Facebook staff raised concerns about Cambridge Analytica in September 2015, per court filing

Further details have emerged about when and how much Facebook knew about data-scraping by the disgraced and now defunct Cambridge Analytica political data firm.

Last year a major privacy scandal hit Facebook after it emerged CA had paid GSR, a developer with access to Facebook’s platform, to extract personal data on as many as 87M Facebook users without proper consents.

Cambridge Analytica’s intention was to use the data to build psychographic profiles of American voters to target political messages — with the company initially working for the Ted Cruz and later the Donald Trump presidential candidate campaigns.

But employees at Facebook appear to have raised internal concerns about CA scraping user data in September 2015 — i.e. months earlier than Facebook previously told lawmakers it became aware of the GSR/CA breach (December 2015).

The latest twist in the privacy scandal has emerged via a redacted court filing in the U.S. — where the District of Columbia is suing Facebook in a consumer protection enforcement case.

Facebook is seeking to have documents pertaining to the case sealed, while the District argues there is nothing commercially sensitive to require that.

In its opposition to Facebook’s motion to seal the document, the District includes a redacted summary (screengrabbed below) of the “jurisdictional facts” it says are contained in the papers Facebook is seeking to keep secret.

According to the District’s account a Washington D.C.-based Facebook employee warned others in the company about Cambridge Analytica’s data-scraping practices as early as September 2015.

Under questioning in Congress last April, Mark Zuckerberg was asked directly by congressman Mike Doyle when Facebook had first learned about Cambridge Analytica using Facebook data — and whether specifically it had learned about it as a result of the December 2015 Guardian article (which broke the story).

Zuckerberg responded with a “yes” to Doyle’s question.

Facebook repeated the same line to the UK’s Digital, Media and Sport (DCMA) committee last year, over a series of hearings with less senior staffers

Damian Collins, the chair of the DCMS committee — which made repeat requests for Zuckerberg himself to testify in front of its enquiry into online disinformation, only to be repeatedly rebuffed — tweeted yesterday that the new detail could suggest Facebook “consistently mislead” the British parliament.

The DCMS committee has previously accused Facebook of deliberately misleading its enquiry on other aspects of the CA saga, with Collins taking the company to task for displaying a pattern of evasive behavior.

The earlier charge that it mislead the committee refers to a hearing in Washington in February 2018 — when Facebook sent its UK head of policy, Simon Milner, and its head of global policy management, Monika Bickert, to field DCMS’ questions — where the pair failed to inform the committee about a legal agreement Facebook had made with Cambridge Analytica in December 2015.

The committee’s final report was also damning of Facebook, calling for regulators to instigate antitrust and privacy probes of the tech giant.

Meanwhile, questions have continued to be raised about Facebook’s decision to hire GSR co-founder Joseph Chancellor, who reportedly joined the company around November 2015.

The question now is if Facebook knew there were concerns about CA data-scraping prior to hiring the co-founder of the company that sold scraped Facebook user data to CA, why did it go ahead and hire Chancellor?

The GSR co-founder has never been made available by Facebook to answer questions from politicians (or press) on either side of the pond.

Last fall he was reported to have quietly left Facebook, with no comment from Facebook on the reasons behind his departure — just as it had never explained why it hired him in the first place.

But the new timeline that’s emerged of what Facebook knew when makes those questions more pressing than ever.

Reached for a response to the details contained in the District of Columbia’s court filing, a Facebook spokeswomen sent us this statement:

Facebook was not aware of the transfer of data from Kogan/GSR to Cambridge Analytica until December 2015, as we have testified under oath

In September 2015 employees heard speculation that Cambridge Analytica was scraping data, something that is unfortunately common for any internet service. In December 2015, we first learned through media reports that Kogan sold data to Cambridge Analytica, and we took action. Those were two different things.

Facebook did not engage with questions about any of the details and allegations in the court filing.

A little later in the court filing, the District of Columbia writes that the documents Facebook is seeking to seal are “consistent” with its allegations that “Facebook has employees embedded within multiple presidential candidate campaigns who… knew, or should have known… [that] Cambridge Analytica [was] using the Facebook consumer data harvested by [[GSR’s]] [Aleksandr] Kogan throughout the 2016 [United States presidential] election.”

It goes on to suggest that Facebook’s concern to seal the document is “reputational”, suggesting — in another redacted segment (below) — that it might “reflect poorly” on Facebook that a DC-based employee had flagged Cambridge Analytica months prior to news reports of its improper access to user data.

“The company may also seek to avoid publishing its employees’ candid assessments of how multiple third-parties violated Facebook’s policies,” it adds, chiming with arguments made last year by GSR’s Kogan who suggested the company failed to enforce the terms of its developer policy, telling the DCMS committee it therefore didn’t have a “valid” policy.

