those who want to secure their homes without feeling obligated to hand over footage whenever the government thinks it might be helpful.

The advantages for law enforcement are obvious. And that has led to more… um… proactive efforts by law enforcement to spread the good word about these doorbell cameras. Louise Matsakis reports for Wired that a California law enforcement agency recently offered Ring doorbells to citizens in exchange for some help with their cop work.

On June 21, Chris Williams, the captain of the El Monte Police Department in California, sent an email to staff reminding them about a new incentive for crime witnesses to share information with law enforcement. Rather than the cash reward used by some programs, El Monte gave out camera-equipped doorbells made by the home security company Ring, which retail starting at $99.

The asking price for a "free" $99 camera seems to be a bit steep. According to documents obtained by Caroline Haskins of Motherboard, the El Monte PD isn't interested in vague tips about somebody seeing somebody do something. This may be acceptable for confidential informants, but potential camera "winners" have a higher bar to hurdle. The tips must be specific, result in a prosecution, and -- here's the big one -- potential camera recipients must be willing to testify in court.

Since the PD is also sort of getting a free camera -- what with Ring's online portal that allows cops to locate any Ring owner and ask them directly for footage sans warrant -- this seems like a raw deal for the general public. While most people do want to help law enforcement put criminals behind bars, a decent percentage of those probably aren't willing to go so far as to get on the stand during a trial.

Ring says it doesn't encourage this sort of thing, nor does it craft scripts or write PR pitches suggesting cops offer free cameras in exchange for testimony. But Ring definitely encourages this sort of thing with its unending push to deploy more cameras and get more people using its Neighbors app.

A few weeks after Williams sent out a reminder about the rewards program, a Ring employee emailed him with a congratulatory note: “Since EMPD first onboarded on 5/1, you have all increased your Neighbors app users (El Monte residents) by 1,058 users! Great job!”

And there's even more encouragement where that came from.

Ring nominated the El Monte Police Department for Ring’s “Agency of the Year Award,” according to new emails obtained by Motherboard. One email from a Ring representative, dated July 2019, asks the police department to submit “a success story” that resulted from using the Law Enforcement Neighborhood Portal.

There's really no downside to the El Monte PD's exchange program, other than some negative press. If someone is willing to do all of this for a $99 camera, it's unlikely they'll push back at all when the PD starts asking for their doorbell footage.

Filed Under: california, doorbells, police, ring doorbells, snitch, testimony
Companies: amazon, ring

WSJ Rightly Attacks Senator Josh Hawley's 'Nannyish' Laws Regarding The Internet

from the good-to-see dept

Just days after publishing yet more anti-internet nonsense, the Wall Street Journal, at least, allowed Andy Kessler to publish an excellent opinion piece calling our Senator Josh Hawley's ridiculous "big government" approach to regulating internet companies.

Mr. Hawley’s new bill has all the worst instincts of the regulatory state—a disappointing achievement coming from a Republican. It would remove the autoplay feature from YouTube, end infinite scrolling on Twitter and Facebook feeds, limit scrolling time to three-minute sessions, set default limits on the use of platforms to 30 minutes a day, and outlaw Snapchat streaks (rewards for consecutive days of contact with friends) and most “gamification” (badges, rewards) for any online service. These diktats are the opposite of market freedom.

The bill’s final kicker is a proposed triennial Federal Trade Commission report to Congress describing how internet companies “interfere with free choices of individuals” by “exploiting human psychology and brain physiology.” In other words, Mr. Hawley wants to restrict freedom because it interferes with free choice. Or something like that. Cut to a video of Orwell rolling over in his grave (though it won’t autoplay). OK, to be fair, Skopos Labs gives the bill a measly 3% chance of being enacted. But that doesn’t make it any less . . . cuckoo.

Kessler's piece also calls out Hawley's laughable claim that there is no innovation at all in social media.

This antitech inclination hasn’t always defined Mr. Hawley’s persona. As attorney general he said, “American workers and American entrepreneurs can compete with anybody, anywhere if our government will stop making America a cost-prohibitive place to do business.” Hear, hear. When he won his Senate seat last year he ran mostly as a conventional conservative.

But even then he already had his enemies marked. His first Senate speech lamented the “cold and judgmental world of social media,” and things kind of went downhill from there.

