Jurisdiction

California’s AI bill nears final decision

California’s contentious AI safety bill, SB 1047, has passed the state legislature and now awaits Governor Gavin Newsom’s decision. The bill mandates safety testing for advanced AI models and requires developers to implement a kill switch, which has sparked intense debate among tech companies and lawmakers. Proponents argue that the legislation is crucial for public safety, while critics, including some major tech firms and Democrats, fear it could stifle innovation and drive AI companies out of California.

Elon Musk, CEO of Tesla and AI firm xAI, supports the bill, while other tech giants like Google, Microsoft-backed OpenAI, and Meta have voiced their concerns. The bill empowers the state attorney general to sue non-compliant developers, particularly if AI threatens critical infrastructure. It also demands third-party audits and whistle-blower protections to prevent AI abuses.

State Senator Scott Wiener, the bill’s author, argues that the legislation is necessary to safeguard the public as AI technology rapidly advances. However, opposition from various quarters, including venture capitalists like Martin Casado of Andreessen Horowitz, highlights the broad and bipartisan concerns surrounding the bill.

Governor Newsom has until 30 September to decide whether to sign the bill into law or veto it, which will have significant implications for AI development in California.

Pavel Durov under formal investigation in France for alleged organised crime activities

Telegram founder Pavel Durov is under formal investigation in France for his alleged involvement in organised crime activities facilitated through the messaging platform. A French judge granted Durov bail on Wednesday, requiring him to pay €5 million, police report twice weekly, and remain within French territory. Durov’s legal troubles stem from accusations that Telegram has been complicit in enabling illicit activities such as child exploitation, drug trafficking, and fraud, as well as refusing to cooperate with authorities.

Durov was initially arrested at a Paris airport on Saturday, sparking significant debate about the balance between free speech and law enforcement. The French authorities’ move to formally investigate Durov highlights ongoing concerns about Telegram’s role in criminal activities and its lack of cooperation with judicial requests. The investigation began in February and is part of a broader effort by European law enforcement to hold tech platforms accountable for illegal activities.

The situation has strained diplomatic relations between France and Russia. Russian officials, including Foreign Minister Sergei Lavrov, have criticised France’s actions, while the Kremlin has offered support to Durov due to his Russian citizenship. However, Durov’s multiple citizenships, including French and UAE, complicate the situation.

Telegram CEO’s lawyer dismissed probe as absurd..

Durov’s lawyer, David-Olivier Kaminski, strongly dismissed the accusations as ‘totally absurd,’ arguing that Durov cannot be held responsible for criminal acts committed by users. The case has sparked a broader debate on the responsibilities of tech companies in moderating content and the balance between freedom of speech and legal enforcement.

Telegram, known for its commitment to free speech and privacy, has faced criticism for being a platform where extremist groups, conspiracy theorists, and political dissidents can operate with little oversight. Despite these concerns, Telegram has defended its moderation practices, stating that they comply with the EU laws and are continually improving.

French President Emmanuel Macron, an active Telegram user who granted Durov French citizenship in 2021, has insisted that the legal actions against Durov are not politically motivated. As the investigation continues, it will test the limits of free speech and the responsibility of tech companies in the digital age.

French Ministry of Justice weighs charges against Telegram CEO

French Ministry of Justice is weighing Pavel Durov’s charges to decide whether he will be placed under formal investigation following his recent arrest as part of a probe into organised crime on the messaging platform. Durov, who was detained on Saturday evening after landing at a Paris airport on a private jet, now faces scrutiny over the potential criminal liability of app providers and the broader debate about the balance between freedom of speech and law enforcement.

Telegram boasts nearly 1 billion users and is particularly popular in Russia, Ukraine, and former Soviet republics. Being placed under formal investigation in France does not imply guilt but signals that judges believe sufficient evidence exists to continue the probe. Such investigations can take years to either go to trial or be shelved. If Durov is formally investigated, judges will also consider whether he should be placed in pretrial detention, mainly if there is concern he might flee.

Currently, the broader investigation is focused on unidentified individuals and examines allegations including facilitating illicit transactions, possession of child sexual abuse material, drug trafficking, fraud, withholding information from authorities, and providing cryptographic services to criminals. The prosecutor’s office has not clarified which specific charges, if any, Durov might face and declared that an update on the investigation is expected soon.

Durov’s French lawyer has not responded to repeated requests for comment. His arrest has exacerbated tensions between Russia and France, especially given France’s support for Ukraine in its ongoing conflict with Russia. President Emmanuel Macron has officially stated that the arrest was not politically motivated.

