Arizona Attorney General sues Google for misleading data collection practices

Arizona Attorney General Mark Brnovich has filed a lawsuit against Google for what he describes as ‘deceptive and unfair’ methods to secure valuable personal data.

While it is hardly unusual for Google to find itself on the wrong side of right when it comes to data collection and privacy practices, registering the attention of a single Attorney General could be a worrying start. These lawyers have a tendency to swarm around an adversary, collecting support from counterparts in other states. Simply look at how easily New York Attorney General Letitia James rallied disciples in failed opposition to the T-Mobile US and Sprint mega-merger, as well as a previous antitrust case against Google.

“While Google users are led to believe they can opt-out of location tracking, the company exploits other avenues to invade personal privacy,” said Brnovich. “It’s nearly impossible to stop Google from tracking your movements without your knowledge or consent. This is contrary to the Arizona Consumer Fraud Act and even the most innovative companies must operate within the law.”

The basis of this lawsuit is whether Google is acting with the rules set forth in Arizona consumer law. Brnovich details that the majority of Google’s revenues are derived from the collection of valuable personal information, though he also claims it is often done without the users’ consent or knowledge.

In 2018, the Associated Press ran an article which claimed Google was continuing to collect data even when the user explicitly removed consent. This practice seemingly carried on until the mid-2018’s and forms the basis of the case for Arizona. However, this is only the tip of the spear.

Following a two-year investigation, the Arizona Attorney General office has filed a 50-page complaint against Google in the Maricopa County Superior Court. Featuring internal documents, under-oath testimony from Google employees, as well as external opinions from academia condemning the activities.

A significant proportion of the information has been redacted and will be examined in private, thanks to confidentiality claims from Google, but the State lawyers will be pushing for more to be made public. Over the course of the next few weeks this could be a very interesting case to keep an eye on as details of the internal workings of Google are potentially exposed. Few people genuinely understand how Google works, so this could be very illuminating.

This will be an interesting case, though Brnovich will have to rally some support very quickly. The privacy advocacy organisations are remaining quiet for the moment, as are other politicians and Attorney Generals. That might change by this afternoon as our transatlantic cousins wake up but fighting the powerful Google legal department solo is unlikely to end well for Arizona’s Attorney General.

Washington State sues Facebook over political ads

Washington State Attorney General Bob Ferguson has filed a lawsuit against Facebook for selling political ads without maintaining information for the public as required by campaign finance law.

The social media giant is of course familiar with the inside of a courtroom, and it might be more at home in Washington State having been sued for exactly the same offence in 2018. Facebook settled the previous lawsuit for $238,000 in December 2018, $200,000 as a fine and $38,000 in legal fees, though it appears this was not enough of a deterrent.

“Whether you’re a tech giant or a small newspaper, those who sell political ads must follow our campaign finance law,” Ferguson said. “Washingtonians have a right to know who’s behind the ads seeking to influence their vote.”

Under Washington State campaign finance law, Facebook is required to publish the sources and payments of political advertising within 24 hours of publication. This information include the name of the candidate or measure supported/opposed, name and address of the person who sponsored the advertising and the total cost of the advert.

Interestingly enough, Facebook has somewhat of an unusual and complicated set of policies when it comes to political advertising. Unlike its Silicon Valley neighbours, Facebook has decided against banning or limiting political advertising, and still allows the hyper-targeting features which makes it such a popular tool for marketers around the world.

However, perhaps the most mind-boggling decision it made in recent years was the decision not to hold political ads accountable to fact-checking thresholds other advertisers must adhere to. Politicians can effectively say whatever they like on the platform without fear of breaking the community guidelines and rules.

These policies are major contributors to the image of Mark Zuckerberg as a successful yet slimy and reprehensible individual with little respect for the users which have fuelled his fortune.

In this case, reported to the Public Disclosure Commission that Facebook had sold a total of 269 political ads for approximately $20,000 to 12 Washington state political committees without making the correct information publicly available. Facebook confirmed these ads, while the Commission also identified sales of an additional $500,000 worth of advertising to political bodies and individuals in the state which had not been properly accounted for in the public information records.