Hawley, of course, has been grandstanding a lot lately about how the "cosmopolitan elite" are the problem. He conveniently leaves out the fact that he attended Stanford and Yale Law School, clerked for the Supreme Court, worked at a massive "cosmopolitan" law firm (based in DC and London), Hogan Lovells, and then became Attorney General for Missouri before becoming Senator. Hawley is about as "cosmopolitan" a Senator as you can find. But apparently, in grandstanding to what he seems to believe is a very, very gullible base, he wants to convince them that he's standing up to the "elites" and that the only innovation that matters is innovation that comes from "the Heartland" or some such nonsense. As Kessler notes, cynically, Hawley's act is all for show:

Whether that worry is real or not doesn’t matter; condemning tech is a form of pretend populism. Mr. Hawley is taking an Elizabeth Warren-esque “I have a plan for that” approach, which is more about grabbing headlines than actually passing laws.

Yet the claim that big tech companies don’t deliver innovation is false. We can stream TV shows on subways, enjoy same-day package delivery, have a lady in our phones help us to avoid traffic, sort photos automatically by date, location and faces, and get instant answers to any question in our kitchens from something that looks like a hockey puck. Yeah, but what have you done for me lately?

Kessler notes that Hawley's plans would completely destroy innovation online.

Mr. Hawley’s style of heavy-handed regulation is what killed Detroit, distracted phone companies, inflated health-care costs, and wrecked education. Don’t let it kneecap the internet. It won’t be long before the senator announces, “If you like your social media, you can keep your social media.”

Given the willingness of the WSJ to publish anti-internet nonsense of late, it's nice to see Kessler able to get at least something sensible through.

Filed Under: andy kessler, big government, ftc, josh hawley, regulations, republicans

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

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Lawsuit Filed By Victims Of ICE's Fake College Sting Revived By Appeals Court

from the abolish-ICE dept

An elaborate scheme involving a fake college set up in New Jersey by ICE has, unsurprisingly, resulted in a lawsuit by some of the foreign students swept up in the sting operation. Apparently having given up on rooting out the worst of the worst non-citizens, ICE is contenting itself with arresting and charging foreigners for attempting to stay in the country legally by continuing their education.

The fake university looked pretty real to applicants. It had a website, a Facebook page, and -- most importantly -- accreditation by a national accreditation service. The school's website told students the fake school was certified by the DHS's Student and Exchange Visitor Program to "educate international students."

It all looked legit. None of it was. ICE claims it was targeting people who defrauded students or universities by brokering illegitimate educational offerings meant to allow visitors to overstay their visas. That doesn't explain why ICE accepted registration fees from interested students. Nor why it arrested a bunch of students trying to do something they were legally allowed to do.

ICE ended up with about eight criminal suspects from the hundred-plus arrests resulting from the sting operation. Some of the others caught up in the sting had their visas cancelled, supposedly due to "fraudulent enrollment." So, in the government's eyes, the people ICE tricked into enrolling in its very real-looking fake college are every bit as criminal as the criminals the government is actually prosecuting.

The lawsuit deals with these suddenly-cancelled visas. The issue is the government's arbitrary decision to turn people they first referred to as "victims" into accused criminals solely for the purpose of stripping them of their visas. This determination comes without any form of due process attached, so it's up to federal courts to field these challenges, as the Appeals Court points out.

The Appeals Court delves into administrative minutia to counter the government's arguments and point out where the lower court went wrong. But it also spends some time dealing with the government's contradictory assertions. After sending letters calling the duped students "frauds," the government argued in court it didn't actually mean what it said in the letters informing the students they were no longer welcome in this country. From the decision [PDF]:

We held argument on September 25, 2018. There, for the first time, the Government informed this Court that its position was not that the students had committed fraud by enrolling in UNNJ. Rather, the Government believed that the students were the victims of fraud. The Government twice stated that the students “were caught up in it in the sense that they were victim by the academic recruiters” and that “[t]here was no fraud here. These students, as far as we are concerned, were the victims of fraud. . . . [T]hey were caught up in it.”

[thinking face emoji]

How does the government explain calling victims of fraud perpetrators of fraud when revoking their visa privileges? In a word, badly.

When pressed about the language in the terminating letter, the Government (incorrectly) stated that “fraudulent enrollment” was “passive voice,” and therefore should not be read to imply that the students had committed fraud.

