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  • Amazon invests up to $4 billion in Anthropic AI in exchange for minority stake and further AWS integration | CNN Business

    Amazon invests up to $4 billion in Anthropic AI in exchange for minority stake and further AWS integration | CNN Business

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    CNN
     — 

    Amazon said on Monday that it’s investing up to $4 billion into the artificial intelligence company Anthropic in exchange for partial ownership and Anthropic’s greater use of Amazon Web Services (AWS), the e-commerce giant’s cloud computing platform.

    The deepening partnership between the two companies highlights how some large tech firms with massive cloud computing resources are increasingly leveraging those assets to gain a bigger foothold in AI.

    As part of the deal, AWS will become the “primary” cloud provider for Anthropic, with the AI company using Amazon’s cloud platform to do “the majority” of its AI model development and research into AI safety, the companies said. That will include using Amazon’s suite of in-house AI chips.

    Anthropic also made a “long-term commitment” to offer its AI models to AWS customers, Amazon said, and promised to give AWS users early access to features such as the ability to adapt Anthropic models for specific use cases.

    “With today’s announcement, customers will have early access to features for customizing Anthropic models, using their own proprietary data to create their own private models, and will be able to utilize fine-tuning capabilities via a self-service feature,” Amazon said in a release.

    Anthropic already offers its models to AWS users through Amazon Bedrock, Amazon’s one-stop shop for AI products. Bedrock also provides access to models from other providers including Stability AI and AI21 Labs, along with proprietary models developed by Amazon itself.

    In a release, Anthropic said that Amazon’s minority stake would not change its corporate governance structure nor its commitments to developing AI responsibly.

    “We will conduct pre-deployment tests of new models to help us manage the risks of increasingly capable AI systems,” Anthropic said.

    Amazon and Anthropic both made commitments to the Biden administration this year to conduct external audits of its AI systems before releasing them to the public.

    Amazon’s investment in Anthropic follows similar moves by cloud leaders such as Microsoft. In 2019, Microsoft invested $1 billion in ChatGPT-maker OpenAI. More recently, Microsoft made a $10 billion investment in OpenAI this year and launched a push to bring OpenAI’s technology into consumer-facing Microsoft products, such as Bing.

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  • Major Supreme Court cases to watch in the new term | CNN Politics

    Major Supreme Court cases to watch in the new term | CNN Politics

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    CNN
     — 

    Looking at an upcoming Supreme Court term from the vantage point of the first Monday in October rarely tells the full story of what lies ahead, but the docket already includes major cases concerning the intersection between the First Amendment and social media, gun rights, racial gerrymandering and the power of the executive branch when it comes to regulation.

    The court will still determine if it will hear oral arguments on issues such as medication abortion and transgender rights, not to mention the possibility of a flurry of emergency requests related to the 2024 election.

    Here are some of the key cases on which the court will hear oral arguments this term:

    After the Supreme Court issued a major decision last year expanding gun rights nationwide, lower courts began reconsidering hundreds of firearms regulations across the country under the new standard crafted by Justice Clarence Thomas that a gun law passes legal muster only if it is rooted in history and tradition.

    On the heels of that decision, a federal appeals court invalidated a federal law that bars an individual who is subject to a domestic violence restraining order from possessing a firearm. That law, the 5th US Circuit Court of Appeals ruled, “is an outlier that our ancestors would never have accepted.”

    The Biden administration has appealed, saying the ruling “threatens grave harms for victims of domestic violence.”

    In 2019, nearly two-thirds of domestic homicides in the United States were committed with a gun, according to Everytown for Gun Safety.

    Lawyers for Zackey Rahimi, a man who was prosecuted under the law in 2020 after a violent altercation with his girlfriend, have urged the justices to let the lower court opinion stand, arguing in part that there is no law from the founding era comparable to the statute at hand.

    Racial gerrymandering: South Carolina congressional maps

    Justices will consider a congressional redistricting plan drawn by South Carolina’s Republican-controlled legislature in the wake of the 2020 census. Critics say it was designed with discriminatory purpose and amounts to an illegal racial gerrymander.

    The case focuses the court’s attention once again on the issue of race and map drawing and comes after the court ordered Alabama to redraw the state’s congressional map last term to account for the fact that the state is 27% black. The decision, penned by Chief Justice John Roberts, surprised liberals who feared the court was going to make it harder for minorities to challenge maps under Section 2 of the historic Voting Rights Act.

    In the latest case, the South Carolina State Conference of the NAACP and a Black voter named Taiwan Scott, are challenging the state’s congressional District 1 that is located along the southeastern coast and is anchored in Charleston County. Although the district consistently elected Republicans from 1980 to 2016, in 2018 a Democrat was elected in a political upset, though a Republican recaptured the seat in 2020.

    The person who devised the map has testified that he was instructed to make the district “more Republican leaning,” but that he did not consider race. He did, however, acknowledge that he examined racial data after drafting each version and that the Black voting age population of the district was likely viewed during the drafting process.

    A three-judge district court panel struck down the plan in January, saying that race had been the predominant motivating factor. “To achieve a target of 17% African American population,” the court said, “Charleston County was racially gerrymandered and over 30,000 African Americans were removed from their home district.”

    Expert explains why Justice Thomas’ gifts from wealthy friends are problematic

    In the latest attack against the so-called administrative state, the justices are considering whether to overturn decades old precedent to scale back the power of federal agencies, impacting how the government tackles issues such as climate change, immigration, labor conditions and public health.

    At issue is an appeal from herring fishermen in the Atlantic who say the National Marine Fisheries Service does not have the authority to require them to pay the salaries of government monitors who ride aboard the fishing vessels.

    In agreeing to hear the case, the justices signaled they will reconsider a 1984 decision – Chevron v. Natural Resources Defense Council – that sets forward factors to determine when courts should defer to a government agency’s interpretation of the law. First, they examine a statute to see if Congress’ intent is clear. It if is – then the matter is settled. But if there is ambiguity – the court defers to the agency’s expertise.

    Solicitor General Elizabeth Prelogar told the justices that the agency was acting within the scope of its authority under the Magnuson-Stevens Fishery Conservation and Management Act and said the fishermen are not responsible for all the costs. The regulation was put in place to combat overfishing of the fisheries off the coasts of the US.

    Representing the fishermen, former Solicitor General Paul Clement argues that the government exceeded its authority and needs direct and clear congressional authorization to make such a demand. “The ‘net effect’ of Chevron,” Clement said, is that it “incentives a dynamic where Congress does far less than the Framers anticipated, and the executive branch is left to do far more by deciding controversial issues via regulatory fiat”

    For the second time in recent years, the court is taking aim at a watchdog agency created to combat unfair and deceptive practices against consumers, in a case that could deal a fatal blow to the future of the agency and send reverberations throughout the financial services industry.

    At the center of the case at hand is the Consumer Financial Protection Bureau – an independent agency set up in the wake of the 2008 financial meltdown that works to monitor the practices of lenders, debt collectors and credit rating agencies.

    Congress chose to fund the CFPB from outside the annual appropriations process to ensure its independence. As such, the agency receives its funding each year from the earnings of the Federal Reserve System. But the conservative 5th US Circuit Court of Appeals held last year that the funding scheme violates the Appropriations Clause of the Constitution, that, the court said “ensures Congress’ “exclusive power over the federal purse.”

    According to the CFPB, the agency has obtained more than $18.9 billion in ordered relief, including restitution and canceled debts, for more than 195 million consumers, and more than $4.1 billion in penalties, in actions brought by the agency against financial institutions and individuals that have broken federal consumer financial protection laws.

    A handful of other agencies have similar funding schemes including the Federal Reserve, the Federal Deposit Insurance Corporation and the Office of the Comptroller of the Currency.

    Three years ago, the Supreme Court limited the independence of the CFPB by invalidating its leadership structure. A 5-4 court held that the structure violated the separation of powers because the president was restricted from removing the director, even if they had policy disagreements.

    Agency regulatory authority: Securities and Exchange Commission

    The justices are looking at the in-house enforcement proceedings of the US Securities and Exchange Commission in another case that invites the conservative majority to pare back the regulatory authority of federal agencies.

    The court’s decision could impact whether the SEC and other agencies can conduct enforcement proceedings in-house, using administrative courts staffed with agency employees, or whether such actions must be brought in federal court.

    On one side are critics of such agency courts who argue that they allow federal employees to serve as prosecutors, judges and jury, issuing rulings that could particularly hurt small businesses. On the other side are those who point out that several agencies, including the Social Security Administration, have such internal proceedings because the topics are often complex and the agency has more expertise than a federal judge.

    The case arose in 2013 after the SEC brought an enforcement action against George Jarkesy, who had established two hedge funds with his advisory firm, Patriot28, for securities fraud.

    The 5th Circuit ruled that the SEC’s proceedings deprive individuals of their Seventh Amendment right to a civil jury. In addition, the court said that Congress had improperly delegated legislative power to the SEC, which gave the agency unconstrained authority at times to choose the in-house administrative proceeding rather than filing suit in district court.

    In December, the court will examine the historic multibillion-dollar Purdue Pharma bankruptcy settlement with several states that would ultimately offer the Sackler family broad protection from OxyContin-related civil claims.

    Until recently, Purdue was controlled by the Sackler family, who withdrew billions of dollars from the company before it filed for bankruptcy. The family has now agreed to contribute up to $6 billion to Purdue’s reorganization fund on the condition that the Sacklers receive a release from civil liability.

    The Biden administration, representing the US Trustee, the executive branch agency that monitors the administration of bankruptcy cases, has called the plan “exceptional and unprecedented” in court papers, noting that lower courts have divided on when parties can be released from liability for actions that caused societal harm.

    “The plan’s release ‘absolutely, unconditionally, irrevocably, fully, finally, forever and permanently releases’ the Sacklers from every conceivable type of opioid-related civil claim – even claims based on fraud and other forms of willful misconduct that could not be discharged if the Sacklers filed for bankruptcy in their individual capacities,” Prelogar argued in court papers.

    For the second year running, the justices will leap into the online moderation debate and decide whether states can essentially control how social media companies operate.

    If upheld, laws from Florida and Texas could open the door to more state legislation requiring platforms such as Facebook, YouTube and TikTok to treat content in specific ways within certain jurisdictions – and potentially expose the companies to more content moderation lawsuits.

    It could also make it harder for platforms to remove what they determine is misinformation, hate speech or other offensive material.

    “These cases could completely reshape the digital public sphere. The question of what limits the First Amendment imposes on legislatures’ ability to regulate social media is immensely important – for speech, and for democracy as well,” said Jameel Jaffer, the executive director of Columbia University’s Knight First Amendment Institute, in a statement.

