Consumer protection

US regulator escalates complaint against Snap

The United States Federal Trade Commission (FTC) has referred a complaint about Snap Inc’s AI-powered chatbot, My AI, to the Department of Justice (DOJ) for further investigation. The FTC alleges the chatbot caused harm to young users, though specific details about the alleged harm remain undisclosed.

Snap Inc defended its chatbot, asserting that My AI operates under rigorous safety and privacy measures and criticised the FTC for lacking concrete evidence to support its claims. Despite the company’s reassurances, the FTC stated it had uncovered indications of potential legal violations.

The announcement impacted Snap’s stock performance, with shares dropping by 5.2% to close at $11.22 on Thursday. The US FTC noted that publicising the complaint’s transfer to the DOJ was in the public interest, underscoring the gravity of the allegations.

China denies forcing firms to share user data

The Chinese government “has never and will never” require companies or individuals to collect or transfer data in ways that violate the law, China’s foreign ministry declared on Friday. The statement was issued in response to a privacy complaint filed by Austrian advocacy group Noyb, which accuses six Chinese companies, including TikTok, Shein, and Xiaomi, of unlawfully sending European Union user data to China.

Noyb, an organisation focused on data protection and privacy rights, alleges that the companies breached the EU’s General Data Protection Regulation (GDPR) by transferring user data without proper safeguards. The complaint has sparked concerns in Europe about how personal information is handled by Chinese firms operating within the EU. If proven, the violations could result in significant fines and further scrutiny of these companies.

In defending the nation’s stance, a foreign ministry spokesperson emphasised that China operates within the bounds of international laws and rejects any claims of illegal data practices. “China strictly upholds its legal and regulatory framework and will never engage in or endorse actions that violate laws regarding data collection or transfer,” the spokesperson said. The spokesperson also criticised what they described as “unfounded accusations” aimed at tarnishing Chinese businesses.

This case is the latest in a series of global concerns about data privacy and the practices of technology firms. It underscores the growing tension between nations over data security, cross-border data flows, and regulatory compliance, particularly as Chinese companies expand their presence in foreign markets. The outcome of Noyb’s complaint could have far-reaching implications for data governance and corporate practices in both Europe and China.

Chinese tech company Zhipu questions US trade ban

Beijing-based AI company Zhipu Huazhang Technology has opposed the US government’s plan to add it to the export control entity list. The company argues the decision lacks a factual basis.

Zhipu issued a statement on its official WeChat account expressing strong opposition to the move. The firm criticised the US commerce department’s intentions, insisting the decision was unjustified.

Zhipu and its subsidiaries face restrictions on accessing US technologies if added to the list. The company maintains it operates lawfully and transparently in its business practices.

The US has been increasing scrutiny on Chinese technology firms, citing national security concerns. Zhipu emphasised its commitment to responsible technology development and cooperation with global partners.

Noyb challenges Chinese data practices in Europe

Austrian advocacy group Noyb has filed privacy complaints against six Chinese companies, including TikTok, Shein, and Xiaomi, alleging illegal transfers of European user data to China. The group, known for targeting US tech giants like Apple and Meta, said this is its first case against Chinese firms. Complaints have been filed in four EU countries, seeking fines of up to 4% of each company’s global revenue.

Noyb claims that companies such as Alibaba’s AliExpress and Tencent’s WeChat transfer EU citizens’ data either directly to China or undisclosed ‘third countries,’ which are likely China. Under EU data protection laws, such transfers are prohibited if the destination country fails to meet the bloc’s strict privacy standards. A Noyb lawyer emphasised that China’s status as a ‘surveillance state’ makes such transfers clearly unlawful.

The allegations add to mounting regulatory challenges for Chinese tech firms. TikTok, already under scrutiny in Europe for election interference concerns, faces a potential US ban starting Sunday over national security fears. Regulators in multiple regions continue to ramp up pressure on Chinese companies amid growing global concerns over data privacy and security.

TikTok prepares for possible US shutdown

TikTok is preparing to shut down its US operations on Sunday unless a federal ban is averted at the last minute, according to sources. The ban, stemming from a law signed last April, requires TikTok’s Chinese parent company, ByteDance, to sell its US assets by January 19 or face nationwide restrictions. The Supreme Court is currently deliberating on whether to uphold or pause the ban, but no ruling has been made yet.

President-elect Donald Trump, set to take office the day after the ban would take effect, is reportedly considering a temporary suspension of the shutdown. However, legal uncertainty clouds the possibility of such action. Meanwhile, the Biden administration, in its final days, has signalled it will not block the ban without a credible divestment plan from ByteDance. TikTok has argued that the law violates First Amendment rights and warned that a prolonged ban could lead to significant user loss and global disruptions to its services.

If the ban proceeds, TikTok plans to display a pop-up message informing users of the shutdown and allow them to download their data. The app would become largely inoperable as US companies would no longer be permitted to provide critical services for its maintenance. TikTok has emphasised its ability to restore operations quickly if the ban is reversed but warned that the shutdown would impact not just American users but its global platform due to its reliance on US-based infrastructure.

The political and legal standoff has sparked widespread public and corporate reactions. Social media users have expressed disappointment at the impending ban, while TikTok’s US operations, employing over 7,000 workers, hang in the balance. Despite ongoing efforts to delay the enforcement, the platform faces an uncertain future as Sunday’s deadline looms.

