Microsoft says it made a mistake last month when it claimed that the very structure of Federal Trade Commission, the agency trying to block its bid for Activision Blizzard, violates the United States Constitution. From a report: Microsoft removed that argument Thursday as it filed a revised -- and less incendiary -- response to the FTC's lawsuit to stop the tech giant's $69 billion gaming acquisition. Microsoft's new filing still argues that its purchase of the creator of Call of Duty, World of Warcraft and Candy Crush would not unfairly stifle competition with other game makers. But it no longer includes a five-bullet-point salvo claiming that the FTC's structure and in-house administrative court, where the Activision case is being heard, run afoul of the Constitution, the separation of powers and the due process clause of the 5th Amendment.

New York's attorney general on Thursday filed a civil lawsuit accusing Celsius Network founder Alex Mashinsky of scheming to defraud hundreds of thousands of investors by inducing them to deposit billions of dollars in digital assets with his cryptocurrency company. From a report: The lawsuit filed in a New York state court in Manhattan accuses Mashinsky of violating the state's Martin Act, which gives Attorney General Letitia James broad power to pursue civil and criminal cases over securities fraud, and other laws. Mashinsky was accused of promoting Celsius as a safe alternative to banks, while concealing that Celsius was actually engaged in risky investment strategies that contributed to its collapse and bankruptcy. "Alex Mashinsky promised to lead investors to financial freedom but led them down a path of financial ruin," James said in a statement. "Making false and unsubstantiated promises and misleading investors is illegal."

Sam Bankman-Fried pleaded not guilty in New York federal court Tuesday to eight charges related to the collapse of his former crypto exchange FTX and hedge fund Alameda Research. CNBC reports: The onetime crypto billionaire was indicted on charges of conspiracy to commit wire fraud and securities fraud, individual charges of securities fraud and wire fraud, money laundering and conspiracy to avoid campaign finance regulations. The trial will begin on Oct. 2. [...] Earlier in the day, attorneys for Bankman-Fried filed a motion to seal the names of two individuals who had guaranteed Bankman-Fried release on bail with a bond. They claimed that the visibility of the case and the defendant had already posed a risk to Bankman-Fried's parents, and that the guarantors should not be subject to the same scrutiny. [Judge Lewis Kaplan] approved the motion in court. Federal prosecutor Danielle Sassoon told the court that Bankman-Fried had worked with foreign regulators to transfer assets that FTX's U.S. management had been attempting to recover through the Chapter 11 bankruptcy process.

Regulators in the Bahamas and FTX's U.S. lawyers have been fighting for weeks in Delaware bankruptcy court over hundreds of millions, if not billions, of dollars worth of cryptocurrency. FTX's attorneys insist that Bahamian regulators have illicitly transferred hundreds of millions of dollars, and that Bankman-Fried assisted them. Bahamian regulators say that local laws give them jurisdiction over those assets, and dispute the validity of the U.S. Chapter 11 proceedings. Federal prosecutors appear to agree with FTX's U.S. attorneys. Sassoon asked Kaplan to impose a new restriction barring Bankman-Fried from transferring or accessing FTX customer assets. The judge approved that motion as well.

The U.S. attorney's office for the SDNY had argued that Bankman-Fried used $8 billion worth of customer assets for extravagant real estate purchases and vanity projects, including stadium naming rights and millions in political donations. Federal prosecutors built the indictment against Bankman-Fried with unusual speed, packaging together the criminal charges against the 30-year-old in a matter of weeks. The federal charges came alongside complaints from the Commodity Futures Trading Commission and the Securities and Exchange Commission.

The Biden administration is working to complete a clean water regulation before a Supreme Court ruling that could complicate the government's ability to protect wetlands and other waters. From a report: The Environmental Protection Agency rule, which was finalized on Friday, essentially reverts protections for millions of streams, marshes and other bodies of water to levels that existed before the Obama administration made major changes in 2015, leading to nearly a decade of political and legal disputes. With the Supreme Court expected to rule next year in a major case that could reduce the government's authority to regulate wetlands, experts called the Biden administration's move strategic. Getting a rule on the books now gives the E.P.A. a greater chance of locking in, at least for a while, a broad definition of which waterways qualify for federal protection under the Clean Water Act.

