Microsoft slammed Sony and UK regulators amid a challenge to its proposed acquisition of Activision Blizzard, saying the UK has relied too much on Sony’s “self-serving” arguments.

The UK Competition & Markets Authority (CMA) last month referred the $68.7 billion deal to a Phase 2 investigation, which could result in the merger being prohibited or a requirement to sell some parts of the business. The CMA today released the full text of its referral decision, and Microsoft provided Ars with the executive summary of its latest response to the regulatory agency.

Sony has argued that Microsoft could pull Call of Duty from PlayStation, saying Microsoft’s offer to keep the Activision Blizzard game series on PlayStation for at least another three years beyond the current agreement is inadequate.

In its filing with UK regulators, Microsoft said PlayStation “has been the largest console platform for over 20 years” and that it’s “not credible” to suggest “that the incumbent market leader, with clear and enduring market power, could be foreclosed by the third largest provider as a result of losing access to one title.” Microsoft continued in its response to the CMA:

In short, Sony is not vulnerable to a hypothetical foreclosure strategy, and the Referral Decision incorrectly relies on self-serving statements by Sony which significantly exaggerate the importance of Call of Duty to it and neglect to account for Sony’s clear ability to competitively respond. The CMA’s assessment of this theory ignores its acknowledgement in the Referral Decision that the gaming industry is “dynamic.” While Sony may not welcome increased competition, it has the ability to adapt and compete. Gamers will ultimately benefit from this increased competition and choice.

Microsoft: Call of Duty concerns overblown

Microsoft submitted its full response to the CMA’s Phase 1 analysis this week. The full document isn’t public yet, but Microsoft made the executive summary public today.

“The CMA’s theories of harm relate to one overarching concern: that Activision Blizzard’s game catalogue—in particular the Call of Duty franchise—will enable Xbox to foreclose its competitors in gaming markets. This concern is misplaced,” Microsoft’s response said. “The Referral Decision fails to recognize the incredible array of popular and diverse gaming content that is available to market participants and overstates the importance of Activision Blizzard’s content to competition in gaming.”

Microsoft said it “plans to make the Call of Duty franchise available to more gamers in more ways than would have been the case in the counterfactual.” The company also said that Sony wields its own market power by “increasing prices of its consoles without fear of losing market share.”

Microsoft further pointed to Sony’s own recent acquisitions of game studios, including Destiny 2-maker Bungie. Sony also has minority stakes in Elden Ring-maker From Software and Epic Games. “There were over 280 exclusive first- and third-party titles on PlayStation in 2021, nearly five times as many as on Xbox,” Microsoft said.

We contacted Sony today and will update this article if we get a response.

https://arstechnica.com/?p=1889553

When Jeff Bezos started Amazon, his motto was “get big fast,” and apparently, ByteDance is applying the same ethos to set its meteorically popular social media platform, TikTok, hot on Amazon’s heels. In the past few weeks, TikTok has posted a series of job listings that, as Axios reported, mark TikTok’s first major move into US e-commerce—unpredictably, by building Amazon-like fulfillment centers.

Job listings for “Fulfillment By TikTok Shop” seek to staff key roles like logistics solutions managers or operations research engineers to assist TikTok in building “international warehousing, customs clearings, and supply chain systems that support domestic e-commerce efforts in the US and cross-border e-commerce efforts,” Axios reported.

It looks like TikTok is building a US-based workforce capable of warehousing, delivering, and processing returns.

Ars reviewed the job listings that Axios found, confirming that TikTok is seeking staff in major US cities where it already has offices, like Los Angeles and Seattle. Earlier this year, The Puget Sound Business Journal reviewed LinkedIn profiles and reported that TikTok’s expansion into Seattle poached employees from Amazon, as well as from Meta, which has had its own success venturing into e-commerce through Facebook and Instagram. (Meta did not immediately provide Ars with comment on its e-commerce operations.)

“Over 170 people work for TikTok or ByteDance in the Seattle area, according to LinkedIn profiles,” the Business Journal reported. “Of those, over half came from Amazon, Microsoft, or Facebook’s parent company, Meta.”

TikTok already operates TikTok Shop outside the US, and TechCrunch reported that within the US, TikTok already has a shopping feature in the works facilitated by Shopify. Now it appears TikTok has bigger plans in mind to potentially move beyond modest aspirations of facilitating sales for influencers and actually become an online retail giant.

