On Monday, the US Department of Justice’s next monopoly trial against Google started in Virginia—this time challenging the tech giant’s ad tech dominance.

The trial comes after Google lost two major cases that proved Google had a monopoly in both general search and the Android app store. During her opening statement, DOJ lawyer Julia Tarver Wood told US District Judge Leonie Brinkema—who will be ruling on the case after Google cut a check to avoid a jury trial—that “it’s worth saying the quiet part out loud,” AP News reported.

“One monopoly is bad enough,” Wood said. “But a trifecta of monopolies is what we have here.”

In its complaint, the DOJ argued that Google broke competition in the ad tech space “by engaging in a systematic campaign to seize control of the wide swath of high-tech tools used by publishers, advertisers, and brokers, to facilitate digital advertising.”

The result of such “insidious” allegedly anti-competitive behavior is that today Google pockets at least 30 cents “of each advertising dollar flowing from advertisers to website publishers through Google’s ad tech tools … and sometimes far more,” the DOJ alleged.

Meanwhile, as Google profits off both advertisers and publishers, “website creators earn less, and advertisers pay more” than “they would in a market where unfettered competitive pressure could discipline prices and lead to more innovative ad tech tools,” the DOJ alleged.

On Monday, Wood told Brinkema that Google intentionally put itself in this position to “manipulate the rules of ad auctions to its own benefit,” The Washington Post reported.

“Publishers were understandably furious,” Wood said. “The evidence will show that they could do nothing.”

Wood confirmed that the DOJ planned to call several publishers as witnesses in the coming weeks to explain the harms caused. Expected to take the stand will be “executives from companies including USA Today, [Wall Street] Journal parent company News Corp., and the Daily Mail,” the Post reported.

The ad tech trial, which is expected to last four to six weeks, may be the most consequential of the monopoly trials Google has recently faced, experts have said.

That’s because during the DOJ’s trial proving Google’s monopoly in search, it remained unclear what remedies the DOJ sought. Some ways to destroy Google’s search monopoly could be “unlikely to create meaningful competition” or hurt Google’s bottom line, experts told Ars, but a more drastic order to spin out its Chrome browser or Android operating system could really impact Google’s revenue. It won’t be until December that the DOJ will even provide a rough outline of proposed remedies in that case, Reuters reported, with the judge not expected to rule until next August.

But the DOJ has been very clear about the remedies needed in the ad tech case, “asking Brinkema to order a divestment of Google’s Ad Manager suite of services, which is responsible for many of the rectangular ads that populate the tops and sides of webpages across the Internet,” the Post reported.

Because the most “obvious” remedy would be to require Google to sell off parts of its ad business, experts told AP News that the ad tech trial “could potentially be more harmful to Google” than the search trial. Perhaps at the furthest extreme, antitrust expert Shubha Ghosh told Ars that “if this case goes against Google as the last one did, it could set the stage for splitting it into separate search and advertising companies.”

In the DOJ’s complaint, prosecutors argued that it “is critical to restore competition in these markets by enjoining Google’s anticompetitive practices, unwinding Google’s anticompetitive acquisitions, and imposing a remedy sufficient both to deny Google the fruits of its illegal conduct and to prevent further harm to competition in the future.”

Ghosh said that undoing Google’s acquisitions could lead to Google no longer representing both advertisers’ and sellers’ interests in each ad auction—instead requiring Google to either pick a side or perhaps involve a broker.

Although the Post reported that Google has argued that “customers prefer the convenience of a one-stop shop,” the DOJ hopes to prove that Google’s alleged monopoly has shuttered newspapers across the US and threatens to do more harm if left unchecked.

https://arstechnica.com/?p=2048608

This story was originally published by ProPublica, a Pulitzer Prize-winning investigative newsroom. Sign up for The Big Story newsletter to receive stories like this one in your inbox.

Most of the products in the typical kitchen use plastics that are virtually impossible to recycle.

The film that acts as a lid on Dole Sunshine fruit bowls, the rings securing jars of McCormick dried herbs, the straws attached to Juicy Juice boxes, the bags that hold Cheez-Its and Cheerios—they’re all destined for the dumpster.

Now a trade group representing those brands and hundreds more is pressuring regulators to make plastic appear more environmentally friendly, a proposal experts say could worsen a crisis that is flooding the planet and our bodies with the toxic material.

The Consumer Brands Association believes companies should be able to stamp “recyclable” on products that are technically “capable” of being recycled, even if they’re all but guaranteed to end up in a landfill. As ProPublica previously reported, the group argued for a looser definition of “recyclable” in written comments to the Federal Trade Commission as the agency revises the Green Guides—guidelines for advertising products with sustainable attributes.