What is worth noting is these are the adverts which have been identified. Facebook could have profited more from these illegal activities, as some instances may have slipped through the net, though we suspect the Commission identified the majority.

With a Presidential Election Campaign on the horizon Facebook is likely to receive a significant amount of interest. President Donald Trump’s campaign demonstrated the power of Facebook’s hyper-targeted advertising platform during the 2016 Election, which perhaps explains why the social media giant is reluctant to ban/limit political advertising like Google and Twitter; it is a lot of money to be turning away.

What this new lawsuit needs to do is dish out an appropriate punishment, however.

Every corporation will push the limits of the law for financial gain and Facebook has demonstrated this assumption here. To ensure Facebook stays within the rules in the future, the penalty should exceed the financial gain. A fine which does not is no deterrent to be compliant in the future as there would be a net gain and no material consequence for the firm.

US heads towards C-Band but critics create risk of legal action

The FCC has proposed new actions which would finally make valuable mid-band spectrum available to telcos, but it is not without opponents.

For five years the FCC has been attempting to figure out how it can free-up the C-Band spectrum airwaves, and now it seems to have finally made some progress. FCC Chairman Ajit Pai announced the country’s largest ever spectrum auction, with 22,000 country-wide licences available in the 3.55-3.65 GHz, though the US will have to swallow a $14.7 billion bill for satellite companies to vacate the space. This is the issue for some.

“Shelling out billions for airwaves we already own is no way to handle taxpayer money – especially when taxpayers want those dollars to support rural broadband,” said Senator John Kennedy of Louisiana.

“People say appetites grow by indulgence, and it’s true: These foreign satellite firms want all four feet and their snout in the taxpayer trough. The FCC shouldn’t be helping them.”

Intelsat, SES, Eutelsat, Telesat and Embratel Star One have all demonstrated to the FCC they have commercial activities in the C-Band airwaves which would be negatively impacted by the proposals. Licences will expire towards the end of the decade, though the FCC has said it would make funds available to accelerate the process of vacating these valuable airwaves.

Senator Kennedy seemingly believes the satellite operators can be kicked off the airwaves at the drop of a hat as they are leaseholders of the assets not owners. The statement generally ignores well established commercial practices, though this is a man in an influential position.

The US Senate Committee on Appropriations regulates expenditures of money by the government. The FCC is under the jurisdiction of the Financial Services and General Government subcommittee, of which Senator Kennedy is the Chairperson. If Senator Kennedy wants to throw a spanner into the auction mechanism, he certainly has the power to do so.

And despite the financial reward for relocated out of the C-Band airwaves, not all the satellite companies are happy with the situation.

“This Order is fatally flawed by its misinterpretations of the Communications Act, and by its numerous arbitrary and capricious conclusions,” said ABS CEO Jim Frownfelter. “The Small Satellite Operators (SSOs) are going to be harmed by the unlawful revocation of the right to use 60% of their licensed C-band spectrum, and we will ask the courts to overturn this Order and to instruct the FCC to start the entire process again.”

ABS is a global satellite operator, offering broadcasting, data and telecommunication services, through a fleet of satellites operating in the C-Band airwaves. The Small Satellite Operators (SSO) is a lobby group representing ABC alongside Hispasat and Embratel Star One, plan on launching legal action to halt the auction process.

What is developing is a very complicated situation. The C-Band airwaves are key to the efficient deployment of 5G services, though thanks to congestion, they are not immediately available to US telcos.

Almost everywhere else around the world, mid-band spectrum is forming the foundation of the drive towards 5G. The spectrum marries a palatable balance between high-speed data downloads and extended coverage, hence the popularity in the absence of network densification projects. With a reliance on high-band spectrum in the US, delivering the promised experience of 5G might be very difficult and expensive.

The proposals put forward by the FCC, a dynamic spectrum sharing policy, is a very interesting one. A three-tier hierarchy will be created to offer the US Navy primary use over the airwaves, though the vast majority of the time, second and third tier licence owners will make use. This is an interesting approach and could offer regulators around the world confidence to take a new approach to spectrum management, though the threat of legal complications in the Senate and courts paint a gloomy picture.

