Microsoft sues hackers over AI security breach

Microsoft has taken legal action against a group accused of bypassing security measures in its Azure OpenAI Service. A lawsuit filed in December alleges that the unnamed defendants stole customer API keys to gain unauthorised access and generate content that violated Microsoft’s policies. The company claims the group used stolen credentials to develop hacking tools, including software named de3u, which allowed users to exploit OpenAI’s DALL-E image generator while evading content moderation filters.

An investigation found that the stolen API keys were used to operate an illicit hacking service. Microsoft alleges the group engaged in systematic credential theft, using custom-built software to process and route unauthorised requests through its cloud AI platform. The company has also taken steps to dismantle the group’s technical infrastructure, including seizing a website linked to the operation.

Court-authorised actions have enabled Microsoft to gather further evidence and disrupt the scheme. The company says additional security measures have been implemented to prevent similar breaches, though specific details were not disclosed. While the case unfolds, Microsoft remains focused on strengthening its AI security protocols.

Infosys files counterclaim against Cognizant in Texas court

Infosys has filed a counterclaim against Cognizant in a Texas federal court, accusing the US-based technology firm of anti-competitive behaviour. The Indian company alleges that Cognizant included restrictive clauses in client contracts, preventing them from working with rival firms and withholding necessary software training.

The Bengaluru-based software giant also claims Cognizant engaged in targeted poaching of its senior executives. The hiring of former Infosys president S Ravi Kumar as Cognizant’s CEO in 2023 allegedly delayed the development of Infosys’ Helix software product.

Cognizant denied the allegations, stating it supports fair competition but accused Infosys of improperly using its intellectual property. The counterclaim follows a 2023 lawsuit by Cognizant’s subsidiary TriZetto, which accused Infosys of stealing trade secrets related to healthcare insurance software.

Infosys is seeking damages, including legal fees, but did not disclose the amount. The case is being heard in the US District Court for the Northern District of Texas.

Supreme Court weighs TikTok ban amid national security concerns

The US Supreme Court on Friday appeared inclined to uphold a law requiring a sale or ban of TikTok in the United States by January 19, citing national security risks tied to its Chinese parent company, ByteDance. Justices questioned TikTok’s potential role in enabling the Chinese government to collect data on its 170 million American users and influence public opinion covertly. Chief Justice John Roberts and others expressed concerns about China’s potential to exploit the platform, while also probing implications for free speech protections under the First Amendment.

The law, passed with bipartisan support and signed by outgoing President Joe Biden, has been challenged by TikTok, ByteDance, and app users who argue it infringes on free speech. TikTok’s lawyer, Noel Francisco, warned that without a resolution or extension by President-elect Donald Trump, the platform would likely shut down on January 19. Francisco emphasised TikTok’s role as a key platform for expression and called for at least a temporary halt to the law.

Liberal and conservative justices alike acknowledged the tension between national security and constitutional rights. Justice Elena Kagan raised historical parallels to Cold War-era restrictions, while Justice Brett Kavanaugh highlighted the long-term risks of data collection. Solicitor General Elizabeth Prelogar, representing the Biden administration, argued that TikTok’s foreign ownership poses a grave threat, enabling covert manipulation and espionage. She defended Congress’s right to act in the interest of national security.

With global trade tensions and fears of digital surveillance mounting, the Supreme Court’s decision will have wide-ranging implications for technology, free speech, and US-China relations. The court is now considering whether to grant a temporary stay, providing Trump’s incoming administration an opportunity to address the issue politically.

Meta accused of using pirated books for AI

A group of authors, including Ta-Nehisi Coates and Sarah Silverman, has accused Meta Platforms of using pirated books to train its AI systems with CEO Mark Zuckerberg’s approval. Newly disclosed court documents filed in California allege that Meta knowingly relied on the LibGen dataset, which contains millions of pirated works, to develop its large language model, Llama.

The lawsuit, initially filed in 2023, claims Meta infringed on copyright by using the authors’ works without permission. The authors argue that internal Meta communications reveal concerns within the company about the dataset’s legality, which were ultimately overruled. Meta has not yet responded to the latest allegations.

The case is one of several challenging the use of copyrighted materials to train AI systems. While defendants in similar lawsuits have cited fair use, the authors contend that newly uncovered evidence strengthens their claims. They have requested permission to file an updated complaint, adding computer fraud allegations and revisiting dismissed claims related to copyright management information.

US District Judge Vince Chhabria has allowed the authors to file an amended complaint but expressed doubts about the validity of some new claims. The outcome of the case could have broader implications for how AI companies utilise copyrighted content in training data.

Brazil’s Lula criticises Meta’s move to end US fact-checking program

Brazilian President Luiz Inácio Lula da Silva has condemned Meta’s decision to discontinue its fact-checking program in the United States, calling it a grave issue. Speaking in Brasília on Thursday, Lula emphasised the need for accountability in digital communication, equating its responsibilities to those of traditional media. He announced plans to meet with government officials to discuss the matter.

Meta’s recent decision has prompted Brazilian prosecutors to seek clarification on whether the changes will affect the country. The company has been given 30 days to respond as part of an ongoing investigation into how social media platforms address misinformation and online violence in Brazil.

