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Settlement curbs firm’s facial recognition database in US

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Facial recognition software such as that used at a fast-track gate at Dubai international airport are becoming increasingly common, but the potential for amassing databases that could be abused has privacy advocates troubled.
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Startup Clearview AI has agreed to limit access to its controversial facial recognition database in the United States, settling a lawsuit filed by privacy advocates, a court filing showed Monday.

The deal, which needs approval by the court to become final, would resolve litigation filed two years ago by the American Civil Liberties Union (ACLU) and rights groups accusing Clearview of violating a strict biometric privacy law in the state of Illinois.

A main provision of the settlement permanently bans Clearview from making its “faceprint” database available to most businesses or other private entities in the country, according the ACLU.

“Clearview can no longer treat people’s unique biometric identifiers as an unrestricted source of profit,” said ACLU speech, privacy and technology director Nathan Freed Wessler.

“Before this agreement, Clearview ignored the fact that biometric information can be misused to create dangerous situations and threats” to lives, said Linda Xochitl Tortolero, chief executive of Chicago-based nonprofit Mujeres Latinas en Accion.

“Today that’s no longer the case.”

Clearview will also stop its practice of offering free trial accounts to police officers without the knowledge or approval of their employers, the ACLU said.

The ban does not limit Clearview from working with federal or state agencies other than those in Illinois, the lawsuit said.

Clearview admits no wrongdoing in the settlement.

Clearview AI says it has built up a database of more than 10 billion facial images taken from public websites, ranging from social media to news portals, which it touts as a tool for law enforcement.

– Still checking faces –

Clearview chief executive Hoan Ton-That said the company has told the court that it intends to make its facial recognition software available to commercial customers, without the database of images.

“Clearview AI’s posture regarding sales to private entities remains unchanged,” the chief executive said in response to an AFP inquiry.

Facial recognition is used to unlock smartphones, verify identities, board aircraft and more, he noted.

The settlement does not require any “material change” in the Clearview business model,” said Cahill Gordon, an attorney representing the company.

Campaigners have condemned Clearview’s use of images for being open to abuse, and a number of groups including Privacy International last year filed complaints with data regulators in France, Austria, Italy, Greece and Britain.

Italy’s data privacy watchdog in March fined Clearview 20 million euros (almost $22 million) over its facial recognition software.

The watchdog ordered the company to delete data relating to people in Italy and banned it from further collection and processing of information there.

France’s privacy watchdog as well in December ordered Clearview to delete data on its citizens and cease further collection.

Meanwhile in June last year, Canada’s independent parliamentary watchdog ruled that both Clearview’s database and the use of it by federal police were illegal.

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W.House expects May inflation to be ‘elevated’

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US President Joe Biden departs the White House in Washington on June 8, 2022
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The White House said Wednesday it expects US inflation was still “elevated” in May despite guarded hopes a key data report due for release later this week will show price increases had cooled.

Consumer prices in the world’s largest economy have soared by the fastest pace in more than four decades, with gas prices at the pump hitting new records daily amid the fallout from Russia’s invasion of Ukraine as well as ongoing supply chain challenges due to the Covid-19 pandemic.

The Labor Department is due to release consumer price data for May on Friday, and economists expect the monthly increase to accelerate after slowing in April, when CPI posted an 8.3 percent increase over last year.

“We expect the headline inflation number to be elevated,” Press Secretary Karine Jean-Pierre told reporters traveling with President Joe Biden on Air Force One.

Biden has made fighting inflation his top domestic priority, but is finding he has few tools to directly impact prices.

The Federal Reserve has begun raising interest rates aggressively to combat inflationary pressures, saying the goal is to sustain economic expansion while avoiding a recession.

Biden has stuck to an upbeat message about the overall outlook.

“We continue to believe that the economy can transition from what has been a historic recovery … to stable steady growth,” Jean-Pierre said.

But she acknowledged that the impact of the war in Ukraine has continued to push some prices higher, including airfares.

