ESA Steps In With Amicus Brief In Support Of Activision Versus Humvee

from the hum-dinger dept

A short while ago, we discussed a rather concerning lawsuit brought by AM General LLC, the company that makes Humvees, against Activision, the game publisher that occasionally publishes Call of Duty games that include depictions of Humvees. AM General's claims are pretty silly, suggesting that players of the games will think that those games were somehow created by or endorsed by AM General. I can't imagine that's the case; instead, most people are likely to think that Activision is attempting realism in their warfare game, since you basically cannot make an American warfare game accurately without including Humvees. Activision's response was on First Amendment grounds, arguing that its games are partly an historically accurate work of art, for which including Humvees is accurate and fair use.

As we pointed out in our original post, this case has great implications for the wider video game industry. Because of that, perhaps it's not hugely surprising to see that the Entertainment Software Association has jumped into the case with an amicus brief arguing for the granting of Activision's summary judgement motion. The whole thing is worth reading, but you can tell that the ESA's viewpoints on this are framed by the wider gaming industry.

AM General LLC’s (“AM General”) lawsuit raises issues of substantial importance to the video-game industry. Today’s video games are exceptionally diverse in their artistic expression, ranging from the action-adventure of Activision’s Call of Duty franchise, to educational games like Where in the World is Carmen San Diego?, to sports-themed games like Madden NFL, to historical simulation games like the Civilization franchise, to games that are derived from motion pictures like Star Wars or that inspire motion pictures like Assassin’s Creed. Whether factbased, fictional, or somewhere in between, many of these games refer to or incorporate real-life historical and cultural elements – often including real products like the military vehicles at issue in this case, and the trademarks, trade dress, and other distinctive elements used to accurately identify and depict those products – to create realistic interactive environments that facilitate expression, enhance verisimilitude, and enrich the user experience.

If AM General succeeds in punishing Activision for exercising its First Amendment right to depict realistic U.S. military vehicles in Call of Duty – or in forcing Activision to endure the burdens of a trial to vindicate its First Amendment rights – ESA’s members and gamers will suffer. Video-game developers and publishers will be exposed to even more frequent litigation, with some developers and publishers foregoing the use of real products in their works to avoid being dragged into court. Because AM General’s theory is antithetical to the rights of ESA’s members – and is irreconcilable with well-settled authority governing the use of real products in expressive works – ESA respectfully requests that this Court grant Activision’s motion for summary judgment.

There are many reasons why AM General's lawsuit should fail, but the risk to artistic output must certainly be first and foremost. The idea that a storied vehicle used in American warfare could be blocked from being depicted in artistic expression over intellectual property rights is purely antithetical to the First Amendment. What I suspect is happening here is something else that regularly annoys me: the dismissal of video games as artistic expression. After all, it's not as though we've heard about many fights between the Humvee people and the film industry. And, yet, the number of depictions of Humvees in TV and film is countless. So why should Call of Duty be any different?

The ESA brief makes this point in the brief.

VIDEO GAMES ARE CULTURALLY SIGNIFICANT EXPRESSIVE WORKS Since the creation of the first electronic game in the 1950s – a highly pixelated version of tic-tac-toe entitled Noughts and Crosses3 – video games have evolved into complex works that are similar to interactive movies. Video games equal books, films, and television shows in terms of cultural significance and share myriad elements with these more traditional forms of expression. Like novels, many video games have multi-dimensional characters, complex storylines, and carefully crafted dialogue. Like films and television shows, many video games contain story arcs, visual images, and musical scores that contribute to their emotional impact.

Video games have become an integral part of American culture. In 2018, nearly 165 million adults in the United States played video games, and 75 percent of all Americans had at least one gamer in their household.

In other words, Call of Duty is every bit as much art and culture as Saving Private Ryan, in which case it is afforded all of the same First Amendment and fair use protections as that movie. Given that, the use of a Humvee is pretty clear fair use in an expressive work. If found to be otherwise, the gaming industry writ large is in a whole lot of trouble, particularly for any game that wants to depict realism.

But I don't think it'll get that far.

Filed Under: 1st amendment, art, call of duty, humvee
Companies: activision, am general, am general llc, esa

EFF Posts New White Paper On Stingray Device Capabilities

from the keeping-abreast-of-the-fuzz dept

The EFF has published a primer on IMSI catchers. Harris Corporation's success in this market has led to near-genericide, as almost every one of these cell tower spoofers is usually referred to as a "stingray."

The white paper [PDF], titled "Gotta Catch 'Em All," runs down what's known about cell-site simulators used by a number of government agencies. Most of this has been gleaned from secondhand info -- the stuff that leaks out during prosecutions or as the result of FOIA requests.

The technical capabilities of CSSs have been kept under wraps for years. The reasoning behind this opacity is that if criminals know how these devices work, they'll be able to avoid being tracked by them. There may be a few technical details that might prove useful in this fashion, but what is known about Stingray devices is that the best way to avoid being tracked by them is to simply not use a cellphone. But who doesn't use a cellphone?

The report is definitely worth reading, even if you've stayed on top of these developments over the past several years. It breaks down the technical subject matter in a way that makes clear what CSSs can and can't do -- and how they're capable of disrupting cellphone networks while in use.

While CSSs can intercept communications, it's hardly worth the effort. Unless the CSS can talk the phone into accepting a 2G connection (which eliminates encryption and severely limits the type of communications originating from the dumbed-down phone), it just doesn't work. This doesn't mean the devices are never used this way. But it does mean it's not a very attractive option.

On the other hand, CSSs impersonate cell towers, so they're able to pull all sorts of info from every device forced to connect with the faux cell tower. These devices are used most often to locate criminal suspects, meaning precise GPS location is a must-have. Operating on their own, cell-site simulators can't generate pinpoint accuracy. Working in conjunction with nearby towers, they can triangulate signals to provide better location info. But there's another option -- one rarely discussed in courtroom proceedings. CSSs can also force phones to give up precise location info.