That's a very fine -- and very understated -- parenthetical there.

And it just keeps getting better. The government comes off as a petulant child who has decided only one thing will make it happy -- tossing these students out of the country -- and will do whatever it takes to ensure that happens.

Despite the Government’s position that the students were the victims of fraud, it acknowledged that database entries for each student would reflect the “fraudulent enrollment” determination made by DHS. The Government acknowledged that it was able to, consistent with its stated position, eliminate any database notations that suggested that the students had committed fraud, yet it refused to do so.

Beautiful. And that's followed immediately by another line of pure horseshit, delivered directly to bench by the government's lawyers.

It argued that correcting the record on a preventive basis was not necessary because the “fraudulent enrollment” determination would not have any adverse impact on the students in future immigration proceedings.

Ah, yes. Being accused of criminal acts by federal agencies tends to have no effect on the accused, especially during removal proceedings or the visa application process.

After all this "no harm, no foul" stuff, delivered in hopes of persuading the judge the government wasn't just a tantrum-throwing child wearing its dad's suit, the government decided to embrace its inner child.

On October 12, 2018, the Government changed course yet again. It filed a letter “to clear up any confusion from certain exchanges” that occurred during argument. The Government informed the Court that it was not, in fact, conceding “that all—or even most—UNNJ enrollees were innocent victims.” In fact, the Government now asserted that some of the students “in all likelihood, knew that their academic recruiters were committing visa fraud” and others even “conspired with their academic recruiters to commit visa fraud.” “Thus,” the letter concluded, “to the extent that any of the Government’s comments at oral argument left the misimpression that all of UNNJ’s enrollees were innocent victims of the academic recruiters’ visa fraud scheme, that is not the case.”

After the discussion of the government's argumentative fuckery, the court turns to the issue at hand. The lower court said the students needed to take their problems up with the immigration court and/or the DHS first before bringing it to the district court. The Appeals Court disagrees. The students can bring this action directly because the determination made by the DHS was indeed final. There are no intermediate steps these students could have taken to challenge the DHS's determination.

The order terminating these students’ F-1 visas marked the consummation of the agency’s decision-making process, and is therefore a final order, for two reasons. First, there is no statutory or regulatory requirement that a student seek reinstatement after his or her F-1 visa has been terminated. Moreover, even if the students attempt to pursue the administrative procedures for reinstatement, there is no mechanism to review the propriety of the original termination order. Second, the students need not wait for removal proceedings to be instituted. As we stated in Pinho, an order’s finality cannot depend on the institution of removal procedures which may never occur. And in any event, immigration judges cannot review the original denial of reinstatement. They do not have that authority.

The court makes no statement on the propriety of the ICE's sting operation. It does, however, spend a few pages detailing all the efforts ICE made to ensure the bogus college looked legitimate. The decision is subtly damning in its construction, contrasting the "realness" of the college with the government's claim students it first called "victims" were now suddenly fraudsters. The lawsuit lives on, headed back to the lower court to give the plaintiffs a shot at getting the DHS's "fraud" designation scrubbed from their permanent record.

Filed Under: dhs, fake college, fraud, ice, immigration, sting

New Hampshire Supreme Court: Of Course It's Not Defamatory To Call A Patent Troll A Patent Troll

from the duh dept

Earlier this year, we wrote about a legal fight in New Hampshire, where patent trolling firm ATL, had sued a bunch of critics for defamation for calling them a patent troll. As we noted in February, this was an incredibly weak argument, as it's a statement of opinion. Thankfully, the New Hampshire Supreme Court got this one right and ruled that calling someone a patent troll is not defamatory.

The ruling is a pretty straightforward, by-the-books ruling on a bogus defamation claim on an opinion statement. It cites all the usual cases -- mainly Phantom Touring -- to point out that "patent troll" is just an opinion that can't be defamatory, because there's no objective standard by which you would prove it true or false. People can (and do!) disagree over what constitutes a patent troll, and the court system is not there to settle that debate.