As we’ve reported previously, the UK’s data protection watchdog — which has an ongoing investigation into CA’s use of Facebook data — was passed information by Facebook as part of that probe which showed that three “senior managers” had been involved in email exchanges, prior to December 2015, concerning the CA breach.

It’s not clear whether these exchanges are the same correspondence the District of Columbia has obtained and which Facebook is seeking to seal. Or whether there were multiple email threads raising concerns about the company.

The ICO passed the correspondence it obtained from Facebook to the DCMS committee — which last month said it had agreed at the request of the watchdog to keep the names of the managers confidential. (The ICO also declined to disclose the names or the correspondence when we made a Freedom of Information request last month — citing rules against disclosing personal data and its ongoing investigation into CA meaning the risk of release might be prejudicial to its investigation.)

In its final report the committee said this internal correspondence indicated “profound failure of governance within Facebook” — writing:

[I]t would seem that this important information was not shared with the most senior executives at Facebook, leading us to ask why this was the case. The scale and importance of the GSR/Cambridge Analytica breach was such that its occurrence should have been referred to Mark Zuckerberg as its CEO immediately. The fact that it was not is evidence that Facebook did not treat the breach with the seriousness it merited. It was a profound failure of governance within Facebook that its CEO did not know what was going on, the company now maintains, until the issue became public to us all in 2018. The incident displays the fundamental weakness of Facebook in managing its responsibilities to the people whose data is used for its own commercial interests.

We reached out to the ICO for comment on the information to emerge via the Columbia suit, and also to the Irish Data Protection Commission, the lead DPA for Facebook’s international business, which currently has 15 open investigations into Facebook or Facebook-owned businesses related to various security, privacy and data protection issues.

An ICO spokesperson told us: “We are aware of these reports and will be considering the points made as part of our ongoing investigation.”

Last year the ICO issued Facebook with the maximum possible fine under UK law for the CA data breach.

Shortly after Facebook announced it would appeal, saying the watchdog had not found evidence that any UK users’ data was misused by CA.

A date for the hearing of the appeal set for earlier this week was canceled without explanation. A spokeswoman for the tribunal court told us a new date would appear on its website in due course.

This report was updated with comment from the ICO

U.S. federal court jury finds Apple infringed three Qualcomm patents

Mobile chipmaker Qualcomm has chalked up another small legal victory against Apple in another patent litigation suit.

A jury in a U.S. federal court in San Diego found Friday that Apple owes Qualcomm about $31M for infringing three patents, per Reuters.

Qualcomm has filed a number of patent suits against the iPhone maker in the U.S., Europe and Asia in recent years. The suits are skirmishes in a bigger battle between the pair over licensing terms that Apple alleges are unfair and illegal.

As we reported earlier the San Diego patent suit relates to the power consumption and speed of boot-up times for iPhones sold between mid-2017 and late-2018.

Qualcomm had asked to be awarded up to $1.41 in unpaid patent royalties damages per infringing iPhone sold during the period.

Reuters suggests the award could have wider significance if it ends up factoring into the looming billion dollar royalties suit between Apple and Qualcomm. By putting a dollar value on some of the latter’s IP, the San Diego trial potentially bolsters its contention that its chip licensing practices are fair.

At the time of writing it’s not clear whether Apple intends to appeal. Reuters reports the iPhone maker declined to comment on that point, after expressing general disappointment with the outcome.

We’ve reached out to Apple and Qualcomm for comment.

In a statement provided to the news agency Apple said: “Qualcomm’s ongoing campaign of patent infringement claims is nothing more than an attempt to distract from the larger issues they face with investigations into their business practices in U.S. federal court, and around the world.”

Cupertino filed its billion dollar royalties suit against Qualcomm two years ago.

It has reason to be bullish going into the trial, given a preliminary ruling Thursday — in which a U.S. federal court judge found Qualcomm owes Apple nearly $1BN in patent royalty rebate payments (via CNBC). The trial itself kicks off next month.

The U.S. Federal Trade Commission also filed antitrust charges against Qualcomm in 2017 — accusing the chipmaker of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents.

That trial wrapped up in January and is pending a verdict from Judge Lucy Koh.

At the same time, Qualcomm has also been pursuing several international patent suits against Apple — also with some success.

In December Apple filed an appeal in China to overturn a preliminary ruling that could have blocked iPhone sales in the market.

While in Germany it did pull older iPhone models from sale in its own stores in January. But by February it was selling the two models again — albeit with Qualcomm chips, rather than Intel, inside.

Former CEO Zain Jaffer files wrongful termination lawsuit against Vungle

Vungle founder Zain Jaffer filed a lawsuit today accusing the mobile advertising company of wrongfully terminating him from the role of CEO.

The lawsuit cites a section of the California labor code that it says “expressly and specifically prohibits discrimination and retaliation by employers based upon an arrest or detention that did not result in conviction.”