First, the Stingray extracts info from nearby cell towers. Using this info (which the EFF points out anyone can access), the CSS alters its signal to become the highest priority connection in the area of operation. Once it's done this, GPS info can be coaxed from phones now connected to the fake cell tower.

[T]he attacker creates a “RRC Connection Reconfiguration” command, which contains the cell IDs of at least 3 neighbouring cell towers and their connection frequencies and sends this command to their target’s phone.

Usually, the “RRC Connection Reconfiguration” command is used to modify an existing connection to a base station, but the attacker is only interested in the target phone’s initial response to its message. This response contains the signal strengths of the previously specified cell towers, which can then be used to find the phone’s location via trilateration.

For newer phones and networks which support the “locationInfo-r10” feature, this report will also contain the phone’s exact GPS coordinates, meaning no trilateration calculations are required. The exact GPS coordinates are just a field in the response (Shaik et al, 2017).

There are few options available for people wanting to use a cellphone but are also wanting to avoid being swept up by a Stingray. As the report notes, there are a few cell tower spoofer detection apps on the market, but they may be more likely to generate false positives than detect IMSI catchers. There's no baseline for carrier behavior, much less "normal" Stingray use.

And, in any event, the EFF isn't publishing a handbook on how to evade detection by these devices. It's simply informing the public of the power of these devices, which are becoming as ubiquitous as the phones they track and trace. Since the public hasn't been invited to any these discussions by law enforcement agencies, it's up to everyone else to detail known capabilities and assess the potential damage to the public's expectation of privacy.

Filed Under: imsi catchers, stingray, surveillance

Pennsylvania Legislators Quickly And Quietly Passed A Law That Strips Power From Its Reform-Minded DA

from the dirty-deeds-done-with-amazing-alacrity dept

The residents of Philadelphia elected Larry Krasner as their new DA in 2018. Krasner promised reforms to the criminal justice system. And he delivered. He secured 33 resignations from prosecutors and staff who didn't feel they could back his reforms. Shortly after this, he received the best possible (inadvertent) endorsement for his reform efforts, one that took the form of criticism from the head of the local police union.

Krasner eliminated cash bail for nonviolent defendants and made it clear he would not tolerate misconduct or abuse by police officers. More importantly, he did more than talk. Two officers were criminally charged for performing an illegal stop of a pedestrian and Krasner secured an indictment from a grand jury against a cop who shot an unarmed man in the back.

Local law enforcement isn't happy. Neither are many politicians. As Akela Lacy and Ryan Grim report for The Intercept, moves have been made to blunt Krasner's reform efforts.

Lawmakers in Pennsylvania have quietly muscled power away from reformist District Attorney Larry Krasner, passing new legislation giving authority to the state’s attorney general to prosecute certain firearms violations in Philadelphia — and nowhere else in the state. The provision will expire in two years, or just after Krasner’s first term ends.

The bill silently sped through the legislative process. It was referred to the Judiciary committee on June 11th and signed into law by the governor on July 2nd. That's amazing turn-time for a bureaucracy. It appears there are plenty of state legislators who prefer their prosecutors to be hard-nosed punishers, rather than actual arbiters of justice who realize the normal way of doing things (cash bail, stiff sentences, over-prosecution of minor crimes) contributes very little to anyone's idea of "justice."

Krasner's office has responded by pointing out the obvious.

In a statement, Krasner’s office said the move is an attempt by the legislature to undermine the will of voters who turned out in record numbers to elect him. “District Attorney Larry Krasner was elected by an overwhelming margin to push for badly needed criminal justice reforms in one of the most highly incarcerated big cities in the country, and he has serious concerns about what Act 58 does, the potential precedent it sets, and what it signifies for the justice movement at large,” said spokesperson Jane Roh, referencing the legislation the new law amends.

Unfortunately, sometimes you have to point out the obvious to put something on the record in black-and-white -- something the legislators who hastily shepherded this bill through the state legislature can't ignore. And there's more to it than a bunch of legislators yearning to stick it to the new reformer. It appears some legislators were completely unaware targeting Krasner was the goal of this legislation.

Multiple legislators made statements to The Intercept indicating the version the House approved did not match the Senate version, which was apparently surreptitiously changed to narrow the focus of the bill to Philadelphia and Krasner in particular. The version these legislators voted for gave smaller towns better access to attorney general resources. The final bill does none of that. All it does is wrest power away from Krasner and hand it to the state's AG.

Meanwhile, the AG's office is claiming this has nothing to do with Krasner -- whose power it preempts -- and everything to do with the city's gun violence problem. But this is bullshit because the problem the AG's office and supportive legislators have with Krasner's exercise of prosecutorial discretion is that he exercises it too often.

Supporters of the legislation say Philadelphia was singled out not because of Krasner, whose office would still technically have jurisdiction over the offenses, but because the city is home to the bulk of the state’s gun violence. “The Philadelphia DA continues to have the authority to prosecute these crimes, should he decide to start enforcing the law,” Republican Rep. Rob Kauffman, who sponsored the bill and worked directly with White to craft the amendment, wrote in a statement to The Intercept. “This wasn’t done statewide because prosecuting these gun offenses doesn’t seem to be a statewide issue.”

If Krasner passes on gun cases, the AG can now prosecute instead. Prosecutorial discretion means nothing when another prosecutor can push cases dropped by a city DA. The city has found one way to undermine a DA who actually changed things. I'm sure they'll keep experimenting until they can undo the good he's done.