We conclude that the challenged statement, that ATL is a well-known patent troll, is one of opinion rather than fact. As the slideshow demonstrates, the statement is an assertion that, among other things, ATL is a patent troll because its patent-enforcement activity is “aggressive.” This statement cannot be proven true or false because whether given behavior is “aggressive” cannot be objectively verified: “[w]hether or not a particular person’s behavior may be characterized as” aggressive is “a quintessential expression of personal judgment which is subjective in character.” Piccone, 785 F.3d at 772 (quotations and brackets omitted); see Catalfo, 657 F. Supp. at 468. “[I]t means different things to different people[,] and there is not a single usage in common phraseology.” McCabe, 814 F.2d at 842 (quotation and ellipsis omitted) (“The lack of precision makes the assertion ‘X is a scam’ incapable of being proven true or false.”); see also Phantom Touring, 953 F.2d at 728 (statements that plaintiff’s theater production was “fake” or “phony” could not be objectively verified “since those adjectives admit of numerous interpretations” (quotations omitted)). That CUNA acknowledged the “pejorative” nature of the phrase “patent troll” does not mean it is an assertion of fact rather than opinion. See Piccone, 785 F.3d at 772; see also Masson v. New Yorker Magazine, 832 F. Supp. 1350, 1367 (N.D. Cal. 1993) (“Falsity and defamatory meaning are analytically separate.”).

To the extent the plaintiffs argue that CUNA’s or the other defendants’ use of “patent troll” is one of verifiable fact rather than opinion because those statements were accompanied by a definition of the phrase, we disagree. As should be apparent from our discussion above, and as the Catalfo court explained, if a challenged statement is defined, but that definition itself “does not have a precise meaning such that it is capable of verification,” neither does the challenged statement. Catalfo, 657 F. Supp. at 468 (even if “sleazy” carried definition of “marked by low ethical standards,” it was not “capable of verification” because “[e]thical standards are inherently subjective”). For the reasons explained above, the definition of “patent troll” offered by CUNA cannot be objectively verified.

Other plaintiffs find their statements to be similarly protected:

Similar to CUNA’s allegedly defamatory statements, we conclude that the “references to ATL as a patent troll” in ABA’s 2013 testimony are expressions of opinion. Unlike CUNA, ABA did not offer a precise definition of “patent troll” in its testimony.4 If anything, though, ABA’s failure to specifically define the phrase, coupled with the lack of any concrete common definition, see Golden, supra at 2112-13 n.7, as well as the myriad ways in which its utterers deploy it, see Allison et al., supra at 242, makes it even more difficult for us to “imagine . . . objective evidence that might conclusively prove or disprove it.” Levinsky’s, 127 F.3d at 130. Like other, similar pejorative terms, “patent troll” is “quintessentially subjective.” Id.; see, e.g., Piccone, 785 F.3d at 772; Gray, 221 F.3d at 248; Dilworth v. Dudley, 75 F.3d 307, 310 (7th Cir. 1996) (statement calling plaintiff a “crank” was not actionable because it was “just a colorful and insulting way of expressing” disapproval of the plaintiff’s work). “[T]he status as a troll is in the eye of the beholder. Every firm that has a patent valuable enough to support major [infringement] litigation . . . has acquired that patent from some person who has invested the resources to invent that technology.” Mann, supra at 1023-24; see also Electronic Frontier Foundation, 290 F. Supp. 3d at 946.

The plaintiffs appear to argue that ABA’s 2013 statement referring to ATL as a patent troll cannot be construed as an opinion because it was made in the context of giving legislative testimony. According to the plaintiffs, “legislation cannot address an issue that cannot be defined.” We disagree with the plaintiffs’ “untenable premise” that all legislative testimony must, ipso facto, consist entirely of factual assertions. Riley, 292 F.3d at 294. People can, and regularly do, express their personal opinions before legislatures.

The court also (easily, as have other courts) rejects the claims that if you don't say "I think" or "In my opinion" before a statement of opinion, it's not longer an opinion:

The plaintiffs’ appellate arguments with respect to Stier and Pierce Atwood’s statements are generally duplicative of their arguments as to CUNA’s and ABA’s respective statements. Their arguments pertaining to these two defendants differ from those pertaining to the other defendants in two ways that bear mention. The plaintiffs contend that the context of Stier and Pierce Atwood’s patent troll statements make them actionable because they contain “no language to alert the audience that the statements . . . are expressions of opinion.” However, “the law does not force writers to clumsily begin each and every sentence with” language such as “I think,” or “in my opinion,” for a statement to constitute an opinion. Riley, 292 F.3d at 292 (quotation and brackets omitted). Rather, Stier and Pierce Atwood’s patent troll statements are opinions for the same reason that CUNA’s and ABA’s statements are: whether ATL is a patent troll cannot be “objectively verified.” Piccone, 785 F.3d at 772 (quotation omitted).