The association’s board of directors includes officials from some of the world’s richest companies, such as PepsiCo, Procter & Gamble, Coca-Cola, Land O’Lakes, Keurig Dr Pepper, Hormel Foods Corporation, Molson Coors Beverage Company, Campbell Soup, Kellanova, Mondelez International, Conagra Brands, J.M. Smucker, and Clorox.

Some of the companies own brands that project health, wellness, and sustainability. That includes General Mills, owner of Annie’s macaroni and cheese; The Honest Co., whose soaps and baby wipes line the shelves at Whole Foods; and Colgate-Palmolive, which owns the natural deodorant Tom’s of Maine.

ProPublica contacted the 51 companies on the association’s board of directors to ask if they agreed with the trade group’s definition of “recyclable.” Most did not respond. None said they disagreed with the definition. Nine companies referred ProPublica back to the association.

“The makers of America’s household brands are committed to creating a more circular economy which is why the industry has set sustainability goals and invested in consumer education tools” with “detailed recycling instructions,” Joseph Aquilina, the association’s vice president and deputy general counsel, wrote in an email.

The Green Guides are meant to increase consumer trust in sustainable products. Though these guidelines are not laws, they serve as a national reference for companies and other government agencies for how to define terms like “compostable,” “nontoxic” and “recyclable.” The Federal Trade Commission is revising the guides for the first time since 2012.

Most of the plastic we encounter is functionally not recyclable. It’s too expensive or technically difficult to deal with the health risks posed by the dyes and flame retardants found in many products. Collecting, sorting, storing and shipping the plastic for reprocessing often costs much more than plowing it into a landfill. Though some newer technologies have pushed the boundaries of what’s possible, these plastic-recycling techniques are inefficient and exist in such limited quantities that experts say they can’t be relied upon. The reality is: Only 5 percent of Americans’ discarded plastic gets recycled. And while soda bottles and milk jugs can be turned into new products, other common forms of plastic, like flimsy candy wrappers and chip bags, are destined for trash heaps and oceans, where they can linger for centuries without breaking down.

The current Green Guides allow companies to label products and packaging as “recyclable” if at least 60 percent of Americans have access to facilities that will take the material. As written, the guidelines don’t specify whether it’s enough for the facilities to simply collect and sort the items or if there needs to be a reasonable expectation that the material will be made into something new.

https://arstechnica.com/?p=2048520

Cops are now using AI to generate images of fake kids, which are helping them catch child predators online, a lawsuit filed by the state of New Mexico against Snapchat revealed this week.

According to the complaint, the New Mexico Department of Justice launched an undercover investigation in recent months to prove that Snapchat “is a primary social media platform for sharing child sexual abuse material (CSAM)” and sextortion of minors, because its “algorithm serves up children to adult predators.”

As part of their probe, an investigator “set up a decoy account for a 14-year-old girl, Sexy14Heather.”

Despite Snapchat setting the fake minor’s profile to private and the account not adding any followers, “Heather” was soon recommended widely to “dangerous accounts, including ones named ‘child.rape’ and ‘pedo_lover10,’ in addition to others that are even more explicit,” the New Mexico DOJ said in a press release.

And after “Heather” accepted a follow request from just one account, the recommendations got even worse. “Snapchat suggested over 91 users, including numerous adult users whose accounts included or sought to exchange sexually explicit content,” New Mexico’s complaint alleged.

“Snapchat is a breeding ground for predators to collect sexually explicit images of children and to find, groom, and extort them,” New Mexico’s complaint alleged.

Posing as “Sexy14Heather,” the investigator swapped messages with adult accounts, including users who “sent inappropriate messages and explicit photos.” In one exchange with a user named “50+ SNGL DAD 4 YNGR,” the fake teen “noted her age, sent a photo, and complained about her parents making her go to school,” prompting the user to send “his own photo” as well as sexually suggestive chats. Other accounts asked “Heather” to “trade presumably explicit content,” and several “attempted to coerce the underage persona into sharing CSAM,” the New Mexico DOJ said.

“Heather” also tested out Snapchat’s search tool, finding that “even though she used no sexually explicit language, the algorithm must have determined that she was looking for CSAM” when she searched for other teen users. It “began recommending users associated with trading” CSAM, including accounts with usernames such as “naughtypics,” “addfortrading,” “teentr3de,” “gayhorny13yox,” and “teentradevirgin,” the investigation found, “suggesting that these accounts also were involved in the dissemination of CSAM.”

This novel use of AI was prompted after Albuquerque police indicted a man, Alejandro Marquez, who pled guilty and was sentenced to 18 years for raping an 11-year-old girl he met through Snapchat’s Quick Add feature in 2022, New Mexico’s complaint said. More recently, the New Mexico complaint said, an Albuquerque man, Jeremy Guthrie, was arrested and sentenced this summer for “raping a 12-year-old girl who he met and cultivated over Snapchat.”