Filed Under: criminal justice, criminal justice reform, da, larry krasner, pennsylvania, philadelphia, prosecutors

The Third Circuit Joins The Ninth In Excluding E-Commerce Platforms From Section 230's Protection

from the selling-out-the-Internet dept

Remember when there was a terrible decision in the 5Pointz VARA case and I wrote 3000 words to explain just how terrible it was? Well, buckle-up, because here's another awful decision, this time in the Section 230 realm. In fact, this one may even be worse, because it was a decision at the federal appellate level, and thus we are more likely to feel the impact of its terribleness. What follows is an explanation of how it so badly missed the mark.

Not long ago we warned that the Ninth Circuit's decision in HomeAway v. City of Santa Monica, if allowed to stand, threatened Internet commerce. This new decision from the Third Circuit in Oberdorf v. Amazon heightens that alarm. As with the Ninth Circuit, it reflects undue focus on the commercial transaction it facilitated instead of on the underlying expression the transaction was connected to. Worse, it did so in a way that gave short shrift to the policy interests behind why Section 230 exists in the first place.

As is typical in cases with terrible Section 230 rulings, the underlying facts in this case are terrible too. One of the plaintiffs had bought a retractable dog leash via Amazon. The leash was defective, and when it broke it recoiled in a way that blinded her in one eye. She and her husband then sued Amazon over the injury. The district court dismissed their claims, partially for Section 230 reasons, and also because it could not find a way to deem Amazon a "seller" for purposes of the Pennsylvania consumer protection law the plaintiffs were trying to base their claim upon. But the Third Circuit, looking at the decision afresh, substantially rejected the district court's analysis and largely reversed its holding. It's this decision that joins the Ninth Circuit HomeAway decision in now seriously threatening Internet commerce.

It is worth noting that this was a 2-1 decision, with a majority opinion providing the controlling analysis and a dissent. Much of the majority decision involves pages and pages of discussion about what counts as a "seller" under that Pennsylvania law. While on the surface this discussion may seem at first seem tangential to our larger Section 230 concerns, in this case it ends up being fairly relevant. For one thing, it's part of the decision, and it shouldn't be. Section 230 includes a pre-emption provision because state and local laws are often messy and, worse, contradictory. An Internet platform's protection from liability should not be contingent on how any given state a platform's services may reach has opted to write its local law. So the mere fact that the decision starts out by reviewing how Pennsylvania's state law might affect the liability of an Internet platform like Amazon is the first sign that the decision is trouble.

Also, the "seller" analysis is itself revealing about how the court got the analysis denying Amazon Section 230 protection so very wrong. Not only does it read like a pre-ordained result – the court seems to really want Amazon to lose this case and stretches its reasoning to make sure this consumer protection law can reach them (in ways the dissent takes significant issue with) – but what's most telling is that the ways that the court decides that Amazon flunks the four-factor test it used to use to decide whether Amazon was a "seller" show why Section 230 should have applied and foreclosed this entire "are they a seller" analytical exercise in the first place.

Things start off poorly. The first factor is whether Amazon “may be the only member of the marketing chain available to the injured plaintiff for redress.” The majority complains:

[…]Amazon fails to account for the fact that under the Agreement, third-party vendors can communicate with the customer only through Amazon. This enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor. [p. 14]

It is a legitimate policy problem that it can be challenging, if not sometimes impossible, to find the person who used the Internet to cause harm and then hold them responsible. But that difficulty doesn't mean that Section 230 is to blame, nor does it follow that Section 230 should be curtailed, which would only end up inviting all the other significant harms that Section 230 exists to prevent. Courts have been clear on this point for over twenty years: Section 230 applies even if the party behind the content at issue cannot be found.

Furthermore, even if there were some reason why that rule should be different here, the majority presented no meaningful justification for why, even though Section 230 would insulate a platform in cases where, say, a user might have said something defamatory, it would not similarly protect the platform if the user's expression instead had offered the sale of a defective good. In all these situations the problem with the expression originated with the user, not the platform, yet the majority treats these situations as if they were somehow different, when they are not. Section 230 should therefore still apply.

Meanwhile, the dissent points out that the majority's decision would effectively punish marketplace platforms for not having vetted all of their users. To which the majority unconvincingly dismisses this reality by declaring, without support, that if the Internet user cannot be found the platform must absorb the liability.

The first factor weighs in favor of strict liability not because The Furry Gang cannot be located and/or may be insolvent, but rather because Amazon enables third-party vendors such as The Furry Gang to structure and/or conceal themselves from liability altogether. As a result, Amazon remains “the only member of the marketing chain available to the injured plaintiff for redress.” [p. 15].

In other words, like the Wisconsin Court of Appeals in Armslist had tried to do (before the Wisconsin Supreme Court corrected it), the Third Circuit is seeking to allow for the punishment of a platform for being a platform that people could use in bad ways. But it is because we knew that people would use the Internet in bad ways that Congress passed Section 230 in the first place. It's the very reason why we insulated platforms from liability. It is not a reason to now take away that protection.

Section 230 was also passed so that platforms would not be crippled with the burden of having to vet all their users or all the expression their users used their services to facilitate. The dissent is right that the majority decision creates that obligation, and thus threatens to chill future online commercial activity, not just by Amazon, but by anyone, including any smaller platforms and anyone who might want to compete with Amazon.

Worse, the majority holds against Amazon that Amazon had tried to police the commercial user expression appearing on its platform anyway, even though it didn't have to. It deems the volitional acts Amazon performed as evidence of sufficient "control" over the contents appearing on its platform to justify holding Amazon liable for anything wrong with that user speech.