Durov has been in police custody since his arrest on Saturday and can be held for a maximum of 96 hours, or four days before judges must decide whether to proceed with a formal investigation.

Dutch Watchdog fines Uber €290 million for data transfer violations

American multinational transportation company Uber faces a significant penalty of €290 million in the Netherlands for transferring the personal data of European taxi drivers to the United States. The Dutch Data Protection Authority (DPA) ruled that the ride-hailing company violated the General Data Protection Regulation (GDPR) by failing to safeguard the data appropriately. Data transfer to the US was deemed a serious breach of the EU privacy laws.

Uber, which has halted the practice, plans to appeal the fine, arguing that its data transfer process complied with GDPR during legal uncertainty between the EU and the US. The appeal process could extend over four years, during which any fines will be suspended.

The case originated from a complaint by a French human rights organisation on behalf of over 170 taxi drivers in France. Although the complaint was initially filed with France’s national data protection regulator, CNIL, it was forwarded to the Dutch DPA because Uber’s European headquarters is in the Netherlands.

Earlier this year, Uber was also fined €10 million by the DPA for other privacy infringements involving its drivers’ data. These fines reflect increasing scrutiny over how global tech companies handle sensitive data across borders.

Zuckerberg alleges Biden admin pressured Meta on COVID censorship

Meta Platforms CEO Mark Zuckerberg has disclosed in a recent letter that senior Biden administration officials pressured his company to censor COVID-19 content during the pandemic. The letter, sent on 26 August to the US House Judiciary Committee, reveals Zuckerberg’s regret over not publicly addressing this pressure sooner and his acknowledgement of questionable content removal decisions made by Meta.

You can read the letter by clicking on X post

Zuckerberg detailed in the letter that, in 2021, the White House and other Biden administration officials exerted considerable pressure on Meta to suppress certain COVID-19-related content, including humour and satire. According to Zuckerberg, this pressure led to frustration when Meta did not fully comply.

The letter, which the Judiciary Committee on Facebook shared, highlights Zuckerberg’s criticism of the government’s actions. He expressed regret for not being more vocal about the situation and reflected on the decisions made with the benefit of hindsight.

The White House and Meta have not commented on the matter outside regular business hours. The Judiciary Committee, led by Chairman Jim Jordan, has labelled the letter a ‘big win for free speech,’ noting Zuckerberg’s admission that Facebook censored some content.

Additionally, Zuckerberg announced that he would refrain from contributing to electoral infrastructure for the upcoming presidential election. The approach follows his controversial $400 million donation in 2020 through his Chan Zuckerberg Initiative, which faced criticism and legal challenges from some groups who perceived it as partisan.

Elon Musk pushes for AI safety law in California

Elon Musk has urged California to pass the AI bill requiring tech companies to conduct safety testing on their AI models. Musk, who owns Tesla and the social media platform X, has long advocated for AI regulation, likening it to rules for any technology that could pose risks to the public. He specifically called for the passage of California’s SB 1047 bill to address these concerns.

California lawmakers have been busy with AI legislation, attempting to introduce 65 AI-related bills this season. These bills cover a range of issues, including ensuring algorithmic fairness and protecting intellectual property from AI exploitation. However, many of these bills have yet to advance.

On the same day, Microsoft-backed OpenAI supported a different AI bill, AB 3211, which requires companies to label AI-generated content, particularly in light of growing concerns about deepfakes and misinformation, especially in an election year.

The push for AI regulation comes when countries representing a broader portion of the global population are holding elections, raising concerns about the potential impact of AI-generated content on political processes.

Pavel Durov detained in France amid crime probe

According to French authorities, Pavel Durov, the founder of the messaging app Telegram, was detained in France as part of an ongoing investigation into several serious crimes, including child pornography, drug trafficking, and fraud. The arrest occurred at Le Bourget airport near Paris, and French President Emmanuel Macron later confirmed the news, stressing that the arrest was not politically motivated.

The arrest is tied to an investigation launched in July by the Paris prosecutor’s office, focusing on Telegram’s alleged role in facilitating illegal activities, including running an online platform for illicit transactions and refusing to provide information to authorities. The probe also includes allegations of money laundering and giving cryptographic services to criminals. Durov, who holds several citizenships, including the French, could be detained further as the investigation progresses.

Telegram, which boasts nearly a billion users worldwide and is especially popular in Russia and Ukraine, responded by stating that it complies with the EU laws and maintains industry-standard moderation practices.

The company dismissed claims that the platform or Durov himself was responsible for criminals’ app misuse.

