Most Downloaded ‘AI’ Powered News App Routinely Makes Up News

(Mis)Uses of Technology

from the badly-automated-simulacrum dept

We’ve noted repeatedly how early attempts to integrate “AI” into journalism have proven to be a comical mess, resulting in no shortage of shoddy product, dangerous falsehoods, and plagiarism. It’s thanks in large part to the incompetent executives at many large media companies, who see AI primarily as a way to cut corners, assault unionized labor, and automate lazy and mindless ad engagement clickbait.

The result has been a keystone-cops-esque parade of scandals where a long line of traditional brands (CNET, Gannett, Sports Illustrated) have been hollowed out and turned into superficial and badly automated engagement and infotainment mills.

But “AI” has also spurred the creation of countless new pseudo-news websites. Outlets that basically use AI to scour the web for journalism and press releases, then reconstitute them into an aggregated mush that sort of looks like original news. This mindless, automated SEO engagement chasing redirects money that should be going to quality journalism and analysis to a sort of dull simulacrum.

Recently we saw a flood of similar stories about such companies. One such story focused on NewsBreak, a Chinese-backed app that’s now the most downloaded news app in the U.S. Like these other outlets, Newsbreak just basically scours the web for existing stories and press releases, jumbles them together into something that vaguely looks like journalism, then poops it out at incredible scale.

Last Christmas, the app completely made up a story about a shooting in New Jersey that never happened:

“…no such shooting took place. The Bridgeton, New Jersey police department posted a statement dismissing the article – produced using AI technology – as “entirely false”.

“Nothing even similar to this story occurred on or around Christmas, or even in recent memory for the area they described,” the post said. “It seems this ‘news’ outlet’s AI writes fiction they have no problem publishing to readers.”

Real journalism is hard and time consuming. It requires actually talking to human beings. It requires digging through court filings. It requires comparing the opinions of multiple experts with a litany of different biases to get to the truth. That’s absolutely not what these outlets are doing, and it’s a direct byproduct of basing the entirety of our truth and information systems on ad engagement.

This was already a problem before LLMs. LLMs have just supercharged the industry’s worst tendencies. “AI” certainly could theoretically help journalists with research, analysis, editing, transcription, and administrative work. But instead it’s largely being used as a way to automate engagement clickbait at unprecedented scale, which further undermines trust in — and the financing of — real reporting.

In this case it took Newsbreak four days before it corrected the story. And the outlet has a history of at least 40 such stories (that we know of) since 2021. Amusingly, this most recent error came after AI scraped false stories written by another shoddy AI-driven infotainment mill named FindPlace.xyz, which was busted also making up stories using fake author bylines.

Ironically all of these outlets try to frame themselves as the solution to the very real problem that is a dearth of quality journalism (especially local). Instead they’re making the problem significantly worse. And they’re helped by companies like Google, which are increasingly focusing on stock-bumping half-assery instead of maintaining quality control across both Google News and Google search.

Whatever this monstrosity we’re building is, it’s most decidedly the complete opposite of what journalism actually needs. And if it continues apace without some kind of meaningful trajectory shift, the cost to history, collective understanding, and an informed public will be incalculable.

Filed Under: automation, clickbait, journalism, llms, media, reporting, search, seo
Companies: newsbreak

Lawsuit Filed Challenging Constitutionality Of Vast Network Of Illinois License Plate Readers

Privacy

from the intersection-of-public-roads-and-active-tracking-system dept

This lawsuit might be a long shot, but it’s not completely a foregone conclusion at this point. The state of Illinois has tougher privacy laws than most states, which may factor into the judge’s decision. On the other hand, this lawsuit — filed by two Illinois residents with the assistance of the Liberty Justice Center — has been filed in federal court, where assumptions about expectations of privacy won’t necessarily be quite as affected by state law stipulations.

What will help this lawsuit along is just how many automatic license plate readers the state has installed, as well as how many records of people’s movements it has on hand at any given moment. Reason’s Patrick McDonald has the stats on that, and those show this form of surveillance is pretty pervasive, even if it only involves plate/location information.

Illinois State Police received a $12.5 million state grant in 2021 to install cameras, which was more than doubled in June 2022 when Pritzker extended the act, granting up to $20 million in additional funding. As of publishing time, the Illinois Department of Transportation has purchased 652 license plate cameras, of which 340 are installed in Cook County, which includes Chicago.

According to the ISP’s dashboard, in the past month, the system has recorded over 215 million “detections” (when a camera captures a digital image of a license plate) and over 1. 4 million “hits” (when a captured license plate matches a plate on the state police’s “Hot List,” which includes the license plate numbers of stolen vehicles and wanted subjects). Annually, the system records over 1.5 billion detections—more than 100 times the state’s population. 

That’s just in Cook County. There are others scattered across the state, but the focal point of ALPR deployment is the Chicago metro area.

