The judge also pointed to a sharp rise in concentration as measured in the Herfindahl-Hirschman Index (HHI), saying the HHI increase for Paramount/WBD exceeds the level necessary to show the merger is likely to enhance market power.

“Where plaintiffs demonstrate a presumption of illegality by way of undue market concentration, they need not offer ‘elaborate proof of market structure, market behavior, or probable anticompetitive effects’” to obtain a restraining order, Martínez-Olguín wrote.

The legal standard for issuing a temporary restraining order is the same as the one for issuing a preliminary injunction. Parties seeking either kind of preliminary relief must show a likelihood of success on the merits, a likelihood of irreparable harm in the absence of a court order, and that the order would be in the public interest.

Martínez-Olguín said the merger poses potential harms to the public, and that Paramount and WBD would not suffer any harm from having to wait a few months.

“Defendants will suffer no apparent harm in the near term if enjoined from consummating the Transaction—they concede that they will not begin to incur carrying costs for a delayed merger until the end of September 2026,” the order said. “Even if Defendants argued that they would suffer economic harm as a result of delaying the merger, the equities do not weigh in their favor when contrasted with the potential public harms that would result from consummation of the Transaction, including the loss of competition.”

Martínez-Olguín set a schedule for the sides to submit briefs and scheduled a hearing on a preliminary injunction for August 3. Paramount can challenge the district court’s rulings in the US Court of Appeals for the 9th Circuit. It is likely to do so if Martínez-Olguín maintains that the merger cannot be completed until after a trial.

https://arstechnica.com/tech-policy/2026/07/judge-halts-paramounts-111b-purchase-of-warner-bros-in-win-for-us-states/

California said its rules are “technology-neutral,” allowing AT&T to use wired, wireless, and/or VoIP service to fulfill its COLR obligations. While AT&T says its wireless AT&T Phone-Advanced (AP-A) is a suitable replacement for copper, California said that “AT&T has never formally sought to substitute POTS with AP-A.”

AT&T “does not want to meet its COLR obligations through AP-A; it seeks relief from meeting them at all,” California said. “That is why AT&T does not claim in this lawsuit, either, that it will offer basic service through AP-A (or any other service) instead.”

AT&T doesn’t promise that AP-A will meet state requirements for basic service, California said. Those state requirements include flat-rate options for unlimited voice calls, discounted Lifeline rates for eligible low-income customers, and telephone relay service for the deaf and hard of hearing, California said.

AT&T seeking more help from FCC

The FCC grandfathering order that AT&T cited in its lawsuit applied industry-wide, not specifically to AT&T. But AT&T also asked the FCC for an order specifically preempting California’s COLR mandates and related requirements, such as tariffing and Lifeline participation rules.

California told the FCC that AT&T is lying when it claims that state rules prevent it from replacing copper with fiber. The Utility Reform Network, an advocacy group in California, told the FCC that AT&T’s wireless home phone service is “an ill-suited replacement for existing legacy infrastructure.”

The advocacy group said that “while AP-A has been approved in other states, none of those states have a remotely similar topographical range or extreme weather events to California. This necessarily means that those residents who live on mountains, in valleys, or other heavily forested areas will likely not have access to a reliable cellular signal.” Power outages from wildfires and earthquakes may last for days or weeks, but AP-A comes with only a 24-hour backup battery, the group said.

In addition to seeking a preemption order, AT&T asked the FCC for permission to discontinue copper-based service to 184,000 residential customers and 15,000 business customers on June 1, 2027. Those petitions were granted automatically after a comment period, but the FCC has not yet acted on AT&T’s request to preempt California rules. Even if the FCC grants AT&T’s petition to preempt state rules, California could challenge such an order in court.

https://arstechnica.com/tech-policy/2026/07/att-loses-key-ruling-in-bid-to-stop-offering-basic-phone-service-in-california/

Yesterday, the European Commission slapped AliExpress with the largest fine yet under the Digital Services Act (DSA), exceeding $625 million.

