In his remarks at a recent Practicing Law Institute program on securities regulation, Securities and Exchange Commission Chairman Jay Clayton once again addressed Initial Coin Offerings, or ICOs. Mr. Clayton highlighted several issues in particular, including that in his view there is a lack of information about many online platforms that list and trade virtual coins or tokens offered and sold in ICOs, and that trading of tokens on these platforms is susceptible to price manipulation and other fraudulent trading practices. Continue Reading
Following the reasoning of several past decisions, a California district court dismissed claims against Google under the Anti-Terrorism Act (ATA), 18 U.S.C. § 2333, for allegedly providing “material support” to ISIS by allowing terrorists to use YouTube (temporarily, before known accounts are terminated) as a tool to facilitate recruitment and commit terrorism. (Gonzalez v. Google, Inc., 2017 WL 4773366 (N.D. Cal. Oct. 23, 2017)). The court rejected the plaintiffs’ arguments that Google provided the terrorists with material support by allowing them to sign up for accounts (or regenerate shuttered accounts) and then allegedly serve targeted ads alongside such posted videos. It ruled that even careful pleadings cannot change the fact that, in substance, plaintiffs’ attempt to hold Google liable as a publisher of the terrorist’s detestable content was barred by Section 230 of the Communications Decency Act (“CDA Section 230” or “CDA”). Continue Reading
In a decision that sets up a potential international comity showdown, a California district court granted Google’s request for a preliminary injunction preventing enforcement in the U.S. of a Canadian court order that compelled Google to globally de-list certain search results of a former distributor that had allegedly used its websites to unlawfully sell the defendant Equustek Solutions’s (“Equustek”) intellectual property. (Google LLC v. Equustek Solutions Inc., 2017 WL 5000834 (N.D. Cal. Nov. 2, 2017)).
In granting Google’s request for a preliminary injunction, the court found that Google likely satisfied all three elements of qualifying for immunity under Section 230 of the Communications Decency Act, 47 U.S.C. §230(c)(1) (the “CDA” or “Section 230”) as a service provider that linked to third-party content, and that the Canadian court’s order implicated online free speech concerns. Indeed, the court concluded its opinion with language that surely buoyed many online providers and open internet advocates that had previously expressed concerns about the extraterritorial effort of the Canadian order:
“By forcing intermediaries to remove links to third-party material, the Canadian order undermines the policy goals of Section 230 immunity and threatens free speech on the global internet.”
With the Court declining to review, this important pair of rulings about the breadth of CFAA liability will stand. What will be interesting – especially with respect to the nuanced issues surrounding CFAA liability for data scraping – is how the Ninth Circuit will clarify or refine its Power Ventures holding when it considers the appeal of the recent landmark decision from the Northern District of California in hiQ Labs, Inc. v. LinkedIn, Corp., 2017 WL 3473663 (N.D. Cal. Aug. 14, 2017), a ruling that distinguished Power Ventures and appeared to limit the applicability of the CFAA as a tool against scraping.
In an unpublished opinion, the Ninth Circuit affirmed a lower court’s ruling that had sent a putative class action against Amazon over its pricing practices to arbitration, as per Amazon’s terms of service. (Wiseley v. Amazon.com, Inc., No. 15-56799 (9th Cir. Sept. 19, 2017) (unpublished)). In finding that Amazon’s “Conditions of Use” were not unconscionable and presented in a reasonable manner, this holding differs from a Second Circuit decision from last year that declined to compel arbitration because reasonable minds could disagree regarding the sufficiency of notice provided to Amazon.com customers when placing an order through the website. (On remand, a New York magistrate judge ruled that the court should grant Amazon’s motion to compel arbitration on other grounds based upon the plaintiff’s constructive knowledge of the terms.) Continue Reading
In a new development in an important scraping dispute, LinkedIn appealed the lower court’s decision to grant a preliminary injunction compelling LinkedIn to disable any technical measures it had employed to block the defendant’s data scraping activities. LinkedIn’s brief was filed on October 3, 2017. In it, LinkedIn asserts that the relevant issue is whether the lower court “erred as matter of law by holding—contrary to the CFAA’s unambiguous text and Circuit precedent—that LinkedIn could not invoke the CFAA after LinkedIn revoked hiQ’s access to its servers by sending a particularized cease-and-desist letter and imposing technical measures to block hiQ’s data-scraping bots.”
We will be watching the developments in this case closely.
For an analysis of the lower court’s August 14th decision, please read the Client Alert on our website.
This month, in one of the many recently-filed Illinois biometric privacy suits, a class action complaint alleging violations of Illinois’s Biometric Information Privacy Act (BIPA) was lodged against Wow Bao, a restaurant chain, over its use of self-order kiosks that allow customers to use faceprints as a method to authenticate purchases. (Morris v. Wow Bao LLC, No. 2017-CH-12029 (Ill. Cir. Ct. filed Sept. 5, 2017)). The suit against Wow Bao was not the only BIPA-related suit filed in September, as several businesses with an Illinois presence, including Crunch Fitness and Speedway, Inc., were served with complaints. And more than a week ago, an Illinois federal court refused to dismiss BIPA claims against photo storage service Shutterfly over claims that its photo tagging feature created a faceprint of the non-user plaintiff after a friend uploaded a group photo, and upon the service’s suggestion, then tagged the plaintiff, thereby storing plaintiff’s faceprint and name in Shutterfly’s database without his notice or consent. (Monroy v. Shutterfly, Inc., No. 16-10984 (N.D. Ill. Sept. 15, 2017)). Continue Reading
This week’s Apple X announcement was not more than a few hours old, and the questions began to come in. Apple’s introduction of Face ID facial recognition on its new phone – although already available in some form on several Android phones – generated curiosity, concerns and creativity. Unfortunately, the details about specifically how the recognition feature will really work are yet unknown. All the public knows right now is that the phone’s facial “capture” function, powered by an updated camera and sensor array, will direct 30,000 infrared dots around a user’s face and create a hashed value that will presumably be matched against a user’s face during the unlocking procedure.
The questions and issues this raises are too numerous and varied to address in a single blog post. I will simply point out that the concerns over Face ID range from spoofing (e.g., Can the phone be unlocked by a picture? [Apple says no, explaining that the system will map the depth of faces]) to security (e.g., Is the “face map” or hashed value stored in a database which can be breached? [Apple, says no, like fingerprints in Apple’s current Touch ID feature, the face map will be securely stored locally on the device]).
One issue that I thought was particularly interesting, however, relates to the ability of apps residing on a phone to interact with facial captures. Unless disabled, Face ID could potentially be “always on,” ready to capture facial images to authenticate the unlocking of the phone, and possibly capturing facial images as the user interacts with the unlocked phone. So, clients have asked: Will the apps on the phone be able to access and use those facial captures? Continue Reading