It’s the sheer number of readers and total number of “detections” that may sway the court to consider ALPRs more akin to always-on surveillance than just the privacy price to be paid for enjoying the use of public roads.

“Public” is the key word. Areas accessible by anyone at any time (most public roads) aren’t generally treated as areas worthy of a reasonable expectation of privacy. On the other hand, most people aren’t sitting on public roads capturing photos of every car that passes by 24/7.

In total, it seems like a privacy violation. Running a plate against an ALPR database could give the government a pretty complete picture of a person’s movements. But even so, courts have often rationalized that if a single ALPR snapshot isn’t a Fourth Amendment violation, multiplying a non-violation by a several million still doesn’t create a constitutional cause of action.

But now that the Supreme Court’s Carpenter decision is in play, things might change. That ruling said collecting long-term records of people’s movements via cell site location data required a warrant. This is pretty much the same thing, even if the network of ALPRs can’t necessarily produce the same amount of granular location data a person’s cell phone can.

The lawsuit [PDF] figures it’s a question worth asking, no matter what precedent exists. The network of ALPRs — run by contractor Vetted Security Systems and utilizing Vigilant’s software to maintain the collection of plate/location records — allows cops to track pretty much anyone traveling in or through Cook County, allowing them to determine where people worship, shop, seek medical help, or what political groups they associate with. So, there’s a First Amendment concern closely aligned with the more immediate Fourth Amendment-related cause for concern.

The lawsuit maintains that collecting plate data is a search under the Fourth Amendment and that the millions of “searches” performed by the plate readers cannot possibly be supported by probable cause or even reasonable suspicion.

It is an unreasonable search when the government tracks the movements of every citizen who drives a car just in case it might someday have reasonable suspicion as to one of the millions of people being tracked.

Defendants do not have any substantial or exigent government interest that would justify searching every citizen who drives a car, every day, and retaining that record of every citizen’s movements.

The plaintiffs seek an injunction blocking the State Police from utilizing its current ALPR system and preventing it from adding additional cameras to the network it already has in place.

It’s an interesting set of arguments. But it will be a tough case to win given the lower expectation of privacy given to drivers on public roads. Pretextual stops exist because of this lower constitutional standard and probable cause isn’t needed to engage in fishing expeditions. ALPRs have their problems but so far, no court has declared them unconstitutional to deploy without a warrant.

While there’s a slim chance a warrant requirement might someday surface in some court, it’s likely it will only affect searches of stored plate records, rather than deployment and use of the devices themselves. Unless this court is willing to buck the trend, the Illinois State Police is unlikely to lose access to its massive network of plate readers.

Filed Under: alpr, automatic license plate readers, fourth amendment, illinois, lawsuit, privacy
Companies: motorola, vetted security solutions, vigilant

Daily Deal: The Mastering Linux Development Bundle

Deals

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

The Mastering Linux Development Bundle has 7 courses to help you become a Linux expert. Courses cover Kali Linux, Ubuntu, Secure Shell, Command Line, and more. It’s on sale for $20.

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

Warning: Believing The Surgeon General’s Social Media Warning May Be Hazardous To Teens’ Health

Overhype

from the this-article-may-contain-actual-evidence dept

You may have heard that yesterday the Surgeon General of the US, Vivek Murthy, announced that Congress should mandate “Surgeon General warnings” on social media, saying that it is harmful to kids. Over at the Daily Beast I went into great detail about just how far from the actual science this suggestion is.

As with video games, the more research we get on teens and social media, the less accurate the moral panic appears. In the last few years alone, we’ve seen more than one organization reach the same conclusion. The National Academies of Sciences released a comprehensive report stating that a “review of the literature did not support the conclusion that social media causes changes in adolescent health at the population level.” The American Psychological Association released a similar report, concluding: “Using social media is not inherently beneficial or harmful to young people.” Instead, it finds that when young people struggle with mental health, their online lives are often just a reflection of their offline lives.

Lots of other research has shown the same thing, yet Murthy’s call for health warnings never mentions all of this research that suggests social media is actually beneficial for many. Instead, he cites a few anecdotes of children who were bullied online. But bullying happened prior to social media, and we did not talk about putting health warnings on telephones or notepads or other forms of communication.

He does not address the potential for very real harm in following his suggestion. For example, a large meta-study in the Journal of Pediatrics, which similarly found no evidence to support social media being harmful to teen mental health, asserts that taking away places where kids can communicate without parental monitoring is the real cause of any teen mental health crisis. Based on that, social media might be one of the few remaining places that kids have a chance to be free from parental surveillance, and yet Murthy suggests it should be surveilled as well.