Although Amazon does not have direct influence over the design and manufacture of third-party products, Amazon exerts substantial control over third-party vendors. Third party vendors have signed on to Amazon’s Agreement, which grants Amazon “the right in [its] sole discretion to . . . suspend[], prohibit[], or remov[e] any [product] listing,” “withhold any payments” to third-party vendors, “impose transaction limits,” and “terminate or suspend . . . any Service [to a third-party-vendor] for any reason at any time.” Therefore, Amazon is fully capable, in its sole discretion, of removing unsafe products from its website. Imposing strict liability upon Amazon would be an incentive to do so. [p. 16]

First, given the sheer volume of content that Amazon intermediates, it is not at all certain that it is correct to say that "Amazon is fully capable of removing unsafe products from its website." It requires a giant, unsupported logical leap to read the language in Amazon's vendor agreement reserving its rights solely with respect to its vendor-users as any sort of declaration that it has the practical ability necessary to do the sort of moderation the majority declares it now must do.

The dissent recognizes this problem. As the majority cites in footnote 28:

The dissent contends that holding Amazon strictly liable for defective products will require them to “enter a fundamentally new business model” because “the company does not undertake to curate its selection of products, nor generally to police them for dangerousness.”

But then the majority dismisses this concern in the same footnote:

We do not believe that Pennsylvania law shields a company from strict liability simply because it adheres to a business model that fails to prioritize consumer safety. The dissent’s reasoning would give an incentive to companies to design business models, like that of Amazon, that do nothing to protect consumers from defective products.

Not only does this language return us to the discussion as to why Section 230 includes a pre-emption provision in order to protect it reliably from the vagaries of state law, but it also fails to account for the market pressures that will demand marketplace platforms act in ways that best protect consumers. The majority seems to take the view that "but for" its ruling no one would be looking out for consumers, but it provided no basis to believe that this assumption is true.

Worse, the decision ends up making it all that much harder, if not impossible, for platforms to look out for consumers as the Third Circuit would want them to. By taking issue with all the things Amazon says it may do to police their platform in the language of its vendor agreement, it's made it impossible for Amazon, or any other marketplace vendor, to actually pursue any of them since the attempt just risks liability for itself. Yet these things are exactly the sorts of moderation activities that Section 230 expressly protects in order to encourage platforms to do. Section 230 sets up a situation where platforms can feel able to take what steps they can to police the user content they facilitate because it removes the risk of liability if they do. But here is the Third Circuit now chilling that moderation activity by instead using it as a basis for imposing liability.

The reasoning for the third and fourth factors isn't much better. The third factor involves considering whether Amazon is “in a better position than the consumer to prevent the circulation of defective products.” [p. 17]. In an earlier Pennsylvania case an auction house had been found not to have been liable for a defective product it sold as a "seller," for several reasons, including that it didn't have sufficient ability to prevent the distribution of defective problems. With little more than supposition, however, the majority decided that Amazon, somehow, did.

Moreover, Amazon is uniquely positioned to receive reports of defective products, which in turn can lead to such products being removed from circulation. Amazon’s website, which Amazon in its sole discretion has the right to manage, serves as the public-facing forum for products listed by third party vendors. In its contract with third-party vendors, Amazon already retains the ability to collect customer feedback: “We may use mechanisms that rate, or allow shoppers to rate, Your Products and your performance as a seller and Amazon may make these ratings and feedback publicly available.” Third-party vendors, on the other hand, are ill-equipped to fulfill this function, because Amazon specifically curtails the channels that third-party vendors may use to communicate with customers: “[Y]ou may only use tools and methods that we designate to communicate with Amazon site users regarding Your Transactions . . ..” [p. 18]

The majority never explains why third-party vendors can't also read the public reviews, or why the Amazon-provided communications mechanisms might not be adequate. And the dissent questions the entire conclusion that Amazon is somehow better situated to take defective items out of circulation.

The dissent contends that Amazon is no better-positioned than the consumer to encourage the safety of products sold in the Amazon Marketplace. However, the dissent openly acknowledges at least one aspect of Amazon’s relationship with third-party sellers that demonstrates Amazon’s powerful position relative to the consumer: Amazon “reserves the right to eject sellers.” Imposing strict liability on Amazon will ensure that the company uses this relative position of power to eject sellers who have been determined to be selling defective goods. [fn 35]

It is hardly revelatory that platforms have the power to terminate users. It's no secret that they can. Pretty much all platforms can, but per the majority's reasoning, none of them should ever be able to avail themselves of Section 230 protection as a result, if they do. Also, using the threat of liability to mandate censorship of any kind – even censorship that might be valid or beneficial – is also what Section 230 was intended to prevent, since the censorship that results from liability pressures so often isn't valid or beneficial. Yet here is the majority doing just that, using the threat of liability to cause vendor expression to be removed, even though it will inevitably cause the same unwarranted censorship, for fear of liability, that Section 230 was designed to forestall for all types of user expression.

Then the fourth factor considers who can best pay to redress the harm. The majority effectively finds that Amazon has the deepest and most locatable pockets, so therefore it decides that it should pay. If this be the rule, other large platforms have deep pockets as well, but not so smaller ones generally, yet eroding Section 230 protection for the big players erodes it for them as well. And even large pockets are not infinitely deep. The majority dismisses this concern by reasoning that Amazon can simply raise its prices:

Moreover, Amazon can adjust the commission-based fees that it charges to third-party vendors based on the risk that the third-party vendor presents. [p. 20]

Of course, those price increases will ultimately be passed onto consumers. Also, if the solution to platform liability is that platforms should just charge more for their services, it bodes poorly for all the free services Internet users have been able to benefit from to date and threatens to lock out those users who won't be able to afford to continue.