    “It’s difficult to think of any other recent First Amendment cases in which the stakes were so high,” Jaffer added.

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  • Apple rejected opportunities to buy Microsoft’s Bing, integrate with DuckDuckGo | CNN Business

    Apple rejected opportunities to buy Microsoft’s Bing, integrate with DuckDuckGo | CNN Business

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    CNN
     — 

    Since 2017, Apple has turned down multiple opportunities to chip away at Google’s search engine dominance, according to newly unsealed court transcripts, including a chance to purchase Microsoft’s Bing and to make the privacy-focused DuckDuckGo a default for users of its Safari’s private browsing mode.

    The previously confidential records, unsealed this week by the judge presiding over the US government’s antitrust lawsuit against Google, illustrate the challenges that have faced Google’s rivals in search as they’ve tried to unseat the tech giant from its pole position as Apple’s default search provider on millions of iPhones and Mac computers. It’s a privilege for which Google has paid Apple at least $10 billion a year.

    The closed-door testimony by the CEO of DuckDuckGo, Gabriel Weinberg, and a senior Apple executive, John Giannandrea, offers a glimpse of the kind of failed deals and backroom negotiations that have helped Google maintain its lead as the world’s foremost search engine.

    But it also shows how Apple has wrestled with Google’s rise and how some at Apple yearned for “optionality.” Apple didn’t immediately respond to a request for comment.

    Giannandrea testified last month Apple began seriously considering a deal with Bing in 2018, after a conversation between Apple CEO Tim Cook and Microsoft CEO Satya Nadella launched a series of further discussions between the two companies. (Last week, Nadella testified that he has spent every year of his tenure as CEO trying to persuade Apple to adopt Bing.)

    Apple insiders ultimately came up with four options for Cook: Buy Bing outright; invest in Bing and take an ownership share of the search engine; collaborate with Microsoft on a shared search index that both companies could use; or do nothing and continue with the Google partnership.

    At the same time, Apple had been actively working with DuckDuckGo on a proposal that could have made it the default search in Safari browser’s private mode, while still maintaining Google as the default in normal mode, which logs user activity, Weinberg testified.

    DuckDuckGo logo displayed on a phone screen and DuckDuckGo website displayed on a laptop screen in October 2021.

    “Our impression was that they were really serious about [it],” Weinberg told the court last month, referring to the roughly 20 meetings and phone calls that DuckDuckGo held with Apple officials, including some senior executives, from late 2017 to late 2019 on the matter. The two companies deliberated over everything from product mockups to contractual language; Apple even went as far as sending a draft contract to DuckDuckGo outlining specific proposed revenue shares.

    “If we were the default in [Safari] private browsing mode, our market share, by our calculations at the time, would increase multiple times over,” said Weinberg, according to the transcript. “We would be getting exposure for our brand every time someone opened up private browsing mode.”

    Ultimately, however, Apple backed away from both potential deals.

    Weinberg blamed Apple’s contract with Google for sinking the initiative, calling it the “elephant in the room” during many of his team’s meetings with Apple. Similar negotiations with other browser or device makers, including Mozilla, Opera and Samsung, fell through due to the Google contract as well, Weinberg claimed, prompting DuckDuckGo to abandon its efforts to gain better browser placement.

    In his testimony, Giannandrea acknowledged a perception that the Apple-Google relationship could be undermined by such plans. In discussing a 2018 slide presentation prepared for Cook and introduced in court, Giannandrea said the slides suggested that even a joint venture with Bing “would probably put us in head-to-head competition with Google” that would “probably” result in the end of the Google search contract with Apple altogether.

    Giannandrea was opposed to moving ahead with a Bing deal, he said, largely because Apple’s testing showed Bing to be inferior to Google in most respects, and that replacing Bing as the default would not best serve Apple’s customers. He made a similar argument internally about DuckDuckGo, saying in an email that moving ahead with that partnership was “probably a bad idea.” (DuckDuckGo licenses search results from Bing.)

    Still, Giannandrea testified, some within Apple thought that dealing with Bing in some fashion could yield benefits to Apple. In one 2018 email introduced in closed session, Adrian Perica, who leads Apple’s strategic investment and merger efforts, argued that collaborating with Microsoft on search technology would help “build them up, create incremental negotiating leverage to keep the take rate from Google and further our optionality to replace Google down the line.”

    Giannandrea believed the proposal “wasn’t a very feasible idea” and in his testimony dismissed Perica’s thinking as a businessperson’s spitballing.

    Apple today has the enormous resources to build a true rival to Google, Giannandrea testified. But, as he wrote in a 2018 email, “it’s probably not the best way to differentiate our products” — a belief he said he still holds today.

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  • Adobe previews new AI editing tools | CNN Business

    Adobe previews new AI editing tools | CNN Business

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    New York
    CNN
     — 

    Photo-editing software maker Adobe unveiled a slew of new AI-powered tools and features last week at its annual Max event, including a dress that transforms into a wearable screen and streamlined ways to delete elements from photos.

    The company previewed a series of prototype tools that make use of both generative AI and 3D image technology in the Adobe MAX Sneaks showcase. Covering photo, audio, video, 3D, fashion and design, the new capabilities are meant to give the public a sneak peak into early-stage ideas that might one day become widely used components of Adobe products.

    A highlight of the event was Adobe’s Project Primrose, an interactive dress that shifts into different colors and patterns as it’s worn.

    Other previewed items include a tool that automatically detects each object in an image and lets users perform a variety of tasks, labeled Project Stardust. For example, it can spot a suitcase within a photo to then be moved or deleted or predict and prompt likely tasks, such as deleting people from the background of an image.

    A screenshot of Project Stardust, a tool unveiled as part Adobe's annual

    Also on display was Project Dub Dub Dub, technology that can automatically dub audio over a video into all supported languages while preserving the speaker’s voice, as was a new tool that shows Adobe users what the ability to apply text-to-image generative AI tool Firefly to videos might look like.

    Adobe first began adding Firefly into a Photoshop beta app in May, with the goal of “dramatically accelerating” how users edit their photos. It allows users to add or delete elements from images with just a text prompt. It can also match the lighting and style of the existing images automatically, the company said.

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  • Portable hotspots arrive in Maui to bring internet to residents and tourists | CNN Business

    Portable hotspots arrive in Maui to bring internet to residents and tourists | CNN Business

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    New York
    CNN
     — 

    Portable mobile hotspots have arrived in Maui to help bring internet service to the thousands of people who may have been unable to call for help since the wildfires started to rage out of control on the island.

    Verizon told CNN on Thursday its teams are currently deploying the first batch of satellite-based mobile hotspots at evacuation sites in areas of greatest need, particularly the west side of the island, west of Maalaea, Lahaina and Northern Kapalua.

    Verizon’s larger equipment, which is being barged over from Honolulu, is expected to arrive later in the day. This includes COLTs (Cells on Light Trucks) — a mobile site on wheels that connects to a carrier’s service via a satellite link — and a specialized satellite trailer used to provide service to a cell site that has a damaged fiber connection.

    “Our team is closely monitoring the situation on the ground and our network performance,” a Verizon spokesperson told CNN. “Verizon engineers on the island are working to restore service in impacted areas as quickly and safely as possible.”

    The company said it is working closely with the Hawaii Emergency Management Agency and the Maui County Emergency Operations Center to prioritize its network recovery.

    Other carriers continue to mobilize their efforts, too. An AT&T spokesperson said it is working with local public safety officials to deploy SatCOLTs (Satellite Cells on Light Trucks), drones with cell support and other solutions across the island, as equipment comes in from neighboring islands.

    Meanwhile, a T-Mobile spokesperson said its cell sites are “holding up well during the fires” but commercial power outages may be disrupting the service for some customers. “As soon as conditions allow, our priority is to deploy teams with portable generators that will bring temporary power back to our sites,” the spokesperson said.

    The Maui disaster has already wiped out power to at least 14,000 homes and businesses in the area, according to PowerOutage.us. Many cell towers have backup power generators but they have limited capacity to keep towers running.

    “911 is down. Cell service is down. Phone service is down,” Hawaii Lt. Gov. Sylvia Luke told CNN on Wednesday morning.

    Verizon, T-Mobile and AT&T said they are waiving call, text and data overage charges for Maui residents during this time.

    Although strong winds can sometimes threaten cell towers, most are strong enough to handle the worst that even a Category 5 hurricane can bring. Fire, however, complicates the issue.

    “When the fires get too close to cell sites, they will obviously burn equipment, antennas, and feedlines,” said Glenn O’Donnell, VP of research at market research firm Forrester. “In extreme cases, they will also weaken the towers, leading some to collapse. The smoke and flames can also attenuate [reduce the strength of] signals because of the particulate density in the air.”

    If a tower collapses, cell networks could take months to be restored. But if carriers are able and prepared to do restorations with mobile backup units, it could bring limited service back within hours, O’Donnell said. Wireless carriers often bring in COWs (Cells On Wheels), COLTs and GOaTs (Generator on a Trailer) in emergencies to provide backup service when cell towers go down.

    Cell towers have backup technology built in, but this is typically done through optical fiber cables or microwave (wireless) links, according to Dimitris Mavrakis, senior researcher at ABI Research. However, if something extraordinary happens, such as interaction with rampant fires, these links may experience “catastrophic failures and leave cells without a connection to the rest of the world.”

    And, in an emergency, a spike in call volume can overload the system — if people are able to get reception.

    “Even cells that have a good service may experience outages due to the sheer volume of communication happening at once,” Mavrakis said. “Everyone in these areas may be trying to contact relatives or the authorities at once, saturating the network and causing an outage. This is easier to correct, though, and network operators may put in place additional measures to render them operational quickly.”

    Although it’s unclear how long cell phone service could be down in affected regions, companies have been able to bring connectivity to disaster regions in the past. In 2017, Google worked with AT&T and T-Mobile to deploy its Project Loon balloons to deliver internet service to Puerto Rico in the aftermath of Hurricane Maria.

    Project Loon has since shut down.

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  • Large US tech companies face new EU rules | CNN Business

    Large US tech companies face new EU rules | CNN Business

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    CNN
     — 

    The world’s largest tech companies must comply with a sweeping new European law starting Friday that affects everything from social media moderation to targeted advertising and counterfeit goods in e-commerce — with possible ripple effects for the rest of the world.

    The unprecedented EU measures for online platforms will apply to companies including Amazon, Apple, Google, Meta, Microsoft, Snapchat and TikTok, among many others, reflecting one of the most comprehensive and ambitious efforts by policymakers anywhere to regulate tech giants through legislation. It could lead to fines for some companies and to changes in software affecting consumers.