Hell, his recommendation even contradicts Murthy’s own report that he released a year ago. That report made it clear how helpful social media is for many kids:

Social media can provide benefits for some youth by providing positive community and connection with others who share identities, abilities, and interests. It can provide access to important information and create a space for self-expression. The ability to form and maintain friendships online and develop social connections are among the positive effects of social media use for youth. , These relationships can afford opportunities to have positive interactions with more diverse peer groups than are available to them offline and can provide important social support to youth. The buffering effects against stress that online social support from peers may provide can be especially important for youth who are often marginalized, including racial, ethnic, and sexual and gender minorities. , For example, studies have shown that social media may support the mental health and well-being of lesbian, gay, bisexual, asexual, transgender, queer, intersex and other youths by enabling peer connection, identity development and management, and social support. Seven out of ten adolescent girls of color report encountering positive or identity-affirming content related to race across social media platforms. A majority of adolescents report that social media helps them feel more accepted (58%), like they have people who can support them through tough times (67%), like they have a place to show their creative side (71%), and more connected to what’s going on in their friends’ lives (80%). In addition, research suggests that social media-based and other digitally-based mental health interventions may also be helpful for some children and adolescents by promoting help-seeking behaviors and serving as a gateway to initiating mental health care.

Yet, in Murthy’s statements this week, he completely ignores all of that evidence. He ignores any possibility of benefits from social media, not with evidence but with a few very limited anecdotes. These include concerns about his own two kids (who he notes are too young to be on social media anyway) and a few random stories of kids being bullied online.

But bullying has always existed. And yes, bullying online can take on more malignant forms due to scale and reach, but we should be focused on the specific conduct, not the clearly incorrect argument that social media is somehow inherently so harmful that it needs a warning.

What frustrates me most of all about this is that Murthy should know better than to base such big decisions on his own feels and anecdotes, especially when nearly all of the evidence disagrees with his beliefs. Murthy is supposed to be following the actual science, not getting swept up by moral panics.

In his op-ed, Murthy compares social media to cigarettes, but it’s utter nonsense to compare speech to something you actually consume. As we’ve noted in the past, social media is not lead paint, or cigarettes, or even chocolate. It’s speech.

And, importantly, speech is protected under the First Amendment. In the Daily Beast piece, I point out that Reagan’s Surgeon General C. Everett Koop kicked off the moral panic about video games in 1982 by arguing that they were harmful and addictive to children. Decades later, that moral panic resulted in California passing a law putting warning labels on video games, which was struck down by the Supreme Court for violating the First Amendment.

It strikes me as quite something that Murthy would choose to use this week to push his unconstitutional attack on free speech, when the Supreme Court is likely to rule, either this week or next, on the case bearing his own name, regarding whether or not he violated the First Amendment in trying to stifle voices on social media.

The US government should win that case for a whole long list of reasons that I’ve explained in the past, because there remains no actual evidence in the record of actual coercion by the government. But, either way, it’s still odd to pick this particular time to then push a clearly unconstitutional attack on the First Amendment in the days leading up to that decision.

In the Daily Beast, I conclude by noting that C. Everett Koop quickly admitted that his remarks regarding video games and kids were off-the-cuff, not based on science, and should not be seen as reflecting administration policy. If Murthy wants to be taken seriously, he should review the actual science and admit to his own error.

Filed Under: 1st amendment, free speech, mental health, social media, surgeon general's warning, vivek murthy

T-Mobile Users Surprised That Company’s Promise Of No Price Hikes Wasn’t Real

Overhype

from the the-uncarrier-unpromises-things dept

We’ve noted repeatedly how T-Mobile simply hasn’t been the same company since its controversial 2020 merger with Sprint. All of the pre-merger concerns deal critics warned about came true, whether it was 9,000 layoffs, worse service, or higher wireless prices. Long gone is the company’s John Legere-era pretense that it was ever seriously interested in being the pro-consumer alternative to Verizon and AT&T.

One study recently found that U.S. wireless price competition stopped completely dead in its tracks immediately after the deal, leaving the U.S. with some of the highest mobile prices in the developed world. T-Mobile also recently raised prices on most of its plans by around $2 to $5, including on customers who long believed they were on a price-locked plans that couldn’t be increased.

The original 2017 promotional press release proclaimed that T-Mobile contracted customers on their One plans customers “keep their price until THEY decide to change it” and that “T-Mobile will never change the price you pay for your T-Mobile One plan.” Except like most of T-Mobile’s promises recently, customers are learning that’s not true.

Annoyed users at Reddit filed a complaint with the FCC about the company’s recent price hikes, and got a response first blaming the price hikes on “inflation” (read: consolidation and muted competition) then pointing out that what users thought was a “price lock” isn’t actually one.

Apparently, T-Mobile had buried some fine print in the program guidelines stating that by a “price lock,” T-Mobile meant something else entirely. The restrictions, included in a FAQ that no longer exists (archived version here), technically stated that should T-Mobile raise rates, they’d agree to pay these customers final month of their bill if users cancelled service and they contacted T-Mobile within 60 days.