Apple and Amazon avoid UK lawsuit over reseller dispute

Apple and Amazon have successfully defeated a UK lawsuit accusing them of colluding to remove resellers of Apple products from Amazon’s platform. The Competition Appeal Tribunal ruled on Tuesday that the case, valued at £494 million, could not proceed.

Consumer law expert Christine Riefa had filed the lawsuit on behalf of around 36 million British consumers who purchased Apple or Beats products. Her legal team alleged the companies agreed in 2018 to block most resellers from Amazon’s UK marketplace, limiting competition for those products.

The tribunal rejected the case, citing Riefa’s failure to prove sufficient independence and robustness to represent the claimant class, particularly concerning third-party litigation funding. Apple and Amazon had previously argued the lawsuit lacked merit and requested its dismissal.

Riefa’s legal team and representatives for Apple and Amazon did not respond to requests for comment following the tribunal’s decision.

US Supreme Court to hear challenge to Texas pornography age verification law

The US Supreme Court will hear a challenge on Wednesday regarding a Texas law that mandates adult websites verify the age of users before granting access to potentially harmful material. The law, which is part of a broader trend across Republican-led states, requires users to submit personal information proving they are at least 18 years old to access pornographic content. The case raises significant First Amendment concerns, as adult entertainment industry groups argue that the law unlawfully restricts free speech and exposes users to risks such as identity theft and data breaches.

The challengers, including the American Civil Liberties Union and the Free Speech Coalition, contend that alternative methods like content-filtering software could better protect minors without infringing on adults’ rights to access non-obscene material. Texas, however, defends the law, citing concerns over the ease with which minors can access explicit content online.

This case is significant because it will test the balance between state efforts to protect minors from explicit content and the constitutional rights of adults to access protected expression. If the Supreme Court upholds the law, it could set a precedent for similar age-verification measures across the US.

Meta faces new challenge in India over data sharing

Meta may be forced to halt or modify features in India after an antitrust ruling banned its WhatsApp messaging service from sharing user data with Meta for advertising purposes. The Competition Commission of India (CCI) imposed a $24.5 million fine and a five-year ban on the practice, accusing the company of abusing its dominance and coercing WhatsApp users into accepting a 2021 privacy policy that allegedly expanded data sharing unfairly.

India, Meta’s largest market with over 500 million WhatsApp users and 350 million Facebook users, is crucial for the company’s operations. The data-sharing ban could impact Meta’s ability to offer personalised ads on Facebook and Instagram, the company said in its court filing. Meta argued that this restriction could harm businesses, such as fashion brands, that rely on personalised ads to connect with customers. The US firm also warned the ruling could threaten its commercial viability in the region.

Meta has publicly defended its 2021 policy changes but criticised the CCI’s decision in a 2,000-page tribunal appeal, claiming the watchdog lacks the technical expertise to assess the implications of its ruling. The Indian appeals tribunal is set to hear Meta’s case, with the possibility of pausing the CCI directive while the legal process unfolds.

This challenge in India adds to Meta’s global struggles, including prior accusations in the EU over unclear privacy policy changes. The CCI’s ruling now requires WhatsApp to give users the choice to opt out of data sharing with Meta, signaling a broader push for greater transparency and user control in data practices worldwide.

SEC takes legal action against Musk for Twitter shares

The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of delaying the disclosure of his 2022 Twitter stake, which violated federal securities laws. According to the complaint, Musk waited 11 days beyond the required 10-day window to reveal his 5% ownership of Twitter, enabling him to purchase over $500 million worth of shares at lower prices before disclosing his 9.2% stake on April 4, 2022. Twitter’s stock price surged by more than 27% following the announcement.

The SEC seeks civil penalties and a repayment of profits it claims Musk gained unfairly. Musk’s attorney, Alex Spiro, dismissed the lawsuit as a ‘sham,’ arguing it stems from a minor administrative oversight. Musk has previously clashed with the SEC, including a 2018 settlement over misleading tweets about taking Tesla private, which resulted in a $20 million fine and other conditions.

This lawsuit is the latest in a series of legal challenges Musk faces over his $44 billion purchase of Twitter, now rebranded as X. Musk, who is worth $417 billion, according to Forbes, has also been sued by former Twitter shareholders in Manhattan federal court for the delayed disclosure, which they claim caused them financial harm. The SEC’s action comes just days before Chair Gary Gensler’s scheduled departure, marking another chapter in Musk’s contentious history with the regulatory body.

Indonesia targets age limits for social media access

Indonesia plans to implement interim guidelines to protect children on social media as it works toward creating a law to establish a minimum age for users, a senior communications ministry official announced on Wednesday. The move follows discussions between Communications Minister Meutya Hafid and President Prabowo Subianto, aiming to address concerns about online safety for children.

The proposed law will mirror recent regulations in Australia, which banned children under 16 from accessing social media platforms like Instagram, Facebook, and TikTok, penalising tech companies that fail to comply. In the meantime, Indonesia will issue regulations requiring platforms to follow child protection guidelines, focusing on shielding children from harmful content while still allowing access to some degree.

Public opinion on the initiative is divided. While parents like Nurmayanti support stricter controls to reduce exposure to harmful material, human rights advocates, including Anis Hidayah, urge caution to ensure children’s access to information is not unduly restricted. A recent survey revealed nearly half of Indonesian children under 12 use the internet, with many accessing social media platforms such as Facebook, Instagram, and TikTok.

This regulatory push reflects Indonesia’s broader efforts to balance digital innovation with safeguarding younger users in its rapidly growing online landscape