🚨AI&Tech Legal Digest - September 27, 2024

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Here, I bring you the latest key legal news and trends in the AI and tech world. Stay updated with expert insights, state approaches, regulations, key recommendations, safeguards, and practical advice in the tech and AI field by clicking the "subscribe" button above ✅ Enjoy your read!        

UN Global Digital Compact: A New Era for AI and Tech Governance

The United Nations has unveiled its Global Digital Compact (GDC), a groundbreaking framework for digital cooperation and AI governance. Adopted as part of the UN's "Pact for the Future," this initiative sets a new global agenda for responsible tech development and deployment.

Key aspects of the GDC include:

1. AI Governance: The compact calls for a roadmap to govern AI, including the creation of a global AI fund to benefit developing nations. It also proposes an International Scientific Panel and a Global Policy Dialogue on AI.
2. Tech Company Responsibilities: Companies are urged to enhance transparency and accountability, particularly in content moderation and data handling. The GDC also encourages open-source technologies and solutions to counter potential AI-related harms.
3. Digital Inclusion: The UN commits to universal internet connectivity, emphasizing increased investments in developing countries and the establishment of national digital skills strategies.
4. Child Protection: The compact addresses online safety concerns, urging tech companies to implement robust reporting mechanisms and enhance content moderation practices.

While non-binding, this comprehensive agreement represents a significant step towards global digital cooperation. Its implementation and impact on tech companies and national policies remain to be seen, but it undoubtedly places tech governance at the forefront of the global agenda.

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EU AI Pact Gains Traction: Major Tech Players Sign Up, While Others Hold Back

The European Commission has unveiled the initial list of over 100 signatories to its AI Pact, a voluntary initiative aimed at promoting responsible AI development and deployment ahead of the EU's AI Act full implementation. This move highlights the EU's proactive stance in addressing the regulatory gap before the AI Act's compliance deadlines take effect.

Key players like Amazon, Google, Microsoft, and OpenAI have joined the pact, committing to a set of core actions including adopting AI governance strategies, identifying high-risk AI systems, and promoting AI literacy among staff. However, notable absences include Apple, Meta, and Anthropic, with Meta explicitly stating its focus on direct AI Act compliance.

The pact offers a flexible approach, allowing signatories to choose from a range of pledges tailored to their operations. These commitments range from transparent AI system interactions to clear labeling of AI-generated content, potentially fostering a competitive environment for AI safety practices.

While the AI Pact is voluntary, it serves as a precursor to the legally binding AI Act, which carries significant penalties for non-compliance. This initiative reflects the EU's strategy to encourage early adoption of best practices and foster collaboration among tech companies in navigating the complex landscape of AI regulation.

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Dubai Tightens Crypto Marketing Rules to Protect Investors

Dubai's Virtual Assets Regulatory Authority (VARA) has introduced stricter guidelines for cryptocurrency marketing, signaling a significant shift in the emirate's approach to digital asset promotion. These new rules, effective October 1, aim to enhance investor protection and transparency in the rapidly evolving crypto market.

Key aspects of the updated regulations include:

1. Mandatory Risk Disclaimers: Crypto firms must now prominently display disclaimers highlighting the potential for complete or partial loss of investment and the extreme volatility of virtual assets.
2. Regulated Incentives: Companies offering incentives or bonuses for crypto-related products must obtain compliance confirmation from VARA, ensuring these promotions don't mislead investors about associated risks.
3. Global Alignment: Dubai's move aligns with similar efforts in countries like Belgium, Singapore, and the UK, where crypto marketing has come under increased scrutiny.

This regulatory update reflects Dubai's commitment to fostering a responsible and transparent virtual asset ecosystem while maintaining its position as a hub for crypto innovation. The new guidelines strike a balance between promoting the sector and protecting investor interests in the face of crypto's inherent volatility.

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Judge Rebukes Legal Team in Meta AI Copyright Case

A San Francisco federal judge has sharply criticized the legal representation in the copyright infringement lawsuit against Meta Platforms. The case, led by comedian Sarah Silverman and other authors, alleges Meta used their copyrighted books without permission to train its AI model, LLaMA.

During a virtual case management hearing, Judge Vince Chhabria stated he would not certify a class action with the current legal team, citing inadequate representation. He urged the plaintiffs' attorneys, led by Joseph Saveri, to bring in other law firms with "the resources and the wherewithal" to litigate the case properly.

The judge granted a 14-day extension for factual discovery, significantly less than the 97 days requested by the plaintiffs' attorneys. This decision came in response to the legal team's apparent failure to raise discovery disputes in a timely manner.

Despite his criticisms, Judge Chhabria acknowledged the case's importance as an "important societal issue" involving copyright law and AI training. Meta is expected to argue that its use of the books falls under copyright law's fair use exception.

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Celebrities Fall for "Goodbye Meta AI" Hoax on Instagram

A viral hoax claiming to protect users' images from Meta's AI training has swept through Instagram, with over 600,000 people, including high-profile celebrities, sharing the false message. Film stars James McAvoy and Ashley Tisdale, along with former NFL player Tom Brady, were among those who reposted the fake "Goodbye Meta AI" statement.

