Business and Technology
Tik Tok Settlement Allows Opt-Outs
In a boon for consumers, the judge overseeing a $92 million class action settlement of claims that TikTok Inc improperly harvested users’ private data ruled on Thursday that 851 class members can opt out of the deal, despite TikTok’s claims that the opt-outs were improperly solicited.
Some members of the privacy class-action lawsuit against China's social media company believe they can recover more from TikTok in individual arbitration -- and Thursday’s ruling from U.S. District Judge John Lee of Chicago means that 851 of them can attempt to do just that.
About 1.2 million TikTok users submitted claims, according to Thursday’s decision, out of an estimated 89 million TikTok users in the class, for an overall claims rate of 1.4%. (The claims rate was higher, 13%, for a subclass of Illinois residents who alleged violations of the state’s biometric privacy law.)
Judge Lee granted final approval to the $92 million nationwide settlement with video sharing service TikTok and its parent, ByteDance Inc, on Thursday. The judge also awarded about $29 million in fees to class counsel from Lynch Carpenter; Bird Marella Boxer Wolpert Nessim Drooks Lincenberg & Rhow; FeganScott and a host of other plaintiffs' firms that did work for the class that launched the suit.
TikTok has denied harvesting biometric data at all and has said it did not compromise users' privacy.
A handful of plaintiffs' firms had objected to the deal’s stringent rules for opt-outs, arguing that law firms should instead be permitted to opt out their clients en masse, via a single electronic filing, rather than advising their clients to complete, sign and submit individual opt-out forms. Lee nixed that request.
Tik Tok defense lawyers at Wilson, Sonsini, Goodrich, & Rosati had argued that the plaintiffs' firms had improperly solicited clients with deceptive ads, then used internet technology to obtain electronic “signatures” from potentially unwitting class members.
“This technology does not change the fact that these firms are still soliciting and submitting opt-out requests en masse to disrupt the court-approved settlement,” the TikTok brief argued. “All of the same concerns discussed with traditional mass opt-outs still apply to these mass-auto-generated individual electronic opt-outs.”
But the TikTok opt-out plaintiffs’ firms said their situation is not analogous. In a strong response to TikTok, they said they didn’t use deceptive ads – and that if anyone is being deceptive, it’s TikTok, which accused them of running one ad they had nothing to do with and claiming another solicitation was misleading when, in fact, it contained no misrepresentations.
TikTok’s “speculative and unprofessional attacks,” the plaintiffs' firms said, were really just an attempt to stymie class members trying to exercise their contractual right to arbitrate. “In TikTok’s view, absentee class members not only should be deprived of their due process rights to opt out, they also lose a right to hire counsel,” the brief said. “This position is contrary to the law, ethics and reason.”
TikTok lawyer Tony Weibell of Wilson Sonsini declined to provide a statement on the opt-out issue. Opt-out lawyers Yana Hart of Clarkson, Michael Kind of Kind Law and Joshua Swigart didn’t respond to email requests for comment.
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The UN Warns that High Interest Rates Impedes Innovation
GENEVA - Funding of innovation is becoming increasingly uncertain, with high interest rates taking a toll on the amounts venture capitalists are willing and able to dish out, the UN said Wednesday.
In a fresh report, the UN's World Intellectual Property Organization (WIPO) found that 2022 was marked by swelling government and company spending on research and development, especially in areas like artificial intelligence and biotech.
But at the same time, the global value of the venture capital (VC) funding that helps transform ideas and inspiration into products and services plunged 40 percent, and is continuing to fall.
"There has been a drop in the investment environment," WIPO chief Daren Tang told reporters in a virtual briefing.
"Venture capital funding is becoming more and more scarce."
The drop last year came after a dramatic surge in such funding in 2021, as the pandemic spurred spending in new areas and in regions that do not usually receive a large share of such investments.
But the funding levels have not just evened out. Sacha Wunsch-Vincent, co-author of the report, said the decline had continued, with a 47-percent drop seen in the first half of 2023 compared to 2022.
"This is only the tip of the iceberg," he told reporters.
- 'End of cheap money' -
Pointing to "a harsher investment conditions," including slow economic recoveries and geopolitical tensions, he warned the current high interest rates especially "endanger the future of innovation."
"Borrowing isn't free anymore. It's really the end of cheap money."
At the same time, WIPO stressed that the picture for innovation was mixed, with 2022 also marked by a significant rise in R&D spending by corporations, to a record high of $1.1 trillion.
And preliminary data indicated that global government R&D budgets increased in real terms last year.
Patents also continued to rise, and while the value of VC funding dropped, the number of VC deals actually swelled, the report showed.
That boom was fuelled in part by activities in the field of artificial intelligence, Wunsch-Vincent said.
Information communication technology companies "were already spending a lot of money, ... but are now almost in an arms race for more spending on AI," he said, also highlighting spending in pharma, biotech and construction.
A number of sectors that cut spending during the pandemic had meanwhile seen spending bounce back, including automobiles.