On the other side, the Kremlin has expressed concerns that France’s accusations against Telegram founder Pavel Durov could be an attempt to limit freedom of communication unless supported by substantial evidence. Kremlin spokesperson Dmitry Peskov announced that Russia is prepared to assist Durov due to his Russian citizenship, though his French citizenship presents additional challenges. Peskov emphasised that the gravity of the charges requires equally serious evidence to avoid perceptions of an effort to curtail communication freedoms.

Peskov also suggested that the case might be used to intimidate a prominent business leader and questioned French President Emmanuel Macron’s assertion that Durov’s detention was free from political motives. Russia has previously faced challenges in blocking Telegram and has fined the company for not removing content it deemed illegal.

The UAE has also called for clearer information about the arrest and investigation. The UAE’s Ministry of Foreign Affairs indicated that it is closely monitoring Pavel Durov’s case and has requested the French government to urgently provide consular services. The ministry emphasized prioritising its citizens’ care, safeguarding their interests, and ensuring comprehensive support are key commitments for the UAE.

Ultimately, Elon Musk confronted Emanuel Macron by responding directly to his post on X, claiming that ‘It would be helpful to the global public to understand more details about why he was arrested’, as he described it as an attack on free speech.

Amazon faces renewed antitrust lawsuit as Washington, DC appeals court reinstates case

A Washington, DC, appeals court has revived a lawsuit against Amazon, claiming that the company’s pricing policies stifle competition. The District of Columbia had initially filed the lawsuit in May 2021, accusing Amazon of restricting third-party sellers from offering lower prices on other platforms and maintaining agreements with wholesalers that discourage price reductions. The lawsuit alleges that these practices harm competition and lead to higher prices for consumers.

The DC Court of Appeals reversed a previous ruling that dismissed the case, stating that the claims made by the DC Attorney General were plausible and could proceed. The lawsuit is part of a broader legal challenge, as Amazon also faces similar accusations from the US Federal Trade Commission and several states.

Amazon has defended its policies, arguing that they benefit consumers by ensuring competitive pricing. However, DC Attorney General Brian Schwalb has welcomed the court’s decision, reaffirming his commitment to fighting what he describes as Amazon’s unfair practices that limit innovation and choice in online retail.

Hybrid work powers Zoom’s revenue growth

Zoom has raised its annual revenue forecast, driven by increasing demand for AI-powered collaboration tools in hybrid work environments. The video-conferencing company has been focusing on integrating AI into its products, which has contributed to its financial success. A key highlight was the success of Zoom Contact Center, a platform that secured several major clients in the second quarter.

Large accounts generating over $100,000 in trailing 12-month revenue saw a notable increase of 7.1%, with average monthly churn rates reaching an all-time low. Industry experts believe Zoom’s continued innovation and product expansion are crucial for sustaining growth beyond its pandemic-era success. However, the company will face challenges in maintaining this momentum.

Zoom also announced that CFO Kelly Steckelberg will be stepping down after the company reports its earnings for the quarter ending 31 October. Steckelberg, who has been with Zoom since 2017 and led its IPO in 2019, will be succeeded by a new CFO, as the search for her replacement is underway.

For fiscal 2025, Zoom now expects revenue between $4.63 billion and $4.64 billion, slightly above previous estimates. The company’s second-quarter revenue of $1.16 billion surpassed expectations, as did its adjusted earnings of $1.39 per share.

Shein and Temu clash over copyright allegations

A fast fashion retailer Shein has escalated its legal battle against rival Temu by filing a lawsuit accusing Temu of operating as an unlawful enterprise. The allegations against Temu include counterfeiting, theft of trade secrets, and manipulating sellers on its platform. Shein claims Temu exerts complete control over its sellers, even preventing them from removing products after admitting to intellectual property infringement.

The lawsuit is part of an ongoing feud between the two budget retailers, which have exchanged legal threats before. Temu had previously accused Shein of pressuring manufacturers to cut ties with it, while Shein claimed Temu encouraged false statements by influencers. Both companies are known for aggressive tactics to dominate the US market, where Temu has recently overtaken Shein in sales.

Shein’s latest lawsuit also highlights its own struggle to improve its reputation as it prepares to go public in the US. The company, notorious for poor working conditions and accusations of copying independent designers, now accuses Temu of similar practices. Both retailers are heavily reliant on the Chinese supply chain and exploit trade loopholes to maintain their competitive pricing.

Meanwhile, Shein itself faces a class action lawsuit, accused of large-scale copyright infringement against small designers and artists. Despite these legal challenges, Shein continues to battle Temu in a race to the bottom in the competitive world of fast fashion.