    The rules seek to address some of the most serious concerns that critics of large tech platforms have raised in recent years, including the spread of misinformation and disinformation; possible harms to mental health, particularly for young people; rabbit holes of algorithmically recommended content and a lack of transparency; and the spread of illegal or fake products on virtual marketplaces.

    Although the European Union’s Digital Services Act (DSA) passed last year, companies have had until now to prepare for its enforcement. Friday marks the arrival of a key compliance deadline — after which tech platforms with more than 45 million EU users will have to meet the obligations laid out in the law.

    The EU also says the law intends “to establish a level playing field to foster innovation, growth and competitiveness both in the European Single Market and globally.” The action reinforces Europe’s position as a leader in checking the power of large US tech companies.

    For all platforms, not just the largest ones, the DSA bans data-driven targeted advertising aimed at children, as well as targeted ads to all internet users based on protected characteristics such as political affiliation, sexual orientation and ethnicity. The restrictions apply to all kinds of online ads, including commercial advertising, political advertising and issue advertising. (Some platforms had already in recent years rolled out restrictions on targeted advertising based on protected characteristics.)

    The law bans so-called “dark patterns,” or the use of subtle design cues that may be intended to nudge consumers toward giving up their personal data or making other decisions that a company might prefer. An example of a dark pattern commonly cited by consumer groups is when a company tries to persuade a user to opt into tracking by highlighting an acceptance button with bright colors, while simultaneously downplaying the option to opt out by minimizing that choice’s font size or placement.

    The law also requires all online platforms to offer ways for users to report illegal content and products and for them to appeal content moderation decisions. And it requires companies to spell out their terms of service in an accessible manner.

    For the largest platforms, the law goes further. Companies designated as Very Large Online Platforms or Very Large Online Search Engines will be required to undertake independent risk assessments focused on, for example, how bad actors might try to manipulate their platforms, or use them to interfere with elections or to violate human rights — and companies must act to mitigate those risks. And they will have to set up repositories of the ads they’ve run and allow the public to inspect them.

    Just a handful of companies are considered very large platforms under the law. But the list finalized in April includes the most powerful tech companies in the world, and, for those firms, violations can be expensive. The DSA permits EU officials to issue fines worth up to 6% of a very large platform’s global annual revenue. That could mean billions in fines for a company as large as Meta, which last year reported more than $116 billion in revenue.

    Companies have spent months preparing for the deadline. As recently as this month, TikTok rolled out a tool for reporting illegal content and said it would give EU users specific explanations when their content is removed. It also said it would stop showing ads to teens in Europe based on the data the company has collected on them, all to comply with the DSA rules.

    “We’ve been supportive of the objectives of the DSA and the creation of a regulatory regime in Europe that minimizes harm,” said Nick Clegg, Meta’s president of global affairs and a former deputy prime minister of the UK, in a statement Tuesday. He said Meta assembled a 1,000-person team to prepare for DSA requirements. He outlined several efforts by the company including limits on what data advertisers can see on teens ages 13 to 17 who use Facebook and Instagram. He said advertisers can no longer target the teens based on their activity on those platforms. “Age and location is now the only information about teens that advertisers can use to show them ads,” he said.

    In a statement, a Microsoft spokesperson told CNN the DSA deadline “is an important milestone in the fight against illegal content online. We are mindful of our heightened responsibilities in the EU as a major technology company and continue to work with the European Commission on meeting the requirements of the DSA.”

    Snapchat parent Snap told CNN that it is working closely with the European Commission to ensure the company is compliant with the new law. Snap has appointed several dedicated compliance employees to monitor whether it is living up to its obligations, the company said, and has already implemented several safeguards.

    And Apple said in a statement that the DSA’s goals “align with Apple’s goals to protect consumers from illegal and harmful content. We are working to implement the requirements of the DSA with user privacy and security as our continued North Star.”

    Google and Pinterest told CNN they have also been working closely with the European Commission.

    “We share the DSA’s goals of making the internet even more safe, transparent and accountable, while making sure that European users, creators and businesses continue to enjoy the benefits of the web,” a Google spokesperson said.

    A Pinterest spokesperson said the company would “continue to engage with the European Commission on the implementation of the DSA to ensure a smooth transition into the new legal framework.” The spokesperson added: “The wellbeing, safety and privacy of our users is a priority and we will continue to build on our efforts.”

    Many companies should be able to comply with the law, given their existing policies, teams and monitoring tools, according to Robert Grosvenor, a London-based managing director at the consulting firm Alvarez & Marsal. “Europe’s largest online service providers are not starting from ground zero,” Grosvenor said. But, he added: “Whether they are ready to become a highly regulated sector is another matter.”

    EU officials have signaled they will be scrutinizing companies for violations. Earlier this summer, European officials performed preemptive “stress tests” of X, the company formerly known as Twitter, as well as Meta and TikTok to determine the companies’ readiness for the DSA.

    For much of the year, EU Commissioner Thierry Breton has been publicly reminding X of its coming obligations as the company has backslid on some of its content moderation practices. Even as Breton concluded that X was taking its stress test seriously in June, the company had just lost a top content moderation official and had withdrawn from a voluntary EU commitment on disinformation that European officials had said would be part of any evaluation of a platform’s compliance with the DSA.

    X told CNN ahead of Friday’s deadline that it was on track to comply with the new law.

    Analysts anticipate that the EU will be watching even more closely after the deadline — and some hope that the rules will either encourage tech platforms to replicate their practices in the EU voluntarily around the world or else drive policymakers to adopt similar measures.

    “We hope that these new laws will inspire other jurisdictions to act because these are, after all, global companies which apply many of the same practices worldwide,” said Agustin Reyna, head of legal and economic affairs at BEUC, a European consumer advocacy group. “Europe got the ball rolling, but we need other jurisdictions to win the match against tech giants.”

    Already, Amazon has sought to challenge the very large platform label in court, arguing that the DSA’s requirements are geared toward ad-based online speech platforms, that Amazon is a retail platform and that none of its direct rivals in Europe have likewise been labeled, despite being larger than Amazon within individual EU countries.

    The legal fights could present the first major test of the DSA’s durability in the face of Big Tech’s enormous resources. Amazon told CNN that it plans to comply with the EU General Court’s decision, either way.

    “Amazon shares the goal of the European Commission to create a safe, predictable and trusted online environment, and we invest significantly in protecting our store from bad actors, illegal content, and in creating a trustworthy shopping experience,” an Amazon spokesperson said. “We have built on this strong foundation for DSA compliance.”

    TikTok did not immediately respond to a request for comment on this story.

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  • China’s top chipmaker may be in hot water as US lawmakers call for further sanctions after Huawei ‘breakthrough’ | CNN Business

    China’s top chipmaker may be in hot water as US lawmakers call for further sanctions after Huawei ‘breakthrough’ | CNN Business

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    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    Shares in SMIC, China’s largest contract chipmaker, plunged on Thursday, after two US congressmen called on the White House to further restrict export sales to the company.

    The comments came after Huawei Technologies introduced the Mate 60 Pro, a Chinese smartphone powered by an advanced chip that is believed to have been made by SMIC.

    Last week’s launch shocked industry experts who didn’t understand how SMIC, which is headquartered in Shanghai, would have the ability to manufacture such a chip following sweeping efforts by the United States to restrict China’s access to foreign chip technology.

    TechInsights, a research organization based in Canada specializing in semiconductors, revealed shortly after the launch that the smartphone contained a new 5G Kirin 9000s processor developed specifically for Huawei by SMIC.

    This is a “big tech breakthrough for China,” Jefferies analysts said Tuesday in a research note.

    The development has fueled fears among analysts that the US-China tech war is likely to accelerate in the near future.

    US representative Mike Gallagher, chair of the US House of Representatives committee on China, called on the US Commerce Department on Wednesday to end all technology exports to Huawei and SMIC, according to Reuters.

    Gallagher was quoted as saying SMIC may have violated US sanctions, as this chip likely could not be produced without US technology.

    “The time has come to end all US technology exports to both Huawei and SMIC to make clear any firm that flouts US law and undermines our national security will be cut off from our technology,” he said.

    Shares in SMIC, which stands for Semiconductor Manufacturing International Corporation, sank 8.3% in Shanghai and 7.6% in Hong Kong on Thursday. Hua Hong Semiconductor, China’s second largest chip foundry, tumbled 5.8%.

    Texas Republican Michael McCaul, who chairs the House Foreign Affairs Committee, was quoted by Reuters as saying he was concerned about the possibility of China trying to “get a monopoly” in the manufacture of less-advanced computer chips.

    “We talked a lot about advanced semiconductor chips, but we also need look at legacy,” he reportedly said, referring to older computer chip technology which does not fall under export controls.

    “I think China is trying to get a monopoly on the market share of legacy semiconductor chips as well. And I think that’s a part of the discussion we’ll be having,” he said.

    Chinese state media have touted the development as a sign the country had successfully “broken US sanctions” and “achieved technological independence” in advanced chipmaking.

    Meme makers on the Chinese internet have even crowned US Commerce Secretary Gina Raimondo the unofficial brand ambassador for the Mate 60 series.

    The memes poke fun at the idea that that US sanctions, which are implemented and enforced by the US Commerce department, may have indirectly led to the launch of the new phone as China’s homegrown firms had to work with the available technology.

    Raimondo visited China last week, when the phone was launched. The memes have gone viral online and been reported on by state broadcaster CCTV.

    Before Thursday, SMIC’s shares in Hong Kong had rallied more than 20% within two weeks due to investor optimism. Huahong Semiconductor jumped 11%.

    CNN has reached out to Gallagher’s and McCaul’s offices for comment, but has yet to receive a response.

    Huawei was added to a blacklist in May 2019 by the US Commerce Department over national security concerns. That means companies have to apply for US export licenses to supply technology to Huawei.

    SMIC was also put on the same list in 2020, as US officials were concerned it could use American technology to aid the Chinese military. SMIC has denied having any relationship with the Chinese military.

    “The fact that China has achieved a big breakthrough in [semiconductor] tech will likely create more debate in the US about the effectiveness of sanctions,” said the Jefferies analysts.

    They expect the Biden administration to tighten chips ban on China, which was introduced in October 2022, in the next few months, further limiting China’s access to advanced US semiconductors.

    “Overall the US-China tech war is likely to escalate,” they said.

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  • Landmark Google trial opens with sweeping DOJ accusations of illegal monopolization | CNN Business

    Landmark Google trial opens with sweeping DOJ accusations of illegal monopolization | CNN Business

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    CNN
     — 

    US prosecutors opened a landmark antitrust trial against Google on Tuesday with sweeping allegations that for years the company intentionally stifled competition challenging its massive search engine, accusing the tech giant of spending billions to operate an illegal monopoly that has harmed every computer and mobile device user in the United States.