I'm reminded of a lawyer who once pointed out to me that it's just as easy to start a sentence saying "in my opinion..." followed by a potentially defamatory factual statement, as it is to state "it is a fact..." followed by a statement that is purely opinion. All that matters is whether or not the claim itself is actually a fact or an opinion -- not whether your declare it one way or the other.

And with that, ATL has to live with the, uh, fact that New Hampshire's Supreme Court has said it's not defamatory to call ATL a patent troll. So, sing it with me, folks: ATL is a patent troll. After all, it sent threat letters to a ton of banks and credit unions, claiming their ATMs violated its patents, and demanding licensing fees. It also set those license fees at a rate that would be below what it would likely cost to fight a patent lawsuit. These are hallmarks of what most of us consider to be patent trolls.

Filed Under: 1st amendment, defamation, free speech, new hampshire, opinion, patent troll
Companies: atl

Huawei Busted Helping African Governments Spy On The Press, Political Opponents

from the ill-communication dept

While the Trump administration's war on Huawei may be largely fueled by evidence optional protectionism, that certainly doesn't mean Huawei is an ethical company. Like any good telecom and networking giant, it can routinely be found helping governments engage in behavior that's less than, say, moral. For example a damning report emerged this week in the Wall Street Journal (paywall, here's a non-paywalled video report and a fairly decent alternative take) showcasing how Huawei technicians have helped African leaders intercept encrypted transmissions of their political opponents:

"Technicians from the Chinese powerhouse have, in at least two cases, personally helped African governments spy on their political opponents, including intercepting their encrypted communications and social media, and using cell data to track their whereabouts, according to senior security officials working directly with the Huawei employees in these countries.

Yeah, gross. The "help" included helping government officials gain access to protected WhatsApp data from political opponents, which was then used against them:

"The Huawei engineers, identified by name in internal police documents reviewed by the Journal, used the Israeli-made spyware to penetrate Mr. Wine’s WhatsApp chat group, named Firebase crew after his band. Authorities scuppered his plans to organize street rallies and arrested the politician and dozens of his supporters."

Granted, the investigation did not turn up evidence that this spying was occurring on behalf of Beijing, or replicated in other countries like the US. Nor did it indicate that any kind of intentional flaw or backdoor in Huawei gear was used to gain access to this confidential data (the cornerstone of the effort to ban Huawei from international networks). But the report does a great job showing how most telecoms are happy to throw ethics in the toilet if it means cozying up to governments when it's profitable to do so.

In this case, Huawei's "help" even included helping African governments access the phones and Facebook pages of bloggers running a pro-opposition news site that had been previously critical of the government. The fusion of telecoms and law enforcement is obviously of particular note when that fusion results in attacks on the press, usually disguised as something else. Enter that ever-menacing but nebulously defined villain known as "fake news":

Zambia’s ruling party spokesman, Antonio Mwanza, said Huawei technicians, based inside the Zambia Information & Communications Technology Authority, or Zicta, regulator, were helping the government combat opposition news sites.

“Whenever we want to track down perpetrators of fake news, we ask Zicta, which is the lead agency. They work with Huawei to ensure that people don’t use our telecommunications space to spread fake news,” he said. Ugandan officials said that Huawei representatives have stopped attending technical briefings since the Journal submitted questions to the Chinese company. China’s Foreign Ministry said in a written statement that it is common practice for countries to cooperate on policing. “Some African countries have enthusiastically built ‘safe cities’ in order to improve the lives of their people and their business environments,” the ministry said. “To equate this positive effort with ‘surveillance’ smacks of ulterior motives.”

That said, none of this is historically unique. Telecoms are, again, routinely grafted to governments, law enforcement, and intelligence agencies in problematic ways. Just ask AT&T, who is so tightly wired to the NSA, you can't tell where the telco ends and the government begins. Similarly the US has a long history of partnering with companies to provide IT support and telecoms gear to a huge variety of dictators who then utilized that technology to help track and kill political opponents, dissidents, and even students. The press and public moral indignation at this kind of behavior tends to be... inconsistent and colored by patriotism.