"If the Supreme Court goes first, then the agency can't finalize a rule that goes beyond it," said Kevin S. Minoli, a partner at Alston & Bird who served as an E.P.A. counsel in the Clinton, Bush, Obama and Trump administrations. By issuing a rule first, he said, the government has "more room to interpret" the court decision when it comes. Under the new rule, the E.P.A. revived a definition of what constitute "waters of the United States" that had been in place since 1986, describing the definition as "familiar" and foundational to decades of clean-water progress. In a statement, the agency said the changes imposed by the Obama administration, a subsequent reversal by the Trump administration and several legal battles in between, had "harmed communities and our nation's waters."

The Ohio Supreme Court has unanimously overruled a judgment of the Ohio Second District Court of Appeals and moved that there must be "direct" physical loss or physical damage in the company's computer software for insurance policy coverage. From a report: In the three-year court proceedings between the greater Dayton medical billing software maker EMOI and its insurance service provider Lansing, Michigan-based Owners Insurance Company, the latter asserted that the insurance contract unambiguously stated only "direct physical loss" or "direct physical damage" to media would be covered under the insurance policy.

The court in its final ruling gave the rationale that a computer might have physical electronic components that are "tangible" in nature but the information stored there has no "physical presence"; thus a ransomware attack on the company software has no coverage under the company's insurance policy. The judgment against EMOI concludes that a software developer can't use its property insurance to cover losses. A district judge had dismissed EMOI's case against Owners, which the developer brought forth just months after the attack. But the appellate court in November 2021 had ruled in favor of EMOI stating that the claimant could sue the insurance company for allegedly treating its claim in bad faith by failing to properly examine "the various types of damage that can occur to media such as software."

Tim Wu, a central architect of President Biden's push to clip the wings of the nation's largest companies, is leaving the White House. From a report: Mr. Wu's last day at the National Economic Council will be Wednesday, ending his 22-month tenure as special assistant to the president for competition and tech policy, the White House said. Mr. Wu told The New York Times that he would return to his previous job, as a professor at Columbia Law School. Mr. Wu is one-third of a troika -- along with Lina Khan at the Federal Trade Commission and Jonathan Kanter at the Justice Department -- leading Washington's attempts to more aggressively check corporate giants, including the largest tech companies. He was an author of a July 2021 executive order demanding that federal agencies take steps to increase competition across the economy. Ms. Khan and Mr. Kanter have tried to block corporate consolidation using uncommon arguments in court.

Mr. Wu, 50, said personal reasons were driving his departure. He has been commuting to Washington from New York, he said, requiring him to spend stretches away from his young children. "There's a time where the burden on family is too much," Mr. Wu said. "I've been feeling the balance has shifted." Mr. Wu said he had entered the job believing it to be a "once-in-a-generation chance" to reverse decades of more conservative thinking in antitrust law. The administration has notched some wins on that front -- such as enacting parts of the 2021 executive order, which led to efforts by the government to open up charging networks for electric vehicles and make hearing aids available for purchase over the counter.

An anonymous reader quotes a report from KOMO: Ermenildo Castro, 28, of Tacoma, allegedly told detectives that he was inspired by the 90's movie "Office Space" when he devised a plan to divert customer fees from his employer, Zulily.com, into his own bank accounts. According to court documents, Castro wrote software code that manipulated the online retailer's checkout page to send the shipping fees into his own account. The charges allege Castro netted $260,000 in stolen shipping fees. Seattle police detectives said Castro also used his position as a software engineer to manipulate prices on Zulily to purchase approximately $41,000 in merchandise for 'pennies on the dollar'.

According to police, the company's cybersecurity staff found a document on Castro's laptop titled 'OfficeSpace project', which outlined Castro's scheme to 'cleanup evidence' by manipulating audit logs and disabling alarm logging. The theft began in February and by March the company had identified discrepancies in the shipping fees being charged to customers, an SPD report states. Castro was part of the team assigned to investigate the discrepancies in shipping fees, according to the report. Zulily investigators eventually caught on to Castro's scheme and went to his house in Tacoma where they found boxes of merchandise piled up outside the front door and driveway, the report states. In total, Zulily's team said Castro had sent over 1,000 items sent to his house. Seattle police detectives wrote a narrative explaining how Castro's alleged scheme related to the movie "Office Space," including the plot outline on IMDB.com.