Users on Reddit say they saw no clear mention of these restrictions on any of their bills, and there’s ongoing debate over when, whether, or how well T-Mobile informed anybody of these limits. Based on this 2017 forum discussion spotted by Ars Technica, users were supposed to have read this FAQ that again, no longer exists.

T-Mobile this week was also criticized by the National Advertising Division (a fairly toothless industry self-regulatory apparatus) for basically making the same empty “price lock” promise related to its home 5G wireless broadband service:

“To avoid conveying a misleading message, NAD recommended that T-Mobile discontinue the “Price Lock” claim or modify it to explain, as part of the main claim, that “Price Lock” is a policy that promises customers a free month of home internet service if T-Mobile raises the monthly price and the consumer promptly notifies T-Mobile that they are cancelling their service.”

This is all very convoluted and stupid and highly representative of the U.S. telecom industry, and what it tries to pass off a customer service and competition. And this was an idea technically born back in the era when T-Mobile had a reputation for being marginally pro consumer (which we pointed out at several points over the years was often already highly performative in the first place).

Now that U.S. wireless sector competition has been weakened via pointless consolidation, these sort of weasel-worded restrictions will only get worse.

Filed Under: high speed internet, price lock guarantee, telecom, wireless
Companies: t-mobile

DOJ: Phoenix PD Officers Routinely Violated Rights, Deployed Unjustified Deadly Force

Legal Issues

from the if-you're-getting-investigated,-you've-done-something-wrong dept

Every report delivered by the DOJ’s Civil Rights Division can be described as “scathing” or “damning.” There are simply no exceptions to this rule. It’s not like the Civil Rights unit picks a US law enforcement agency out of the hat and then initiates an investigation. (Maybe it should? I mean, I’m sure there’s plenty of police misconduct flying under the radar at any given moment.)

No, if the DOJ opens an investigation into a local law enforcement agency it’s because that law enforcement agency has been making headlines for all the wrong reasons for months or years. And such is the case with the Phoenix, Arizona police department.

The investigation was announced in 2021, with the DOJ noting the PD routinely violated a decision delivered by the Ninth Circuit Appeals Court forbidding governments in the jurisdiction from arresting or fining homeless people for the “crime” of being homeless. It also noted there was more than a hint of a deep-rooted misconduct problem — one that definitely wasn’t made any better by the PD’s mass purge of internal investigation records back in 2019.

The DOJ’s report [PDF] goes further than these initial hints that something’s rotten in Phoenix. It says officers routinely deploy excessive and unreasonable force. It arrived at this conclusion despite the PD’s lack of up-to-date use of force records.

Officers use unreasonable force to rapidly dominate encounters, often within the first few moments of an encounter. Officers fail to employ basic strategies to avoid force, like verbal de-escalation or using time or distance to slow things down. PhxPD’s training has encouraged officers to use force when it is not lawful to do so, and to use serious force to respond to hypothetical, not actual, danger. P

More specifically, officers fire weapons at people who pose no immediate threat. Then they continue to shoot at people long after they’ve been rendered unable to pose a threat. Officers escalate situations seemingly for the sole purpose of deploying deadly force. And when they’re finally out of bullets, they delay rendering aid to those they’ve wounded. Two cases detailed in the report involve officers shooting suicidal people who only posed a threat to themselves. In another incident, officers shot a woman 10 times and did not render any medical aid until more than nine minutes after they had shot her. In another case, they waited fifteen minutes to provide any aid to a person they had shot.

If officers aren’t shooting people, they’re Tasing them, beating them, choking them, or firing non-lethal munitions at them from close range. And just because it’s less-than-lethal doesn’t mean its a reasonable use of force.

In one incident, a group of officers shot 40mm foam rounds, a Taser, and over 20 Pepperballs at an unarmed man within 20 seconds of announcing their presence. The officers planned to take the man into custody for two open felony warrants related to probation violations. They surrounded a storage facility where he stood outside a unit repairing a bicycle. One officer yelled, “Hands!” seconds before firing Pepperballs and yelling, “Get on the ground!” While the officer continued to pelt him with Pepperballs, another officer struck the man with a 40mm impact round. The man turned away, screaming. Then, a third officer advanced and fired a Taser, incapacitating the man. As he fell—nearly hitting his head on the wall of the storage unit—an officer fired another 40mm round.

Officers routinely engaged in violence against people who were never given enough time to comply with shouted, sometimes-contradictory orders from officers. In some cases, the order given to the person was immediately followed by an act of violence. Just as routinely, officers’ reports portrayed their use of force as “justified” due to the person’s supposed “refusal” to comply with their orders.