And while Huawei is clearly not ethical, you'd be hard pressed to find a telecom giant that is. The US blackballing of Huawei is still based on a lot of unproven allegations of wholesale spying on Americans at China's behest, something that would drive (and has driven) US companies bat-shit crazy when the shoe is on the other foot. And while the US war on Huawei is partially based on some genuine security concerns, it's also heavily driven by a protectionist bid by companies like Cisco that simply don't want to have to compete with cheaper Chinese kit. The exact percentage breakdown of this equation has yet to be seen.

Filed Under: africa, authoritarian governments, china, freedom of the press, political opponents, surveillance, uganda, zambia
Companies: huawei

Intra-Family Trademark Violence: SR Sues JR For Using His Own Name In Law Firm Marketing

from the sins-of-the-father dept

With the chief hurdle for infringement in trademark law being potential public confusion as to the source of a good or service, we sometimes toss that standard around as a blanket sort of thing. And, in trademark law, it kind of is just that binary. But the combination of the protectionist view of trademark law taking hold in America and the unfortunate habit of many people attempting to trademark their own names in one fashion or another, I wonder if the law might need to be updated in some ways. For example, we've seen several instances of intra-family trademark spats that arise from a person or business looking to trademark or simply use their own names. Any system of trademark enforcement that results in broadly disallowing someone to use their own name in the marketplace feels like a clear step too far, if only from a common sense perspective.

Yet it keeps happening. The latest iteration of this involves a lawyer, George Sink Sr., suing his own son, George Sink Jr., for using his own name for his law firm and marketing material. The court overseeing the matter just this week issued a restraining order barring George Jr. from using his own name to advertise his firm.

A Fourth Circuit judge issued a temporary restraining order that stops Sink Jr. from using the family name to advertise his personal injury firm on its website, in email, and on social media.

“George Sink Jr. is of course not barred from practicing law under his birth name, but in advertising for his legal services he must do more to differentiate between him and plaintiff,” writes Judge David Norton. “The mere fact that it is George Sink Jr.’s given name does not automatically shield him from allegations of infringement.”

The court documents note the similarities in the advertisements Sink’s son was using and said customers might and in some cases did get confused about which Sink law firm they were dealing coordinating with. “The logos that each party uses on their respective law firm websites, the name GEORGE SINK is more prominent than the auxiliary words,” writes Norton.

Again, perhaps this all legally correct. But that sure feels like an indication that there is a problem with the law, not with a person using his or her own name in their business' name. And the fact that this sort of dispute incorporates an inter-family squabble makes this all the more bizarre. George Jr. apparently worked for his father's firm some time ago and practiced there as George Jr. His firm handles a different type of law than his father. But now that his son has opened up his own firm using the uncreative name George Sr. gave him, it's a legal matter.

In the suit, Sink Sr. says the company name is "famous" around South Carolina and Georgia. He also notes in the document that the business' name is trademarked, and by using a similar name, his son is committing trademark infringement and creating unfair competition. According to the lawsuit, Sink Jr.'s firm was hurting his father’s online reviews and prominence on search websites.

In the lawsuit, Sink Sr. alleges that his son has always preferred the nickname "Ted," and by going by the same name as his father, he is confusing customers.

George Sr. sure seems fun. Regardless, I can't think of any reason why a bit more nuance couldn't be inputted into existing trademark law. All this really screams for is a provision in the law that would allow someone to use their birth-name so long as there was no other attempt to create confusion with another entity holding a similar mark.

That...just doesn't seem too hard to do.

Filed Under: family squabbles, george sink, george sink jr., george sink sr., lawyers, names, trademark

White House Suspends Another Reporter's Press Pass, Once Again, Raising 1st Amendment Concerns

from the not-how-it-works dept

As you'll recall, last year, the White House tried to remove CNN reporter Jim Acosta's press pass over a silly made up controversy claiming that he had "assaulted" an intern in trying to hold onto the microphone while the intern had tried to pull it away. CNN sued and a court sided with them in blocking the White House's action. Soon after, the White House released new rules, that we mentioned left them open to future 1st Amendment challenges.