In the past, police have posed as kids online to catch child predators using photos of younger-looking adult women or even younger photos of police officers. Using AI-generated images could be considered a more ethical way to conduct these stings, a lawyer specializing in sex crimes, Carrie Goldberg, told Ars, because “an AI decoy profile is less problematic than using images of an actual child.”

But using AI could complicate investigations and carry its own ethical concerns, Goldberg warned, as child safety experts and law enforcement warn that the Internet is increasingly swamped with AI-generated CSAM.

“In terms of AI being used for entrapment, defendants can defend themselves if they say the government induced them to commit a crime that they were not already predisposed to commit,” Goldberg told Ars. “Of course, it would be ethically concerning if the government were to create deepfake AI child sexual abuse material (CSAM), because those images are illegal, and we don’t want more CSAM in circulation.”

Experts have warned that AI image generators should never be trained on datasets that combine images of real kids with explicit content to avoid any instances of AI-generated CSAM, which is particularly harmful when it appears to depict a real kid or an actual victim of child abuse.

In the New Mexico complaint, only one AI-generated image is included, so it’s unclear how widely the state’s DOJ is using AI or if cops are possibly using more advanced methods to generate multiple images of the same fake kid. It’s also unclear what ethical concerns were weighed before cops began using AI decoys.

The New Mexico DOJ did not respond to Ars’ request for comment.

Goldberg told Ars that “there ought to be standards within law enforcement with how to use AI responsibly,” warning that “we are likely to see more entrapment defenses centered around AI if the government is using the technology in a manipulative way to pressure somebody into committing a crime.”

https://arstechnica.com/?p=2047932

Telegram CEO Pavel Durov, in his first public comments since being arrested by French authorities, said that Telegram is not an “anarchic paradise” but promised that the platform will enhance its moderation of harmful content.

While Telegram has room for improvement, “the claims in some media that Telegram is some sort of anarchic paradise are absolutely untrue,” Durov wrote on Telegram yesterday. “We take down millions of harmful posts and channels every day. We publish daily transparency reports (like this or this). We have direct hotlines with NGOs to process urgent moderation requests faster.”

The links Durov provided go to Telegram channels that report the number of groups and channels banned for terrorist content and child-abuse content. Telegram has been criticized by groups such as the National Center for Missing and Exploited Children (NCMEC) for allegedly not cooperating on removal of child sexual abuse material.

Durov said Telegram has heard criticism that its moderation efforts are “not enough,” adding that “Telegram’s abrupt increase in user count to 950M caused growing pains that made it easier for criminals to abuse our platform. That’s why I made it my personal goal to ensure we significantly improve things in this regard. We’ve already started that process internally, and I will share more details on our progress with you very soon.”

Durov is forbidden from leaving France after his indictment last week. Prosecutor Laure Beccuau alleged that law enforcement authorities received a near-total lack of response from Telegram to requests for cooperation in cases related to crimes against minors, drug crimes, and online hate.

FAQ signals new approach to “private” messages

Telegram already made a change to its FAQ in a section on how the company handles illegal content. The change suggests Telegram may do more moderation of private messages.

An Internet Archive capture of the FAQ page from yesterday contained the following text:

Q: There’s illegal content on Telegram. How do I take it down?
All Telegram chats and group chats are private amongst their participants. We do not process any requests related to them.

But sticker sets, channels, and bots on Telegram are publicly available. If you find sticker sets or bots on Telegram that you think are illegal, please ping us at abuse@telegram.org.

You can also use the ‘report’ buttons right inside our apps, see this post on our official @ISISwatch channel for details.

That section in the current version of the FAQ page was heavily rewritten. The statement that all chats are private and that Telegram does not “process any requests related to them” has been removed. It now says, “All Telegram apps have ‘Report’ buttons that let you flag illegal content for our moderators—in just a few taps,” and goes on to provide more specific instructions on how to report illegal content in messages.

Some of the key language removed from the section on illegal content remains in the FAQ section on how to report copyright infringement. The copyright section still contains the statement that all chats are private and that Telegram does not “process any requests related to them.” Despite that, testing the app today showed that clicking “Report” on a Telegram message provides an option to report copyright infringement. Users can also report messages for spam, violence, pornography, child abuse, illegal drugs, or personal details.

Telegram messages do not have end-to-end encryption by default, but the security feature can be enabled for one-on-one conversations. The app has social-network features letting users create groups of up to 200,000 people and channels for posting of public messages to audiences of any size. Telegram users cannot enable end-to-end encryption on group messages.

https://arstechnica.com/?p=2047905

Verizon today announced a deal to acquire Frontier Communications, an Internet service provider with about 3 million customers in 25 states. Verizon said the all-cash transaction is valued at $20 billion.