    In opening remarks before a federal judge in Washington, lawyers for the Justice Department alleged that Google’s negotiation of exclusive contracts with wireless carriers and phone makers helped cement its dominant position in violation of US antitrust law.

    The Google case has been described as one of the largest US antitrust trials since the federal government took on Microsoft in the 1990s, and involves some similar arguments about the tying of multiple proprietary products. The multi-week trial is expected to feature witness testimony from Google CEO Sundar Pichai, as well as other senior executives or former employees from Google, Apple, Microsoft and Samsung.

    The effects of Google’s alleged misconduct are vast, DOJ lawyer Kenneth Dintzer told the court.

    “This case is about the future of the internet, and whether Google’s search engine will ever face meaningful competition,” Dintzer said, adding that Google pays more than $10 billion a year to Apple and other companies to ensure that Google is the default or only search engine available on browsers and mobile devices used by millions.

    Also anticompetitive, the Justice Department said, are Google’s contracts to ensure that Android devices come with Google apps and services — including Google search — preinstalled.

    The deals guarantee a steady flow of user data to Google that further reinforces its monopoly, the US government said, leading to other consequences such as harms to consumer privacy and higher advertising prices.

    “This feedback loop, this wheel has been turning for 12 years, and it always turns to Google’s advantage,” Dintzer said. The practice ultimately affects what consumers see in search results and prevents new rivals from gaining scale and market share, he added.

    For Google’s opening statement, attorney John Schmidtlein said that Apple’s decision to make Google the default search engine in its Safari browser demonstrates how Google’s search engine is the superior product consumers prefer.

    “Apple repeatedly chose Google as the default because Apple believed it was the best experience for its users,” he said.

    The Google case “could not be more different” from the historic Microsoft litigation at the turn of the millennium, Schmidtlein continued.

    Where the Microsoft case revolved around that company’s alleged harms to Netscape, a small browser maker, the Google case is based on claims that Google search has harmed a much larger and more powerful entity: Microsoft and its Bing search engine, Schmidtlein said.

    “Google competed on the merits to win preinstallation and default status” on consumer devices and browsers, he insisted, attacking Microsoft as a failed search engine developer.

    “The evidence will show that Microsoft’s Bing search engine failed to win customers because Microsoft did not invest [and] did not innovate,” Schmidtlein added. “At every critical juncture, the evidence will show that they were beaten in the market.”

    And Schmidtlein argued that forbidding Google from being able to compete for default status on browsers and devices would lead to its own harms to competition in search, stating that contracts ensuring that Android devices come with certain apps preinstalled such as Google Maps and Gmail also promotes competition — against Apple.

    “Google’s Android agreements are important components of a business model that has sustained the most important competitor to Apple for mobile devices in the United States,” Schmidtlein said.

    Google has previously said that consumers choose Google’s search engine because it is the best and that they prefer it, not because of anticompetitive practices.

    But DOJ prosecutors said Tuesday that they plan to present evidence in the case that Google knew what it was doing was illegal and that the company “hid and destroyed documents because they knew they were violating the antitrust laws.

    “The harm from Google contracts affects every phone and computer in the country,” Dintzer said.

    Kent Walker, Google’s president of global affairs, and Rep. Ken Buck from Colorado were in attendance for the opening. Buck, a vocal tech industry critic, is the former top Republican on the House antitrust subcommittee — which in 2020 released a widely publicized investigative report finding that Amazon, Apple, Google and Facebook enjoyed “monopoly power.”

    Kent Walker, President of Global Affairs and Chief legal officer of Alphabet Inc., arrives at federal court on September 12, 2023 in Washington, DC. Google will defend its default-search deals in an antitrust trial against the U.S. Justice Department which begins today.

    The trial marks the culmination of two ongoing lawsuits against Google that started during the Trump administration.

    In separate complaints, the Justice Department and dozens of states accused Google in 2020 of abusing its dominance in online search but were eventually consolidated into a single case.

    Google’s search business provides more than half of the $283 billion in revenue and $76 billion in net income Google’s parent company, Alphabet, recorded in 2022. Search has fueled the company’s growth to a more than $1.7 trillion market capitalization.

    “This is a backwards-looking case at a time of unprecedented innovation,” said Walker in a statement, “including breakthroughs in AI, new apps and new services, all of which are creating more competition and more options for people than ever before. People don’t use Google because they have to — they use it because they want to. It’s easy to switch your default search engine — we’re long past the era of dial-up internet and CD-ROMs.”

    The trial may also be a bellwether for the more assertive antitrust agenda of the Biden administration.

    At the time the lawsuit was first filed, US antitrust officials did not rule out the possibility of a Google breakup, warning that Google’s behavior could threaten future innovation or the rise of a Google successor.

    Separately, a group of states, led by Colorado, made additional allegations against Google, claiming that the way Google structures its search results page harms competition by prioritizing the company’s own apps and services over web pages, links, reviews and content from other third-party sites.

    But the judge overseeing the case, Judge Amit Mehta in the US District Court for the District of Columbia, tossed out those claims in a ruling last month, narrowing the scope of allegations Google must defend and saying the states had not done enough to show a trial was necessary to determine whether Google’s search results rankings were anticompetitive.

    Despite that ruling, the trial represents the US government’s furthest progress in challenging Google to date. Mehta has said Google’s pole position among search engines on browsers and smartphones “is a hotly disputed issue” and that the trial will determine “whether, as a matter of actual market reality, Google’s position as the default search engine across multiple browsers is a form of exclusionary Conduct.”

    In January, meanwhile, the Biden administration launched another antitrust suit against Google in opposition to the company’s advertising technology business, accusing it of maintaining an illegal monopoly. That case remains in its early stages at the US District Court for the Eastern District of Virginia.

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  • Fortnite players can now apply for a portion of its $245 million FTC settlement | CNN Business

    Fortnite players can now apply for a portion of its $245 million FTC settlement | CNN Business

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    New York
    CNN
     — 

    Millions of Fortnite users can now claim their small part of the $245 million that the game’s parent company agreed to pay as part of a settlement with the US Federal Trade Commission.

    Epic Games in December settled allegations with the FTC that it used deceptive tactics that drove users to make unwanted purchases in the multiplayer shooter game that became wildly popular with younger generations a few years ago. The FTC said Tuesday it has now opened the claims process for the more than 37 million potentially affected users who could qualify for compensation.

    Epic Games agreed in December to pay a total of $520 million to settle US government allegations that it misled millions of players, including children and teens, into making unintended purchases and that it violated a landmark federal children’s privacy law.

    In one settlement, Epic agreed to pay $275 million to the US government to resolve claims that it violated the Children’s Online Privacy Protection Act by gathering the personal information of kids under the age of 13 without first receiving their parents’ consent. In a second and separate settlement, Epic also agreed to pay $245 million as refunds to consumers who were allegedly harmed by user-interface design choices that the FTC claimed were deceptive.

    The FTC said in a statement Tuesday that the Fortnite maker “used dark patterns and other deceptive practices to trick players into making unwanted purchases” and also “made it easy for children to rack up charges without parental consent.”

    (“Dark patterns” refer to the gently coercive design tactics used by countless websites and apps that critics say are used to manipulate peoples’ digital behaviors.)

    The FTC is now notifying users who may be eligible to receive part of that $245 million settlement fund. Affected users may receive an email from the FTC over the next month with a claim number, or they can go directly to the settlement site and file a claim using their Epic account ID.

    Here’s who can apply: Users who were charged in-game currency for items they didn’t want between January 2017 and September 2022, parents whose children made charges to their credit cards on Fortnite between January 2017 and November 2018 or users whose accounts were locked sometime between January 2017 and September 2022 after they complained to their credit card company about wrongful charges. Claimants must be 18 years old; for younger users, their parents can submit a claim on their behalf.

    Users have until January 17, 2024, to submit a claim to be included in the settlement class. It is not yet clear how much the individual settlement payments will be.

    Epic’s agreement with the FTC also prohibits the company from using dark patterns or charging consumers without their consent, and forbids Epic from locking players out of their accounts in response to users’ chargeback requests with credit card companies disputing unwanted charges.

    Epic said in a blog post in December when it reached the agreement that, “no developer creates a game with the intention of ending up here.” It added, “We accepted this agreement because we want Epic to be at the forefront of consumer protection and provide the best experience for our players.”

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  • US government and 17 states sue Amazon in landmark monopoly case | CNN Business

    US government and 17 states sue Amazon in landmark monopoly case | CNN Business

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    CNN
     — 

    The US government and 17 states are suing Amazon in a landmark monopoly case reflecting years of allegations that the e-commerce giant abused its economic dominance and harmed fair competition.

    The groundbreaking lawsuit by the Federal Trade Commission and 17 attorneys general marks the US government’s sharpest attack yet against Amazon, a company that started off selling books on the internet but has since become known as “the everything store,” expanding into selling a vast range of consumer products, creating a globe-spanning logistics network and becoming a powerhouse in other technologies such as cloud computing.

    The complaint alleges Amazon unfairly promotes its own platform and services at the expense of third-party sellers who rely on the company’s e-commerce marketplace for distribution.

    For example, according to the FTC, Amazon has harmed competition by requiring sellers on its platform to purchase Amazon’s in-house logistics services in order to secure the best seller benefits, referred to as “Prime” eligibility. It also claims the company anticompetitively forces sellers to list their products on Amazon at the lowest prices anywhere on the web, instead of allowing sellers to offer their products at competing marketplaces for a lower price.

    That practice is already the subject of a separate lawsuit targeting Amazon filed by California’s attorney general last year.

    Because of Amazon’s dominance in e-commerce, sellers have little option but to accept Amazon’s terms, the FTC alleges, resulting in higher prices for consumers and a worse consumer experience. Amazon also ranks its own products in marketplace search results higher than those sold by third parties, the FTC said.

    Amazon is “squarely focused on preventing anyone else from gaining that same critical mass of customers,” FTC Chair Lina Khan told reporters Tuesday. “This complaint reflects the cutting edge and best thinking on how competition occurs in digital markets and, similarly, the tactics that Amazon has used to suffocate rivals, deprive them of oxygen, and really leave a stunted landscape in its wake.”

    The states involved in the case are Connecticut, Delaware, Maine, Maryland, Massachusetts, Michigan, Minnesota, New Jersey, New Hampshire, New Mexico, Nevada, New York, Oklahoma, Oregon, Pennsylvania, Rhode Island, and Wisconsin.