Justice Alexandre de Moraes of Brazil’s Supreme Court, known for his strict oversight of tech companies, reiterated that social media firms must adhere to Brazilian laws to continue operating in the country. Last year, he temporarily suspended X (formerly Twitter) over non-compliance with local regulations.

Meta has so far declined to comment on the matter in Brazil, fueling concerns over its commitment to tackling misinformation globally. The outcome of Brazil’s inquiry could have broader implications for how tech firms balance local laws with global policy changes.

Judge rejects man’s legal battle to recover lost Bitcoin

A High Court judge has dismissed a legal challenge by James Howells, who sought to recover a Bitcoin hard drive worth nearly £600 million from a Newport landfill. Howells claimed his former partner mistakenly discarded the device in 2013 and had repeatedly asked the council for permission to excavate the site. He argued that the lost cryptocurrency should be returned to him or that he should receive £495 million in compensation.

Newport City Council opposed the claim, stating that existing laws meant the hard drive became council property when it entered the landfill. The judge ruled there were no reasonable grounds for the case to proceed, as the claim had no realistic chance of success. Environmental regulations also prohibited digging up the site, which contains more than 1.4 million tonnes of waste.

Howells, who mined the Bitcoin in 2009 when it was virtually worthless, expressed disappointment at the ruling, calling it a “kick in the teeth.” He had offered to share a portion of the recovered cryptocurrency with the council and the local community. With Bitcoin’s value surging in 2024, he speculated that the hard drive’s worth could exceed £1 billion by next year, but the legal route to reclaiming it has now been firmly closed.

Frank McCourt’s Project Liberty proposes TikTok US buyout

Frank McCourt’s Project Liberty, along with a group of partners, has formally proposed a bid to acquire TikTok’s US assets from ByteDance. The consortium announced its intentions just ahead of ByteDance’s January 19 deadline to sell the platform or face a ban under legislation signed by President Joe Biden in April.

The group has gathered sufficient financial backing, including interest from private equity funds, family offices, and high-net-worth individuals, with debt financing from a leading US bank. The proposed value of the deal has not been disclosed.

McCourt stated the goal is to keep TikTok accessible to millions of US users without relying on its current algorithm while preventing a ban. Efforts are underway to engage with ByteDance, President-elect Trump, and the incoming administration to finalise the deal.

EU court orders SNCF to eliminate gender titles in online ticket purchases to comply with privacy regulations

The EU’s highest court ruled today that France‘s railway company SNCF must stop asking customers for their gender titles when purchasing tickets online. This ruling follows a complaint filed by LGBT+ rights group Mousse, which argued that requiring a title like Mr. or Mrs. violated EU privacy laws, specifically the General Data Protection Regulation (GDPR), which mandates data minimisation.

Mousse contended that asking for a title, which reflects a person’s gender identity, was unnecessary and infringed on privacy rights. While SNCF justified the practice of personalising communications and offering services like women-only carriages on night trains, the court disagreed. It concluded that personalising commercial communications based on presumed gender identity was not essential for completing a rail transport contract.

The court’s decision, based on a previous opinion from Advocate-General Maciej Szpunar, allows companies to communicate with customers in a more inclusive, non-gendered manner. Mousse celebrated the ruling as a victory for LGBT+ rights, emphasising its potential to bring wider positive changes for equality across the EU.

Judge allows Google privacy case to proceed to trial

Google will face a class action trial in August after failing to dismiss claims it collected personal data from mobile devices despite users disabling tracking settings. A federal judge rejected the argument that the company clearly disclosed how its Web & App Activity settings worked.

Chief Judge Richard Seeborg ruled that reasonable users could find Google’s data collection practices ‘highly offensive’ since data was collected even after concerns were raised internally about unclear disclosures. He noted internal communications indicating Google deliberately kept details vague to avoid alarming users.

Google denied wrongdoing, stating its privacy controls were long established and accusing the plaintiffs of deliberately misrepresenting its products. The plaintiffs’ lawyers, also involved in a $5 billion privacy settlement against Google last year, did not comment.

The trial, scheduled for 18 August, stems from a July 2020 lawsuit. Google previously faced similar claims when accused of tracking users in Chrome’s ‘Incognito’ mode, leading to a substantial data deletion settlement.

Do Kwon’s trial set for early 2026

Do Kwon, the founder of Terraform Labs, is facing a criminal trial in the US, currently anticipated for early 2026. Prosecutors are dealing with six terabytes of data, encrypted devices, and the need to translate messages from Korean to English, creating significant delays in evidence gathering. District Judge Paul Engelmayer described the extended schedule as unprecedented in his 15 years on the bench.

Kwon denies the nine charges against him, which include securities fraud and money laundering conspiracies related to the $60 billion collapse of the Terra/Luna ecosystem in 2022. The incident impacted over 1 million investors. In a separate civil fraud lawsuit, a New York jury ordered Terraform Labs to cease operations and pay $4.5 billion in fines.

Extradited from Montenegro after 22 months in custody, Kwon has financed his legal defence with $200 million. His lawyers have until next week to request an earlier trial date, with the next hearing scheduled for 6 March.