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Google loses appeal against record EU antitrust fine

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The Android case was the third of three major cases brought against Google by the EU's competition czar Margrethe Vestager
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The European Union’s second-highest court on Wednesday overwhelmingly upheld the EU’s record fine against Google over its Android operating system for mobile phones, slightly reducing the fee for technical reasons.

In a statement, the EU’s General court said it “largely confirms the commission’s decision that Google imposed unlawful restrictions on manufacturers of Android mobile devices” in order to benefit its search engine.

The court, however, said the fine should be slightly reduced to 4.125 billion euros ($4.1 billion), instead of the 4.3 billion euros decided by the commission in 2018 after reviewing the duration of the infringement. 

The levy remains the EU’s biggest ever despite Google’s arguments that the commission’s case was unfounded and falsely relied on accusations it imposed its search engine and Chrome browser on Android phones.

The company also pushed the case that the EU was unfairly blind to the strength of Apple, which imposes or gives clear preference to its own services such as Safari on iPhones.

Google insisted that downloading rival apps was only a click away and that customers were in no way tied to Google products on Android.

The EU and complainants responded that Google used contracts with phone makers in the early days of Android to stifle rivals.

“This shows the European Commission got it right,” said Thomas Vinje, a lawyer representing FairSearch, whose original complaint launched the case in 2013.

“Google can no longer impose its will on phone makers. Now they may open their devices to competition in search and other services, allowing consumers to benefit from increased choice,” he added. 

The decision by the General Court is not necessarily the end of the story. Both sides can turn to the EU’s highest court, the European Court of Justice, for a final say on the fine, which was the equivalent of $5 billion when levied.

– Global action –

The Android case was the third of three major cases brought against Google by the EU’s competition czar Margrethe Vestager, whose legal challenges were the first worldwide to directly take on the Silicon Valley giants.

Since then, global regulators have followed suit, with Google facing a barrage of cases in the US and Asia based on similar accusations.

Last year, South Korea fined Google nearly $180 million for abusing its dominance in a similar case.

Vestager has already won against Google in its appeal of a separate case, a 2.4-billion-euro fine for the company for abusing its search engine dominance. As expected, the tech giant appealed that setback to the high court.

The EU, however, has lost recent cases involving the microchip industry. 

Vestager’s team lost an appeal against a $1 billion fine imposed on Qualcomm in the same court in June. 

That followed another setback in January when the EU lost the court’s backing for a 1.06-billion-euro fine on Intel.

Frustrated at the length of time it takes to pursue competition cases, Brussels has since adopted the Digital Markets Act (DMA), which puts a much tighter leash on the way Big Tech can do business. 

The new law, set to come into force next year, would set up a rulebook of do’s and don’ts for Big Tech companies such as Google and Facebook. 

The DMA includes specific bans or limits on Google, Apple and other gatekeepers from promoting their own services on platforms.

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‘Everybody is vulnerable’: Fake US school audio stokes AI alarm

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The fabricated audio clip of the Maryland school principal underscores the ease with which widely available AI and editing tools can be misused to impersonate celebrities and everyday citizens alike
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A fabricated audio clip of a US high school principal prompted a torrent of outrage, leaving him battling allegations of racism and anti-Semitism in a case that has sparked new alarm about AI manipulation.

Police charged a disgruntled staff member at the Maryland school with manufacturing the recording that surfaced in January — purportedly of principal Eric Eiswert ranting against Jews and “ungrateful Black kids” — using artificial intelligence.

The clip, which left administrators of Pikesville High School fielding a flood of angry calls and threats, underscores the ease with which widely available AI and editing tools can be misused to impersonate celebrities and everyday citizens alike.

In a year of major elections globally, including in the United States, the episode also demonstrates the perils of realistic deepfakes as the law plays catch-up.

“You need one image to put a person into a video, you need 30 seconds of audio to clone somebody’s voice,” Hany Farid, a digital forensics expert at the University of California, Berkeley, told AFP.

“There’s almost nothing you can do unless you hide under a rock.

“The threat vector has gone from the Joe Bidens and the Taylor Swifts of the world to high school principals, 15-year-olds, reporters, lawyers, bosses, grandmothers. Everybody is now vulnerable.”