In a press release, the EC said that AliExpress failed to “diligently assess and mitigate risks relating to the sale of illegal, unsafe, or counterfeit products on its e-commerce platform.”

Officials found that AliExpress not only failed to staff teams dedicated to removing counterfeit and dangerous items from the platform, but it also made it easy for bad actors to evade detection.

Staff was so limited that some content moderators were sometimes given just “tens of seconds” to evaluate if a flagged product met EU standards, The Guardian reported. The result, the EC said, was that it “found millions of products that reappeared online” after being flagged for removal, “which sometimes stayed for longer than a month.”

Bad actors can easily skirt AliExpress safeguards, the EC said. All some sellers had to do to circumvent automatic takedowns was miscategorize their products so that fewer checks were required before posting dangerous goods.

For shady sellers, the risks of detection appeared low. The e-commerce site’s mandatory brand authorization system was also ineffective and understaffed, the EC found, and AliExpress did not penalize traders for selling illegal products as its policy claims it would.

Making things worse, AliExpress “inadequately assessed how its recommender and advertising systems exacerbate the spread of illegal products,” the EC said. So rather than remove illegal products, AliExpress was recommending them to consumers and helping to maximize exposure. Talking to the press, the European Union’s tech chief, Henna Virkkunen, noted that one in five Europeans shop monthly at retail sites like AliExpress, Temu, and Shein.

AliExpress also relied on a single quantitative metric to gauge how effectively its systems were working to weed out illegal products. And that metric did not properly measure the extent of the harm. EC testing found that “a high volume of illegal products”—including unsafe toys and dangerous cosmetics—“continued to circulate despite AliExpress’ moderation efforts.”

https://arstechnica.com/tech-policy/2026/07/aliexpress-fined-625m-for-failing-to-remove-unsafe-toys-dangerous-cosmetics/

With the Paramount-Skydance merger greenlit by the FCC, Ellison, the new company’s CEO, then set his sights on acquiring Warner Bros. Discovery.

Warner at first rebuffed Paramount’s overtures and on Dec. 5—two days before the Kennedy Center gala—accepted a bid from Netflix to buy its studio and streaming assets. Ellison responded by making numerous calls to administration officials and had a long talk with Trump, according to The Wall Street Journal.

On the night of the gala, Trump told reporters the Netflix deal “could be a problem” and that he planned to get directly involved with the regulatory approval. Inside the Kennedy Center, Carr and his wife sat with Ellison in an exclusive skybox, Bloomberg reported. (Gomez said in her statement to ProPublica that she declined Paramount’s “invitation because of serious concerns about press independence connected to conditions Paramount agreed to as part of its merger transaction before the FCC.”)

Hours after the gala ended, Paramount announced it was launching its hostile takeover bid of Warner Bros. Discovery.

About three months later, Carr publicly endorsed Paramount over Netflix on CNBC, promising swift approval.

If one or more commissioners choose to abstain from a merger vote because of ethical concerns, what would happen next is unclear. Under federal conflict of interest rules, an agency designee could theoretically permit commissioners to vote after considering several factors, including “the difficulty of reassigning the matter,” the nature of the relationship between the commissioners and Paramount, and the “effect that resolution of the matter would have upon the financial interests” of the firm.

Carr could bypass a full commission vote entirely, as he did with the recent acquisition of Tegna by Nexstar Media Group. In that case, Carr delegated authority to FCC staff to approve the takeover.

But any decision on the Paramount deal—whether by the full commission or by staff at the direction of the chair—is likely to be challenged.

Richard Painter, a former White House ethics attorney in the administration of George W. Bush, said while courts often defer to the government’s judgment, they also can become skeptical if a regulatory agency is shown to have violated ethics rules.

“A judge may very well say that the merger decision of the FCC isn’t worth jack because the process was corrupted,” he said.

This story was originally published by ProPublica.

https://arstechnica.com/tech-policy/2026/07/fcc-took-pricey-gifts-from-paramount-as-the-company-needed-approval-for-deals/

Odean and her husband switched from Verizon to get the lifetime T-Mobile price lock in 2017, signing up for a two-line plan specifically marketed to people ages 55 and over. They are now set to receive their second price increase since 2024.