    The complaint was filed in the US District Court for the Western District of Washington, and seeks a court order blocking Amazon from engaging in the allegedly anticompetitive behavior. Khan declined to say Tuesday whether the agency will be seeking a breakup of the company, saying the case is currently focused on proving Amazon’s liability under federal antitrust law.

    The suit makes Amazon the third tech giant after Google and Meta to be hit with sweeping US government allegations that the company spent years violating federal antitrust laws, reflecting policymakers’ growing worldwide hostility toward Big Tech that intensified after 2016. The litigation could take years to play out. But just as Amazon founder Jeff Bezos and his spectacular wealth have inspired critics to draw comparisons to America’s Gilded Age, so may the FTC lawsuit come to symbolize a modern repeat of the antitrust crackdown of the early 20th century.

    In a release, Khan accused Amazon of using “punitive and coercive tactics” to preserve an illegal monopoly.

    “Amazon is now exploiting its monopoly power to enrich itself while raising prices and degrading service for the tens of millions of American families who shop on its platform and the hundreds of thousands of businesses that rely on Amazon to reach them,” Khan said. “Today’s lawsuit seeks to hold Amazon to account for these monopolistic practices and restore the lost promise of free and fair competition.”

    “Today’s suit makes clear the FTC’s focus has radically departed from its mission of protecting consumers and competition. The practices the FTC is challenging have helped to spur competition and innovation across the retail industry, and have produced greater selection, lower prices, and faster delivery speeds for Amazon customers and greater opportunity for the many businesses that sell in Amazon’s store,”said David Zapolsky, Amazon’s Senior Vice President of Global Public policy and General Counsel. “If the FTC gets its way, the result would be fewer products to choose from, higher prices, slower deliveries for consumers, and reduced options for small businesses—the opposite of what antitrust law is designed to do. The lawsuit filed by the FTC today is wrong on the facts and the law, and we look forward to making that case in court.”

    For years, Amazon’s critics including US lawmakers, European regulators, third-party sellers, consumer advocacy groups and more have accused the company of everything from mistreating its workers to forcing its third-party sellers to accept anticompetitive terms. Amazon has unfairly used sellers’ own commercial data against them, opponents have said, so it can figure out what products Amazon should sell itself. And the fact that Amazon competes with sellers on the very same marketplace it controls represents a conflict of interest that should be considered illegal, many of Amazon’s critics have said.

    The lawsuit represents a watershed moment in Khan’s career. She is widely credited with kickstarting antitrust scrutiny of Amazon in the United States with a seminal law paper in 2017. She later helped lead a congressional investigation into the tech industry’s alleged competition abuses, detailing in a 450-page report how Amazon — as well as Apple, Google and Meta — enjoy “monopoly power” and that there is “significant evidence” to show that the companies’ anticompetitive conduct has hindered innovation, reduced consumer choice and weakened democracy.

    The investigation led to a raft of legislative proposals aimed at reining in the companies, but the most significant ones have stalled under a barrage of industry lobbying and decisions by congressional leaders not to bring the bills up for a final vote.

    Lawmakers’ inaction has left it to antitrust enforcers to police the tech industry’s alleged harms to competition. In 2021, President Joe Biden stunned many in Washington when he tapped Khan not only to serve on the FTC but to lead the agency, sending a signal that he supported tough antitrust oversight.

    Since then Khan has taken an aggressive enforcement posture, particularly toward the tech industry. Under her watch, the FTC has sued to block numerous tech acquisitions, most notably Microsoft’s $69 billion deal to acquire video game publisher Activision Blizzard. It has moved to restrict how companies may collect and use consumers’ personal information, and warned them of the risks of generative artificial intelligence.

    Throughout, the FTC has scrutinized Amazon — suing the company in June for allegedly tricking millions of consumers into signing up for Amazon Prime and reaching multimillion-dollar settlements in May with the company over alleged privacy violations linked to Amazon’s smart home devices.

    But the latest suit against Amazon may rank as the most significant of all, because it drives at the heart of Amazon’s e-commerce business and focuses on some of the most persistent criticisms of the company. In a sign of how threatening Amazon perceived Khan’s ascent to be, the company in 2021 called for her recusal from all cases involving the tech giant.

    Khan has resisted those calls. On Tuesday, the FTC said it held a unanimous 3-0 vote authorizing the lawsuit; Khan was among those voting to proceed.

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  • X has ditched a political misinformation reporting feature, researchers say | CNN Business

    X has ditched a political misinformation reporting feature, researchers say | CNN Business

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    CNN
     — 

    X, the social media company formerly known as Twitter, has scrapped a feature that lets users self-report political misinformation on the platform, a research group says, marking the latest safety-focused guardrail that X has rolled back since billionaire Elon Musk took the helm.

    The move was first spotted by an Australia-based digital policy think tank, Reset Australia. The group of researchers sent an open letter to X warning of the potential harms this can cause as it came just weeks ahead of a major referendum vote on whether to change the Australian constitution to establish an Indigenous advisory group with a direct line to government.

    “There now appears to be no channel to report electoral misinformation when discovered on your platform,” the letter from Reset Australia states. “It is extremely concerning that Australians would lose the ability to report serious misinformation weeks away from a major referendum.”

    The rollback also comes as political campaigning for the United States 2024 presidential election ramps up, and concerns about the spread of misinformation online remains a keystone issue ahead of the US vote.

    X did not immediately respond to CNN’s request for comment Wednesday morning. X users, notably, can still report content on the platform for violations in other categories — such as “Hate,” “Abuse & Harassment,” and “Violent Speech,” among other issues. Musk has also long touted the platforms “Community Notes” feature, which lets users add context they think is missing to posts.

    The user-reporting feature initially launched as a test for a small group of users in the US, South Korea and Australia, X (then called Twitter) announced in August 2021. The feature allowed users to report a post as “it’s misleading” when they encountered problematic political content. In January 2022, the company said it was expanding the misinformation reporting feature to more countries and users.

    Musk’s rocky takeover of Twitter, meanwhile, was officially completed in October 2022.

    With Musk at the helm, the platform has also made other changes, such as reinstating controversial accounts, including those belonging to former US President Donald Trump and rapper Kanye West. Musk has long opined concerns about perceived censorship on the platform and its need to focus on promoting what he views as “free speech.”

    In other recent changes to its approach to political content, X announced last month that it will again allow political ads on the platform — for the first time since 2019 — and said that it is hiring for its safety and election teams ahead of the 2024 US presidential vote.

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  • Biden administration defends communications with social media companies in high-stakes court fight | CNN Business

    Biden administration defends communications with social media companies in high-stakes court fight | CNN Business

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    Washington, DC
    CNN
     — 

    The Biden administration on Thursday defended its communications with social media giants in court, arguing those channels must stay open so that the federal government can help protect the public from threats to election security, Covid-19 misinformation and other dangers.

    The closely watched court fight reflects how social media has become an informational battleground for major social issues. It has revealed the messy challenges for social media companies as they try to manage the massive amounts of information on their platforms.

    And it has highlighted warnings by independent researchers, watchdog groups and government officials that malicious actors will continue to try to disrupt the country’s democracy by flooding the internet with bogus and divisive material ahead of the 2024 elections.

    In oral arguments before a New Orleans-based federal appeals court, the US government challenged a July injunction that blocked several federal agencies from discussing certain social media posts and sharing other information with online platforms, amid allegations by state governments that those communications amounted to a form of unconstitutional censorship.

    The appeals court last month temporarily blocked the injunction from taking effect. But the outcome of Thursday’s arguments will determine the ultimate fate of the order, which placed new limits on the Departments of Homeland Security, Health and Human Services and other federal agencies’ ability to coordinate with tech companies and civil society groups.

    If upheld by the US Court of Appeals for the Fifth Circuit, the injunction would suppress a broad range of public-private partnerships and undermine the US government’s mission to protect the public, the Biden administration argued.

    “For example, if there were a natural disaster, and there were untrue statements circulating on social media that were damaging to the public interest, the government would be powerless under the injunction to discourage social media companies from further disseminating those incorrect statements,” said Daniel Tenny, a Justice Department lawyer.

    Now, a three-judge panel of the Fifth Circuit is set to decide how executive agencies may respond to those threats.

    At issue is whether the US government unconstitutionally pressured social media platforms into censoring users’ speech, particularly when the government flagged posts to the platforms that it believed violated the companies’ own terms of service.

    During more than an hour of oral arguments Thursday, the three judges handling the appeal gave little indication of how they would rule in the case, with one judge asking just a couple of questions during the hearing. The other two spent much of the time pressing attorneys for the Biden administration and the plaintiffs in the case on issues concerning the scope of the injunction and whether the states even had the legal right – or standing – to bring the lawsuit.

    Before them is not only the request to reverse the lower court injunction, but also one from the administration to issue a more lasting pause on that injunction while the judges weigh the challenge to it.

    In briefs submitted to the court ahead of Thursday’s hearing, the Biden administration argued that a lower court judge was wrong to have identified the government communications with social media companies as potentially, in his words, “the most massive attack against free speech in United States’ [sic] history.”

    “There is a categorical, well-settled distinction between persuasion and coercion,” the administration’s lawyers wrote, adding that the lower court “equated legitimate efforts at persuasion with illicit efforts to coerce.”

    The administration’s opponents in the case, which include the states of Missouri and Louisiana, have argued that the federal government’s communications with social media companies are a violation of the First Amendment because even “‘encouragement short of compulsion’ can transform private conduct [by social media companies] into government action” that infringes on users’ speech rights.

    “Every one of these federal agencies has insinuated themselves into the content moderation decisions of major social media platforms,” D. John Sauer, an attorney representing the state of Louisiana, told the judges on Thursday. Hypothetically speaking, he added: “The Surgeon General can say, ‘All this speech is terrible, it’s awful.’ …. But what he can’t do is pick up the phone and say, ‘Take it down.’”

    In addition to the states, five individuals are also plaintiffs in the suit. They include three doctors who have been critical of state and federal pandemic-era restrictions, a Louisiana woman who claims she was censored by social media companies for her online criticisms of Covid health measures and a man who runs a far-right website known for pushing conspiracy theories.

    Much of Thursday’s oral arguments hinged on the definition of coercive communication and how courts have analyzed government pressure against private parties in past cases.

    But the states also claimed that there could be a pathway to finding a constitutional violation if the court agreed that social media companies, in heeding the administration’s calls to action, had been effectively turned into agents of the US government.

    In the past month, after District Judge Terry Doughty issued his injunction, current and former US officials, along with outside researchers and academics, have worried that the order could lead to a chilling effect for efforts to protect US elections.