By establishing its own US-based fulfillment centers, reports suggest that TikTok could explode a whole new revenue stream and become a preferred online shopping destination for its broad, young audience. But TikTok’s not ready to talk about any of that yet.

A TikTok spokesperson provided Ars with the same statement it gave other outlets, insisting that ByteDance is focused on its existing e-commerce operations, not any US expansion.

“We’re focused on providing a valuable shopping experience in countries where TikTok Shop is currently offered across Southeast Asia and the UK, which includes providing merchants with a range of product features and delivery options,” a TikTok spokesperson told Ars.

TikTok Shop going live in US before the holidays

Although TikTok officially says that it’s focused on its operations in places like the UK, the Financial Times reported earlier this month that the UK TikTok Shop struggled to take off. It could be that the US market is more likely to embrace TikTok shopping, and according to FT, TikTok plans to launch a US shopping feature ahead of this holiday season.

Or it could be that social media platforms don’t make great shopping destinations anywhere. TikTok’s shopping feature would allow influencers to drop links to products during livestreams—which Meta tried and failed to do with Facebook, shutting down a similar feature earlier this month. It’s still unclear if TikTok could succeed where Meta failed.

Although TikTok’s US fulfillment centers may be ByteDance’s newest idea to expand into US e-commerce, it’s clearly just beginning to break ground on this project. However, Amazon’s success story shows how quickly a company can build an empire once it’s connected to a broad customer base online. Within four years of launching, Amazon went from mostly selling books in the US to dominating global e-commerce.

The Associated Press noted that TikTok’s popular #BookTok community “has been credited with driving a spike in the sales of print romance books this year,” so it makes sense for TikTok to follow in Amazon’s footsteps and want to move beyond just selling books for other retailers. Forbes reported last year that the TikTok hashtag #tiktokmademebuyit attracted 2.3 billion views, while a similar TikTok hashtag #amazonfinds captured 6.7 million views. If TikTok maintains its popularity and influence, AP reported that the social platform could do the impossible and become a disruptive force, even to an e-commerce giant like Amazon.

Not everyone is convinced that would happen, though. At least one wealth management expert told AP that he thinks the notion of TikTok moving into e-commerce is “idiotic.”

TikTok is remaining quiet as it fields applications in major US cities but previously told FT that its interest in e-commerce stems from users seeking a “seamless” experience while using the app. It likely became too tempting for the social platform to imagine the potential revenue stream it could generate if the billions clicking the hashtag #tiktokmademebuyit could make purchases right there in the app—with TikTok then fulfilling the orders and even processing returns.

“When it comes to market expansion for TikTok Shop we are always guided by demand and are constantly exploring new and different options for how we can best serve our community, creators and merchants in markets around the world,” TikTok told FT.

https://arstechnica.com/?p=1889530

Self-described free speech absolutist Elon Musk couldn’t resist warmly welcoming Kanye West back to Twitter after the rapper had his Instagram account locked over the weekend for posting a caption that echoed dangerous Nazi propaganda by suggesting that Jewish people today have too much power. On Saturday, Musk replied to a tweet from West criticizing Mark Zuckerberg for the rapper’s Instagram ban, with Musk saying to Kanye, “Welcome back to Twitter, my friend!”

A short time later, West got his account locked on Twitter, too, this time for escalating his antisemitic content. In another tweet, West coldly invoked memories of the Holocaust by suggesting that he would go “death con 3 on Jewish people.” Commentators since have speculated whether West intended to tweet “death con 3” or “Defcon 3,” a military term indicating a high level of defense readiness that the US has only ever reached twice in history. Both meanings, Vanity Fair reported, raised alarm bells, though. “While it was not clear if he’d meant to write ‘Defcon,’ or actually meant ‘death con,’ neither would be great, given the persecution that Jews have historically faced, including that one period in which more than 6 million of them were wiped off the face of the earth,” Vanity Fair’s analysis read.

Musk, like many Republicans, opposes broad social media censorship of hate speech, which he suggests conflicts with First Amendment protections. As controversy swirled, Musk stuck by West, who now goes by Ye and has publicly spoken about his bipolar disorder and his experiences tweeting through manic episodes. On Monday, Musk tweeted, “Talked to Ye today & expressed my concerns about his recent tweet, which I think he took to heart.”