Odean, who is in her early 70s, told us she is furious about the latest price change. She said she complained to the company and “just got a generic email in reply.”

T-Mobile trying to simplify back-end system

T-Mobile COO Jon Freier told staff in a leaked email last month that the carrier is removing about 1,100 legacy billing codes from its systems in the process of eliminating old plans.

“Nearly half of these customers won’t see their price change at all by the time this migration is complete,” Freier wrote. “For those who do, It’s up to $6 per line. We’re reaching out to anyone—including employees—whose new plan includes a price adjustment.”

Freier’s email said plans originally sold in the 3G and 4G eras had stricter restrictions on smartphone and hotspot data, little or no international roaming, and a video resolution cap of 480p. Customers being moved to new plans will “get more premium data, more high-speed hotspot [data], and better international coverage,” plus a five-year price guarantee, the Freier email said.

A Fierce Network report said the elimination of 1,100 billing codes will leave fewer than 100 codes in T-Mobile’s system. With a smaller number of codes that reference various products and rate plans, T-Mobile is attempting to greatly simplify its back-end system.

“These are not 1,100 different price plans; they’re codes in the billing system that tell the network what to allow and not allow,” Fierce Network wrote. When T-Mobile adds a feature or capability to its website or mobile app, “it has to run it through all these codes to make sure it’s backwards compatible.”

It’s clear that in this mass migration of plans and reduction in billing codes, old service offerings weren’t always replaced with close equivalents. If T-Mobile lives up to the promise it made today, customers should at least get the missing free lines back and have their bills cleared of any erroneous charges. But the $6 per-line price increases are here to stay.

https://arstechnica.com/tech-policy/2026/07/t-mobile-bungled-forced-plan-migration-canceling-some-users-free-lines/

It’s further noted that any CSAM uncovered by xAI is reported to NCMEC.

In its complaint, xAI claimed that Harwood alone is responsible for his outputs because he “flagrantly violated” xAI’s rules and “went to great lengths to circumvent” Grok’s “technological safeguards.”

Harwood allegedly did this by relying on “misleading prompts,” xAI said. And Harwood also failed to police himself once he saw that he could generate illegal content, xAI argued. In the complaint, xAI alleged that Harwood should have known that he was banned from using Grok after the first time he relied on the chatbot to make illegal content. Glaringly, though, xAI does not indicate that Harwood received any warnings that his account risked penalties.

Instead, Harwood allegedly “continued to use Grok during the Relevant Period after violating the xAI Terms of Service,” xAI argued. “The xAI Terms of Service to which he agreed prohibited his use after his prior violations.”

xAI is hoping the US district court will rule that Harwood violated xAI’s terms and breached his contract with xAI. But perhaps more importantly, Musk wants the court to recognize an indemnity clause that holds that only users—and not xAI—are liable for Grok-generated CSAM and NCII. According to xAI, when people use Grok, they are responsible for all of their content, which xAI insisted includes both inputs and outputs.

Whether the court will agree that users are responsible for AI outputs has yet to be seen. Perhaps notably, the Copyright Office does not view AI outputs as human-created. That could throw a wrench in xAI’s offense, if the court struggles to see how child sex images generated by an AI tool could be created by the user if any other image could not be legally credited that way.

If xAI wins this fight, Harwood could owe substantial damages, including damages for “any real harm to third parties,” xAI’s “exposure to potential third-party claims and lawsuits,” and “any xAI reputational harm,” the complaint said.

https://arstechnica.com/tech-policy/2026/07/xai-cant-deny-grok-makes-csam-anymore-so-its-suing-users/

Meta’s AI-fueled layoffs of 8,000 employees targeted workers with disabilities and those who took protected medical or family leaves, alleged a lawsuit filed by 26 employees who were selected for termination. Meta used internal AI tools to select employees for layoffs, according to the complaint filed yesterday by 26 “Doe” plaintiffs in US District Court for the Northern District of California.