Texas Judge rules for White House over Huawei

Huawei has faced a setback in its pursuit of legitimacy in the US. as a Texas District Court ruled against its lawsuit directed towards the National Defense Authorization Act (NDAA).

Judge Amos Mazzant of the US District Court in East Texas ruled that section 889 of the NDAA was valid and legal. Huawei had argued the clause, which effectively banned it and ZTE from working with any company receiving federal funding, was unconstitutional on the grounds it presumed guilt without a fair trial.

While a Huawei victory was hardly going to make an impression with the single-minded White House policy makers, this is a victory for the Government, seemingly validating its decision.

“Contracting with the federal government is a privilege, not a constitutionally guaranteed right – at least not as far as this court is aware,” Judge Mazzant said in the ruling, first reported by Reuters.

This is an interesting nuance which has been put forward by Judge Mazzant. Huawei has argued the clause banning service providers from spending federal money on Chinese equipment is unconstitutional, though Judge Mazzant has stated that the Government should have the right to control how its money is allocated and spent. The Act does not prevent Huawei from doing business in the US entirely, which keeps the Government on the right side of the line.

The lawsuit, which was filed in March 2019, stated that Congress was acting in violation of the US Constitution as it was denying the firm the right to bid on both Government and private sector contracts. Huawei suggested the Act was a Bill of Attainder, as it presumed guilt without trial. Under Article I Section 9 in federal law, and in state law under Article I Section 10, US Constitution forbids such actions.

For the US, this could add some momentum to the already existing propaganda campaign against China and seemingly all companies from China. This ruling could add buoyancy to the Simple Resolution which has recently been passed in the House of Representatives.

The resolution, which can be used to influence administrative actions and foreign policy, stated that the House of Representatives believed all Chinese countries were effectively under Government control, state-owned or private. Such a broad-brush approach to condemnation is a very dangerous and small-minded approach to take, though the anti-China rhetoric could be offered a new lease of live…

New York ends resistance to T-Mobile/Sprint merger

New York Attorney General Letitia James has announced her office will not pursue an appeal against the courts decision to approve the $26 billion T-Mobile US and Sprint merger.

While the other states involved in the lawsuit to prevent the combination of the two telcos are yet to formally make their position public, James was the primary driving force behind the legal opposition. Others might try to step up, but without one of the US’ fastest growing political forces at the helm, responses look relatively pitiful.

“After a thorough analysis, New York has decided not to move forward with an appeal in this case. Instead, we hope to work with all the parties to ensure that consumers get the best pricing and service possible, that networks are built out throughout our state, and that good-paying jobs are created here in New York.

“We are gratified that this process has yielded commitments from T-Mobile to create jobs in Rochester and engage in robust national diversity initiatives that will connect our communities with good jobs and technology. We are committed to continuing to fight for affordability and access for all of New York’s mobile customers.”

James’ opposition to the $26 billion merger first emerged in June 2019 when, alongside California Attorney General Xavier Becerra, support was raised for a multi-state lawsuit against the corporate transaction. James managed to convince 12 State Attorney Generals to oppose the deal, questioning whether it would be beneficial for the consumer and attempting to disprove that Dish would not be adequate as a fourth mobile operator.

In a 173-page opinion, Judge Victor Marrero effectively said the merger was a good idea as Sprint was not worthy of being called competition. The combined entity would be a much better representative, while Marrero believed Dish plans to scale rapidly were viable, even if few others do. His ruling effectively killed the resistance to the merger.

Although some will be disappointed the lawyers are giving up the fight, it might simply be a case of looking at the bigger picture. James has pointed to job creation promises in her state, though now the attention will turn to ensure these jobs are actually created. Back in October, Colorado and Mississippi both did the same; the legal opposition was dropped as agreements were forged with T-Mobile US and Dish to offer benefits to the states.