The Washington Post analyzed the tweet exchanges and suggested that if Elon Musk does indeed take over Twitter, he likely would not have locked Ye’s account. “Between a growing field of state laws that seek to restrict content moderation and Elon Musk’s determination to loosen Twitter’s policies, posts such as Ye’s could soon become more prevalent online,” The Post suggested, while also noting that neither Twitter nor Instagram had clarified which specific policies West’s posts had violated.

While Musk appeared to back West in this content-moderation fight, a few Twitter users mocked Musk on his thread, joking that the billionaire’s content moderation policy, should he ever take the reins and head up Twitter, will be to personally meet with every individual person posting hate speech.

Asked if West would eventually be informed of why his posts violated Twitter rules, a Twitter spokesperson told Ars that Twitter still has nothing beyond its original statement to share: “The account was locked for violating Twitter’s policies.”

Meta did not immediately respond to Ars’ request for comment on its decision to lock Ye’s Instagram account and remove posts.

What Twitter users want

Musk’s plan to buy Twitter was largely prompted by his views on free speech, with the billionaire describing the platform last spring as “the digital town square where matters vital to the future of humanity are debated.” More recently, this month, Musk gave up his lawsuit against Twitter that has stalled the buy-out, and the deal was supposed to be back on, but Twitter has since claimed that Musk cannot be trusted to follow through on the deal.

For Twitter users targeted by hate speech, this deal remaining in limbo leaves open the question of how safe users will be on the platform moving forward. Musk has vowed to loosen content moderation standards, but it’s not clear yet what that will entail. Currently, Twitter’s policies restrict content like Ye’s tweet if it threatens violence against a group of people, threatens or promotes terrorism (the FBI recently reported that antisemitic domestic terrorism is on the rise), or promotes violence against people based on race, ethnicity, and religious affiliation.

Although private corporations like social media companies are legally allowed to set policies that restrict speech on their platforms, Musk suggested earlier this year that companies should align policies with laws like the First Amendment, because he says it’s what users want.

“If people want less free speech, they will ask government to pass laws to that effect,” Musk tweeted in April this year. “Therefore, going beyond the law is contrary to the will of the people.”

Musk may not have a complete grasp of what Twitter users want, though. In May, the nonpartisan watchdog group, the Anti-Defamation League, published results of a survey of more than 2,000 Americans reporting their experiences with online hate and harassment. Among survey questions, ADL asked what solutions Americans want social media companies to implement to address the issue. “Both targets of harassment and those who did not report having been harassed want effective action by platforms and more legal accountability,” ADL reported. More than 80 percent of respondents agreed that “social media platforms should do more to counter hate online.”

https://arstechnica.com/?p=1889071

A Florida-based software development firm called Chetu provided a perfect example of how an employer in 2022 can take worker surveillance one step too far. Describing an order issued last week, a Dutch court document (translated with Google Translate) explained that it was wrong for the Florida firm to punish a remote Dutch telemarketer for turning off his webcam—and that firing him for doing so actually violated the employee’s human rights.

After the employee (whose name is redacted in the court document) repeatedly refused to turn on his webcam in August, the company terminated his employment abruptly via an email that explained the termination decision in fewer than 10 words. Chetu apparently cited Dutch civil code as supporting its decision, writing to the employee: “Your employment is hereby terminated. Reason: Refusal to work; Insubordination.”

However, the Dutch court last week ultimately disagreed with Chetu’s reading of the Dutch law, deciding that not turning on a webcam isn’t a refusal to work or insubordination. Instead, the employee was rightly and reasonably defending his right to privacy. That’s protected by the European Convention of Human Rights, according to the court order, which quoted, “video surveillance of an employee in the workplace, be it covert or not, must be considered as a considerable intrusion into the employee’s private life.”

Chetu did not immediately respond to Ars’ request for comment.

Pandemic sparks explosion of remote-worker surveillance

This verdict can be viewed as a win for any remote worker anywhere who ever hesitated when their boss asked them to hit record and subject themselves to prolonged surveillance.

As remote work became a default mode for many employees globally through the pandemic, employers began exploring new ways to monitor employee productivity. Demand for employee surveillance technology leapt by 58 percent, Top10VPN reported. This, reported researchers based in Canada and Spain in the National Library of Medicine, was just one part of “an unprecedented COVID-19-induced explosion in digital surveillance” that “has reconfigured power relationships in professional settings.” Current laws, specifically in the European Union, were not prepared to address such “excessive supervision” and data-driven management, researchers warned.