The hoax falsely claimed that sharing the message would prevent Meta from using personal information for AI training. However, Meta has confirmed that posting such messages has no impact on users' privacy settings. Users who wish to opt out of AI training can do so through their account settings.

Lead Stories, a third-party fact-checker for Meta, has labeled these posts as "false information." The trend originated from a Facebook post on September 1st, gaining significant traction when celebrity accounts began sharing it after September 24th.

This incident is reminiscent of previous "copypasta" trends where users erroneously attempt to declare their privacy rights through public posts. While such hoaxes are not new, the scale of celebrity involvement in this case is unusual.

The hoax comes in the wake of Meta's June announcement about using public posts for AI training, highlighting ongoing concerns about data privacy in the age of artificial intelligence.

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Lionsgate Partners with AI Startup Runway for Content Creation

Lionsgate, the studio behind popular franchises like John Wick and The Hunger Games, has announced a groundbreaking partnership with AI startup Runway. This collaboration aims to develop a customized video generation model using Lionsgate's extensive portfolio of films and TV shows.

The deal positions Lionsgate to explore "capital-efficient content creation opportunities," according to studio vice chair Michael Burns. The AI model is intended to augment and enhance pre-production and post-production processes, with several filmmakers already expressing interest in its potential applications.

Runway, known for its generative AI models, sees this partnership as a way to provide filmmakers with innovative tools for storytelling. However, specific details about the deal, including potential compensation for creative teams whose work may be used in training the AI, remain undisclosed.

This partnership emerges amid growing industry debates about AI in filmmaking. Recent developments include California's passage of SAG-AFTRA-backed bills protecting performers' digital likenesses and the pending SB 1047 legislation on AI developer liability. The move highlights the evolving landscape of AI integration in entertainment, balancing innovation with concerns about job security and creative rights in Hollywood.

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FTC Report Reveals Extensive User Data Collection by Tech Giants

The Federal Trade Commission (FTC) has released a comprehensive report exposing the widespread surveillance practices of major social media and online video companies. The study, which examined nine tech giants including Meta, Google, TikTok, and others, reveals alarming insights into data collection and sharing practices.

Key findings from the FTC report include:

1. Vast data collection: Companies are amassing extensive personal information both on and off their platforms.
2. Third-party sharing: User data is being shared with numerous external entities.
3. Limited user control: Consumers have minimal ability to opt out of data collection or control how their information is used.
4. Algorithmic targeting: Personal data is used to tailor content and advertisements, often without user knowledge.
5. Inadequate protections for minors: Many platforms lack specific safeguards for users under 18.
6. Insufficient data deletion practices: Some companies fail to fully delete user data upon request.

The FTC is urging Congress to enact federal privacy regulations and calling on tech companies to improve their data practices. This report underscores the urgent need for stronger consumer privacy protections in the digital age.

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Google Files Antitrust Complaint Against Microsoft in EU

Google has lodged an antitrust complaint against Microsoft with the European Union, accusing its rival of anti-competitive practices in the cloud computing market. The complaint centers on Microsoft's alleged use of its dominant position in business software to unfairly lock customers into its Azure cloud services.

Key points of the complaint include:

1. Punitive fees: Google claims Microsoft imposes excessive charges on customers who wish to transfer projects from Azure to competing cloud platforms.
2. Financial impact: The alleged practices are said to cost European businesses over 1 billion euros annually.
3. Market competition: Google argues these tactics stifle competition in the rapidly growing cloud services industry.

This move marks the latest development in the ongoing rivalry between the tech giants, with both companies having previously accused each other of monopolistic behavior. Microsoft responded by referring to a recent settlement with European cloud providers, suggesting Google's complaint may not succeed.

The complaint comes amid increasing scrutiny of big tech companies, with Microsoft already facing antitrust investigations in Europe and the UK over its business practices. Meanwhile, Google itself is battling antitrust cases in the United States related to its search and advertising technology businesses.

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Mozilla Faces EU Privacy Complaint Over Firefox Tracking Technology

Privacy rights group noyb has filed a complaint against Mozilla with the European Union, accusing the Firefox browser developer of violating the General Data Protection Regulation (GDPR). The complaint centers on Mozilla's new "Privacy Preserving Attribution" (PPA) feature, which noyb claims turns Firefox into a tracking tool for websites without user consent.

Key points of the complaint include:

1. Default tracking: Mozilla is accused of enabling PPA by default without user permission.
2. Lack of transparency: noyb argues that Mozilla failed to adequately inform users about the processing of their personal data.
3. Opt-out mechanism: The group criticizes Mozilla for using an opt-out rather than an opt-in approach for the feature.
4. Additional tracking: noyb contends that PPA doesn't replace existing tracking methods but adds another layer of user monitoring.

Mozilla defends PPA as a limited test aimed at improving invasive advertising practices, claiming it allows advertisers to measure ad effectiveness without identifying individuals. The company admits to poor communication about the feature and states that no end-user data has been recorded or sent yet.