"In the Initech office, the insecure Peter Gibbons hates his job. His best friends are two software engineers Michael Bolton and Samir Nagheenanajar, that also hate Initech. When he discovers that Michael and Samir will be downsized, they decide to plant a virus in the banking system to embezzle fraction of cents on each financial operation into Peter's account. However[,] Michael commits a mistake in the software on the decimal place and they siphon off over $300,000. The desperate trio tries to fix the problem, return the money and avoid going to prison."

An anonymous reader quotes a report from Ars Technica: An appeals court has revived a lawsuit against that accuses Google, YouTube, DreamWorks, and a handful of toymakers of tracking the activity of children under 13 on YouTube. In an opinion (PDF) released Wednesday, the Ninth US Circuit Court of Appeals ruled that the Children's Online Privacy Protection Act does not bar lawsuits based on individual state privacy laws.

Passed in 1998 and amended in 2012, COPPA requires websites to obtain parental consent for the collection and dissemination of personally identifiable information of children under the age of 13. COPPA gives the FTC and state attorneys general the ability to investigate and levy fines for violations of the law. Several states across the US have laws similar to COPPA on the books. The revived lawsuit cites laws in California, Colorado, Indiana, and Massachusetts to argue that Hasbro, DreamWorks, Mattel, and the Cartoon Network illegally lured children to their YouTube channels in order to target them with ads.

A federal judge in San Francisco dismissed the original lawsuit, ruling that COPPA bars individuals from suing companies for privacy violations. In a unanimous decision, the Ninth Circuit judges hearing the appeal disagreed with the district court's reasoning. COPPA is not, in fact, the only route to enforcement, according to the ruling. "Since the bar on 'inconsistent' state laws implicitly preserves 'consistent' state substantive laws, it would be nonsensical to assume Congress intended to simultaneously preclude all state remedies for violations of those laws," wrote Judge Margaret McKeown. The case, which seeks damages for a seven-year time period between 2013 and 2020, now heads back to district court.

Intel and SoftBank-backed VLSI Technology have agreed to end a $4 billion patent dispute, according to documents filed in Delaware District Court this week. From a report: The decision marks a victory for Intel, which has already lost $3 billion in failed patent disputes to VLSI over the past few years. The case in question dates back to 2018 and alleged that Intel had infringed on five VLSI-owned patents governing things like secure communications, power optimization and delivery, and flip-chip interconnects.

If VLSI sounds familiar, that's because the company has been lurking around the semiconductor industry in one shape or form since the late '70s. The company originally made ASICs before it was acquired by Philips Electronics and later spun off under NXP. But despite any early successes in chipmaking, VLSI is now owned by SoftBank's Fortress Investment Group, and appears to exist solely to sue chipmakers it believes have violated its intellectual property -- in other words, it's a patent troll. The decision to call it quits comes after nearly five years of litigation. Tuesday, Intel and VLSI released a joint filing in which Intel and VLSI mutually agreed to dismiss the case and resolve all disputes over Intel's use of the aforementioned patents. Critically, VLSI has done so with prejudice. As we understand it, this means the company can't refile the case.

U.S. prosecutors have filed criminal charges of commodities fraud and manipulation against a man accused of trying to steal about $110 million in October by rigging the Mango Markets cryptocurrency exchange. From a report: According to a complaint made public on Tuesday in Manhattan federal court, Avraham Eisenberg's trades in futures related to Mango's crypto token MNGO enabled him to withdraw $110 million in cryptocurrencies from other investors' deposits, with no apparent intention to repay the funds. Eisenberg was arrested on Monday night in Puerto Rico, U.S. Attorney Damian Williams in Manhattan said in a court filing. It was unclear whether Eisenberg has a lawyer. Mango is a decentralized cryptocurrency exchange run by Mango DAO that lets investors lend, borrow, swap, and use leverage to trade cryptocurrency assets. The Dec. 23 complaint signed by FBI Special Agent Brandon Racz said Eisenberg on Oct. 11 used two accounts to concurrently buy and sell futures based on the relative values of MNGO and the stablecoin USD Coin (USDC).