At least, it seems, in the Netherlands, remote workers can now expect to be protected from invalid all-day webcam requests. As a result of the wrongful termination verdict, the court ordered Chetu to withdraw a non-compete clause that limited the former worker’s new employment options. Chetu also had to pay a fine of $50,000, as well as the employee’s back wages, unused vacation time, and court fees.

TechCrunch reported that in Florida, where Chetu is based, there are at-will employment laws that cover Chetu so that the firm can fire any Florida-based employee for any reason that doesn’t violate labor laws. The email that prompted the Dutch-based employee’s firing suggests that the firm did make some attempt to consult Dutch civil code before making their termination decision but seemingly didn’t think to check what’s protected by law under the European Convention of Human Rights.

https://arstechnica.com/?p=1888602

The Federal Communications Commission is hoping to solve one of the thorniest problems in the fight against robocalls: how to verify caller ID on older landlines that don’t use Internet Protocol (IP) technology.

The FCC already requires phone companies to implement STIR/SHAKEN caller ID authentication tech on the IP portions of their voice networks. But due to technology limitations, STIR/SHAKEN requirements haven’t applied to the older TDM-based networks generally used with copper landlines.

The FCC is now investigating how best to tackle this problem in a draft Notice of Inquiry released last week by Chairwoman Jessica Rosenworcel. The FCC is scheduled to vote on issuing the Notice of Inquiry at its October 27 meeting.

The FCC said it already sought comment on caller ID authentication for non-IP networks earlier this year, asking among other things, “whether we should require all providers to adopt a non-IP caller ID authentication solution.” The responses “reflected interest in this subject from a broad array of stakeholders with divergent views on the best path forward.”

The new Notice of Inquiry will “seek more focused comment on caller ID authentication technology for non-IP networks and how best to address this remaining gap in our caller ID authentication scheme.” 

Phone companies don’t want new rules

Among other things, the FCC will seek comment on what legal authority it can use to implement rules for non-IP caller ID authentication.

Phone companies don’t want new requirements for older landlines, arguing that the industry is upgrading to IP anyway. Lobby group USTelecom “argues that requiring implementation of a non-IP authentication solution would be resource-intensive and ‘detract from other, more fruitful efforts’—namely, ubiquitous IP network technology that in turn would enable end-to-end STIR/SHAKEN implementation,” the FCC said.

Any attempt by Rosenworcel to issue strict rules for non-IP networks would require Republican support as long as the FCC continues to lack a Democratic majority.

Currently, FCC rules “require providers using older forms of network technology to either upgrade their networks to IP or actively work to develop a caller ID authentication solution that is operational on non-IP networks.” The Notice of Inquiry will “seek comment on two standards for caller ID authentication on non-IP networks developed by the Alliance for Telecommunications Industry Solutions (ATIS).”

“Do these standards adequately address non-IP technology throughout the entire call path; in other words, do they resolve issues around non-IP voice service providers, non-IP intermediate providers, and non-IP interconnection?” the Notice of Inquiry asks.

https://arstechnica.com/?p=1888596

As Russian troops have flooded into Ukraine’s borders for the past eight months—and with an ongoing mobilization of hundreds of thousands more underway—the Western world has taken drastic measures to cut the economic ties that fuel Russia’s invasion and occupation. But even as those global sanctions have carefully excised Russia from global commerce, millions of dollars have continued to flow directly to Russian military and paramilitary groups in a form that’s proven harder to control: cryptocurrency.

Since Russia launched its full-blown invasion of Ukraine in February, at least $4 million worth of cryptocurrency has been collected by groups supporting Russia’s military in Ukraine, researchers have found. According to analyses by cryptocurrency-tracing firms Chainalysis, Elliptic, and TRM Labs, as well as investigators at Binance, the world’s largest cryptocurrency exchange, recipients include paramilitary groups offering ammunition and equipment, military contractors, and weapons manufacturers. That flow of funds, often to officially sanctioned groups, shows no sign of abating and may even be accelerating: Chainalysis traced roughly $1.8 million in funding to the Russian military groups in just the past two months, nearly matching the $2.2 million it found the groups received in the five months prior. And despite the ability to trace those funds, freezing or blocking them has proven difficult, due largely to unregulated or sanctioned cryptocurrency exchanges—most of them based in Russia—cashing out millions in donations earmarked for invaders.