Verizon agreed to pay $9.6 billion and is taking on over $10 billion in debt held by Frontier. Verizon said the deal is subject to regulatory approval and a vote by Frontier shareholders and is expected to be completed in 18 months.

“Under the terms of the agreement, Verizon will acquire Frontier for $38.50 per share in cash, representing a premium of 43.7 percent to Frontier’s 90-Day volume-weighted average share price (VWAP) on September 3, 2024, the last trading day prior to media reports regarding a potential acquisition of Frontier,” Verizon said.

Assuming regulatory and shareholder approval, Verizon will be buying back a former portion of its network that it sold to Frontier eight years ago. In 2016, Frontier bought Verizon’s FiOS and DSL operations in Florida, California, and Texas. The 2016 changeover was marred by technical problems that caused weeks of outages for tens of thousands of customers.

Frontier, which had also purchased the Connecticut portion of AT&T’s network, struggled for many years and filed for bankruptcy in April 2020. It was criticized by regulators for not properly maintaining its copper phone network. Frontier emerged from bankruptcy in 2021 with a plan to upgrade many of its outdated copper DSL locations with fiber-to-the-home service.

“Frontier’s 2.2 million fiber subscribers across 25 states will join Verizon’s approximately 7.4 million FiOS connections in 9 states and Washington, D.C.,” Verizon said. “In addition to Frontier’s 7.2 million fiber locations, the company is committed to its plan to build out an additional 2.8 million fiber locations by the end of 2026.”

Combined, the Verizon and Frontier fiber networks pass over 25 million premises in 31 states and the District of Columbia, the companies said. Verizon and Frontier both “expect to increase their fiber penetration between now and closing,” they said.

Frontier “complementary” to Verizon’s Northeast market

Frontier has 2.05 million residential fiber customers and 721,000 residential copper DSL customers, according to an earnings report. In the business and wholesale category, Frontier has 134,000 fiber customers and 102,000 copper customers. Frontier reported $1.48 billion in revenue in Q2 2024 and a net loss of $123 million.

Verizon said Frontier’s recent investment in fiber made it a more attractive acquisition target. “Over approximately four years, Frontier has invested $4.1 billion upgrading and expanding its fiber network, and now derives more than 50 percent of its revenue from fiber products,” Verizon said.

Verizon FiOS is available in parts of Connecticut, Delaware, Maryland, Massachusetts, New York, New Jersey, Virginia, Rhode Island, Pennsylvania, and the District of Columbia. Verizon said Frontier’s footprint is “highly complementary to Verizon’s core Northeast and Mid-Atlantic markets,” and will help grow the number of customers who purchase both home Internet and mobile service.

Frontier is available in parts of Alabama, Arizona, California, Connecticut, Florida, Georgia, Illinois, Indiana, Iowa, Michigan, Minnesota, Mississippi, Nebraska, Nevada, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas, Utah, West Virginia, and Wisconsin.

https://arstechnica.com/?p=2047606

The Internet Archive has lost its appeal after book publishers successfully sued to block the Open Libraries Project from lending digital scans of books for free online.

Judges for the Second Circuit Court of Appeals on Wednesday rejected the Internet Archive (IA) argument that its controlled digital lending—which allows only one person to borrow each scanned e-book at a time—was a transformative fair use that worked like a traditional library and did not violate copyright law.

As Judge Beth Robinson wrote in the decision, because the IA’s digital copies of books did not “provide criticism, commentary, or information about the originals” or alter the original books to add “something new,” the court concluded that the IA’s use of publishers’ books was not transformative, hobbling the organization’s fair use defense.

“IA’s digital books serve the same exact purpose as the originals: making authors’ works available to read,” Robinson said, emphasizing that although in copyright law, “[n]ot every instance will be clear cut,” “this one is.”

The appeals court ruling affirmed the lower court’s ruling, which permanently barred the IA from distributing not just the works in the suit, but all books “available for electronic licensing,” Robinson said.

“To construe IA’s use of the Works as transformative would significantly narrow―if not entirely eviscerate―copyright owners’ exclusive right to prepare (or not prepare) derivative works,” Robinson wrote.

Maria Pallante, president and CEO of the Association of American Publishers, the trade organization behind the lawsuit, celebrated the ruling. She said the court upheld “the rights of authors and publishers to license and be compensated for their books and other creative works and reminds us in no uncertain terms that infringement is both costly and antithetical to the public interest.”

“If there was any doubt, the Court makes clear that under fair use jurisprudence there is nothing transformative about converting entire works into new formats without permission or appropriating the value of derivative works that are a key part of the author’s copyright bundle,” Pallante said.

Lead attorneys representing publishers, Elizabeth A. McNamara and Linda Steinman, provided statements to Ars.

“The Second Circuit’s decision is animated by common sense and the desire to foster creativity,” McNamara said. “The Court correctly rejected Internet Archive’s arguments that mass copyright infringement can be justified by invoking convoluted theories like the ‘one-to-one-owned to loaned-ratio.’”