Ultimately, if there is a bright spot in this decision it is that the majority still found that Section 230 knocked out a few of the plaintiffs' claims, claims where the court was able to identify how they involved expressive activity by the platform.

to the extent that Oberdorf is alleging that Amazon failed to provide or to edit adequate warnings regarding the use of the dog collar, we conclude that that activity falls within the publisher’s editorial function. That is, Amazon failed to add necessary information to content of the website. For that reason, these failure to warn claims are barred by the CDA. [p. 32-33]

But in failing to recognize the expressive activity involved with "Amazon’s role as an actor in the sales process" the Third Circuit has doubled-down on the false dichotomy the Ninth Circuit's earlier HomeAway decision had created by deeming the brokering of the financial transaction connected with the facilitation of expression as something somehow separate from that expression. This bifurcation threatens to put all commercial activity beyond the reach of Section 230 and create an exception to its protection that simply is not in the statute, for good reason.

Filed Under: 3rd circuit, cda 230, e-commerce, intermediary liability, section 230, transactions
Companies: amazon

The FTC And Facebook: Why The $5 Billion Fine Is Both Too Little And Too Much

from the pointless-gestures dept

By now, you've certainly heard the news that was very likely leaked by Facebook late on Friday that the FTC, by a narrow 3 to 2 party line vote, had approved a $5 billion fine for Facebook for violating its earlier consent decree in the way it allowed an app to suck up lots of data that eventually ended up in Cambridge Analytica's hands. Most of the reaction to this fine (by far, the largest in the FTC's history) is anger.

Many people focused on one key point to argue that the fine wasn't enough: Facebook's stock jumped upwards after the news broke, to the point that Facebook's valuation probably went up more than the amount of the fine itself (never mind the difference between the value of equity and actual cashflow...). However, I wouldn't read too much into the stock jump. After all, Facebook had already said back in April that it was expecting a $5 billion fine, meaning that Wall Street had already priced in exactly that. If the $5 billion fine had come out of the blue it might have been a different story. The bump, then, could be explained by investors reacting to the end of any uncertainty and the fear that the fine might have been larger.

That said, there are good arguments for why this is a really significant fine. And for that, I'll turn to the former acting-CTO of the FTC, Neil Chilson, who knows a thing or two about how the FTC works, and points out that this sort of thing is extremely aggressive (and this part is important): given the FTC's mandates and powers. As he notes:

The FTC is using an extremely general law intended to stop or redress practices that harm consumers. It is reportedly getting a settlement that is 225x larger than the prev. record. And it got this for practices where AFAIK no consumer lost a penny. Laws have meaning. There is only so far an agency can push the commands of Congress before a court will slap them back (as has happened to the FTC a few times recently.) This settlement is, I think, probably at the bleeding edge of the FTC's litigation risk. If you're angry about this settlement, calling the FTC a "co-conspirator" is ridiculous. The FTC has been an aggressive privacy enforcer using a statute that isn't specifically intended to protect privacy. That's on Congress. If you don't like it, talk to your lawmaker.

In short, given the FTC's powers and the details of what happened with Cambridge Analytica, where the "harms" are not directly quantifiable (you can argue harms against democracy, but that would require a bit more actual evidence and is not the FTC's mandate...), a $5 billion fine is quite a lot. So, frankly, attacking it as "an embarrassing joke" or "a tap on the wrist" or even "a victory for Facebook" seems to be missing the point.

That said, what I think all this anger is getting at -- and which I mostly agree on -- is that we still have not figured out a way to adequately deal with privacy in a digital age. And people are (partly reasonably, partly irrationally) very mad at Facebook for that. Part of the problem here, however, is expecting that a single FTC action is somehow magically going to fix all of that. It can't. No amount would have done that, and it's quite unlikely that any restrictions the FTC puts forth as part of this agreement are going to fix that either. So, I can totally understand the anger and annoyance at this particular settlement -- but it's not as if anything the FTC would have done here would have satisfied most people.

And, of course, this one FTC action is hardly the end of the line. The EU and other countries are still likely to come down hard on Facebook, and the company is still facing antitrust questions as well. And, then there's Congress. At some point, Congress will put forth various privacy bills (and various states may follow California's dubious lead in doing so as well).

In short: this is a significant fine, given the FTC's mandate and the issue at hand. And if you think it's "not enough" because it won't hobble Facebook, well, then you're correct. But the FTC's mandate isn't to randomly hobble companies because people are angry at them.

Facebook is going to be facing a long line of angry regulator and legislators, and that seems unlikely to change as a result of this fine (indeed, it appears to have inspired many to increase their efforts to "do something").

Filed Under: consumer harms, data, fines, ftc, privacy, punishment
Companies: facebook

Daily Deal: The Complete Become A Product Manager Certification Bundle

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

From coding to productivity to effectively managing teams and projects, the Complete Become A Product Manager Certification Bundle has you covered. You'll learn how to lead effective 1-on-1 meetings, how to work with SQL and MySQL, how to implement vision and strategy to getting a better understanding of how to use data, and more. It's on sale for $39.

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

IBM's Ridiculous Opportunism: Sells Out Section 230 To Sell More Filters

from the go-away dept

This perhaps isn't a huge surprise, but IBM is being disdainful of the wider tech ecosystem, yet again. It has an incredibly long history of this kind of activity -- mostly in the patent space, where it is the world's foremost patent bully. The company gleefully announces each and every year that it gets the most patents of any company in the US. It has done this (no joke) for 26 straight years. Of course, given how many patents it gets, if patents actually were a marker for innovation, you'd think that IBM would still be putting out all sorts of innovative new products all the time. Right? Except, of course, it is not. Instead, it uses the patents to shake down companies who actually do innovate. The most famous of these stories is the one about IBM and Sun in its early days, in which IBM showed up at Sun's offices with threats of patent infringement:

My own introduction to the realities of the patent system came in the 1980s, when my client, Sun Microsystems--then a small company--was accused by IBM of patent infringement. Threatening a massive lawsuit, IBM demanded a meeting to present its claims. Fourteen IBM lawyers and their assistants, all clad in the requisite dark blue suits, crowded into the largest conference room Sun had.