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US regulator favors revamp of stock market trading system

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SEC Chair Gary Gensler endorsed a revamp of the trading system following the Gamestop frenzy
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Citing equity market trading defects revealed in last year’s GameStop saga, a top US securities regulator on Wednesday endorsed a broad revamp of the stock market trading system. 

In a speech billed as a first step towards a possible update in the rules likely to rile financial firms, Gary Gensler, chair of the Securities and Exchange Commission, said he favored restructuring the system in order to better protect retail investors.

“It’s not clear… that our current national market system is as fair and competitive as possible for investors,” Gensler said in a virtual address at a conference hosted by Piper Sandler.

The speech marks the SEC’s latest action in response to frenzied trading in early 2021 during which extreme volatility in GameStop, AMC Entertainment and a handful of other equities rocked the market and led brokerages to implement sudden trading restrictions that angered investors and spurred congressional probes.

Gensler said the current system routes “the vast majority” of stock trades orders to electronic trading wholesalers such as Citadel Securities and Virtu Financial. 

In some cases, these firms pay the brokerages, an arrangement known as “payment for order flow” that can allow brokerages such as Robinhood Markets to offer commission-free trades to individual investors.

But Gensler is skeptical that this arrangement protects retail investors and believes the payment for order flow system creates conflicts of interests and encourages “gamification” on online platforms to increase trading volumes.

Gensler has asked SEC staff to consider steps to “enhance order-by-order competition,” potentially through auctions. He has also asked staff for recommendations to mitigate the risks with payment for order flow and to provide more transparency.

The SEC head described the speech as a starting point towards possible regulation that will include extensive public comment and discussion with other SEC commissioners.

Doug Cifu, chief executive of Virtu, disputed Gensler’s characterizations, telling CNBC that most of the broker dealers with which his firm trades do not accept payment for order flow.

“The chair with all due respect is conflating the issue of payment for order flow with the ecosystem that has evolved in this country for retail trading, which has really enabled retail investors to have instantaneous execution and essentially zero commission on 8000 listed names,” Cifu said.

“You know, the cliche that markets have never been better is actually factually correct.”

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Twitter to share data at heart of Musk deal dispute: report

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Elon Musk is demanding access to Twitter's trove of internal data to check for fake accounts, but analysts wonder if it is a ruse to back out of the $44 billion deal to buy the global online stage.
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Twitter will yield to Elon Musk’s demand for internal data central to a standoff over his troubled $44 billion bid to buy the social media platform, the  Washington Post reported on Wednesday.

The news comes just days after the Tesla chief threatened to back out of his deal to purchase Twitter, accusing it of failing to provide data on fake accounts.

The Post cited an unnamed source familiar with the negotiations as saying Twitter’s board decided to let Musk access its full “firehose” of internal data associated with the hundreds of millions of tweets posted daily at the service.

“This would end the major standoff between Musk and the board on this hot button issue which has paused the deal,” Wedbush analyst Dan Ives said in a tweet.

Twitter chief executive Parag Agrawal has said that fewer than five percent of accounts active on any given day at Twitter are bots, but that analysis cannot be replicated externally due to the need to keep user data private.

About two dozen companies already pay to access the massive trove of internal Twitter data, which includes records of tweets along with information about accounts and devices used to fire them off, according to the Post.

Twitter declined to comment on the Washington Post report but has defended its responsiveness to Musk’s requests, and vowed to complete the deal on the original terms.

The mercurial Musk agreed to buy Twitter in a $44 billion deal in late April.

He began making significant noise about fake accounts in mid-May, saying on Twitter he could walk away from the transaction if his concerns were not addressed.

Some observers have seen Musk’s questioning of Twitter bots as a means to end the takeover process, or to pressure Twitter into lowering the price.

The potential for Musk to take Twitter private has stoked protest from critics who warn his stewardship will embolden hate groups and disinformation campaigns.

US securities regulators have also pressed Musk for an explanation of an apparent delay in reporting his Twitter stock buys.

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