Then there’s stuff like this, which covers multiple areas of the DOJ’s damning report, all in a single anecdote:

In one example, two officers used excessive force after stopping a bicyclist who ran a red light. The man allowed the officers to search him. As one officer checked the man’s pockets, the man appeared to move something from one hand to the other. The officers grabbed him, told him to put his hands behind his back, and then pulled him to the ground. The man asked, “What am I under arrest for?” An officer said, “For not obeying a police officer.” The officers appeared to recognize they lacked a lawful basis for arresting the man, and one said, “We need to develop PC [probable cause].” Both officers then muted their body-worn cameras. PhxPD arrested him for resisting arrest and possession of marijuana. County and city prosecutors declined to pursue the charges.

There’s a lot more along these lines if you’ve got the stomach for it. Officers routinely violating protocol and internal policy to hogtie people in positions that increased their chance of death. Officers siccing dogs on cooperative arrestees and letting the dogs chew on them while they placed them in handcuffs. Officers continuing to punch, kick, or otherwise physically harm people who were already handcuffed.

Part of this is due to training. Too much of it, surprisingly. As the DOJ notes, Phoenix PD training materials actually encourage this sort of behavior. The chaser is everything else: a systemic failure to discipline officers and officers’ refusal to report force deployment.

There’s also a long section about the PD’s tactics when dealing with the city’s homeless population — efforts that directly contradicted a precedential court ruling by the Ninth Circuit Appeals Court. And, like far too many law enforcement agencies in the United States, minorities are the most frequent targets for police harassment and violence.

PhxPD uses race or national origin as a factor when enforcing traffic laws. Officers cite a disproportionate number of Black and Hispanic drivers when compared to violations recorded by neutral traffic cameras in thesame locations. PhxPD also enforces traffic laws more severely against Black and Hispanic driver than it does against white drivers engaged in the same behaviors.

PhxPD enforces alcohol use offenses and low-level drug offenses more severely against Black, Hispanic, and Native American people than against white people engaged in the same behaviors.

PhxPD enforces quality-of-life laws, like loitering and trespassing, more severely against Black, Hispanic, and Native American people than it does against white people engaged in the same behaviors.

Another 20 pages or so is given over to discussing the Phoenix PD’s retaliatory actions against anti-police violence protesters and others engaged in protected First Amendment activities the officers didn’t care for.

Sadly, this is par for the course for DOJ investigations. Every law enforcement agency investigated by the DOJ has pretty much the same list of problems. This clearly shows there’s something wrong with cop culture in general. It’s not a byproduct of the environment these officers work in. No matter where the agency is located, the same sort of violence, abuse, and frequent rights violations are uncovered.

This will start the long, expensive, and pretty much ineffectual process of reforming the Phoenix Police Department. A federal monitor with be put in place and the city will agree to a consent decree. It will make things better in the short term, but very slowly and incrementally. And the most likely outcome will be a lot of nothing. Once the decree is lifted, most agencies tend to go back to doing what they’ve always done: pretend they’re a law unto themselves until the next round of investigations begin.

Filed Under: arizona, civil rights, department of justice, doj, investigation, phoenix, phoenix pd, phoenix police department, police accountability, police misconduct

Mysterious Malware Attack Destroys 600 Routers On One ISP In 72 Hours

Broadband

Last Halloween, thousands of users for U.S. broadband provider Windstream began complaining online about the fact that their routers simply stopped working. At the time, Windstream (one of the worst ranked ISPs in the country) sent users replacement routers, but couldn’t be bothered to transparently inform customers what was happening.

More than half a year later and Ars Technica points to a belated explanation of the incident by Lumen Technologies’ Black Lotus Labs. Dubbing it the “Pumpkin Eclipse,” security researchers found that over a 72-hour period beginning on October 25, malware infected more than 600,000 routers connected to a single autonomous system number (ASN) belonging to Windstream.

The culprit or motivation still haven’t been identified, but the researchers note the outage impacted the kind of folks who already tend to have substandard broadband access:

“Destructive attacks of this nature are highly concerning, especially so in this case. A sizeable portion of this ISP’s service area covers rural or underserved communities; places where residents may have lost access to emergency services, farming concerns may have lost critical information from remote monitoring of crops during the harvest, and health care providers cut off from telehealth or patients’ records. Needless to say, recovery from any supply chain disruption takes longer in isolated or vulnerable communities.”

The report doesn’t highlight this fact, but another recent report by the American Consumer Satisfaction Index found that Windstream has among the lowest customer satisfaction ratings of all U.S. broadband providers. Not only that, Windstream (which sees little competition and therefore little incentive to try) dropped 20% to 56, lower than nearly any company in any industry in America.

In other words, U.S. telecom monopolization and consolidation not only results in spotty coverage, slow speeds, terrible customer support, and high prices, it can help cultivate an additional security risk. The full Ars Technica analysis of the unique aspects of the attack are worth a read, though Windstream’s lack of meaningful transparency into the incident remains curiously under-stated.