The chief blue suit orchestrated the presentation of the seven patents IBM claimed were infringed, the most prominent of which was IBM's notorious "fat lines" patent: To turn a thin line on a computer screen into a broad line, you go up and down an equal distance from the ends of the thin line and then connect the four points. You probably learned this technique for turning a line into a rectangle in seventh-grade geometry, and, doubtless, you believe it was devised by Euclid or some such 3,000-year-old thinker. Not according to the examiners of the USPTO, who awarded IBM a patent on the process.

After IBM's presentation, our turn came. As the Big Blue crew looked on (without a flicker of emotion), my colleagues--all of whom had both engineering and law degrees--took to the whiteboard with markers, methodically illustrating, dissecting, and demolishing IBM's claims. We used phrases like: "You must be kidding," and "You ought to be ashamed." But the IBM team showed no emotion, save outright indifference. Confidently, we proclaimed our conclusion: Only one of the seven IBM patents would be deemed valid by a court, and no rational court would find that Sun's technology infringed even that one.

An awkward silence ensued. The blue suits did not even confer among themselves. They just sat there, stonelike. Finally, the chief suit responded. "OK," he said, "maybe you don't infringe these seven patents. But we have 10,000 U.S. patents. Do you really want us to go back to Armonk [IBM headquarters in New York] and find seven patents you do infringe? Or do you want to make this easy and just pay us $20 million?"

After a modest bit of negotiation, Sun cut IBM a check, and the blue suits went to the next company on their hit list.

This kind of negotiation is a standard part of IBM's business practices these days. Just recently it was shaking down Groupon. And a few years ago, we wrote about the similar shakedown of Twitter, with the threat coming on the eve of Twitter's IPO -- timed perfectly to scare off investors. Left with little choice, Twitter caved, even though the patents were bogus, and paid IBM $36 million.

Back in 2013, when IBM first went after Twitter, I highlighted how it was an example of how older tech companies focus on litigation when they have no innovation left. In the comments, a few people challenged that claim, saying that IBM was innovative. "Just look at Watson," the company's big AI project, they all said. So, about that:

• How IBM Watson Overpromised and Underdelivered on AI Health Care
• What went wrong at IBM? Its 'master plan' has failed to deliver...
• IBM pitched its Watson supercomputer as a revolution in cancer care. It’s nowhere close
• MD Anderson Cancer Center’s IBM Watson project fails, and so did the journalism related to it
• IBM’s Watson ‘is a joke,’ says Social Capital CEO Palihapitiya
• IBM’s Watson Not Living Up to Hype
• Doctors Are Losing Faith in IBM Watson’s AI Doctor
• Report: IBM Watson delivered ‘unsafe and inaccurate’ cancer recommendations

I could go on and on, but I think you get the picture. And of course, in a post-Alice world, where the Supreme Court has made it clear that most software doesn't deserve a patent, IBM is losing its ability to prop up its businesses with the patent shakedown game as well. Indeed, EFF even shamed the company into dropping one of its truly stupid patents.

So what's a giant tech company that hasn't been innovative in years, and can't rely on shaking down actually innovative companies with bogus patents, to do? Well, how about using some other methods of gaming the regulatory system? Last year, IBM made it quite clear that it wanted to fuck up the internet, when it came out in favor of FOSTA (and at the same time, against inserting intermediary liability protections, like Section 230 of the CDA, into trade agreements).

Now, incredibly, just at the time when there are bipartisan attacks on Section 230, IBM has decided to support gutting Section 230 with a truly malicious and ill-informed statement arguing that 230 protections should be "earned" based on an impossible "reasonable" standard.

In the United States, precision regulation means taking a fresh look at Section 230 of the Communications Decency Act (CDA 230). As currently written, CDA 230 grants an expansive liability shield to any provider of an “interactive computer service” for the actions that occur on their platform, regardless of whether the platform turns a blind eye to illegal activity. Courts have found companies that knowingly host illegal content to be exempt from legal liability based on the broad protection that CDA 230 provides. But a measure designed nearly a quarter-century ago to foster an infant internet needs to keep pace with the enormous social, economic, and even political power that the online world today commands.

Instead of holding all online platforms exempt from liability by default, IBM believes that the exemption should be conditioned on companies applying a standard of “reasonable care” and taking actions and preventative measures to curb unlawful uses of their service.

We just recently discussed how this is a completely unworkable standard. First of all, a reasonable care standard would mean widespread censorship, because what internet company wants to risk going to court over all of this? If "conservatives" think they're getting banned too frequently from social media today, just wait until those platforms face real liability for leaving content up too much.

Second, "reasonable care" will have to be proven in court -- meaning that the procedural benefits of Section 230 get tossed out the window (rather than being able to get a case tossed at an early stage on 230 grounds, companies will have to go through the expensive and time-consuming process of "proving" to a court that they've taken "reasonable care").

Of course, IBM doesn't give a shit about the open internet. To them, killing Section 230 opens up all sorts of neat possibilities. First off, IBM doesn't host any significant online services that rely on Section 230 protections, so it doesn't increase its own liability. Second, it handicaps the companies who actually have been innovating in AI technology, like Google and Microsoft. Third -- and this is the key -- you can bet that one way that many companies will try to prove "reasonable care" would be to purchase an expensive filtering technology. Perhaps one based on... Watson? IBM gets to salvage its junk technology and have the government create a market for it. Bonus.

The rest of IBM's post is incredibly disingenuous:

The “reasonable care” standard would provide strong incentives for companies to limit illegal and illicit behavior online, while also being flexible enough to promote continued online innovation and fairly easy adaptation to different online business models.