    “There is no serious dispute that foreign adversaries have and continue to attempt to interfere in our elections and that they use social media to do it,” FBI Director Christopher Wray testified to the House Judiciary Committee in July. “President Trump himself in 2018 declared a national emergency to that very effect, and the Senate Intelligence Committee — in a bipartisan, overwhelmingly bipartisan way — not only found the same thing but called for more information-sharing between us and the social media.”

    Ohio Republican Rep. Jim Jordan, the panel’s chair, remains unconvinced. Earlier this week, he and other Republican lawmakers filed their own brief to the appeals court, accusing the Biden administration of a campaign to stifle speech.

    “On issue after issue, the Biden Administration has distorted the free marketplace of ideas promised by the First Amendment, bringing the weight of federal authority to bear on any speech it dislikes—including memes and jokes,” Jordan and the other lawmakers wrote. “Of course, Big Tech companies often required little coercion to do the Administration’s bidding on some issues. Generally eager to please their ideological allies and overseers in the federal government, these companies and other private entities have repeatedly censored accurate speech on important public issues.”

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  • Illinois passes a law that requires parents to compensate child influencers | CNN Business

    Illinois passes a law that requires parents to compensate child influencers | CNN Business

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    CNN
     — 

    When 16-year-old Shreya Nallamothu from Normal, Illinois, scrolled through social media platforms to pass time during the pandemic, she became increasingly frustrated with the number of children she saw featured in family vlogs.

    She recalled the many home videos her parents filmed of herself and her sister over the years: taking their first steps, going to school and other “embarrassing stuff.”

    “I’m so glad those videos stayed in the family,” she said. “It made me realize family vlogging is putting very private and intimate moments onto the internet.”

    She said reminders and lectures from her parents about how everything is permanent online intensified her reaction to the videos she saw of kid influencers. “The fact that these kids are either too young to grasp that or weren’t given the chance to grasp that is really sad.”

    Nallamothu wrote a letter last year to her state senator, Democrat Dave Koehler, urging him to consider legislation to protect young influencers. Last week, her home state became the first to pass a law that establishes safeguards for minors who are featured in online videos – and how they’re compensated.

    Illinois Gov. J. B. Pritzker on Friday signed a bill, inspired by Nallamothu’s letter, amending the state’s Child Labor Law that will allow teenagers over the age of 18 to take legal action against their parents if they were featured in monetized social media videos and not properly compensated, similar to the rights held by child actors.

    Starting July 1 2024, parents in Illinois will be required to put aside 50% of earnings for a piece of content into a blocked trust fund for the child, based on the percentage of time they’re featured in the video. For example, if a child is in 50% of a video, they should receive 25% of the funds; if they’re in 100%, they are required to get 50% of the earnings. However, this only applies in scenarios during which the child appears on the screen for more than 30% of the vlogs in a 12-month period.

    “We understand that parents should receive compensation too because they have equity in this, but we don’t want to forget about the child,” Koehler told CNN.

    Many YouTube parent vloggers or social media influencers post multiple videos each month or weekly, sharing intimate details about their lives, ranging from family financial troubles and the birth of a new baby to opening new toys or going through a child’s phone or report card. Although children are predominantly featured in these monetized videos, parents have had no legal obligation to give them any portion of the earnings.

    Meanwhile, kid influencer accounts, which can at times earn $20,000 or more for sponsored posts, are typically run by parents and not often set up in the child’s name due to age restrictions on social media platforms.

    “We often see with emerging technology and trends that legislation is always a reaction to that,” Koehler said. “But we know with the explosion of social media that parents are using it to monetize kids being on videos. If money is being made and nothing is set up for the children, it’s the same thing as a child actor.”

    The new law is modeled off of the 1936 Jackie Coogan’s Law, the Hollywood silent actor discovered by Charlie Chaplin whose parents swindled him out of his earnings. That California law required parents to set aside a portion of 15% of child earnings in a blocked trust account that the child actor could access after the age of 18.

    Although similar bills have been proposed in California and Washington, Jessica Maddox — an assistant professor at The University of Alabama who studies the social media influencer community — said she’s hopeful other states will follow in Illinois’ footsteps.

    “Even though Illinois is the first state to pass such a law, this legislation is a long time coming,” Maddox said. “Social media labor and careers are becoming increasingly common and viable forms of income, and it’s important that the law catches up with technology to ensure minors aren’t being exploited.”

    Maddox said it also breathes new life into the long-simmering debate over what is appropriate for parents to document online and whether a child can really consent to participating.

    “I’ve seen organic conversations start to emerge between individuals who had been featured heavily in their parents’ social media content but are now of age to tell their stories and admit that had they really understood what was going on, they would have never consented for their lives to be broadcast for everyone.”

    Chris McCarty — the 19-year-old founder of Quit Clicking Kids, an advocacy and education site to combat the monetization of children on social media, who is helping to develop child influencer legislation in Washington State — believes that as the kids featured in family vlogs grow up and share their stories, there will be an increase in public pressure to provide more privacy protections.

    “When children are slightly older, often the narratives get increasingly personal; for example. detailing trouble with bullies, first periods, doctor’s visits, and mental health issues,” McCarty said. “A lot of consumers assume that children working in a family vlog and child actors have the same experiences. This is not the case. As difficult as it is to be a child actor, child actors are still playing a part rather than having their intimate personal details shared for entertainment and monetary purposes.”

    Nallamothu agrees that the next step is for legislation to evolve over time to include more regulations around consent.

    “I know this bill isn’t going to be perfect off the bat but I don’t want perfection to get in the way of progress because regulations have only started coming up,” she said. “I’m glad it’s getting there.”

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  • Here’s what Donald Trump’s return to X could mean for the platform’s business | CNN Business

    Here’s what Donald Trump’s return to X could mean for the platform’s business | CNN Business

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    New York
    CNN
     — 

    Nine months after Elon Musk reinstated Donald Trump’s account on the social network previously known as Twitter, the former president has returned to what was once his platform of choice for communicating with the country.

    The return of Trump – who used to be one of the site’s most prominent, if controversial, users – could mark a turning point for the company now called X after months of turbulence. Trump, who has nearly 87 million followers, could attract a wide set of viewers, especially in the lead up to the 2024 presidential election, where he is the front-runner for the Republican nomination. But it could also present a new set of challenges for the social network, including for its effort to revive its ad business, if Trump decides to resume regularly posting on the platform at all.

    Trump on Thursday night posted on the platform for the first time since January 2021, when he was suspended for violating Twitter’s rules against glorification of violence in the wake of the January 6, 2021, attack on the US Capitol. On Thursday, he posted a photo of his mug shot – the first such photo of a US president in history – after his surrender in Georgia on more than a dozen charges stemming from his efforts to reverse the 2020 election results there. He also added a link to a fundraiser.

    Trump’s return appeared to be welcomed by X owner Musk, who has been encouraging politicians and public figures to post on the site in a bid to improve user numbers. He shared Trump’s X post saying, “Next-level.” Later, appearing to reference the former president without explicitly naming him, Musk posted that “the speed at which your message on this platform can reach a vast number of people is mind-blowing.”

    X declined to comment for this story.

    If Trump decides to return to regularly posting on X, it could be a major boon to the platform’s effort to attract an audience as it faces increased competition. In the wake of controversial policy decisions by Musk, a slew of Twitter copycats have popped up as users seek alternative platforms, including Meta’s Threads, which rolled out a key update this week. The week of July 17, traffic to then-Twitter was down more than 9% compared to the same period in the prior year, according to the most recent public report from web traffic intelligence firm Similarweb.

    Musk’s changes at the company have also irked some advertisers, weighing on X’s core business.

    When he was president, Trump’s posts on what was then Twitter often moved the markets, set the news cycle and drove the agenda in Washington – a fact that benefited the company in the form of countless hours of user engagement and almost certainly could again. And while Trump has remained mostly on his own platform, Truth Social, since he was suspended from many mainstream social networks in early 2021, X would give him a larger reach as he vies for the 2024 Republican nomination.

    Trump’s return “should have a positive impact on [X’s] engagement at a time when it needs it,” D.A. Davidson analyst Tom Forte told CNN in an email Friday.

    (It’s not clear how Musk – who has often been X’s main character since his takeover, thanks in some cases to his own policy decisions – would feel about sharing the spotlight.)

    That engagement could be a selling point for X in its quest to lure advertisers back to the platform. But Trump’s return could also raise fresh concerns for advertisers, some of whom have pulled back their spending on the platform over fears that their ads could run next to controversial or potentially objectionable content as Musk has reduced content moderation on the site.

    Musk said last month that the company still had negative cash flow because of a 50% decline in revenue from its core ad business, although CEO Linda Yaccarino said weeks later the company is now “close to break-even.”

    And while X’s leadership has said advertisers are returning thanks to new brand safety controls, at least two brands recently paused their spending on the platform after their ads were run alongside an account celebrating the Nazi party. (X suspended the account after it was flagged and said ad impressions on the page were minimal.)

    Trump frequently pushed boundaries when he was active on Twitter. For years, the platform took a light-touch approach to moderating his account, arguing at times that as a public official, the then-president must be given wide latitude to speak. Now, if Trump returns to his old habits – the former president has, for example, continued to falsely claim in posts on Truth Social that the 2020 election was stolen – Musk could be forced to decide whether to risk alienating additional advertisers or compromise his stated commitment to “free speech.”

    Forte said he will be closely watching the impact of Trump’s return on Twitter’s advertising business. “The increased engagement should be favorable, but there is a risk that heightened controversy could hamper ad sales,” he said.

    And it’s not yet clear whether Trump will actually return to being active on X beyond Thursday’s post, which was essentially a fundraising appeal, and similar to what he posted on Truth Social. After Facebook restored Trump’s account earlier this year, many of his posts on that platform have been aimed at directing users to donate or volunteer for his campaign.

    What’s more, after making his return to X, Trump appeared to try to clarify where his loyalty lies. “I LOVE TRUTH SOCIAL. IT IS MY HOME!!” Trump posted on the X competitor platform.

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  • The iPhone’s new Action Button is more than a one-trick pony | CNN Business

    The iPhone’s new Action Button is more than a one-trick pony | CNN Business

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    CNN
     — 

    The new iPhone 15 Pro lineup offers the typical slate of new features designed to persuade customers to upgrade: They’re slimmer and thinner than last year’s crop. The new cameras are professional-grade and the switch to USB-C charging will make your life easier.

    But one new feature easily stands out: The Action Button.

    Apple has repurposed its physical mute button on the side of its high-end models into a more customizable tool, allowing users to carry out a handful of commands, from recording a voice memo and taking a picture to turning on the flashlight. The button can also be programmed to launch any app or shortcut, essentially turning it into a remote control or launching pad to gain quick access to something you want on demand.