- 'More diverse' -
Wednesday's report also comprised the UN agency's annual ranking of the world's most innovative countries, with Switzerland topping the list for the 13th year running.
But the Global Innovation Index 2023 showed that the innovation economy, long heavily concentrated in North America and Western Europe, is diversifying.
"It is getting more diverse, there are more engines of innovation around the world," Tang said.
The top 10 list still includes mainly Western countries, with the exception of Singapore in fifth position, and South Korea in tenth.
The United States slipped to third position, with Sweden now in second, and Britain remaining in fourth.
China meanwhile dipped slightly from 11th to 12th place, but from 35th a decade ago.
China figures among the middle-income countries that have climbed the ranking the fastest in the past decade, alongside the likes of Turkey, India and Iran.
Since the pandemic started four years ago, Mauritius, Indonesia, Saudi Arabia, Brazil and Pakistan have meanwhile risen most, WIPO said.
While the value of VC funding shrank last year, Wunsch-Vincent meanwhile said it was positive that the investments remained spread out geographically, and had not shrunk back to simply focus on the traditional centers of innovation.
Africa was the only region that did not see a decline in the value of VC funding last year, he said.
Nigeria's Tinubu Advances Domestic Reform, Regional Role
LAGOS — Just a month in power, President Bola Ahmed Tinubu has already received foreign entrepreneurs and investors at his villa, telling them Nigeria is open for business after a flurry of surprise economic reforms.
The former Lagos governor added a diplomatic step this week, becoming chairman of the West Africa bloc, Economic Community of West Africa States, ECOWAS, with a call for more democracy and cooperation in the region wracked by coups and jihadists.
Tinubu, 71, has made a swift start, defying critics fearful of his health and appearing determined to propel Africa's most populous nation "Nigeria, we are back," he said, accepting the rotating presidency of 15-member ECOWAS in Guinea Bissau.
His financial overhaul — floating the naira currency and ending a fuel subsidy — and the push to promote Nigeria's global role broke from former president Muhammadu Buhari's more low-key approach.
Supporters see the man known as the "Godfather of Lagos" for his political acumen bringing his experience to the regional stage.
"Everybody is looking up to Nigeria, especially in Africa and the ECOWAS region and President Tinubu is ready to take up the gauntlet," Dele Alake, a government spokesman, said.
But while business chiefs from Bank of America to Shell and Western partners lined up to praise Tinubu for his swift reforms, the Nigerian leader still must tackle vast domestic financial difficulties.
Elected in February in a highly contested vote, Tinubu last month acknowledged his early policies caused short-term pain for Nigerians with higher fuel, transport and food costs.
And while he pushes Nigeria's role as a regional heavyweight in West Africa, at home his own country struggles with huge security challenges.
"It interesting to see Tinubu's international focus, the key risk is being seen as a paper tiger," said Cheta Nwanze, partner at SBM Intelligence, a Nigerian risk advisory.
"Only Nigeria is in the position to corral the region, but it will be difficult for Nigeria to do that when the homefront is still a mess."
The continent's biggest economy and a top oil producer, Nigeria has always been a regional player, sending troops on peacekeeping missions and offering leadership in multilateral African organizations.
Under Tinubu's predecessor, former army commander Buhari, Nigeria dislodged jihadists from the northeastern areas they once controlled, helped by troops from neighboring Chad. But critics say eight years of his unorthodox economics deterred investors while massive theft of oil undermined the petroleum sector.
Nicknamed "Baba Go-Slow" by critics, Buhari also mostly kept a lower profile on the global stage.
"Nigeria's leadership role within the West African sub-region has declined a little during Buhari's tenure due to a number of reasons including some policy decisions," said Professor Kabiru Sufi, public affairs senior lecturer at Kano College.
"I believe Tinubu stands a chance to redeem Nigeria's standing and status. His recent election as ECOWAS chairman is a good start."
But the ECOWAS region is in a delicate spot. Three member states are now governed by military juntas after coups and jihadists control large parts of Burkina Faso. Facing a wave of anti-French sentiment, France has also withdrawn its military presence from Mali, Burkina and Central African Republic.
Even before he turns his attention outward, Tinubu faces enough challenges at home.
Beyond the 14-year jihadist conflict, insecurity has spread to many parts of Nigeria, where bandits carry out mass kidnappings, intercommunal attacks destroy villages and separatist tensions simmer in the southeast.
The economic outlook is equally as complex. Tinubu quickly reversed some of Buhari's economic policies, ending a costly fuel subsidy meant to keep petrol prices low and lifting controls on the naira currency.
"We are excited with the new government, some of the early decisions they have taken," Bank of America international executive Bernard Mensah told reporters in Nigeria this month, echoing other multinationals visiting Tinubu.
But, already hit hard by inflation, Nigerians now must deal with a naira devalued 40% and tripled fuel prices biting into their family budgets.
About 40% of Nigerians or nearly 83 million people already live below the poverty line, according to the World Bank.
In a report, the bank welcomed Tinubu's early reforms as "timely and crucial," but called for more social programs to shield the most vulnerable.