Well, here we are. On Friday, the White House removed Playboy reporter Brian Karem's press pass, claiming it was about some sort of weird yelling match Karem had with ex-Trump official Sebastian Gorka at Trump's silly social media troll summit back in July. Karem immediately said he'd sue over the removal and his attorney Ted Boutrous has sent a series of letters to White House press secretary, Stephanie Grisham over the last few weeks. The opening of the first one lays everything out pretty nicely.

We write on behalf of our client, Brian Karem, who serves as the White House correspondent for Playboy, in response to your August 2, 2019 letter informing of your "preliminary decision" to suspend his hard pass for 30 days, supposedly "due to [his] conduct at the press event in the Rose Garden on July 11, 2019," and giving him one business day to submit a response before you "make a final decision on the matter." We object to this arbitrary and unfair procedure threatening to deprive Mr. Karem of his constitutionally protected liberty and property interests in his hard pass, which would flatly violate the First Amendment and the Due Process Clause and the principles established by the D.C. Circuit's decision in Sherrill v. Knight, 569 F.2d 124 (D.C. Cir. 1977) and many other cases. Your invocation of the Rose Garden event weeks after it occurred and without any notice whatsoever that you were considering taking action against Mr. Karem is the opposite of due process, and is clearly pretext for punishing Mr. Karem based on his viewpoint and the content of his reporting on President Trump.

It's the "arbitrary and unfair procedure" part of the above quote that is most important. The White House can't just cook up reasons to remove someone if the real reason is they don't like his reporting (as was the case with Acosta).

In a later letter, Boutrous points out that Grisham herself has admitted to not following any basic due process, as required by the 1st Amendment:

Your email of last night revealed that you failed to conduct a reasonable investigation before reaching your preliminary decision. Among other deficiencies, you admit that you did not speak to a single witness. You did not speak to Sebastian Gorka, Jim Hanson, or any of the other individuals who are seen on video taunting and/or threatening Mr. Karem. You did not speak to any of the journalists who were standing alongside Mr. Karem in the press pen and observed firsthand what happened. Nor did you speak to Mr. Karem himself, despite his efforts to speak with you. In fact, you claimed you lack evidence that Mr. Karem made any attempt to speak with you. Enclosed with this letter are emails reflecting his efforts.

You have also elected to ignore publicly-available evidence that Mr. Gorka has trumpeted his confrontation with Mr. Karem, bragging that he took on the "fake news industrial complex," as well as evidence that the President himself viewed the events as humorous. All of this information is highly relevant to your decision, yet you have deliberately chosen to ignore it.

After suggesting that Gorka was the one who initiated and escalated the confrontation, while Karem was the one who sought to de-escalate it, Boutrous also notes the following:

The President himself has used far stronger language and imagery. Among other things, he has tweeted an image of himself wrestling a CNN icon to the ground, and stated that a congressman who body-slammed a reporter is "my kind of guy." He has also urged his supporters to "knock the hell" out of protestors at his rallies, and remarked about one protestor, "I'd like to punch him in the face." If the President's statements cannot reasonably be understood as endorsing or inciting violence, the White House cannot possibly deem Mr. Karem's offer to "go outside and have a long talk" as over the line.

None of this seemed to matter. In the official suspension notice, Grisham insists that Karem's comment to go outside and have a conversation was obviously a threatening statement.

It seems likely that Karem will now sue and we'll get yet another court to weigh in on the process by which the President (any President, not just this one...) can remove press passes.

Filed Under: 1st amendment, brian karem, free speech, jim acosta, press pass, stephanie grisham, ted boutrous

Techdirt Podcast Episode 221: What's Really In The FTC's Facebook Settlement, Part Two

from the digging-further dept

Last week, we featured part one of our discussion with lawyer Joshua de Larios-Heiman, about the details of the FCC's Facebook settlement, beyond the headline-grabbing fine. It was a long conversation that we cut off right in the middle, so be sure to listen to part one first and then come back for part two, in which we finish picking apart the settlement item by item.

Follow the Techdirt Podcast on Soundcloud, subscribe via iTunes or Google Play, or grab the RSS feed. You can also keep up with all the latest episodes right here on Techdirt.

Filed Under: ftc, podcast, privacy, settlement, techdirt podcast
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