It’s still not clear who launched the attack or what their motivation was (disgruntled employee? ransomware campaign? state-sponsored chaos agent?) and Windstream doesn’t seem interested in shedding any more light on the incident. In part because feckless regulatory oversight and muted competition doesn’t really give them any meaningful incentive to.

Filed Under: pumpkin eclipse, routers
Companies: windstream

Clearview AI Is So Broke It’s Now Offering Lawsuits Plaintiffs A Cut Of Its Extremely Dubious Future Fortunes

Legal Issues

from the it-is-to-lol dept

Clearview was probably its healthiest when it was still flying under the radar. It courted billionaires with a new facial recognition tech plaything — one capable of searching millions (and, ultimately, billions) of images for a match for any uploaded photo. The dirty secret? All of the images and data had been scraped from the web without the consent of any of its millions of “participants.”

Then it decided there just weren’t enough billionaires to go around. To get big in the surveillance world, a company needed to start courting governments. Clearview started pitching its tech to law enforcement agencies. The problem with doing that is that it creates the sort of paper trail public records requesters can obtain.

That was the beginning of the end. Kashmir Hill’s exposé of the company for the New York Times clued in millions to its existence, its web-scraping tactics, and its unseemly marketing efforts. Lawsuits followed in quick succession. So did orders from foreign governments forbidding Clearview from doing business on their turf. And those orders came with hefty price tags attached for multiple violations of local privacy laws.

But it wasn’t just Europe trying to collect cash from Clearview. As the company continued to tout the billions of images at its disposal, lawsuits filed in the US proved successful. One of those alleged violations of Illinois privacy laws. And it’s this class action lawsuit that’s finally paying off, although it seems unlikely the proposed pay off will result in anything of value for the class action suit’s plaintiffs. Here’s Kashmir Hill again with the latest for the New York Times:

Anyone in the United States who has a photo of himself or herself posted publicly online — so almost everybody — could be considered a member of the class. The settlement would collectively give the members a 23 percent stake in Clearview AI, which is valued at $225 million, according to court filings. (Twenty-three percent of the company’s current value would be about $52 million.)

If the company goes public or is acquired, those who had submitted a claim form would get a cut of the proceeds. Alternatively, the class could sell its stake. Or the class could opt, after two years, to collect 17 percent of Clearview’s revenue, which it would be required to set aside.

Well, all well and good if you’re hoping Clearview’s fortunes improve and that it finds plenty of public and private customers to sell access to its database of billions of scraped images. But if you’re this sort of person, you’re probably not engaging in litigation with the company. If you’re a plaintiff hoping the company will find itself pariah-ed out of the market, holding a 23 percent stake of a failing company isn’t going to get you much more than a rather unenjoyable form of schadenfreude.

Clearview’s lawyer, Jim Thompson, told the New York Times the company was “pleased” with this agreement, which is perhaps all you need to know about the company’s view of its future prospects. If it expected to be making headway towards being a billion-dollar company in the next few years, it might not have been so willing to give nearly a quarter of that away in a single lawsuit settlement. But if it sees years of financial struggle ahead, handing a peculiar I.O.U. to class action plaintiffs is a pretty good way to keep some cash in the coffers and halt the financial bleeding that is always part of protracted litigation.

Clearview may have lost the war, but it seems to have won this particular battle. It won’t have to pay anything now. And, given the numerous issues it still faces in other countries, it likely won’t have any cash lying around to pay anything in the future either.

Filed Under: lawsuit, privacy, surveillance
Companies: clearview, clearview ai

Crypto Bros Sue Pharma Bro Martin Shkreli Over Making A Copy Of That Wu-Tang Album The US Government Briefly Owned

Legal Issues

from the yes,-that-headline-actually-makes-sense dept

You know those lawsuits where you kinda hope everyone can lose? Yeah. This is one of those.

Some crypto bros are suing the world’s most hated pharma bro, who jacked up prices on some essential pharmaceuticals before eventually being arrested and sentenced to jail. And the lawsuit is about a Wu-Tang album that almost no one has heard, that the US government briefly owned, which is now being sorta, kinda, but not really offered as an NFT where if you buy in, you only speed up the release date from nearly a century away by 88 seconds.

I fear this is going to take some explaining.

A decade ago, the Wu-Tang Clan did something of a fascinating stunt. It announced it was releasing a new album, Once Upon A Time in Shaolin, but that only one single copy would be sold. Part of the deal was that the album could only be released publicly in the year 2103, 88 years after it was sold. While the original reports suggested that it wouldn’t be sold at auction, in September of 2015, it was. A few months later, it was revealed that Martin Shkreli won the bidding at somewhere around $2 million.