While there will be some benefits to the transaction, it is impossible to avoid the negatives. T-Mobile US and Sprint will be able to realise efficiencies to better compete with AT&T and Verizon, while Dish will offer more jobs. However, there will be a rationalisation project after the transaction leading to job losses in shared business functions (finance, legal etc.) and also in areas where the retail footprint overlaps. Redundancies are unavoidable.

The question which remains is who will get the best slice of the benefits?

Colorado agreed to drop the lawsuit against the merger if Dish was to create 2,000 jobs in the statey and will also keep its corporate HQ in the city of Littleton for at least seven years. The Attorney General has also negotiated an accelerated 5G deployment timeline with T-Mobile US in exchange. Over in Mississippi, former-Attorney General Jim Hood also negotiated an accelerated 5G deployment plan and also a ceiling on tariffs for consumers for a five-year period.

These were the only two states to drop out prior to the conclusion of the lawsuit, though now the lobbying for attention can begin as T-Mobile/Sprint and Dish are wooed by each of the states for their own benefit. James has said the deal offers new jobs to citizens in Rochester, New York, though with other states considering more legal action, T-Mobile US and Dish might have to hit the negotiating table elsewhere.

In California, Attorney General Becerra is considering his options, while Ken Paxton, the Attorney General for Texas, has not stated whether he will pursue an appeal to the decision. These might not be the catalyst for opposition that Letitia James is, but they will certainly be able to cause a problem. T-Mobile US, Sprint and Dish executives want this deal done, are will probably be willing to negotiate some attractive deals.

Huawei hits out at Verizon with Texas patent lawsuit

Huawei has announced it has filed a patent lawsuit against Verizon with the District Courts of both East and Western Texas districts, covering several applications in its fixed line business unit.

Although Huawei is not a supplier to Verizon, the Chinese firm is claiming several products in the wireless business make use of patented technologies which are protected by 12 Huawei patents. Verizon is yet to make comment on the lawsuit, though Huawei claims there have been various meetings between the two parties to discuss this dispute over the last 12 months.

“For years now we have successfully negotiated patent license agreements with many companies,” said Huawei’s chief legal officer Song Liuping. “Unfortunately, when no agreement can be reached, we have no choice but to seek a legal remedy.

“This is the common practice in the industry. Huawei is simply asking that Verizon respect Huawei’s investment in research and development by either paying for the use of our patents or refraining from using them in its products and services.”

This lawsuit is somewhat of a no-lose situation for Huawei. If it wins the lawsuit, it could be the focal point of a PR campaign to fight back against Chinese-aggression, but a loss could also be spun due to the anti-China rhetoric.

While details are thin on the ground, this is not the first time this saga has emerged. Last year, the Wall Street Journal reported Huawei had written to Verizon about this very matter, demanding payments which could have exceeded $1 billion. Song has not confirmed how much Huawei is asking for, though the lawyer did suggest the two companies had met several times to discuss the matter.

And while this is an interesting development, the Huawei legal team are of course no strangers to the US legal system.

On the offensive, Huawei has filed lawsuits against the White House claiming the ban on working with US suppliers is unconstitutional, while it has also questioned the legality of the FCC’s demands on rural suppliers. The FCC has previously stated any telco with Huawei equipment in the network cannot access federal subsidies for rural connectivity.

Sitting on the other side of the aisle, a trial date has been set in March 2020 to decide whether Huawei had stolen trade secrets from T-Mobile US concerning a phone testing robot called Tappy. It was also accused of stealing patents from Portuguese inventor Rui Pedro Oliveira.

Cox piracy ruling could open Pandora’s Box for US telcos

Cox Communications has found itself on the wrong wide of a $1 billion cheque after a court ruled it did not do enough to prevent illegal download of content across its network.

The telco of course plans to appeal the case, though the lawsuit suggested the team prioritised profits over legal obligations to prevent the illegal distribution of copyright protected content. The lawsuit brought to the courts by 53 music companies focused on 10,017 recordings and compositions. For each case, Cox Communications is liable to pay just over $99,000 to the copyright owner.

“The judgement is unwarranted, unjust and an egregious amount,” Cox said in a statement. “We plan to appeal the case and vigorously defend ourselves.