Jaffer was arrested in October 2017 in an incident involving his young son — the charges included performing a lewd act on a child and assault with a deadly weapon. Last year, the charges were dropped, with the San Mateo District Attorney’s Office saying it did “not believe that there was any sexual conduct by Mr. Jaffer that evening,” while “the injuries were the result of Mr. Jaffer being in a state of unconsciousness caused by prescription medication.”

Afterwards, Jaffer began looking into either selling his Vungle shares or pursuing a leadership change at the company, something he alludes to in his statement on the suit:

Once I was absolved of any wrongdoing, I was looking forward to a friendly relationship with the Company. Instead, Vungle unfairly and unlawfully sought to destroy my career, blocked my efforts to sell my own shares or transfer shares to family members, and tried to prevent me from purchasing shares in the Company.

When reached by TechCrunch, a Vungle spokesperson declined to comment on the lawsuit.

The suit does not specify the amount that Jaffer is seeking, but his attorney Joann Rezzo reportedly told Bloomberg that he has suffered at least $100 million worth of harm. When asked about damages, Jaffer’s spokesperson sent us the following statement from Rezzo:

The amount to be awarded would be entirely within the discretion of the jury. My firm won almost $20M for an employee who asserted similar claims against Allstate Insurance Company. Mr. Jaffer’s potential recovery is much, much higher.

The suit she’s referring to involved a former Allstate employee who was awarded $18.6 million after he was fired following an arrest for domestic violence and possession of marijuana paraphernalia. All the charges were eventually dismissed.

You can read Jaffer’s full lawsuit below.

Jaffer v. Vungle Conformed … by on Scribd

‘Fresh Prince’ actor dismisses his Fortnite dance lawsuit

Fresh Prince star Alfonso Ribeiro has dropped his lawsuit against Fortnite creator Epic Games for using his “Carlton” dance as an emote in the popular game without his permission.

According to documents filed in LA court, Ribeiro voluntarily dismissed the suit. He had already dropped a suit against Take-Two Interactive similarly related to his dance. Last month, Ribeiro was denied a copyright for his dance by federal officials, which seemed to put the nail in the coffin for his lawsuit.

The “Carlton” dance seems to be pretty immediately recognizable for its dorky arm swinging maneuver, but that didn’t cut it for copyright officials. In the U.S. Copyright Office’s statement denying Ribeiro’s copyright claim, their detailed that his copyright was being refused because the work was a “simple dance routine” and thus wasn’t registrable as a choreographic work.

On one hand, original creative expression should always incentivize creators to keep pushing boundaries. On the other hand, singular dance moves are a bit of an annoying thing to copyright, though I still certainly understand the sentiment. Perhaps it’s for the best that future copyright trolls will have one less arena in which to file suit.

Uber pays $2.6M to settle historical charges it violated Dutch taxi laws

Another fine for Uber’s historical playbook: The ride-hailing giant has agreed to pay around $2.6 million (€2.3M) to settle charges in the Netherlands related to violations of local taxi law, dating back to when it was operating a peer-to-peer ride-hailing service in contravention of local transport laws.

Uber offered its UberPop service in the Netherlands between July 2014 and November 2015, when it pulled the plug — saying the service “had become a blog to regulatory progress”. Which is a long-winded way of saying it wasn’t legal to operate it.

The Dutch Public Prosecution Service (DPPS) announced the settlement today, saying it consists of a €2,025,000 fine across the four Uber companies — Uber International BV, Uber Netherlands BV, Uber BV and Rasier Operations BV — in addition to €309,409 in “criminally earned capital”, via Uber’s 20% commission on rides, which is being clawed back.

The DPPS said it’s happy to settle with Uber as it believes the courts would have reached the same penalizing conclusion.

In a press release announcing the settlement it writes that the four named Uber entities “co-perpetrated” the violation of local taxi law, which requires transport services to have a taxi license to operate (whereas with UberPop Uber allowed anyone with a vehicle to sell a ride).

Uber BV has been given the maximum possible fine (€810,000). The other three entities have been fined half the maximum — as a result of smaller roles in the violation, the DPPS said.

“The person responsible for the rollout of UberPop in the Netherlands has performed a 90-hour [community service] penalty,” it adds.

Commenting on the settlement in a statement, an Uber spokesperson said: “We have changed the way we do business across the world, putting integrity in the core of everything that we do. We are committed to being a good partner to Dutch cities. We have shut down UberPOP services in 2015. Since then, we only allow professional and certified drivers on the app, through uberX, Van and Black services.”

Also since 2015: Europe’s top court judged Uber to be a transport company — firmly closing the regional book on any more attempts to circumvent taxi laws by claiming it’s ‘just a technology platform’.