“As the Court’s clear-eyed opinion demonstrates, there was nothing transformative about Internet Archive’s distribution of millions of unlicensed ebooks,” Steinman said. “This unequivocal decision will serve as a clear warning to future infringers.”

The Internet Archive’s director of library services, Chris Freeland, issued a statement on the loss, which comes after four years of fighting to maintain its Open Libraries Project.

“We are disappointed in today’s opinion about the Internet Archive’s digital lending of books that are available electronically elsewhere,” Freeland said. “We are reviewing the court’s opinion and will continue to defend the rights of libraries to own, lend, and preserve books.”

IA’s lending harmed publishers, judge says

The court’s fair use analysis didn’t solely hinge on whether IA’s digital lending of e-books was “transformative.” Judges also had to consider book publishers’ claims that IA was profiting off e-book lending, in addition to factoring in whether each work was original, what amount of each work was being copied, and whether the IA’s e-books substituted original works, depriving authors of revenue in relevant markets.

Ultimately, for each factor, judges ruled in favor of publishers, which argued that granting IA was threatening to “‘destroy the value of [their] exclusive right to prepare derivative works,’ including the right to publish their authors’ works as e-books.”

While the IA tried to argue that book publishers’ surging profits suggested that its digital lending caused no market harms, Robinson disagreed with the IA’s experts’ “ill-supported” market analysis and took issue with IA advertising “its digital books as a free alternative to Publishers’ print and e-books.”

“IA offers effectively the same product as Publishers―full copies of the Works―but at no cost to consumers or libraries,” Robinson wrote. “At least in this context, it is difficult to compete with free.”

Robinson wrote that despite book publishers showing no proof of market harms, that lack of evidence did not support IA’s case, ruling that IA did not satisfy its burden to prove it had not harmed publishers. She further wrote that it’s common sense to agree with publishers’ characterization of harms because “IA’s digital books compete directly with Publishers’ e-books” and would deprive authors of revenue if left unchecked.

“We agree with Publishers’ assessment of market harm” and “are likewise convinced” that “unrestricted and widespread conduct of the sort engaged in by [IA] would result in a substantially adverse impact on the potential market” for publishers’ e-books, Robinson wrote. “Though Publishers have not provided empirical data to support this observation, we routinely rely on such logical inferences where appropriate” when determining fair use.

Judges did, however, side with IA on the matter of whether the nonprofit was profiting off loaning e-books for free, contradicting the lower court. The appeals court disagreed with book publishers’ claims that IA profited off e-books by soliciting donations or earning a small percentage from used books sold through referral links on its site.

“Of course, IA must solicit some funds to keep the lights on,” Robinson wrote. But “IA does not profit directly from its Free Digital Library,” and it would be “misleading” to characterize it that way.

“To hold otherwise would greatly restrain the ability of nonprofits to seek donations while making fair use of copyrighted works,” Robinson wrote.

https://arstechnica.com/?p=2047365

The Department of Justice is reportedly deepening its probe into Nvidia. Officials have moved on from merely questioning competitors to subpoenaing Nvidia and other tech companies for evidence that could substantiate allegations that Nvidia is abusing its “dominant position in AI computing,” Bloomberg reported.

When news of the DOJ’s probe into the trillion-dollar company was first reported in June, Fast Company reported that scrutiny was intensifying merely because Nvidia was estimated to control “as much as 90 percent of the market for chips” capable of powering AI models. Experts told Fast Company that the DOJ probe might even be good for Nvidia’s business, noting that the market barely moved when the probe was first announced.

But the market’s confidence seemed to be shaken a little more on Tuesday, when Nvidia lost a “record-setting $279 billion” in market value following Bloomberg’s report. Nvidia’s losses became “the biggest single-day market-cap decline on record,” TheStreet reported.

People close to the DOJ’s investigation told Bloomberg that the DOJ’s “legally binding requests” require competitors “to provide information” on Nvidia’s suspected anticompetitive behaviors as a “dominant provider of AI processors.”

One concern is that Nvidia may be giving “preferential supply and pricing to customers who use its technology exclusively or buy its complete systems,” sources told Bloomberg. The DOJ is also reportedly probing Nvidia’s acquisition of RunAI—suspecting the deal may lock RunAI customers into using Nvidia chips.

Bloomberg’s report builds on a report last month from The Information that said that Advanced Micro Devices Inc. (AMD) and other Nvidia rivals were questioned by the DOJ—as well as third parties who could shed light on whether Nvidia potentially abused its market dominance in AI chips to pressure customers into buying more products.

According to Bloomberg’s sources, the DOJ is worried that “Nvidia is making it harder to switch to other suppliers and penalizes buyers that don’t exclusively use its artificial intelligence chips.”