After the official probe, the school’s athletic director, Dazhon Darien, 31, was arrested late last month over the clip.

Charging documents say staffers at Pikesville High School felt unsafe after the audio emerged. Teachers worried the campus was bugged with recording devices while abusive messages lit up Eiswert’s social media.

The “world would be a better place if you were on the other side of the dirt,” one X user wrote to Eiswert.

Eiswert, who did not respond to AFP’s request for comment, was placed on leave by the school and needed security at his home.

– ‘Damage’ – 

When the recording hit social media in January, boosted by a popular Instagram account whose posts drew thousands of comments, the crisis thrust the school into the national spotlight.

The audio was amplified by activist DeRay McKesson, who demanded Eiswert’s firing to his nearly one million followers on X. When the charges surfaced, he conceded he had been fooled.

“I continue to be concerned about the damage these actions have caused,” said Billy Burke, executive director of the union representing Eiswert, referring to the recording.

The manipulation comes as multiple US schools have struggled to contain AI-enabled deepfake pornography, leading to harassment of students amid a lack of federal legislation.

Scott Shellenberger, the Baltimore County state’s attorney, said in a press conference the Pikesville incident highlights the need to “bring the law up to date with the technology.”

His office is prosecuting Darien on four charges, including disturbing school activities.

– ‘A million principals’ –

Investigators tied the audio to the athletic director in part by connecting him to the email address that initially distributed it.

Police say the alleged smear-job came in retaliation for a probe Eiswert opened in December into whether Darien authorized an illegitimate payment to a coach who was also his roommate.

Darien made searches for AI tools via the school’s network before the audio came out, and he had been using “large language models,” according to the charging documents.

A University of Colorado professor who analyzed the audio for police concluded it “contained traces of AI-generated content with human editing after the fact.”

Investigators also consulted Farid, writing that the California expert found it was “manipulated, and multiple recordings were spliced together using unknown software.”

AI-generated content — and particularly audio, which experts say is particularly difficult to spot — sparked national alarm in January when a fake robocall posing as Biden urged New Hampshire residents not to vote in the state’s primary.

“It impacts everything from entire economies, to democracies, to the high school principal,” Farid said of the technology’s misuse.

Eiswert’s case has been a wake-up call in Pikesville, revealing how disinformation can roil even “a very tight-knit community,” said Parker Bratton, the school’s golf coach.

“There’s one president. There’s a million principals. People are like: ‘What does this mean for me? What are the potential consequences for me when someone just decides they want to end my career?'”

“We’re never going to be able to escape this story.”

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TikTok reaches music licensing deal with Universal, ending feud

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The Universal-TikTok deal ends closely watched negotations that saw a breakdown earlier this year as two of the most powerful players in the music and tech industries publicly criticized each other as they jockeyed for leverage
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TikTok and Universal announced a new licensing agreement Thursday, ending a months-long dispute that saw popular music expunged from the social media platform.

The companies released a joint statement that said the new deal included “improved remuneration” for artists and songwriters under the Universal Music Group (UMG) umbrella, and will also assuage concerns over the growth of AI-generated content on TikTok.

Universal chairman Sir Lucian Grainge said “this new chapter in our relationship” would “drive innovation in fan engagement while advancing social music monetization.” 

The deal “focuses on the value of music, the primacy of human artistry and the welfare of the creative community,” he said.

TikTok’s CEO Shou Chew similarly said “we are committed to working together to drive value, discovery and promotion for all of UMG’s amazing artists and songwriters, and deepen their ability to grow, connect and engage with the TikTok community.”

The deal wraps up closely watched negotiations that saw a breakdown earlier this year, with the companies — two of the most powerful players in the music and tech industries — publicly criticizing each other as they jockeyed for leverage.

Universal — whose roster of artists includes Taylor Swift, Drake and Billie Eilish — ordered music from all artists connected to its vast publishing catalog to come down off the app, leaving many concerned over losing the marketing potential TikTok can offer.

Millions of videos involving Universal artists became muted on the platform.

But while the stripped music will now return to TikTok, it comes at a moment of uncertainty for the wildly popular video-sharing app, one week after a new US law demands the company divest from its Chinese parent company ByteDance or be shut out of the American market.

The app has 170 million users in the United States alone.

Neither Universal nor TikTok disclosed any financial terms of the deal.