The timing on this is fascinating, because in between the time he won the auction and when it was revealed that he did, Shkreli became the face of all that is terrible in pharmaceuticals when he went on TV to try to defend his decision to suddenly increase the price of Daraprim, an important anti-parasitic drug from $13.50 a tablet to $750. That all happened just weeks after he won the auction.

Just a couple months after that, Shkreli was arrested and perp-walked for securities fraud. Three years later, in 2018, he was sentenced to seven years in prison, along with a $75k fine and $7.3 million in forfeiture. That included the Wu-Tang album. The DOJ’s press release about the sentence literally mentions the album in the very first paragraph.

Earlier today, in federal court in Brooklyn, Martin Shkreli was sentenced by United States District Judge Kiyo A. Matsumoto of the Eastern District of New York to seven years’ imprisonment for committing securities fraud and securities fraud conspiracy, to be followed by three years’ supervised release.  The Court also ordered Shkreli to pay a $75,000 fine and $7.3 million in forfeiture.  Earlier this week, the Court signed a Preliminary Order of Forfeiture, which will allow the government to seize substitute assets to satisfy the forfeiture judgment if necessary, including $5 million held in an account that had been used to secure Shkreli’s bail, the “Once Upon A Time in Shaolin” album by the Wu Tang Clan, the “Tha Carter V” album by Lil Wayne, and a Picasso painting. 

While Shkreli was able to get out of prison after four years, in the interim, the DOJ sold off the Wu-Tang album to what was originally “an anonymous buyer.” In the fall of 2021, however, that anonymous buyer was revealed to be some crypto bros behind the decentralized autonomous organization, PleasrDAO, though it appears others were involved as well:

Now the album has found yet another life on the frontier of digital art and cryptocurrency, having been sold for $4 million to PleasrDAO, a collective that has existed for less than a year but has already built a reputation for acquiring high-profile digital works.

In a complex deal with multiple parties, one of whom remains unidentified, PleasrDAO acquired “Once Upon a Time” after its sale in July by the federal government, which had seized the album to satisfy the balance of a $7.4 million forfeiture money judgment against Mr. Shkreli that was part of his sentencing in 2018.

As the PleasrDAO folks made clear, this album is kind of an NFT of its own. There’s only one in the world, and it’s about as non-fungible as can be.

In the interim, not much has happened with PleasrDAO and the album. Until now.

Just last week, PleasrDAO did two things. First, it set up a site for the album, conveniently at thealbum.com. It has a countdown until the year 2103, but allows anyone to buy… something. Technically, you appear to be buying the ability to speed up the release of the album. $1 takes 88 seconds off the time. $11 takes 16 minutes and 8 seconds, $111 gets everyone 2 hours, 42 minutes, and 48 seconds closer to release, and onward. There are typical DAO/NFT related features like leaderboards on there too.

The actual details are still pretty weird. If you pay up, you do get access to a sampler, but not the actual album.

Buyers will only receive an “encrypted” version of Shaolin that they cannot actually listen to. The deal will instead unlock exclusive access to a five-minute audio “sampler” composed of pieces of five tracks; the rest of the album will remain sealed.

As for the reduction in time before the album is actually released, some of that is apparently theoretical/wishful thinking:

It’s worth noting PleasrDAO likely hasn’t finished negotiating with the group and producer Cilvaringz for full rights to Once Upon a Time in Shaolin. According to Decrypt, Pleasr has only acquired rights to 16 of the 31 tracks on the album and will “share progressively larger pieces of that selected library with purchasers of the encrypted album over time.”

I’m sure that won’t lead to any problems at all.

And that brings us to the second bit, which should be clear from what’s been discussed above. Just days before releasing this, PleasrDAO sued Martin Shkreli, claiming he violated the terms of the original purchase agreement and kept a copy of the album for himself. There’s a lot of fun stuff in the lawsuit, but it boils down to this.

PleasrDAO bought the Album in two transactions in 2021 and 2024, for approximately $4,000,000, and $750,000, respectively. The Album was supposed to constitute the sole existing copy of the record, music, data and files, and packaging. It now appears, however, that Shkreli improperly retained copies of the data and files at the time of the forfeiture and has released and/or intends to release them to the public. Such actions would cause PleasrDAO to incur significant monetary and irreparable harm, and give rise to numerous claims for relief under the forfeiture order and common law.

The complaint spends almost as much time on Shkreli’s pharma/securities misdeeds as it does on the actual complaint here. It makes it feel almost like this whole lawsuit is part of the marketing campaign.

As for the evidence that Shkreli violated the terms of the deal, well:

On June 18, 2022, during one of these live streams, Shkreli admitted that he played the Album for his followers. He stated, during the live stream, “Yeah, that’s the Wu-Tang album for all you crazy streamer people.”

On June 22, 2022, during another live stream on YouTube, Shkreli was asked if he still has a copy of “Once Upon a Time in Shaolin.” Shkreli said, “I do. I was playing it on YouTube the other night even though somebody paid $4 million for it.”