An anonymous reader shares a report: Tracy Harpster, a deputy police chief from suburban Dayton, Ohio, was hunting for praise. He had a business to promote: a miracle method to determine when 911 callers are actually guilty of the crimes they are reporting. "I know what a guilty father, mother or boyfriend sounds like," he once said. Harpster tells police and prosecutors around the country that they can do the same. Such linguistic detection is possible, he claims, if you know how to analyze callers' speech patterns -- their tone of voice, their pauses, their word choice, even their grammar. Stripped of its context, a misplaced word as innocuous as "hi" or "please" or "somebody" can reveal a murderer on the phone. So far, researchers who have tried to corroborate Harpster's claims have failed. The experts most familiar with his work warn that it shouldn't be used to lock people up. Prosecutors know it's junk science too. But that hasn't stopped some from promoting his methods and even deploying 911 call analysis in court to win convictions.

[...] Junk science in the justice system is nothing new. But unvarnished correspondence about how prosecutors wield it is hard to come by. It can be next to impossible to see how law enforcement -- in league with paid, self-styled "experts" -- spreads new, often unproven methods. The system is at its most opaque when prosecutors know evidence is unfit for court but choose to game the rules, hoping judges and juries will believe it and vote to convict. People like Faria, defense lawyers and sometimes even the judges are blindsided. "I don't want what happened to me to happen to anyone else," Faria told me. Askey, who now goes by Leah Chaney and is no longer a prosecutor, did not answer questions about the case other than to say she didn't know about Harpster's work until after Faria's first trial. She has denied allegations of misconduct in other media interviews.

An anonymous reader quotes a report from Reuters: FTX customers filed a class action lawsuit against the failed crypto exchange and its former top executives including Sam Bankman-Fried on Tuesday, seeking a declaration that the company's holdings of digital assets belong to customers. FTX pledged to segregate customer accounts and instead allowed them to be misappropriated and therefore customers should be repaid first, according to the lawsuit filed in U.S. Bankruptcy Court in Delaware. "Customer class members should not have to stand in line along with secured or general unsecured creditors in these bankruptcy proceedings just to share in the diminished estate assets of the FTX Group and Alameda," said the complaint.

The proposed class, which wants to represent more than 1 million FTX customers in the United States and abroad, seeks a declaration that traceable customer assets are not FTX property. The customer class also wants the court to find specifically that property held at Alameda that is traceable to customers is not Alameda property, according to the complaint. If the court determines it is FTX property, then the customers seek a ruling that they have a priority right to repayment over other creditors.

Former FTX chief Sam Bankman-Fried borrowed hundreds of millions of dollars from Alameda Research to purchase his stake in trading app Robinhood Markets (HOOD), according to court documents (PDF). CoinDesk reports: In an affidavit provided to a Caribbean court before his arrest, Bankman-Fried said he and FTX co-founder Gary Wang together borrowed over $546 million from Alameda via promissory notes in April and May. They used that money to capitalize Emergent Fidelity Technologies Ltd., the shell corporation that in May bought a 7.6% stake of Robinhood. The affidavit provides a new curveball in the three-way race to lay claim to the 56 million Robinhood shares. Crypto lender BlockFi, FTX Group and Bankman-Fried himself have all attempted to lay claim to the shares, which could be worth over $440 million.

Crypto lender BlockFi, which like FTX has filed for bankruptcy, alleged in a court document (PDF) that it was owed the rights to the Robinhood shares due to a deal Bankman-Fried made in early November. The shares were pledged as collateral against a loan taken out by Alameda Research -- the same firm whose funds were used to purchase the shares to begin with, according to Tuesday's filing.

An anonymous reader shares a report: The investment bank B Riley is so determined to persuade the troubled bitcoin miner Core Scientific to avoid filing for bankruptcy that it has offered as much as $72mn in fresh financing to keep the company from seeking a court-supervised Chapter 11 restructuring. "Bankruptcy is not the answer and would be a disservice to the Company's investors," B Riley wrote in a letter from early December. "It will destroy value for the Company's shareholders, reduce potential recoveries for the Company's lenders, deplete its limited resources and create massive uncertainty for all its stakeholders."