Several weeks ago, the powerful and popular Swift returned some of her music to the app ahead of the release of her most recent album.

It was unclear exactly how she did it, but Swift does own her own master recordings as well as her songwriting rights, though those two are administered by Universal’s publishing arm.

In their joint statement the companies said they were “working expeditiously to return music by artists represented by Universal Music Group and songwriters represented by Universal Music Publishing Group to TikTok in due course.”

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Changpeng Zhao, the ‘normal guy’ who conquered crypto

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Changpeng Zhao pleaded guilty to violating US anti-money laundering laws and agreed to step down as Binance CEO
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During his time at the helm of the world’s biggest cryptocurrency firm, former Binance boss Changpeng Zhao, who will be sentenced in the United States later Tuesday for money laundering, perfected the humble executive look.

At parties, on stages and in meetings, he was rarely seen without his black polo shirt, emblazoned with the insignia of his firm — complemented by the corporate logo tattooed on his arm.

It was vital to cement the myth of a boy who came from hardship in China and once flipped burgers for a living in Canada — before making a fortune still estimated in the tens of billions.

“I’m a small entrepreneur,” and a “normal guy”, the man known in crypto circles as “CZ” told AFP in 2022 when comparing himself to Elon Musk, whose buyout of Twitter (now X) Zhao later backed with $500 million.

Yet there was little normal about Zhao’s leadership of Binance, a company that largely cornered the crypto-trading market before careening into a slew of charges including sanctions busting and illegal trading. 

Zhao, who founded Binance in Shanghai in 2017, emerged as the most visible figure in crypto after his great rival Sam Bankman-Fried was arrested in 2022 for masterminding a giant Ponzi scheme.

During his rival’s downfall, Zhao was there to twist the knife, first suggesting he might buy FTX before very publicly withdrawing.

A year later, it was Zhao’s turn for contrition.

He pleaded guilty to violating US anti-money laundering laws and agreed to step down as Binance CEO, the authorities announcing later that the firm would pay a $4.3 billion settlement.

– True grit? –

The legal cases painted a picture of Zhao as a ruthless operator pursuing growth at all costs.

It was a far cry from the folksy legend he had fostered, which had become almost mythical in crypto circles.

Zhao’s early life in China was scarred by hardship when his parents were sent to the countryside for a dose of peasant reality — a common punishment for those suspected of having capitalist sympathies during the Cultural Revolution of the 1960s and 1970s.

They emigrated to Canada in the late 1980s, where young Zhao worked at a McDonald’s and a petrol station to help the family survive, according to his own account of his life and a blog from 2020 on the Binance website.

This instilled “drive, grit, and initiative” into the young man and helped to create a “crypto leader”, the Binance blog said.

Zhao’s nomadic childhood informed his adult life, which has seen him crop up everywhere from New York to Tokyo.

The official legend has it that he caught the bitcoin bug during a conversation around a poker table in Shanghai in 2013, starting Binance in the Chinese city a few years later.

Beijing’s crackdown on crypto hastened his departure from China and he began his voyage through various jurisdictions, establishing a raft of complicated corporate structures on his way.

For years, he kept regulators at arm’s length by refusing to commit to a single jurisdiction for Binance’s headquarters, repeatedly saying it was a “complex issue”.

The stance made him a popular figure among crypto purists who loathe any form of regulation.

– ‘Good old times’ –

But the whiff of scandal finally got too strong for US market regulators, who labelled Binance’s compliance regime a “sham” and accused Zhao of orchestrating a “secret plot” to help VIP customers evade the law.

Then the law enforcement authorities came knocking.

Among other complaints, they accused Binance of failing to stop payments to the Islamic State militant group and other banned organisations in Iran and North Korea.

Unlike Bankman-Fried, Zhao was quick to admit guilt and avoid a high-profile trial.

But prosecutors are asking the court in Seattle to dole out a three-year prison sentence to Zhao.

In response to his troubles, Zhao has fallen back on his everyman persona.

He launched a start-up in March called the Giggle Academy that he said would aim to bring free education to underprivileged children around the world.

“Start up mode all over again. Like good old times,” he wrote on X in early April, just weeks before he was due to be sentenced.

Among the subjects he is aiming to teach? Blockchain, AI and finance.

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