"Without compensation, many households could be pushed into poverty," it warned.
Along with the fuel subsidy and forex controls, public debt is also a risk. Last year, Nigeria spent 96% of its revenues on debt servicing alone, according to SBM.
"Removing the fiscal and monetary distorters of fuel and FX subsidies are the first two crucial things," its report said. "Right behind these two is the matter of debt management."
Global Shipping Aims to Cut Carbon Emissions
LONDON — The International Maritime Organization, overseer of the highly-polluting shipping industry, has agreed to improve on its target to cut carbon emissions, according to a draft agreement seen July 7 by AFP.
The latest carbon reduction agreement comes at the end of a five-day meeting at the International Maritime Organization's headquarters in London.
The gathering of the IMO's Marine Environment Protection Commission pitted climate-vulnerable nations - particularly islands in the Pacific - and richer countries against big exporters such as China.
The vast majority of the world's 100,000 cargo ships - which carry 90 percent of the world's goods - are powered by highly-polluting diesel.
Shipping, which is responsible for around three percent of global greenhouse gas emissions according to the U.N., is judged to be off course in the fight against climate change.
Compared with 2008 levels, the United Nations' global shipping regulator has agreed to cut total annual emissions of greenhouse gases "by at least 20 percent, striving for 30 percent, by 2030" and "by at least 70 percent, striving for 80 percent, by 2040."
The current target was a 50-percent reduction by mid-century, compared with 2008.
Shipping emits roughly the same level of greenhouse gases as aviation, which is aiming for net zero by 2050.
Environmental campaigners on July 3 protested outside the IMO's headquarters at the start of the group's meeting..
Several dozen activists, including some dressed as jellyfish, urged greener freight to help tackle climate change and protect the oceans.
Student Private Data Exposed By Ransomware Operators
WASHINGTON — Ransomware gangs have been stealing confidential documents from schools and dumping them online. The documents describe student sexual assaults, psychiatric hospitalizations, abusive parents — even suicide attempts. U.S. schools are now prime targets for far-flung criminal hackers.
The confidential documents stolen from schools and dumped online by ransomware gangs are raw, intimate and graphic. They describe student sexual assaults, psychiatric hospitalizations, abusive parents, truancy — even suicide attempts.
“Please do something,” begged a student in one leaked file, recalling the trauma of continually bumping into an ex-abuser at a school in Minneapolis. Other victims talked about wetting the bed or crying themselves to sleep.
Complete sexual assault case folios containing these details were among more than 300,000 files dumped online in March after the 36,000-student Minneapolis Public Schools refused to pay a $1 million ransom. Other exposed data included medical records, discrimination complaints, Social Security numbers and contact information of district employees.
Rich in digitized data, the nation’s schools are prime targets for far-flung criminal hackers, who are assiduously locating and scooping up sensitive files that not long ago were committed to paper in locked cabinets. “In this case, everybody has a key,” said cybersecurity expert Ian Coldwater, whose son attends a Minneapolis high school.
Often strapped for cash, districts are grossly ill-equipped not just to defend themselves but to respond diligently and transparently when attacked, especially as they struggle to help kids catch up from the pandemic and grapple with shrinking budget.
Months after the Minneapolis attack, administrators have not delivered on their promise to inform individual victims. Unlike for hospitals, no federal law exists to require this notification from schools.
The lasting legacy of school ransomware attacks, it turns out, is not in school closures, recovery costs or even soaring cyberinsurance premiums. It is the trauma for staff, students and parents from the online exposure of private records — which the AP found on the open internet and dark web.
Taking the situation in perspective, analyst Brett Callow of the cybersecurity firm Emsisoft said “A massive amount of information is being posted online, and nobody is looking to see just how bad it all is. Or, if somebody is looking, they’re not making the results public.”
US Regulators Demand Details on Tesla's 'Autopilot'
NEW YORK — U.S. auto safety regulators have demanded additional information about Tesla's Autopilot, threatening civil penalties on the automaker for inadequate response, according to a document request reviewed July 6 by AFP.
The information request from the National Highway Traffic Safety Administration, filed July 3, seeks more details about Tesla's modifications to the driver-assistance system, which has been probed by the agency since 2021 over its safety record.
"Failure to respond promptly and fully" could lead to civil penalties of up to $26,315 per violation per day for a maximum of $131.6 million, said the letter from Tanya Topka, acting director of the Office of Defects Investigation, which set July 19 as a deadline.
NHTSA launched the probe in August 2021 following a series of accidents involving Autopilot and emergency vehicles. After the initial inquiry, the agency expanded the investigation in June 2022.
The probe "aims to explore the degree to which Autopilot and associated Tesla systems may exacerbate human factors or behavioral safety risks by undermining the effectiveness of the driver's supervision," NHTSA has said.
In the July 3 letter to Tesla Director of Field Quality, Eddie Gates, Topka asked for "all modifications or changes" from the start of production for vehicles produced between 2014 and 2023.
This includes: the date of the modification; the reason for the change; and the primary means of distribution and whether the change required personal servicing.