The companies already have plenty of incentives to "limit illegal and illicit behavior online" -- because when they don't, they get a ton of shit for it in the press and from politicians. Establishing a new bullshit level of liability will only lead to much greater censorship, including of perfectly legal content. This is something IBM doesn't even acknowledge.

In fact, IBM tries to rewrite what happened with FOSTA:

Around the same time, IBM played a key role in promoting passage of U.S. legislation to crackdown on the spread of online content with a truly horrific purpose: trafficking children for sexual exploitation. We saw this legislation, known as SESTA/FOSTA, as an important step in a broader global effort to stop criminals from using digital platforms for clearly illegal behavior.

And what has happened since then? FOSTA has failed in every measure. More women and children have been put at risk thanks to FOSTA. For IBM to be taking a victory lap on that is truly fucked up.

Then IBM pushes out this complete nonsense:

Reasonable care does not mean eliminating entirely the intermediary liability protections of CDA 230, or comparable laws in Europe and elsewhere. Nor are we calling for amending the “Good Samaritan” provision of CDA 230, which limits the liability of companies that take voluntary actions to stop bad actors. We simply believe companies should also be held legally responsible to use reasonable, common-sense care when it comes to moderating online content. This means, for example, quickly identifying and deleting content focused on child pornography, violence on child-oriented sites, or online content promoting acts of mass violence, suicide, or the sale of illegal drugs. A reasonable care standard in CDA 230 would add a measure of legal responsibility to what many platforms are already doing voluntarily.

Note the many, many contradictions in just this paragraph alone. The "Good Samaritan" provision of Section 230 is what encourages companies to take down that content already. Adding legal liability absolutely does remove the very mechanism that the Good Samaritan provision provides. Second, if (as the paragraph notes) the internet platforms are already doing this voluntarily, why do we need to add legal liability to hold them responsible? And that's not even mentioning the fact that the post conflates a bunch of different content -- ignoring how difficult some of it is to recognize (compared to others that are easy to recognize). There is not a single serious internet company that is allowing child pornography on its platform. They all ban it. They all remove it as soon as they're aware of it. They all tap into the giant NCMEC database of hashes. And they do that because they don't face liability.

IBM has long been a black hole for actual innovation. Now it wants to suck down the open internet with it. Don't let it.

Filed Under: cda 230, filters, liability, patents, reasonable care, section 230, watson
Companies: ibm

West Virginia's Biggest Telco Says Broadband Business 'Unsustainable'

from the ill-communication dept

For years we've explored how the nation's phone companies no longer really want to be in the broadband business. They routinely refuse to upgrade their networks, yet often lobby to ensure nobody else can deliver broadband in these neglected footprints either. Telcos in particular have a bizarre disdain for their paying customers, delivering the bare minimum (slow DSL) at the highest rates they can possibly charge without a full-scale consumer revolt. It's not surprising then that many telco DSL customers are fleeing to cable, assuming they even have a second option for broadband.

This scenario has been particularly true in West Virginia, which has become the poster child for telecom sector graft and corruption. For years, incumbent phone provider Frontier Communications (which bought most of the state assets from Verizon), has seen zero competitive pressure to improve service. At the same time, they've enjoyed rampant regulatory capture, to the point where company executives have simultaneously acted as state senator, without a single question raised. The company has also been routinely under fire for bilking the government (read: you) out of millions of dollars intended to shore up coverage gaps.

Frontier in West Virginia is the picture perfect example of why we can't have nice things. Coddled natural monopolies, free from competition and meaningful oversight, always double down on bad behavior. Yet as customers in the state routinely complain about lengthy outages and terrible service, Frontier executives are blaming everybody but themselves, to the point where the company is now proclaiming that its entire business model in the state is "unsustainable":

"Frontier serves only about ten percent of the state voice lines in its service area—and falling—but has 100 percent of the universal service obligation to serve the most rural and high-cost areas,” Mendoza said in a statement. “Our customer base continues to decline, while the cost of service per line has increased dramatically. This has resulted in an unsustainable model for providing service in rural and high-cost areas, manifesting in increased numbers of service complaints. We plan to reach out to the state’s leaders to collaboratively find solutions to this difficult challenge."

Of course Frontier put itself in this business by gobbling up Verizon's unwanted assets in a bid to grow bigger for bigger's sake and thrill its investors. While some of the company's decline is due to copper phone users switching to wireless, much of it is because the company's still offering broadband speeds to most of its customers that don't even meet the FCC's modern definition of "broadband." Don't upgrade your network? Customers leave. The real "unsustainable" model is throwing millions of dollars at apathetic natural monopolies but never holding them accountable for failure.

When Frontier executives talk about finding "solutions" with state lawmakers, they usually mean "throw even more taxpayer money at us that may or may not actually be spent to fix the problem." Frontier has been lavished with subsidies and tax breaks for years, only to face accusations it not only defrauded the government, but used much of that money on projects that didn't actually help improve last mile connectivity. A monumental portion of Frontier's problems are very much of its own design.

This is US broadband in a nutshell. Regional telecom monopolies, which all but own state and federal lawmakers, face zero regulatory or competitive pressure to actually do their jobs. As a result, in state after state, DSL networks are being allowed to literally fall apart so telcos can shift their focus to sexier objectives (usually business service or wireless video advertising). And when the government does act, it usually involves throwing even more money at a broken market, then failing to adequately ensure that money is spent properly.

Cable giants like Comcast and Spectrum then rush in to dominate the market, raising rates, neglecting customer service, and making everything worse across the board. Rinse, wash, repeat. In state, after state, after state. And while fifth-generation wireless is often painted as some kind of panacea for this problem, that's simply not the case. Nothing in this equation changes until one thing happens: apathetic voters wake up and stop electing politicians who prioritize monopoly profits over the public welfare.