“We provide customers with a powerful tool that connects to a world full of content and information. Unfortunately, some customers have chosen to use that connection for wrongful activity. We don’t condone it, we educate on it and we do our best to help curb it, but we shouldn’t be held responsible for the bad actions of others.”

Cox executives will of course not be happy with the outcome, but there will be numerous other parties across the US who might be fretting also. In short, this case sets precedent and in ruling Cox is financially liable for copyright infringement, the door has been opened to take other communication service providers to court.

When you consider how litigious the US is as a society, it would not be too surprising to see a broad range of lawsuit, from the different segments of the content world, filed against the telcos.

In this case, Cox Communications was found to be at fault because it did not do enough to prevent copyright infringement through the communications service it provides. While previously the individual not the internet companies have been the focal point of prosecutions, this opens-up a whole new avenue for rights owners who believe communications service providers are being negligent, or too passive.

AT&T is one company which might be sleeping easier than others though. Last year, AT&T reshaped its own piracy policies which led to the first instance of it cutting off customers from internet services due to piracy infringements. Examples of proactive protection of copyright like this is what the telcos will need to prove if they are to avoid the same significant financial burdens as Cox is facing here.

Facebook gets a thumbs-up from privacy officials

The Advocate General to the Court of Justice of the European Union (CJEU) has said Facebook is not in violation of privacy rules in transferring data to US servers.

In a rare sign of approval from privacy officials, Facebook has won the backing of Advocate General Saugmandsgaard Øe, who has confirmed Facebook Ireland is acting legally by sending data to servers located in the US. The opinion from Øe is in connection with a lawsuit filed by Austrian privacy advocate Max Schrems.

Removing all the legal jargon, Øe’s opinion is that there are adequate protections in place to ensure the rights of European citizens are maintained in the event data is transferred from Facebook’s Irish servers to be processed in the US. Agreements have been signed between the two parties which contain contractual clauses to enforce the privacy rights of European citizens.

Although this is the opinion of the Advocate General and not binding for the CJEU, it is a very positive (and perhaps surprising) note for a company which so often flirts with privacy controversy.

For Schrems, this is not the most encouraging of signs. The CJEU is not bound to Øe’s opinion, but the courts rarely hold a different view to such high-ranking officials.

The court case in question was initially filed by Schrems, the man largely responsible for the downfall of the Safe Harbour mechanism dictating trans-Atlantic data transfer, in 2015. Schrems argued that in light of privacy violations highlighted by Edward Snowden, the Irish data protection authorities were falling short of their own responsibilities. As it had been proven intelligence agencies were spying on citizens, Schrems argued it was not possible to maintain the privacy rights of European citizens if data is transferred to the US.

With the downfall of Safe Harbour, the mechanism that deems protections were being upheld in the US, big questions were being asked. Schrems suggested that even with the contractual clauses in place protections could not be maintained and there was little justification to transfer data to US servers in the first place.

Øe’s opinion disagrees with these assertions. Firstly, the ‘exporter’ has placed appropriate protections, and secondly, the US Government is entitled to process some data under the banner of national security.

Schrems has been fighting Facebook and other internet platforms for years in an attempt to stop the flow of information across the Atlantic. He and other privacy advocates suggest this information is being used to aide US intelligence agencies in snooping on European citizens. While his actions certainly were successful in bringing down Safe Harbour, he has been less successful in arguing the invalidity of the replacement mechanism, Privacy Shield.

Data protection is, and will continue to be, a significant talking point in the increasingly digital world, though this is a case which will add some confidence in the internet platforms so many people blindly trust. The new digital world needs people like Schrems to hold Big Tech accountable, though it does appear this is a case where the internet giants are on the right side of the line.

Cisco names rival in trade secret lawsuit

Cisco has updated an existing lawsuit to include its rival, Poly, as well as Poly Executives, in the trade secret dispute.

Although Poly employees were named in the original lawsuit, filed in the US District Court for the Northern District of California, it was believed the three ex-Cisco employees acted individually. Cisco has suggested new evidence has emerged which drags Poly directly into the saga.