“Our aim is to identify all the crypto wallets being used by Russian military groups and the people helping them; to find, seize and block all this activity that is helping to buy the bullets, the ammunition of this occupation,” says Serhii Kropyva, who until recently served as deputy of Ukraine’s Cyber Police and advisor to the country’s prosecutor general. “With the close cooperation of companies like Chainalysis and Binance, we can see all the wallets involved in this criminal activity, these money flows of millions of dollars. But we can, unfortunately, see that the transfer is continuing all the time.”

In separate reports, the cryptocurrency-tracing firms and Binance’s investigations team each tracked donations to the Russian war effort that very often began with public posts on the messaging app Telegram soliciting crowdfunded donations. Chainalysis, for instance, found Telegram posts from organizations including the pro-Russian media sites Rybar and Southfront, as well as the paramilitary group Rusich—which has ties to the notorious Wagner mercenary group—all posting cryptocurrency donation addresses to Telegram. These posts told followers that the money raised there would be used for everything from weaponized drones to radios, rifle accessories, and body armor. In another instance, Chainalysis points to a fundraiser by a group called Project Terricon that attempted to auction NFTs to support pro-Russian militia groups in Eastern Ukraine, though the NFTs were removed from the marketplace they were hosted on before any bids were placed.

Binance’s investigations team, in its own report, found that a total of $4.2 million in crypto had been funneled to Russian military groups since February. The groups named in its research didn’t entirely overlap with those named in Chainalysis’ report, suggesting that the overall funding could be far greater than either Binance’s or Chainalysis’ total. Binance, for instance, points to a pro-Russian “cultural heritage” group known as MOO Veche that has carried out fundraisers for military equipment similar to the kinds funded by the groups Chainalysis flagged. While Binance, TRM Labs, and Elliptic all name MOO Veche as a major fundraiser, Elliptic traced $1.7 million in crypto donations to the group, far more than the other researchers.

https://arstechnica.com/?p=1888260

Lawyers, who are representing parents suing Amazon for selling “suicide kits” to teenagers who died by suicide, say they have reached a “breaking point.”

Amazon lawyers have allegedly told parents that the online retailer had a right to sell these so-called “suicide kits.” The kits are described in the lawsuit as bundled items that Amazon suggests buyers purchase together, including a potentially lethal chemical called sodium nitrite, a scale to measure a lethal dose, a drug to prevent vomiting, and a book with instructions on how to use the chemical to attempt suicide. The online retailer’s lawyers also allegedly said that it would be “unfair and inhumane” to hold Amazon liable for the teens’ deaths.

One of the parents’ lawyers, Carrie Goldberg, took to Twitter yesterday, alleging that Amazon’s corporate ties with news outlets like CBS are effectively working to silence media attention for their lawsuit, while more lives likely remain at risk.

“For months, we avoided press attention to this case,” Goldberg, founder of C.A. Goldberg, PLLC, told Ars in a statement. “But we have reached a breaking point of too many people dying, of medical providers not knowing what is happening or that a treatment protocol exists, and of press spiking stories about it—presumably because of corporate ties to Amazon.”

In her tweet thread, Goldberg claimed that a producer told her that CBS canceled a pair of 60 Minutes segments on the lawsuit—after CBS requested an exclusive—because “higher-ups at CBS quashed the story.” Allegedly, the producer said these executives “didn’t want to risk anybody dying from suicide on account of their segment.” Ars found that CBS News has previously in 2020 reported on lethal uses of sodium nitrite and last month did a 60 Minutes segment on child suicides.

Parents allegedly told Goldberg that CBS canceling was understandable because “everyone is afraid of Amazon.” Goldberg tweeted that parents also noted that CBS has a partnership with Amazon Prime.

Goldberg tweeted that the law firm had extensively communicated with CBS ahead of connecting their clients to CBS reporters to ensure that CBS had experience reporting on suicide and knew how to sensitively handle the segments. After receiving assurances from CBS and a commitment that the segment would air, Goldberg set up a Zoom with parents suing. Her concern was that the interviews could retraumatize her clients, and that, to them, it was only worth enduring that emotional duress if by talking to CBS they could raise awareness for the suffering they’d endured.