“Meta did not assemble the termination list through the considered judgment of managers who knew the work. Instead, Meta used a constellation of internal artificial-intelligence systems—including a system referred to internally as ‘Metamate,’ employee-trained ‘second-brain’ agents, keystroke- and activity-monitoring data, AI-token-usage dashboards, and algorithmically assisted performance ranking and calibration—to score, rank, and select employees for inclusion on the list,” the lawsuit said.

Employees were allegedly graded, among other things, on how much they used Meta’s AI tools. “Meta’s internal dashboards classified employees by their stage of adoption of its artificial-intelligence tools, using categories such as ‘AI Native,’ ‘AI First,’ and ‘AI Enabled,’” the lawsuit said.

The lawsuit is apparently “the first against a major US company to challenge the alleged use of AI in conducting layoffs,” according to Reuters. The complaint alleges that Meta’s tools for monitoring employees did not account for differences caused by disabilities and protected leaves.

“Those tools draw on inputs—performance ratings, calibration scores, productivity and output metrics, ‘AI-native’ ratings, and AI-token consumption—that, by design, cannot be accumulated by an employee who is on protected medical or family leave, or whose output is reduced by a disability,” the lawsuit said.

Meta says people, not AI, made layoff decisions

Meta says that people made the layoff decisions. “These claims lack merit and are not based on facts. Workforce management and organizational decisions were and are made by people, not AI,” Meta said in a statement provided to Ars today. Meta did not provide any other comment on the lawsuit.

https://arstechnica.com/tech-policy/2026/07/lawsuit-claims-metas-layoff-decisions-were-made-by-ai-not-humans/

The xAI class covers all US persons whose “real images of themselves as minors” were altered using Grok “to produce images or videos of sexually explicit conduct or content with their faces and/or other distinguishing features reasonably identifiable.” And the Stability AI class includes US persons similarly harmed using “an app built upon a Stability AI model.”

Lawyers estimate that thousands of minors may be eligible to join the classes and continue to seek out victims harmed by AI CSAM.

NCMEC did not respond to Ars’ request to comment.

However, the group has called for platforms, lawmakers, child safety organizations, and law enforcement to work together to address the “growing urgency for coordinated action.”

In March, NCMEC warned of a “sharp rise” in “reports related to generative AI” (GAI) in 2025. According to NCMEC, more than 1.5 million CyberTipline reports were made last year,  “indicating a nexus to GAI and child sexual exploitation.” Troublingly, in more than 133,000 cases, NCMEC “lacked sufficient information to determine how the technology was used.”

That report did not call out X or xAI, but it did suggest that it’s likely common for AI firms to avoid sharing information on AI CSAM that cops can use to make arrests. For another example, NCMEC noted that Amazon AI services submitted the vast majority of tips (1.1 million), and none of those tips gave “actionable information” that law enforcement could use to identify perpetrators.

As scrutiny on the harm inflicted on children by AI firms intensifies, advocates are hoping that firms will fine-tune models to block all nudity. Girls suing X alleged that’s the only remedy, “because if you have a model that allows for any sexual or abusive content, it is impossible to prevent that model from creating such content involving minors.”

In the press release, one of the lawyers representing minors, Annika K. Martin, slammed xAI and Stability AI as allegedly knowingly building models “capable of producing deepfake CSAM,” with “complete disregard for the devastation they knew would follow.”

“AI-generated CSAM is a scourge on society that touches every community and every demographic,” Martin said. “The scale of harm is staggering, and the companies whose products enable it must be held accountable.”

This story was updated on July 8 to include comments from Stability AI.

https://arstechnica.com/tech-policy/2026/07/lawsuit-grok-user-made-7k-child-sex-images-xai-only-reported-one-gang-rape-prompt/

“The presumption against preemption, therefore, applies to this case, and the Court must analyze whether Kalshi has demonstrated that, in enacting the CEA, it was the ‘clear and manifest purpose of Congress’ to preempt New York’s authority to regulate gambling where a DCM, like Kalshi, offers sports-event contracts on its platform,” Torres wrote.