In a statement to Bloomberg, Nvidia insisted that “Nvidia wins on merit, as reflected in our benchmark results and value to customers, who can choose whatever solution is best for them.” Additionally, Bloomberg noted that following a chip shortage in 2022, Nvidia CEO Jensen Huang has said that his company strives to prevent stockpiling of Nvidia’s coveted AI chips by prioritizing customers “who can make use of his products in ready-to-go data centers.”

Potential threats to Nvidia’s dominance

Despite the slump in shares, Nvidia’s market dominance seems unlikely to wane any time soon after its stock more than doubled this year. In an SEC filing this year, Nvidia bragged that its “accelerated computing ecosystem is bringing AI to every enterprise” with an “ecosystem” spanning “nearly 5 million developers and 40,000 companies.” Nvidia specifically highlighted that “more than 1,600 generative AI companies are building on Nvidia,” and according to Bloomberg, Nvidia will close out 2024 with more profits than the total sales of its closest competitor, AMD.

After the DOJ’s most recent big win, which successfully proved that Google has a monopoly on search, the DOJ appears intent on getting ahead of any tech companies’ ambitions to seize monopoly power and essentially become the Google of the AI industry. In June, DOJ antitrust chief Jonathan Kanter confirmed to the Financial Times that the DOJ is examining “monopoly choke points and the competitive landscape” in AI beyond just scrutinizing Nvidia.

According to Kanter, the DOJ is scrutinizing all aspects of the AI industry—”everything from computing power and the data used to train large language models, to cloud service providers, engineering talent and access to essential hardware such as graphics processing unit chips.” But in particular, the DOJ appears concerned that GPUs like Nvidia’s advanced AI chips remain a “scarce resource.” Kanter told the Financial Times that an “intervention” in “real time” to block a potential monopoly could be “the most meaningful intervention” and the least “invasive” as the AI industry grows.

https://arstechnica.com/?p=2047264

Disney-owned channels have been blacked out on DirecTV for the past two days because of a contract dispute, with both companies claiming publicly that they aren’t willing to budge much from their negotiating positions. Until it’s resolved, DirecTV subscribers won’t have access to ABC, ESPN, and other Disney channels.

While there have been many contentious contract negotiations between TV providers and programmers, this one is “not a run-of-the-mill dispute,” DirecTV CFO Ray Carpenter said today in a call with reporters and analysts, according to The Hollywood Reporter. “This is not the kind of dispute where we’re haggling over percentage points on a rate. This is really about changing the model in a way that gives everyone confidence that this industry can survive.”

Carpenter was quoted as saying that DirecTV will fight Disney “as long as it needs to” and accused Disney of timing the blackout before big sporting events “to put the most pain and disruption on our customers.” Carpenter also said DirecTV doesn’t “have any dates drawn in the sand” and is “not playing a short-term game,” according to Variety.

On Sunday, Disney issued a statement attributed to three executives at Disney Entertainment and ESPN. “DirecTV chose to deny millions of subscribers access to our content just as we head into the final week of the US Open and gear up for college football and the opening of the NFL season,” the Disney statement said. “While we’re open to offering DirecTV flexibility and terms which we’ve extended to other distributors, we will not enter into an agreement that undervalues our portfolio of television channels and programs.”

DirecTV users must apply for $20 credits

DirecTV is offering $20 credits to affected customers, but the TV firm is not applying those credits automatically. Customers need to go to this webpage to request a bill credit.

AT&T owns 70 percent of DirecTV after spinning it off into a new entity in 2021. AT&T explored options for selling its 70 percent stake almost a year ago. Private equity firm TPG owns the other 30 percent.

Based on previous TV carriage fights, a DirecTV/Disney agreement could be reached within days. A similar dispute between Disney and Charter Communications happened almost exactly a year ago and was resolved after eight days.

Carpenter said today that DirecTV wants to sell smaller channel packages and that Disney’s proposed terms conflict with that goal. Variety summarized his comments:

At the heart of the dispute, says Carpenter, is a desire by DirecTV to sell “skinnied down” packages of programming tailored to various subscriber interests, rather than forcing customers to take channels they may not want or watch very often. The company believes such a model would help retain subscribers, even if they were paying less. There is also interest in helping customers find other content, even if it’s not sold directly on the service, Carpenter says.

Streaming add-ons and “skinny” bundles

Last year’s agreement between Disney and Charter included access to the Disney+ and ESPN+ streaming services for Charter’s Spectrum cable customers. Carpenter was quoted by the Hollywood Reporter as saying there is “value” in that kind of deal, “but what’s important is that it’s not a replica of the model that got us here in the first place, where it has to be distributed and paid for by 100 percent or a large percentage of the customers.”