“CBS’ failures have been demoralizing and deeply confusing,” Goldberg tweeted. “If it was really about not wanting to report on suicides, why did they assure us so many times they knew how to handle it?”

CBS did not immediately respond to Ars’ request for comment. An Amazon spokesperson provided a statement to Ars, saying, “We extend our deepest condolences to the families and loved ones personally affected by suicide. Customer safety is a top priority at Amazon. We are committed to a safe shopping experience and require our selling partners to follow all applicable laws and regulations when listing items in our store.”

According to the complaint, “Amazon defends its right to sell sodium nitrite (and other products known to be used for suicide) because it says some states immunize defendants that cause a personal injury where that injury occurred during an attempted or completed suicide.”

Amazon appears to bundle items into “suicide kits”

In their complaint filed in a California court, parents claimed that—despite it being illegal for anyone, including corporations, to assist or aid in suicide—Amazon is the No. 1 “vendor of sodium nitrite used for suicides” and has been “knowingly assisting in the deaths of healthy children by selling them suicide kits.”

Also named in the lawsuit is an Amazon seller, Loudwolf, which is described as the No. 1 “brand of sodium nitrite sold by Amazon.”

Loudwolf did not immediately respond to Ars’ request for comment on how much sodium nitrite it sells on Amazon. The lawsuit claims that Amazon has also failed to supply this information. Earlier this year, Amazon failed to meet a deadline set by a congressional inquiry (following a New York Times investigation into the matter) to confirm “the number of units of sodium nitrite” that Amazon sold. The lawsuit says that Congress expressed concern in a letter to the online retailer that Amazon provides “minors and adults with easy access to sodium nitrite, a deadly chemical.”

Both teen suicide cases described in the lawsuit illustrate how easy it can be for teens to quickly access the chemical on Amazon.

In the first case, a teen named Kristine started experiencing suicidal ideation when the pandemic isolated her from seeing friends in September 2020. Kristine hid her feelings from her family but registered on an online forum called Sanctioned-Suicide.org, where the lawsuit says users increasingly link to Amazon to encourage others to buy sodium nitrite as a preferred suicidal method.

https://arstechnica.com/?p=1888101

Elon Musk’s latest promise to buy Twitter can’t be trusted, the company told a Delaware Court of Chancery judge yesterday.

“Now, on the eve of trial, Defendants declare they intend to close after all. ‘Trust us,’ they say, ‘we mean it this time,’ and so they ask to be relieved from a reckoning on the merits,” Twitter wrote in a filing that opposed Musk’s motion to stay the trial. “To justify that relief, they propose an order that allows them an indefinite time to close on the basis of a conditional withdrawal of their unlawful notices of termination coupled with an explicit reservation of all ‘claims and defenses in the event a closing does not occur.’ Defendants’ proposal is an invitation to further mischief and delay.”

While Musk told the court that debt financing needed to complete the purchase is on track, Twitter’s filing said there is a problem:

Just this morning, a corporate representative for one of the lending banks testified that Mr. Musk has yet to send them a borrowing notice and has not otherwise communicated to them that he intends to close the transaction, let alone on any particular timeline. The bank further testified that the main task necessary to close the deal—memorializing the debt financing—could have happened in July but didn’t because Mr. Musk purported to terminate the deal.

Judge Kathaleen McCormick granted Musk’s motion for a stay yesterday, preventing the trial from beginning on October 17 as scheduled. But she seems to have taken Twitter’s concerns into account because McCormick’s grant of the stay does not give Musk “an indefinite time to close.” If Musk doesn’t complete the purchase of Twitter by October 28, a new trial would be scheduled for November.

“This action is stayed until 5 p.m. on October 28, 2022, to permit the parties to close on the transaction. If the transaction does not close by 5 p.m. on October 28, 2022, the parties are instructed to contact me by email that evening to obtain November 2022 trial dates,” McCormick wrote.

Musk is the obstacle, Twitter says

Musk’s motion for a stay blasted Twitter for wanting to continue litigation, claiming that “Twitter will not take yes for an answer” and is “recklessly putting the deal at risk and gambling with their stockholders’ interests.”