No clear intent from Congress to preempt

Torres does not see any clear intent from Congress to preempt New York gambling laws. While the CEA gives the CFTC exclusive jurisdiction over transactions involving swaps on a DCM, it says this power does not “supersede or limit the jurisdiction at any time conferred on… other regulatory authorities under the laws of the United States or of any State.”

“This provision evinces Congress’ intent to leave room for states to regulate certain activities that may have otherwise been covered by the CEA… Moreover, given that the power to regulate gambling is a traditional police power exercised by New York, the Court also declines to interpret the CEA’s grant of exclusive jurisdiction as leaving ‘no room for supplementary state legislation,’” Torres wrote.

Congress specifically prohibited states from applying gambling laws to swaps in certain limited circumstances, and similarly prohibited state regulation of swaps in insurance contracts and other contexts, Torres wrote. These provisions demonstrate “Congress’ intended scope of preemption” and provide evidence that “Congress did not intend to regulate so broadly as to exclude all state gambling laws from regulating transactions involving swaps,” she wrote.

Kalshi also hasn’t proven that enforcement of New York gambling laws would prevent the federal government from achieving the purposes of the Commodity Exchange Act, Torres found. “Kalshi has not shown that it is impossible to comply with both New York gambling laws and the CEA,” she wrote.

The legal battle over state regulation of prediction markets is proceeding at various district courts and circuit appeals courts around the US. In another lawsuit filed by Kalshi, the US Court of Appeals for the 3rd Circuit ruled in April that New Jersey cannot regulate sports bets on prediction markets.

Kalshi has lost some other notable decisions, including a 6th Circuit appeals court ruling in which judges refused to grant a preliminary injunction against Ohio gambling laws. Conflicting rulings at circuit appeals courts raise the odds that the Supreme Court will eventually determine where federal jurisdiction ends and state authority begins when it comes to prediction markets.

https://arstechnica.com/tech-policy/2026/07/new-york-can-restrict-sports-gambling-on-prediction-markets-us-judge-rules/

Last week, thousands of SamKnows routers were bricked after a government program ran its course.

In 2020, as part of a program conducted by the Australian Competition & Consumer Commission (ACCC), the Australian government’s chief competition regulator, thousands of volunteers received routers to help test and report on the typical speed and performance of broadband plans in Australia. (More specifically, the Measuring Broadband Australia (MBA) program targeted fixed-line broadband services provided over the NBN, Australia’s government-owned wholesale open-access broadband network, as well as services delivered over other access networks.)

According to the final report that the ACCC distributed, the routers are whiteboxes that were “supplied by SamKnows” and that “perform tests to measure internet performance using test servers maintained by SamKnows and hosted in Australia.”

Last month, the program concluded, and the ACCC released its final performance report (PDF). Subsequently, the routers used for the program were bricked after June 30.

Ars Technica reviewed a copy of an email that an MBA volunteer received in mid-June informing them that the program would end on June 30, 2026 and further stating:

Service Termination: Your whitebox will be disabled, and your SamKnows One account will be closed.

The email, signed by “The SamKnows Team (part of Cisco),” noted that after June 30, the devices would stop collecting data and that users’ “measurement and registration data will be deleted in accordance with our retention obligations under our end-user license agreement.”

However, as one MBA volunteer pointed out to Ars via email, the routers are still working, making the decision to disable the devices an avoidable e-waste risk.

When asked by Ars, the ACCC didn’t specify the number of SamKnows routers disabled last month. However, in a report about the MBA program released in December 2020 (PDF), the ACCC said it initially expected to release about 4,000 whiteboxes throughout the program’s duration and had distributed “over 2,600″ by December 2020. The report noted that the ACCC retained an “adequate pool of whiteboxes to allow for the expansion of our reporting to cover, for example, emerging [retail service providers] and new speed tier plans.”

https://arstechnica.com/gadgets/2026/07/thousands-of-routers-bricked-after-government-program-concludes-in-australia/