Core Scientific filed for bankruptcy anyway last week. Still, B Riley's aversion should be understandable. A series of players have succumbed to the ongoing crypto winter including FTX, BlockFi, Voyager Digital and Celsius with customer accounts largely frozen. The novel legal issues about digital asset ownership, the continuing problems in the sector and the deliberative nature of US bankruptcy proceedings have kept any of the major companies from exiting court protection yet. The costs are piling up and account holders are noticing. Lawyers, bankers and other advisers in the Celsius case that began in July recently submitted detailed fee requests to the New York federal bankruptcy court totalling $53mn.

Per US law, these official advisers will have these so-called "administrative expenses," subject to court approval, paid by the "estate" or the company which will naturally eat into the recoveries of account holders. Law firms involved including Kirkland & Ellis and White & Case which are usual powerhouses in corporate and private equity bankruptcies are involved in Celsius and have top lawyers billing more than $1,800 per hour. (This may remain a bargain as top lawyers in the FTX bankruptcy at Sullivan & Cromwell are charging in excess of $2,000 per hour).

For the last thirteen years the Free Software Foundation has published its Ethical Tech Giving Guide. But what's interesting is this year's guide also tags companies and products with negative recommendations to "stay away from." Stay away from: iPhones
It's not just Siri that's creepy: all Apple devices contain software that's hostile to users. Although they claim to be concerned about user privacy, they don't hesitate to put their users under surveillance.

Apple prevents you from installing third-party free software on your own phone, and they use this control to censor apps that compete with or subvert Apple's profits.

Apple has a history of exploiting their absolute control over their users to silence political activists and help governments spy on millions of users.


Stay away from: M1 MacBook and MacBook Pro
macOS is proprietary software that restricts its users' freedoms.

In November 2020, macOS was caught alerting Apple each time a user opens an app. Even though Apple is making changes to the service, it just goes to show how bad they try to be until there is an outcry.

Comes crawling with spyware that rats you out to advertisers.


Stay away from: Amazon
Amazon is one of the most notorious DRM offenders. They use this Orwellian control over their devices and services to spy on users and keep them trapped in their walled garden.

Be aware that Amazon isn't the peddler of ebook DRM. Disturbingly, it's enthusiastically supported by most of the big publishing houses.

Read more about the dangers of DRM through our Defective by Design campaign.


Stay away from: Spotify, Apple Music, and all other major streaming services
In addition to streaming music encumbered by DRM, people who want to use Spotify are required to install additional proprietary software. Even Spotify's client for GNU/Linux relies on proprietary software.

Apple Music is no better, and places heavy restrictions on the music streamed through the platform.


Stay away from: Netflix
Netflix is continuing its disturbing trend of making onerous DRM the norm for streaming media. That's why they were a target for last year's International Day Against DRM (IDAD).

They're also leveraging their place in the Motion Picture Association of America (MPAA) to advocate for tighter restrictions on users, and drove the effort to embed DRM into the fabric of the Web.

"In your gift giving this year, put freedom first," their guide begins.

And for a freedom-respecting last-minute gift idea, they suggest giving the gift of a FSF membership (which comes with a code and a printable page "so that you can present your gift as a physical object, if you like.") The membership is valid for one year, and includes the many benefits that come with an FSF associate membership, including a USB member card, email forwarding, access to our Jitsi Meet videoconferencing server and member forum, discounts in the FSF shop and on ThinkPenguin hardware, and more.

If you are in the United States, your gift would also be fully tax-deductible in the USA.

U.S. lawmakers have left a proposal to make the federal judiciary's PACER online court records system free out of a sprawling, $1.66 trillion spending measure unveiled on Tuesday, a setback for advocates as the current Congress nears its end. From a report: Supporters of the Open Courts Act had been pushing to get the stalled, bipartisan legislation attached to the omnibus spending measure, which boosts overall spending on the judiciary by nearly 6% to $8.461 billion in fiscal year 2023. Currently, users of PACER, which stands for Public Access to Court Electronic Records, are charged $0.10 per page to download documents up to a $3 cap, which does not cover transcripts. The Open Courts Act would make electronic court records freely available and mandate the judiciary to develop a new website to access them. It had already advanced out of the Senate Judiciary Committee on a bipartisan vote in December 2021.