    In the days since Apple’s iPhone 15 event at its Cupertino, California, headquarters, I’ve used it to load a variety of apps in a single press, including CNN, Amazon and Instagram. It’s certain the Action Button will become a viable resource for anyone who revisits an app time and time again throughout the day.

    But it also has the potential to become an even more powerful tool; you could program it to play your favorite playlist, turn on the smart lights in your living room or use it to open the garage door. You could even turn it into a dedicated button to call mom. It builds on iOS’s existing offering of ready-made or custom shortcuts, and Apple is encouraging developers to build other unique shortcuts that other users could activate on the Action Button.

    The change is subtle but it’s one of the few noticeable tweaks to the iPhone’s design this year. The Action Button is about the same size as the existing button, and users still hold it down to switch between muting and turning on the ringer. Commands are accompanied with visual feedback from the Dynamic Island barhome to alerts and notifications at the top of the screen.

    The Action Button update, along with changes in the phone’s charging and camera systems, comes as Apple looks to give consumers more reasons to upgrade their iPhones. Last month, Apple’s sales fell for the third consecutive quarter. iPhone revenue came in at $39.7 billion for the quarter, marking an approximately 2% year-over-year decline, as people update their devices less often.

    Another selling point to splurge for the iPhone 15 Pro ($1,099) or iPhone 15 Pro Max ($1,199): The phones come with a titanium casing — the same alloy used to build the Mars Rover — making them what Apple calls the thinnest and lightest Pro models to date. Apple’s entry level iPhones, the iPhone 15 and iPhone 15 Plus, cost $799 and $899, respectively. The entire lineup starts shipping on Friday.

    To program the Action Button, iPhone 15 Pro users can visit the button’s section in Settings, scroll through and select from a series of functionalities — such as flashlight or camera. By picking the shortcuts option, however, users can sift through their list of apps or previously established commands.

    Once set, there’s a slight learning curve following years of falling into the habit of using the physical button to turn the volume on and off. For this reason, it could take quite a while for some of iPhone’s loyalists to change how they use the device.

    The Action Button isn’t entirely new; the company unveiled it last year on the Apple Watch Ultra. Apple told CNN it was inspired to bring it to the iPhone after hearing anecdotes from users who said they consistently leave their phone on silent, rendering that button essentially useless. Considering iPhone usage has changed a lot since the iPhone debuted 16 years ago, revisiting a hallmark feature like the mute button was only a matter of time, according to the company.

    Ramon Llamas, a director at market research firm IDC, believes last week’s announcement is only the first step toward making the Action Button more dynamic. “I’d like to think that the Action Button could be expanded a bit more, like one click will take you to one feature; two clicks takes you to another, and three clicks gets you something else,” Llamas said. “But I think that would be it. Any more than that and you risk launching the wrong app, like Wordle, at the wrong time (when you need your camera the most),” he said.

    It’s also a strategic way for Apple to make the most of already tight real estate on the device, according to Llamas. Annette Zimmerman, a VP analyst with market research firm Gartner, agrees, noting that “having one button to do exactly one thing isn’t really progressive in a time where everything has multi-functionality and can be programmed.”

    Although it’s unclear if the Action Button will come to more devices in the future, Apple continues its sweep to create a uniform ecosystem for its consumers. Similarly, Apple is adding a Double Tap feature that allows people to use a finger feature to control the Apple Watch, just months after it showed off a similar gesture on its upcoming Vision Pro mixed reality headset.

    For now, iPhone 15 Pro users will enjoy playing with the new Action Button. While the feature is not worth the upgrade to iPhone 15 alone, the switch to universal charging, a faster processor and advanced camera capabilities make it a solid package, especially if you haven’t upgraded in the last few years.

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  • Another top Silicon Valley investor is splitting off its China business as pressure mounts | CNN Business

    Another top Silicon Valley investor is splitting off its China business as pressure mounts | CNN Business

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    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    GGV Capital, a prominent Silicon Valley venture capital firm, has become the latest big investor to break up its US and China operations into separate companies as tensions between the two countries over tech and geopolitics continue to rise.

    The firm announced Thursday that it would divide its business into two “completely independent” firms with separate new brands, which have not been revealed.

    According to the company, one side will concentrate on North America, Latin America, Europe, Israel and cross-border US-India deals, led by teams in California and New York by managing partners Glenn Solomon, Hans Tung, Jeff Richards and Oren Yunger.

    The other side will focus on China, Southeast Asia and South Asia, run from its headquarters in Singapore, by managing partners Jenny Lee and Jixun Foo.

    GGV’s existing Chinese yuan-denominated funds “will continue to be managed independently” under its Chinese brand, Jiyuan Capital, it said.

    In a statement, the firm attributed the decision to the fact that “over the last decade, the investment landscape has shifted significantly, and the operating environment has become highly complex.”

    “Against these new realities, GGV is also evolving,” it added, without elaborating further.

    The transition is expected to be completed by the end of the first quarter of next year.

    GGV Capital has approximately $9.2 billion in assets under management. The firm is known for backing tech companies around the world, such as Alibaba (BABA), Airbnb (ABNB), Slack, TikTok owner ByteDance and Chinese ride-hailing provider Didi.

    The move comes as US-China tensions continue to affect how businesses operate across the world’s top two economies.

    Last month, the Biden administration announced it would restrict investments by US venture capital and private equity firms, as well as joint ventures, in Chinese artificial intelligence, quantum computing and semiconductors.

    The executive order will exacerbate a slump in deals between the United States and China, and deliver a “major blow” to Chinese startups, analysts and investors previously told CNN.

    Asked whether the US order or wider geopolitical tensions had factored into its decision, GGV Capital declined to comment.

    The firm has recently come under greater scrutiny from US lawmakers.

    In July, a US House committee said it had sent letters to four investment firms, including GGV, “expressing serious concern and demanding information about the firms’ investments” in artificial intelligence, chips and quantum computing companies in China.

    One investment named was a GGV deal with Megvii, an AI developer. The company is best known for its facial recognition software, and has long been accused of human rights violations against Uyghurs and other members of Muslim minority groups in China’s Xinjiang region.

    Megvii was added to a US trade blacklist in 2019 over the issue and previously told CNN that there were “no grounds” for that decision.

    The ongoing pressure has already led other firms to separate their US and Chinese businesses this year.

    In June, top global venture capital firm Sequoia announced a similar decision to cordon off its operations into three entities that cover Europe and the United States; China; and India and Southeast Asia. Its China business will be run independently under its Chinese name, Hongshan.

    Leaders of the Silicon Valley firm said at the time that it had “become increasingly complex to run a decentralized global investment business.”

    In August, Dentons, a leading law firm, also said its China unit would become a standalone legal entity, in response to new Chinese regulations related to data privacy, cybersecurity and capital control.

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  • Biden teases forthcoming executive order on AI | CNN Business

    Biden teases forthcoming executive order on AI | CNN Business

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    CNN
     — 

    The White House plans to introduce a highly anticipated executive order in the coming weeks dealing with artificial intelligence, President Joe Biden said Wednesday.

    “This fall, I’m going to take executive action, and my administration is going to continue to work with bipartisan legislation,” Biden said, “so America leads the way toward responsible AI innovation.”

    Biden offered no details on the contents of the coming order, which the White House had first announced in July. But his remarks offer greater insight into his administration’s timing.

    Biden’s signing of the order would build on an earlier administration proposal for an “AI Bill of Rights.” Civil society groups have urged the Biden administration to require federal agencies to implement the AI Bill of Rights as part of any executive order on the technology. Meanwhile, the US Senate is continuing to educate lawmakers on artificial intelligence in preparation for months of legislative work on the issue.

    In Wednesday’s remarks during a meeting of the Presidential Council of Advisors on Science and Technology, Biden described the recent conversations he’s had with AI leaders and experts.

    “Vast differences exist among them in terms of what potential it has, what dangers there are, and so, I have a keen interest in AI,” Biden said. “I’ve convened key experts on how to harness the power of artificial intelligence for good while protecting people from the profound risk it also presents.”

    “We can’t kid ourselves,” Biden continued. “[There is] profound risk if we don’t do it well.”

    Biden reiterated the United States’ commitment to working with international partners including the United Kingdom on developing safeguards for artificial intelligence.

    The meeting also saw presidential advisers showcasing to Biden several use cases for artificial intelligence. Maria Zuber, the panel’s co-chair, said the examples Biden would see during the meeting would include the use of AI to predict extreme weather linked to climate change; to “create materials that have properties we’ve never been able to create before”; and to “understand the origins of the universe, which is literally as big as it gets.”

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  • Baidu says its AI is in the same league as GPT-4 | CNN Business

    Baidu says its AI is in the same league as GPT-4 | CNN Business

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    Editor’s Note: Sign up for CNN’s Meanwhile in China newsletter which explores what you need to know about the country’s rise and how it impacts the world.


    Hong Kong
    CNN
     — 

    Chinese tech giant Baidu is officially taking on GPT-4.

    On Tuesday, the company unveiled ERNIE 4.0, the newest version of its artificial intelligence chatbot that it directly compared to the latest iteration of OpenAI’s ChatGPT.

    The new ERNIE Bot “is not inferior in any aspect to GPT-4,” Baidu’s billionaire CEO, Robin Li, told an audience at its annual flagship event.

    Speaking onstage, Li showed how the bot could generate a commercial for a car within minutes, solve complicated math problems and create a plot for a martial arts novel from scratch. The bot works mainly in Mandarin Chinese, its primary language. It is also able to handle queries and produce responses in English at a less advanced level.

    Li said the demonstrations showed how the bot had been “significantly improved” in terms of its understanding of queries, generation of complex responses and memory capabilities.

    While coming up with ideas for the novel, for instance, the bot was able to remember previous instructions and create sophisticated story lines by adding conflicts and characters, said Li.

    “We always complained that AI was not intelligent enough,” he quipped.

    “But today, it understands almost everything you say, and in many cases, it understands what you’re saying better than your friends or your colleagues.”

    Charlie Dai, vice president and research director of technology at Forrester, said Baidu is “the first vendor in China” to claim it could perform as well as GPT-4.

    “We still need more benchmarking evidence to prove it, but I’m cautiously optimistic that this is China’s GPT-4 moment, giving its long-term investment in AI [and machine learning],” he told CNN.

    In contrast to a pre-recorded presentation in March that failed to impress investors, Li demonstrated the bot in real time.

    Investors appeared unmoved, however, with Baidu’s shares down 1.4% in Hong Kong following the presentation.

    Baidu (BIDU) has been a frontrunner in China in the race to capitalize on the excitement around generative AI, the technology that underpins systems such as ChatGPT or its successor, GPT-4.