On June 30, 2022, during another live stream, Shkreli again played a portion of the Album and again admitted to having retained the Album, stating: “of course I made MP3 copies, they’re like hidden in safes all around the world . . . I’m not stupid. I don’t buy something for two million dollars just so I can keep one copy.”

And then there’s this:

On April 13, 2024, a member of PleasrDAO posted a photo of the Album on X (formerly Twitter), and in the comment thread below, Shkreli made various comments in which he admitted to retaining copies of the Album’s data and files and streaming them to an internet audience:

a. “LOL i have the mp3s you moron”

b. “i literally play it in my discord all the time. you’re an idiot.”

c. “so what are you arguing about? this thread is about someone listening to a CD > 5000 people have…”

d. “yeah i have the music, sold the plastic”

Also, in case you’re not yet hating everyone in this story:

On May 13, 2024, Shkreli appeared on a video-recorded podcast posted on YouTube. In the video, Shkreli stated that he “burned the album and sent it to like, 50 different chicks[.]” He then asked the interviewer, “Do you know how many blowjobs that album got me? You think I didn’t make a fucking copy of it? Are you joking?” He also stated that “thousands of people have listened to it. I sent the mp3s to all these people.”

PleasrDAO thus claims:

Shkreli therefore violated the Forfeiture Order’s provisions requiring Shkreli to forfeit his interests in the Album and prohibiting him from taking any action that would reduce the Album’s value

PleasrDAO claims that under FRCP 71, they’re able to enforce that violation, and that could be the case (certainly not my area of expertise), though it seems weird.

I had also wondered if PleasrDAO was even an actual party that could bring a lawsuit, given that part of the point of DAOs was that they weren’t traditional corporations and were, instead, just effectively a smart contract. But the lawsuit clarifies:

PleasrDAO is an exempted foundation company established in the Cayman Islands located with a registered address at Cricket Square, Hutchins Drive, PO Box 2681, Grand Cayman, KY1-1111, Cayman Islands.

PleasrDAO then immediately sought a temporary restraining order on Shkreli, which the court promptly granted.

Having reviewed Plaintiff’s Verified Complaint and the moving papers and declarations submitted by Plaintiff, the Court finds that:

Plaintiff is likely to succeed on the merits or raises sufficiently serious questions going to the merits of its claims for third-party enforcement of the Forfeiture Order; violation of the Defend Trade Secrets Act; misappropriation of trade secrets; tortious interference with prospective economic advantage; unjust enrichment; and recovery of chattel;

It also sets in motion the process to turn that TRO into a preliminary injunction, while also demanding that Shkreli reveal who he gave the album to, plus some other stuff, while demanding that all copies be returned. And I always find it funny when there’s a demand to “return” a digital file. As if that were a thing.

Pursuant to the Court’s equitable powers, Defendant to provide an inventory and account of (i) the copies of the Album’s data and files that Defendant retained; (ii) the individuals to whom he distributed those data and files; and (iii) the profits traceable to his retention and distribution of the data and files, and/or an order authorizing Plaintiff to examine Defendant for the purpose of obtaining information regarding the location of his retained and distributed copies of the Album and its data and files, under FRCP 64 and CPLR § 7112; and

Seizure of all of Defendant’s remaining copies of the Album’s data and files and/or the return of those copies pursuant to 18 U.S.C. § 1836(b)(2), FRCP 64, and CPLR § 7102(d)(1).

So, yeah, from the sound of it, Shkreli’s probably in some amount of legal trouble here. But, what else is new?

All in all, what a dumb situation all around. This is where we end up in a world where we create legal fictions of scarcity over something that is inherently abundant. We end up in this weird world where legitimate scarcity and artificial scarcity are considered the same thing, when any thinking person recognizes they’re not.

The whole NFT/DAO space could actually be interesting in exploring those boundaries and differences, but instead mostly turned into a mess. And mixing this album into it only makes things more complex. Because here you have legit scarcity in the form of the one physical album, competing with artificially enforced scarcity of copyright laws (even though this isn’t a copyright case), and the reality that music can be infinitely copied and shared without a loss.

No one is defending Shkreli here, as he seems like legitimately a horrible person. But if we just take a step back from all that and think about all of this logically, it never, ever makes any sense to argue that he shouldn’t be allowed to keep a copy of the music.

Either way, this all adds up to quite the bizarre story. A decade ago, I thought that Wu-Tang experiment of the single album was a fun, creative idea to play with scarcity and abundance. But the fact that it now results in this monumentally stupid situation, involving NFTs, Martin Shkreli, the DOJ and more should say something about why trying to put artificial limits on abundance is a fool’s errant.

Filed Under: dao, martin shkreli, nft, ownership, scarcity, wu tang
Companies: pleasrdao