A lobby group that represents DirecTV and other TV providers, the American Television Alliance, blasted Disney for “seek[ing] to raise rates and force distributors to carry an unwieldy ‘one-size fits all’ bundle of more than a dozen channels to the vast majority of their subscribers.” The group said Disney’s proposed terms would require TV companies to sell “fat bundles” that “force consumers to pay for programming they don’t watch.”

Disney’s statement on Sunday claimed that DirecTV rejected its offer of “a fair, marketplace-based agreement.”

“DirecTV continues to push a narrative that they want to explore more flexible, ‘skinnier’ bundles and that Disney refuses to engage,” Disney said. “This is blatantly false. Disney has been negotiating with them in good faith for weeks and has proposed a variety of flexible options, in addition to innovative ways to work together in making Disney’s direct-to-consumer streaming services available to DirecTV’s customers.”

We contacted both companies today and will update this article if there are any major developments.

Disclosure: The Advance/Newhouse Partnership, which owns 12.4 percent of Charter, is part of Advance Publications, which also owns Ars Technica parent Condé Nast.

https://arstechnica.com/?p=2046976

A controversial facial recognition tech company behind a vast face image search engine widely used by cops has been fined approximately $33 million in the Netherlands for serious data privacy violations.

According to the Dutch Data Protection Authority (DPA), Clearview AI “built an illegal database with billions of photos of faces” by crawling the web and without gaining consent, including from people in the Netherlands.

Clearview AI’s technology—which has been banned in some US cities over concerns that it gives law enforcement unlimited power to track people in their daily lives—works by pulling in more than 40 billion face images from the web without setting “any limitations in terms of geographical location or nationality,” the Dutch DPA found. Perhaps most concerning, the Dutch DPA said, Clearview AI also provides “facial recognition software for identifying children,” therefore indiscriminately processing personal data of minors.

Training on the face image data, the technology then makes it possible to upload a photo of anyone and search for matches on the Internet. People appearing in search results, the Dutch DPA found, can be “unambiguously” identified. Billed as a public safety resource accessible only by law enforcement, Clearview AI’s face database casts too wide a net, the Dutch DPA said, with the majority of people pulled into the tool likely never becoming subject to a police search.

“The processing of personal data is not only complex and extensive, it moreover offers Clearview’s clients the opportunity to go through data about individual persons and obtain a detailed picture of the lives of these individual persons,” the Dutch DPA said. “These processing operations therefore are highly invasive for data subjects.”

Clearview AI had no legitimate interest under the European Union’s General Data Protection Regulation (GDPR) for the company’s invasive data collection, Dutch DPA Chairman Aleid Wolfsen said in a press release. The Dutch official likened Clearview AI’s sprawling overreach to “a doom scenario from a scary film,” while emphasizing in his decision that Clearview AI has not only stopped responding to any requests to access or remove data from citizens in the Netherlands, but across the EU.

“Facial recognition is a highly intrusive technology that you cannot simply unleash on anyone in the world,” Wolfsen said. “If there is a photo of you on the Internet—and doesn’t that apply to all of us?—then you can end up in the database of Clearview and be tracked.”

To protect Dutch citizens’ privacy, the Dutch DPA imposed a roughly $33 million fine that could go up by about $5.5 million if Clearview AI does not follow orders on compliance. Any Dutch businesses attempting to use Clearview AI services could also face “hefty fines,” the Dutch DPA warned, as that “is also prohibited” under the GDPR.

Clearview AI was given three months to appoint a representative in the EU to stop processing personal data—including sensitive biometric data—in the Netherlands and to update its privacy policies to inform users in the Netherlands of their rights under the GDPR. But the company only has one month to resume processing requests for data access or removals from people in the Netherlands who otherwise find it “impossible” to exercise their rights to privacy, the Dutch DPA’s decision said.

It appears that Clearview AI has no intentions to comply, however. Jack Mulcaire, the chief legal officer for Clearview AI, confirmed to Ars that the company maintains that it is not subject to the GDPR.

“Clearview AI does not have a place of business in the Netherlands or the EU, it does not have any customers in the Netherlands or the EU, and does not undertake any activities that would otherwise mean it is subject to the GDPR,” Mulcaire said. “This decision is unlawful, devoid of due process and is unenforceable.”

But the Dutch DPA found that GDPR applies to Clearview AI because it gathers personal information about Dutch citizens without their consent and without ever alerting users to the data collection at any point.

“People who are in the database also have the right to access their data,” the Dutch DPA said. “This means that Clearview has to show people which data the company has about them, if they ask for this. But Clearview does not cooperate in requests for access.”

Dutch DPA vows to investigate Clearview AI execs

In the press release, Wolfsen said that the Dutch DPA has “to draw a very clear line” underscoring the “incorrect use of this sort of technology” after Clearview AI refused to change its data collection practices following fines in other parts of the European Union, including Italy and Greece.