Filed Under: broadband, competition, monopolies, oversight, profits, west virginia
Companies: frontier

No Shirt, No Shoes, No Facescan, No Service: Welcome To 21st Century Convenience Store Shopping

from the say-cheese-snacks dept

Developers of facial recognition software and their customers are finding new and uninventive ways to use unproven tech to keep people out of places. Law enforcement just wants to watch everyone who's out in the open and strays too close to the right cameras. Security agencies just want to watch everyone leaving or entering the country.

Private businesses, on the other hand, want to limit their interactions with certain people. Landlords are replacing keys/locks with cameras and phone apps. Retailers are implementing facial recognition tech to create digital barriers to entry. Given the tech's error rate, the chance of misidentifying someone as a shoplifter is omnipresent, leaving would-be shoppers in the awkward position of attempting to prove a negative just for the opportunity to give a retailer money.

Large retailers have already played around with the tech, but it's now finding a new home at the smaller end of the retail spectrum. The Seattle Times reports a convenience store chain is kicking the facerec tires.

Jacksons Food Store customer Denise Diharce was surprised to learn that the Tacoma location she frequents for odds and ends is testing a high-tech system that, prior to entry, will compare her to images of previous crime suspects.

Before patrons can enter the basic convenience store at the corner of South 38th Street and Pacific Avenue, a camera under a red awning will take a picture and use artificial intelligence (AI) to decide whether the image matches any in a database of known robbers and shoplifters at that location.

This was during the chain's test run. But it's moving forward with full deployment, seeking to have the systems run during night hours to keep criminals out of its stores. When the system is on, customers will be informed of the system's use -- something they will have a hard time not noticing when a speaker asks them to stand still and point their faces in the direction of the camera.

The system used by the convenience store chain is very much DIY, which probably keeps it at an affordable price point. There's no link to existing criminal databases. Every undesirable member of the public must be hand-flagged by store staff to be added to the database. Limiting the number of faces in the database should help decrease both false positives and false negatives -- something that's a commonly-observed problem with larger deployments linked to much bigger databases composed of both criminal and non-criminal face photos.

In isolation, this use may seem justified. Convenience stores tend to get robbed more frequently than other retailers and anything that adds a bit of safety for employees is probably a good thing. But it can't be viewed in isolation -- not when government agencies at all levels are snapping up facial recognition software from a handful of vendors who are creating massive databases of photos for use by almost anyone -- public or private -- that can afford to purchase the tech.

The steady creep of surveillance tech makes people more accepting of even more serious encroachments on their privacy -- or just their ability to move around in public without being "noticed" by dozens of cameras linked to dozens of databases.

Filed Under: convenience stores, crime, facial recognition, law enforcement, privacy, shoplifting

Funniest/Most Insightful Comments Of The Week At Techdirt

from the say-something dept

This week, our first place winner on the insightful side is Rocky, who provided some details on why game developers take issue with key reseller G2A:

And just to expand upon the term fraudulent in this context with an example:

Someone buys a Steam-key with a stolen credit-card, sells the key to G2A, some gamer buys the key and starts playing the game. Later the owner of the credit-card discovers the fraudulent transaction and reverses the charge. Now comes the problem, who should take the cost of the fraudulent transaction? The gamer, Steam or the developer?

In reality the total cost of the fraudulent transaction is usually passed onto the developer by Steam so the gamer who bought the key in good faith can keep playing, and that's why some indie developers thinks it's better for people to rather pirate the game instead of buying keys from re-sellers, since the latter actually can costs them money PLUS a lost sale, ie for each fraudulent transaction they need to sell 2 more keys to make up for it.

In second place, we've got Thad with a response to Lindsay Graham's technological illiteracy that also serves as a good general demand:

Bring back the Office of Technology Assessment.

For editor's choice on the insightful side, we start out with an anonymous commenter who thanked our first place winner and others for their explanation of the G2A situation:

Thank you to everyone above who explained the fraudulent practice side of things. I can imagine that is probably a bulk problem. Otherwise i am left thinking that game companies are just still whining about the First Sale Doctrine, with occasional fraud, and oh-my-god-no someone resold a key we gave away. (Gee sorry someone less influence-y is playing your game, asshats.)

The issue here, when fraud is involved at scale, yeah that is a legit complaint.

I will certainly think twice about buying from a reseller, but what about genuine resales without ethical or legal baggage?

Next, we've got a comment from PaulT in response to someone defending the secret Facebook group for CBP agents:

"Just because they work for CBP doesn't stop them from being human."

Also, crossing the border, sometimes in a perfectly legal attempt to apply for asylum does not make one less than human. Yet, here we are with concerns about the way that the people in these groups are treating them anyway.

"Its also been proved that PTSD and an incredibly dark sense of humor are related."

So, we shouldn't be concerned about people having severe bigotry issues against people they have control over because they might have been severely psychologically damaged before they took the job? That sounds backwards to me.

I agree that caution should be taken, but those really aren't convincing reasons.

Over on the funny side, our first place winner is Thad explaining how Gavin McInnes won him over by pointing out a slightly incorrect assertion by SPLC:

Ah. Well there you have it: Gavin McInnes is definitely not a white supremacist, because he didn't use racial slurs on Fox News or VDARE, he used them in Taki's Magazine.

In second place, it's an anonymous commenter who couldn't resist a quick lil' vegan joke:

I hear they’re now selling beef milk, which is like almond milk that’s pushed through tiny holes in cows.

For editor's choice on the funny side, we start out with an anonymous commenter responding to questions about the legitimacy of Laura Loomer's lawyer:

I'm sure there's a bar, somewhere that gives a damn... but they probably serve alcohol

And finally, it's Toom1275 with a metric for the blog:

The veracity of Techdirt's reporting is directly proportional to the number of trollskis whining about it in the comments.

That's all for this week, folks!