    The Beijing-based company unveiled ERNIE Bot in March, before launching it publicly in August.

    The newest iteration will launch first to invited users, Li said. The company did not specify when it would be made available publicly.

    ERNIE Bot has quickly gained traction, racking up more than 45 million users after reaching the top of Chinese app stores at one point, according to the company. ChatGPT, which was released last November, surpassed 100 million users in its first two months, according to a March report by Goldman Sachs analysts.

    Baidu faces competition within China, from companies such as Alibaba (BABA) and SenseTime, which have also shown off their own ChatGPT-style tools.

    Baidu says its service stands out because of its advanced grasp of Chinese queries, as well as its ability to generate different types of responses, such as video and audio.

    By comparison, GPT-4 is also able to analyze photos, but currently only generates text responses, according to its developer, OpenAI.

    Baidu is a market leader in China, said Dai.

    But the competition in this space “has just begun, and AI tech leaders like Alibaba … Huawei, JD Cloud, SenseTime, and Tencent all have chance to take the lead,” he noted.

    Some critics say the new offerings from Chinese firms will add fuel to an existing US-China rivalry in emerging technologies. Li has tried to shake off that comparison, saying previously that the company’s platform “is not a tool for the confrontation between China and the United States.”

    But Baidu has previously touted how ERNIE can outperform ChatGPT in some instances, saying its bot had scored higher marks than OpenAI’s on some academic exams.

    The Chinese company also announced Tuesday it had updated its suite of services to integrate the latest upgrades from ERNIE. Baidu’s popular search engine is now able to use the tool to produce more specific results, while its mobile mapping app can help users book services, such as taxis, according to Li.

    By doing so, “Baidu is also the first Chinese tech leader that has made substantial progress in modernizing the majority of its products” with an AI model, said Dai.

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  • Regulators give green light to driverless taxis in San Francisco | CNN Business

    Regulators give green light to driverless taxis in San Francisco | CNN Business

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    CNN
     — 

    California regulators gave approval Thursday to two rival robotaxi companies, Cruise and Waymo, to operate their driverless cars 24/7 across all of San Francisco and charge passengers for their services.

    The much-anticipated vote, which followed roughly six hours of public comment both for and against driverless taxis, came amid clashes between the robotaxi companies and some residents of the hilly city. San Francisco first responders, city transportation leaders and local activists are among those who shared concerns about the technology.

    The California Public Utilities Commission regulates self-driving cars in the state and voted 3-to-1 in favor of Waymo and Cruise expanding their operations.

    That means residents and visitors to San Francisco will be able to pay a fare to ride in a driverless taxi, ushering in new automated competition to cab and ridehail drivers.

    “Today’s permit marks the true beginning of our commercial operations in San Francisco,” said Tekedra Mawakana, co-CEO of Waymo, in a press release.

    Cruise spokesperson Drew Pusateri said in a statement to CNN that the 24/7 driverless service is a “historic industry milestone” that puts Cruise “in a position to compete with traditional ridehail, and challenge an unsafe, inaccessible transportation status quo.”

    Until Thursday’s vote, Cruise and Waymo could offer only limited service to San Francisco residents.

    Cruise – a subsidiary of General Motors – could charge a fare only for overnight rides occurring between 10 p.m. and 6 a.m. in select parts of the city. Waymo, owned by Google’s parent company Alphabet, could charge a fare only for rides with a human driver in the vehicle.

    Now, Cruise and Waymo can charge a fare for their driverless rides and 24/7 access to San Francisco streets as they do so.

    Cruise officials told state commissioners at a recent public hearing that it deploys about 300 vehicles at night and 100 during the day, while Waymo officials said that around 100 of its 250 vehicles are on the road at any given time.

    The autonomous ride-hailing service offered by Cruise and Waymo allows users to request a ride similar to Uber or Lyft. There is a difference, of course: The car has no driver.

    Members of the public packed the commission’s San Francisco headquarters to share their thoughts with state commissioners in one-minute increments during the meeting. Critics pointed to driverless cars freezing in traffic and blocking first responders, while advocates said they felt the cars drove more defensively than human drivers.

    Although the decision ultimately laid in the hands of state regulators, who delayed the vote twice, local officials also expressed their dissent.

    The San Francisco Police Officers Association, San Francisco Deputy Sheriffs’ Association and the San Francisco Fire Fighters Local 798 all wrote letters to the CPUC in the week leading up to the originally scheduled vote on June 29. Each expressed concerns that autonomous vehicles could impede emergency responders.

    “The time that it takes for an officer or any other public safety employee to try and interact with an autonomous vehicle is frustrating in the best-case scenario, but when they can not comprehend our demands to move to the side of the roadway and are stopped in the middle of the roadway blocking emergency response units, then it rises to another level of danger,” wrote Tracy McCray, president of the San Francisco Police Officers Association in June, “and that is unacceptable.”

    The San Francisco Fire Department has recorded 55 incidents of driverless vehicles interfering with their emergency responses in 2023 as of Wednesday, the department confirmed to CNN.

    In one incident reported by the department on Saturday, a Waymo car pulled up between a car on fire and the fire truck aiming to put it out.

    Other instances include robotaxis driving through yellow tape into the scene of a shooting, blocking firehouse driveways such that a fire truck farther away had to respond to the scene, and requiring firefighters to reroute, according to Fire Chief Jeanine Nicholson.

    “It should not be up to my people to have to move their vehicle out of the way when we’re responding to one of our 160,000 calls,” Nicholson told CNN in June.

    Robotaxi companies have often touted their safety records. Out of 3 million driverless miles, a Cruise car has not been involved in a single fatality or life-threatening injury, according to the company. In a February review of its first million driverless miles, Waymo said their cars caused no reported injuries and that 55% of all contact events were the result of a human driver hitting a stationary Waymo vehicle.

    2022 was the worst year on record for traffic fatalities in San Francisco since 2014, according to city data. Cruise said that when benchmarked against human drivers in comparable driving environments, its vehicles were involved in 54% fewer collisions overall.

    The San Francisco Municipal Transportation Agency said in a California Public Utilities Commission meeting on Monday that it had logged almost 600 incidents involving autonomous vehicles since the technology first launched in San Francisco. The agency said they believe this is “a fraction” of actual incidents due to what they allege is a lack of data transparency.

    Genevieve Shiroma, the dissenting commissioner in the 3-1 vote, recommended the commission delay the vote until they received a “better understanding of the safety impacts” of the vehicles.

    “First responders should not be prevented from doing their job. The fact that an injury or fatality has not occurred yet is not the end of the inquiry,” Shiroma said. “The commission needs a better explanation regarding why these events occur.”

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  • Two brands suspend advertising on X after their ads appeared next to pro-Nazi content | CNN Business

    Two brands suspend advertising on X after their ads appeared next to pro-Nazi content | CNN Business

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    New York
    CNN
     — 

    At least two brands have said they will suspend advertising on X, the platform formerly known as Twitter, after their ads and those of other companies were run on an account promoting fascism. The issue came less than a week after X CEO Linda Yaccarino publicly affirmed the company’s commitment to brand safety for advertisers.

    The nonprofit news watchdog Media Matters for America documented in a report published Wednesday that ads for a host of mainstream brands have been run on the account, which has shared content celebrating Hitler and the Nazi Party.

    Ads for brands including Adobe, Gilead Sciences, the University of Maryland’s football team, New York University Langone Hospital and NCTA-The Internet and Television Association were run alongside tweets from the account that had garnered hundreds of thousands of views, CNN observed.

    Spokespeople for NCTA and pharmaceutical company Gilead said that they immediately paused their ad spending on X after CNN flagged their ads on the pro-Nazi account.

    “We take the responsible placement of NCTA ads very seriously and are concerned that our post about the future of broadband technology appeared next to this highly disturbing content,” NCTA spokesperson Brian Dietz said in a statement, adding that the organization had opted into X’s brand safety measures including keyword restrictions and limiting its ad placement to the “home feed of target audiences.”

    “Brand safety will remain an utmost priority for NCTA, which means suspending advertising on Twitter/X for the foreseeable future and heavily limiting NCTA’s organic presence on the platform,” Dietz said.

    A spokesperson for Gilead said the company will pause its ad spending while X investigates the issue.

    Jason Yellin, University of Maryland’s associate athletic director, expressed concern about the placement of the football team’s post on the account and said Maryland Football has not spent money on advertising on X since 2021, meaning X may have promoted the post despite it not being a paid ad.

    A spokesperson for NYU Langone said in a statement that the hospital was “completely surprised by this and are extremely concerned with any appearance of our advertising and brand next to obviously objectionable content that promotes hatred,” adding that it expects its advertising partners to “act responsibly.”

    X did not immediately respond to a request for comment from CNN. Hours after the Media Matters report was published Wednesday morning and CNN observed additional brands’ ads running on the account, the account appeared to be suspended.

    Adobe did not immediately respond to requests for comment from CNN.

    The issue comes as X has been trying to lure advertisers back to the platform after many left in the wake of Elon Musk’s takeover of the company last fall over concerns about content moderation, mass layoffs and general uncertainty over the platform’s direction. Musk said last month that the company still had negative cash flow because of a nearly 50% drop in its core advertising revenue.

    Yaccarino — who joined the company in June, just ahead of a major rebrand from Twitter to X — told CNBC in her first public interview as chief executive last week that many of the platform’s advertisers have returned and that the company is “close to break-even.” She touted the company’s “freedom of speech, not freedom of reach” policy, which aims to limit the reach of so-called lawful but awful content on the platform and to protect brands from having their ads appear alongside such content.

    X last week said it had rolled out additional brand safety controls for advertisers, including the ability to avoid having their ads show next to “targeted hate speech, sexual content, gratuitous gore, excessive profanity, obscenity, spam, drugs.” In addition to human content moderation reviewers that monitor for content that violates the platform’s rules, X says it has automated software that determines where and how ads are placed on the platform.

    “Your ads will only air next to content that is appropriate for you,” Yaccarino said during last week’s interview.

    But Wednesday’s report suggests that the company still has work to do if it wants to avoid monetizing, and placing ads alongside, objectionable content. “Media Matters and other observers have documented how X has remained a dangerous cesspool of content, especially for advertisers,” Wednesday’s report states. Media Matters says it has also documented instances of brands’ ads being placed next to content from Holocaust denial and white nationalist accounts.

    While she did not publicly comment on the ads appearing alongside pro-Nazi content, Yaccarino did post on X Wednesday that, “Sensitivity Settings is live globally in the X Ads Manager — making it even simpler for all advertisers to find the right balance between reach and suitability.”

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