Twitter’s response said Musk should have completed the merger long ago:

The obstacle to terminating this litigation is not, as Defendants say, that Twitter is unwilling to take yes for an answer. The obstacle is that Defendants still refuse to accept their contractual obligations. For months, Defendants have pursued increasingly implausible claims and over and over sought to delay trial on the merits to enforce the Merger Agreement. Discovery has shown each and every one of those claims to be utterly without merit. It has also shown that Defendants have repeatedly breached their obligation to exercise reasonable best efforts to move toward closing. The merger should have closed long ago, as Defendants’ recent concessions confirm.

Musk’s motion said that “Debt Financing parties are working cooperatively to fund the close, and closing is expected on or around October 28.” But Twitter’s reply said the defendants “refuse to commit to any closing date. They ask for an open-ended out, at the expense of Twitter’s stockholders (who are owed $44 billion plus interest), all the while remaining free to change their minds again.”

“Twitter is entitled to its day in court”

Twitter wrote that Musk’s proposed order sought a stay “[w]ithout any admission of liability and without waiver of or prejudice to [their] claims and defenses.” Twitter said this provision would let Musk “invent new grounds” to avoid completing the merger.

Twitter also said Musk “provided no justification” for failing to complete the merger already and breached the obligation to use “‘reasonable best efforts’ to close the merger and to ‘do… all things necessary, proper or advisable’ to close the financing at or before closing.” The merger agreement requires Musk to close the deal within two business days of all conditions being met, a date that “came and went on September 15,” Twitter said. (Twitter shareholders approved the merger on September 13.)

Twitter’s filing ended with a plea to maintain the October 17 trial date—but also said the merger could be finished next week. “Until Defendants commit to close as required, Twitter is entitled to its day in Court, to demonstrate its entitlement to specific performance and prove Defendants’ breaches so as to ensure complete relief in the event the closing should for any reason not occur,” the filing said. “Defendants can and should close next week. Until they do, this action is not moot and should be brought to trial.”

https://arstechnica.com/?p=1888043

Hackers have stolen around $570 million in tokens from Binance, in a rare blow to the world’s biggest crypto exchange and another dent to the troubled digital assets industry struggling to regain trust after a collapse in prices.

Binance initially estimated on Friday that tokens worth about $100 million to $110 million had been taken, pausing the operation of the affected blockchain for approximately eight hours.

However, the exchange later disclosed that the hacker had taken around 2 million of the cryptocurrency BNB, Binance’s own digital token, with a value of around $284 each. The hack targeted BSC Token Hub, a bridge between two Binance systems.

It comes at a time when digital assets are trying to recover from a credit crisis that wiped nearly two-thirds off the value of its most high-profile tokens such as bitcoin. Industry data have also indicated that theft from projects is soaring this year.

Cyber criminals had taken nearly $2 billion this year to the end of July, nearly double the total in the first seven months of last year, according to data from Chainalysis. High-profile thefts included $600 million from the blockchain behind popular crypto-gaming platform Axie Infinity. Many hacks have been traced to state-sponsored actors in North Korea.

Binance’s position as the world’s largest crypto exchange means Friday’s exploit represents a significant blow to the digital assets industry.

In a series of social media posts Changpeng Zhao, Binance’s founder and chief executive, told users: “The issue is contained now. Your funds are safe. We apologize for the inconvenience and will provide further updates accordingly.”

Binance asked the affected network’s validators, who secure the system, to pause their work. The funds were taken from BSC Token Hub, a bridge that allows customers to transfer tokens tied to one chain to another. The hack exploited a weakness that created extra BNB tokens on the network, according to Zhao.

Many of the world’s most widely used blockchains, such as Binance Smart Chain and Ethereum, run on separate technologies or use different tokens. That means investors and developers cannot easily move their tokens to a different blockchain to use or trade them elsewhere.

Binance estimated that about $7 million of the tokens had been frozen by the crypto community and its security operations.

Binance Smart Chain allows the world’s largest crypto exchange to open its doors to let developers build applications that use smart contracts, based on Binance’s own token. Binance launched the new chain in September 2020, at a time when the crypto industry was seeing widespread interest in decentralized finance projects.

© 2022 The Financial Times Ltd. All rights reserved Not to be redistributed, copied, or modified in any way.

https://arstechnica.com/?p=1887987

Update at 7:30 pm ET: Delaware Court of Chancery Judge Kathaleen McCormick granted Elon Musk’s request for a stay in an order that gives the parties three weeks to negotiate and close the merger. The trial won’t begin on October 17 as scheduled and would be canceled entirely if the merger closes by the end of this month. If deal talks fall apart, a trial would be scheduled for November.