“I cannot emphasize enough that we did not want to bring this litigation,” said Mark Chandler, Chief Legal Officer for Cisco. “We worked hard to have the issues addressed directly by Poly.

“Poly is a competitor in the collaboration space, and we are focused on innovating in the market, not litigating in the courts. This litigation is not about Poly products. It’s about Poly’s refusal to address a serious cultural issue, characterized by repeated efforts to receive and use Cisco trade secrets and confidential information in their business.”

Cisco now believes its rival Poly was proactively aiding the three named defendants, while Executive Vice President, Thomas Puorro, who is also a former Cisco employee, is alleged to have been critical in encouraging the movement of trade secrets from Cisco to Poly. The original lawsuit stated the three individuals acted alone, though Cisco now suggests Poly actively pursued individuals to gain access to Cisco’s trade secrets.

The case focuses around the activities of three individuals, and, in particular, Dr Wilson Chung. Chung worked at Cisco for more than a decade, rising to become a Principal Engineer at the business. Over the first few months of 2019, Chung handed in his notice at Cisco, downloaded more than 3,000 sensitive documents, which eventually emerged when Chung begun his role at Poly in February 2019.

Although the focus of the lawsuit will continue to remain on the three individuals and their actions, dragging Poly into the lawsuit is an important point. Corporations generally don’t like to sue each other, so this would have been a very considered move by Cisco.

Huawei files defamation lawsuits in France

Huawei has filed defamation lawsuits against two individuals in France after claims that the business is controlled by the Chinese Government were aired on national television.

While these lawsuits are only coming to light now, the lawsuits were filed back in March, following interviews on television. The two individuals in question, who are remaining anonymous until the courts decide otherwise, suggested Huawei is a puppet of the Chinese Government, relating to the ownership structure and the history of founder Ren Zhengfei, who was a member of the engineering corps of the People’s Liberation Army.

Although defamation lawsuits are a very rare occurrence in the technology segment, Huawei has been taking an increasingly aggressive stance against its critics in recent months. In previous years, Huawei might have been happy to sit back, letting the hot air pass by, however 2019 has certainly seen a different strategy.

Perhaps the most notable example of this shift is the public presence of founder Ren Zhengfei. Ren has traditionally avoided the limelight though the ‘Coffee with Ren’ segments to discuss various issues and accusations directed at the firm has been regularly hitting the airwaves over the course of the year.

Alongside the more public presence of Ren, Huawei also filed a lawsuit against the US Government, suggesting it was an unconstitutional as Congress is not permitted to pass laws targeting individuals or specific companies. Although Congress did not word the National Defense Authorization Act (NDAA) to enforce a complete ban, the nuanced language made it effectively impossible for either Huawei or ZTE to do any meaningful work in the US.

There are various other examples, but it is a much more proactive defence of the business than has been seen in previous years.

Looking at the French situation, Huawei does need to be very careful. The French Government has already created a law which allows it to veto the introduction of components or products in communications infrastructure which are deemed to compromise national security. This is not a ban, Huawei is still permitted to bid for projects, though once again nuanced language has been introduced to potentially allow a ban with little/no evidence.

While the damage to Huawei’s business has been limited for the moment, it is far from in a healthy position. Many of the major European markets are yet to make a formal, and long-term, decision on Huawei’s presence in the market. France is an influential voice across the bloc, with decisions and opinions creating ripples in other European nations.

Huawei statement:

“Huawei has filed 3 complaints alleging public defamation of the company in March 2019. The complaints relate to claims that Huawei is a Chinese company controlled by state and Chinese Communist Party; that it is led by a former “counter-intelligence” member and that it uses its technological expertise in telecom networks to commit acts of espionage to the detriment of the Western world.

“Huawei believes these statements are seriously defamatory. Huawei is a private company, 100% owned by its employees. For the last 30 years since it was founded, there has never been a serious cyber-security issue with Huawei products.

“These complaints are directed against the authors of the comments and not to the media that report them. Huawei respects the independence of the media and the freedom of the press.”