This complaint is unusual as Mozilla is typically associated with enhancing user privacy. If EU regulators agree with noyb's assessment, Mozilla could face orders to change its approach or potentially incur fines under GDPR.

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Automattic and WP Engine Escalate Trademark Dispute in WordPress Community

The conflict between Automattic, the company behind WordPress, and WP Engine, a major WordPress hosting provider, has intensified with both parties exchanging cease-and-desist letters over trademark issues. This development follows recent public criticism from Automattic's CEO, Matt Mullenweg, towards WP Engine.

Key points of the dispute:

1. Automattic's claims:Accuses WP Engine of unauthorized use of WordPress and WooCommerce trademarks.Alleges WP Engine has built a $400 million business by misleading consumers about its affiliation with WordPress.Demands compensation for profits made using Automattic's trademarks.
2. WP Engine's response:Defends its use of "WordPress" under fair use laws. Claims Mullenweg demanded a significant percentage of WP Engine's revenues for trademark use.Accuses Mullenweg of launching a smear campaign after financial demands were not met.
3. Community impact:Concerns arise about potential harm to specialized WordPress hosting providers.WordPress Foundation updates its Trademark Policy page, specifically mentioning WP Engine.

This escalation highlights the complex relationships within the WordPress ecosystem, where open-source software intersects with commercial interests. The dispute could have far-reaching implications for the WordPress community and hosting industry.

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FTC Launches Crackdown on Deceptive AI Practices

The U.S. Federal Trade Commission (FTC) has taken action against five companies for alleged deceptive and unfair use of artificial intelligence, signaling increased scrutiny of AI-related claims and practices. This enforcement sweep highlights the agency's stance that AI does not exempt businesses from existing laws and regulations.

Key points of the FTC's actions include:

1. E-commerce schemes: Three companies were forced to suspend operations for falsely promising passive income through AI-powered e-commerce storefronts.
2. DoNotPay settlement: The company agreed to pay $193,000 and notify customers about limitations of its automated legal services.
3. Rytr case: The AI writing tool was ordered to stop providing a feature that allowed users to generate fake product reviews.
4. FTC's stance: Chair Lina M. Khan emphasized that using AI to deceive or defraud consumers is illegal.
5. Internal debate: While the commission unanimously agreed on taking action against false AI claims, Republican commissioners criticized the Rytr case as potentially overreaching.

This crackdown signals the FTC's commitment to protecting consumers from deceptive AI practices and sets a precedent for future enforcement actions in the rapidly evolving AI landscape.

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Nokia Wins Patent Dispute Against Amazon in German Court

A German court has ruled in favor of Nokia in a patent dispute with Amazon, finding that the e-commerce giant is using Nokia's patented video technologies without proper licensing. This decision marks a significant development in the ongoing intellectual property battle between the two tech companies.

Key points of the ruling and its implications:

1. Court decision: The Munich Regional Court found Amazon to be using Nokia's video-related technologies in its streaming devices without a license.
2. Amazon's response: The company disagrees with the ruling and expects a resolution soon. Amazon claims the decision won't affect existing customers or the availability of Fire TV devices.
3. Licensing dispute: Amazon argues that Nokia is demanding more in licensing fees than other companies combined and has rejected Amazon's offer, which it considers fair and in line with market rates.
4. Ongoing litigation: This case is part of a broader legal battle, with Nokia initiating litigation against Amazon in multiple countries over patented multimedia inventions.
5. Countersuit: Amazon previously sued Nokia in a U.S. court, accusing it of infringing on Amazon's cloud-computing patents.

This ruling highlights the complexities of patent licensing in the tech industry, especially as companies expand into new markets and technologies. The outcome could have implications for how tech giants negotiate and license patents in the future.

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FTC Report Reveals Limited User Control Over AI Data on Social Media

The U.S. Federal Trade Commission (FTC) has released a report highlighting significant concerns about data management practices of major social media and tech companies, particularly in relation to artificial intelligence systems. The report analyzed data practices of several prominent platforms including Meta, TikTok, Twitch, YouTube, X (formerly Twitter), Snap, Discord, and Reddit.

Key findings from the FTC report:

1. Extensive data collection: Companies gather vast amounts of user information through various means, including tracking technologies and data broker purchases.
2. Lack of transparency: Users have little insight into or control over how their data is collected, shared, and processed.
3. AI concerns: There's limited user control over how personal data is used in AI systems.
4. Inadequate policies: Many companies' data management and retention policies were deemed "woefully inadequate" by the FTC.
5. Privacy risks: These practices potentially endanger user privacy and expose individuals to various harms, including identity theft and stalking.
6. Varied responses: Some companies, like Discord and X, have disputed aspects of the report or claimed improvements since the study period.

FTC Chair Lina Khan emphasized the lucrative nature of these surveillance practices for companies while highlighting the associated risks to user privacy and freedom. This report underscores the ongoing challenges in balancing technological innovation with user privacy and data protection in the digital age.

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In this fast-paced, ever-changing world, it can be challenging to stay updated with the latest legal news in the AI and tech sectors. I hope you found this digest helpful and were able to free up some time for the real joys of life.

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Anita