“This action is stayed until 5 p.m. on October 28, 2022, to permit the parties to close on the transaction. If the transaction does not close by 5 p.m. on October 28, 2022, the parties are instructed to contact me by email that evening to obtain November 2022 trial dates,” McCormick wrote.

Musk’s motion for a stay said the merger is on track to close by October 28. Twitter did not want the litigation stayed. “Plaintiff Twitter opposes the motion on the basis that Defendants’ agreement will not ensure that the transaction closes fast enough,” McCormick wrote.

Original story: Elon Musk today slammed Twitter for not immediately dropping its lawsuit against him and asked the judge to stay the case because “Twitter will not take yes for an answer.”

With Musk having told Twitter this week he is once again willing to honor their original deal, the company is unsurprisingly seeking assurances that Musk won’t break the merger contract again before agreeing to pause litigation. Musk—who previously tried to delay the trial until 2023—accused Twitter of not acting fast enough in a court filing his lawyers submitted today:

Twitter will not take yes for an answer. Astonishingly, they have insisted on proceeding with this litigation, recklessly putting the deal at risk and gambling with their stockholders’ interests. Proceeding toward trial is not only an enormous waste of party and judicial resources, it will undermine the ability of the parties to close the transaction.

The filing asks Delaware Court of Chancery Judge Kathaleen McCormick “to stay this action and remove the October 17 trial from the Court’s calendar based on changed circumstances that have effectively mooted this action.” Musk’s filing also said the merger is on track to close on or around October 28.

While a stay wouldn’t close the court case, Twitter likely doesn’t want to cancel the scheduled trial date until it’s more certain the merger will be completed.

Musk scoffs at debt financing concerns

Debt financing is reportedly a sticking point in negotiations. Musk’s letter to Twitter earlier this week said his offer to honor the original deal is pending receipt of debt financing.

Musk has committed up to $33.5 billion himself. His filing said there won’t be any problems completing financing for the rest of the $44 billion purchase price:

Quite to the contrary, counsel for the debt financing parties has advised that each of their clients is prepared to honor its obligations under the Bank Debt Commitment Letter on the terms and subject to satisfaction of the conditions set forth therein. We have so advised Twitter, again to no avail. Not only has Twitter’s baseless speculation been refuted by the banks themselves, any theoretical claims Twitter could concoct based on a potential financing failure that has not happened are unripe and unpled, making them well outside the scope of the trial set to begin in eleven days.

Musk further claimed that continuing litigation “would send a signal to the market that—despite Defendants’ commitment to perform their obligations under the Merger Agreement and Equity Commitment Letter—Twitter is demanding that the Court impede the deal moving forward. Instead of allowing the parties to turn their focus to securing the Debt Financing necessary to consummate the transaction and preparing for a transition of the business, the parties will instead remain distracted by completing discovery and an unnecessary trial. In effect, a trial would keep the merger transaction in limbo for longer, casting an unnecessary cloud of uncertainty over the company.”

With an October 28 closing, “Shareholders would receive their payments far faster than would be possible if Twitter were to proceed to trial and win, win again on appeal, and only then first proceed toward funding and closing,” Musk’s filing said.

Musk’s spam claims went nowhere

Musk agreed to buy Twitter in April but later tried to get out of the deal by claiming the company lied about the number of bots and spam accounts on the platform. Twitter sued Musk to force him to complete the purchase.

While Musk now accuses Twitter of “casting an unnecessary cloud of uncertainty over the company,” Twitter’s lawsuit against him said the company faces problems caused by Musk’s public criticism and his attempts to break the merger agreement.

“Defendants’ actions in derogation of the deal’s consummation, and Musk’s repeated disparagement of Twitter and its personnel, create uncertainty and delay that harm Twitter and its stockholders and deprive them of their bargained-for rights. They also expose Twitter to adverse effects on its business operations, employees, and stock price,” Twitter’s lawsuit said.

During the discovery process, Musk apparently wasn’t able to obtain any substantial evidence to back up his spam claims, making it unlikely that he could win at trial.

https://arstechnica.com/?p=1887793