Facebook owner Meta Platforms has agreed to pay $725 million to resolve a class-action lawsuit accusing the social media giant of allowing third parties, including Cambridge Analytica, to access users' personal information. From a report: The proposed settlement, which was disclosed in a court filing late on Thursday, would resolve a long-running lawsuit prompted by revelations in 2018 that Facebook had allowed the British political consulting firm Cambridge Analytica to access data of as many as 87 million users. Lawyers for the plaintiffs called the proposed settlement the largest to ever be achieved in a U.S. data privacy class action and the most that Meta has ever paid to resolve a class action lawsuit.

"This historic settlement will provide meaningful relief to the class in this complex and novel privacy case," the lead lawyers for the plaintiffs, Derek Loeser and Lesley Weaver, said in a joint statement. Meta did not admit wrongdoing as part of the settlement, which is subject to the approval of a federal judge in San Francisco. The company said in a statement settling was "in the best interest of our community and shareholders." "Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program," Meta said.

An anonymous reader quotes a report from Reuters: Microsoft was hit on Tuesday in U.S. court with a private consumer lawsuit claiming the technology company's $69 billion bid to purchase "Call of Duty" maker Activision Blizzard will unlawfully squelch competition in the video game industry. The complaint filed in federal court in California comes about two weeks after the U.S. Federal Trade Commission filed a case with an administrative law judge seeking to stop Microsoft, owner of the Xbox console, from completing the largest-ever acquisition in the video-gaming market. The private lawsuit also seeks an order blocking Microsoft from acquiring Activision. It was filed on behalf of 10 video game players in California, New Mexico and New Jersey.

The proposed acquisition would give Microsoft "far-outsized market power in the video game industry," the complaint alleged, "with the ability to foreclose rivals, limit output, reduce consumer choice, raise prices, and further inhibit competition." A Microsoft representative on Tuesday defended the deal, saying in a statement that it "will expand competition and create more opportunities for gamers and game developers." After the FTC sued, Microsoft President Brad Smith said, "We have complete confidence in our case and welcome the opportunity to present our case in court."

FTX sought a U.S. bankruptcy court's help amid a battle over ownership of about $450 million worth of stock in Robinhood Markets (HOOD), according to a filing (PDF) Thursday. CoinDesk reports: At issue are about 56 million shares of the brokerage owned by Emergent Fidelity Technologies Ltd., a corporate entity organized in Antigua and Barbuda and 90% controlled by former FTX CEO Sam Bankman-Fried, according to the filing. Three parties, the filing says, have tried to get control of those shares: BlockFi (a lender that FTX had helped prop up earlier this year), Yonathan Ben Shimon (an FTX creditor appointed as a receiver in Antigua and granted permission to sell the shares under supervision of a court there) and Bankman-Fried himself (who has legal bills).

FTX's bankruptcy estate told ED&F Man Capital Markets, the brokerage where the shares are parked, to freeze the stock around the time the Chapter 11 case began on Nov. 11. FTX has determined that Emergent only "nominally" owns the shares and that they truly belong to FTX. "Emergent is a special-purpose holding company that appears to have no other business," the crypto exchange said in the filing. The judge overseeing the bankruptcy case should force the shares to remain frozen while FTX tries to figure out how to repay all its creditors, FTX argued in the filing.

Sam Bankman-Fried will be released on a $250 million bond package while he awaits trial on fraud charges related to the collapse of the FTX crypto exchange, a federal magistrate judge said on Thursday. From a report: Prosecutors have accused him of stealing billions of dollars in FTX customer funds to plug losses at his hedge fund, Alameda Research. Nicolas Roos, a prosecutor, told U.S. Magistrate Judge Gabriel Gorenstein that the bail package included home detention and location monitoring. Bankman-Fried will also have to surrender his passport. Bankman-Fried's defense counsel said he agreed with these conditions.