While Wolfsen acknowledged that Clearview AI could be used to enhance police investigations, he said that the technology would be more appropriate if it was being managed by law enforcement “in highly exceptional cases only” and not indiscriminately by a private company.

“The company should never have built the database and is insufficiently transparent,” the Dutch DPA said.

Although Clearview AI appears ready to defend against the fine, the Dutch DPA said that the company failed to object to the decision within the provided six-week timeframe and therefore cannot appeal the decision.

Further, the Dutch DPA confirmed that authorities are “looking for ways to make sure that Clearview stops the violations” beyond the fines, including by “investigating if the directors of the company can be held personally responsible for the violations.”

Wolfsen claimed that such “liability already exists if directors know that the GDPR is being violated, have the authority to stop that, but omit to do so, and in this way consciously accept those violations.”

https://arstechnica.com/?p=2046793

A judge in Ohio has issued a temporary restraining order against a security researcher who presented evidence that a recent ransomware attack on the city of Columbus scooped up reams of sensitive personal information, contradicting claims made by city officials.

The order, issued by a judge in Ohio’s Franklin County, came after the city of Columbus fell victim to a ransomware attack on July 18 that siphoned 6.5 terabytes of the city’s data. A ransomware group known as Rhysida took credit for the attack and offered to auction off the data with a starting bid of about $1.7 million in bitcoin. On August 8, after the auction failed to find a bidder, Rhysida released what it said was about 45 percent of the stolen data on the group’s dark web site, which is accessible to anyone with a TOR browser.

Dark web not readily available to public—really?

Columbus Mayor Andrew Ginther said on August 13 that a “breakthrough” in the city’s forensic investigation of the breach found that the sensitive files Rhysida obtained were either encrypted or corrupted, making them “unusable” to the thieves. Ginther went on to say the data’s lack of integrity was likely the reason the ransomware group had been unable to auction off the data.

Shortly after Ginther made his remarks, security researcher David Leroy Ross contacted local news outlets and presented evidence that showed the data Rhysida published was fully intact and contained highly sensitive information regarding city employees and residents. Ross, who uses the alias Connor Goodwolf, presented screenshots and other data that showed the files Rhysida had posted included names from domestic violence cases and Social Security numbers for police officers and crime victims. Some of the data spanned years.

On Thursday, the city of Columbus sued Ross for alleged damages for criminal acts, invasion of privacy, negligence, and civil conversion. The lawsuit claimed that downloading documents from a dark web site run by ransomware attackers amounted to him “interacting” with them and required special expertise and tools. The suit went on to challenge Ross alerting reporters to the information, which ii claimed would not be easily obtained by others.

“Only individuals willing to navigate and interact with the criminal element on the dark web, who also have the computer expertise and tools necessary to download data from the dark web, would be able to do so,” city attorneys wrote. “The dark web-posted data is not readily available for public consumption. Defendant is making it so.”

The same day, a Franklin County judge granted the city’s motion for a temporary restraining order against Ross. It bars the researcher “from accessing, and/or downloading, and/or disseminating” any city files that were posted to the dark web. The motion was made and granted “ex parte,” meaning in secret before Ross was informed of it or had an opportunity to present his case.

In a press conference Thursday, Columbus City Attorney Zach Klein defended his decision to sue Ross and obtain the restraining order.

“This is not about freedom of speech or whistleblowing,” he said. “This is about the downloading and disclosure of stolen criminal investigatory records. This effect is to get [Ross] to stop downloading and disclosing stolen criminal records to protect public safety.”

The Columbus city attorney’s office didn’t respond to questions sent by email. It did provide the following statement:

The lawsuit filed by the City of Columbus pertains to stolen data that Mr. Ross downloaded from the dark web to his own, local device and disseminated to the media. In fact, several outlets used the stolen data provided by Ross to go door-to-door and contact individuals using names and addresses contained within the stolen data. As has now been extensively reported, Mr. Ross also showed multiple news outlets stolen, confidential data belonging to the City which he claims reveal the identities of undercover police officers and crime victims as well as evidence from active criminal investigations. Sharing this stolen data threatens public safety and the integrity of the investigations. The temporary restraining order granted by the Court prohibits Mr. Ross from disseminating any of the City’s stolen data. Mr. Ross is still free to speak about the cyber incident and even describe what kind of data is on the dark web—he just cannot disseminate that data.

Attempts to reach Ross for comment were unsuccessful. Email sent to the Columbus mayor’s office went unanswered.

As shown above in the screenshot of the Rhysida dark web site on Friday morning, the sensitive data remains available to anyone who looks for it. Friday’s order may bar Ross from accessing the data or disseminating it to reporters, but it has no effect on those who plan to use the data for malicious purposes.

https://arstechnica.com/?p=2046614