Facebook sues four Chinese companies over trademark infringement

Facebook is taking legal action against a cluster of Chinese websites that sell fake accounts, likes and followers both on Facebook itself and on Instagram. The company announced the legal action in a short blog post late Friday afternoon (a move unusual enough to pique our curiosity a little). Of course, the fact that Facebook isn’t allowed in China might be a complexifier, in Bezos-speak.

The lawsuit, filed with the Northern District of California, alleges that starting in 2017 four Chinese companies and three individuals based in China “operated a series of websites promoting the sale of fake accounts (e.g. using fake names or other false identifiers) and inauthentic accounts (e.g. used for inauthentic activity),” infringing on Facebook and Instagram’s trademarks and terms of service in the process.

The lawsuit names Xiu Network Science and Technology Company, Xiu Feishu Science and Technology Company, Xiufei Book Technology Co., Home Network (Fujian) Technology Co., Ltd. and three people affiliated with those operations. TechCrunch reached out to Facebook for clarification about the scope of the fraudulent activity and the reason behind its decision to escalate these concerns, though didn’t receive much clarification.

Trademark infringement is certainly nothing new for the biggest social network on the planet, so our guess is that the activity must have been on a fairly large scale to attract Facebook’s legal ire. The company is asking for $100,000 in damages each for six websites it lists in the complaint for trademark infringement, terms of service violations and cybersquatting domains using its name. At the time of writing, the domains in question mostly still appeared online and operational — another factor that may have contributed to Facebook’s choice to pursue legal action. Some of the websites also sell accounts for services from Google, Twitter other American tech companies.

As Facebook notes in the filing, “According to their websites, these Defendants… engage in the registration and sale of accounts, in bulk, for various social networking sites.” When we looked into one of the websites, 9xiufacebook.com, we found that most people discovered it through a Chinese web search for “Facebook account purchase.”

The court filing is embedded below.

Justin Caldbeck sues Binary Capital co-founder Jonathan Teo, claiming he ‘made no effort to save the firm’

Embattled venture capitalist Justin Caldbeck (pictured) is suing his former co-Binary Capital founder Jonathan Teo, alleging breach of contract, fraud and more.

Caldbeck, accused of sexual harassment and unwanted sexual advances in 2017, took an indefinite leave of absence from Binary Capital, leaving to Teo all the responsibilities of the $175 million fund. Shortly after, Teo offered to step down in a last-ditch effort to keep the firm afloat. Ultimately, Binary Capital shut down and New York venture capital firm Lerer Hippeau assumed responsibility for its $125 million debut investment vehicle, 70 percent of which has been deployed, per details shared in the lawsuit.

In the legal filing submitted to the Superior Court of The State of California, Caldbeck accuses Teo of mismanagement following his June 2017 departure. We’ve reached out to lawyers for both parties for comment.

“Mr. Teo completely abandoned the leadership responsibilities that were entrusted to him, neglecting to take the most basic steps required to run a venture capital firm,” the lawsuit states. “Mr. Teo was laughably bad at this job. As another Silicon Valley entrepreneur remarked publicly, ‘this guy has done everything possible wrong.’ ”

The filing cites 500 Startups and Sherpa Capital as examples of funds that were able to survive following similar scandals wherein a partner was accused of sexual harassment and misconduct. Caldbeck, in essence, is upset Teo wasn’t able to successfully run Binary Capital following his own alleged wrongdoings.

Binary Capital co-founders Jonathan Teo and Justin Caldbeck

Caldbeck, who’s taken to angel investing in the months following the high-profile scandal, was previously a managing director at Lightspeed Venture Partners before launching Binary Capital alongside Teo in 2014. Teo, for his part, was formerly a managing director at General Catalyst. Binary Capital, an early-stage fund, has backed companies including plus-sized clothing business Dia&Co and airfare search engine Skiplagged.

According to several reports, Teo had hoped to keep Binary Capital alive after The Information published a report highlighting six women’s allegations of being groped and propositioned during their professional relationship with Caldbeck.

Caldbeck, however, is less than satisfied with Teo’s handling of those allegations and the wave of “negative press articles” that followed. Caldbeck also claims he resigned from the firm only in exchange for a promise for future financial stability from Teo.

In the months following his departure, Caldbeck asserts Teo took personal vacations to Mongolia, Ibiza and the Burning Man festival. He “went AWOL,” “was completely unresponsive,” “seemed not to care,” and “made no effort to save the firm,” per the filing.

Teo, additionally, allegedly took on an operating role at Binary Capital portfolio company Trillex, where he increased corporate spending limits to purchase gifts for himself, including taking out a more than $2 million unauthorized loan to pay his personal taxes and to assist a family member with a real estate project.

According to a Forbes report on the lawsuit, Teo’s legal team says “The justice system will soon remind Mr. Caldbeck that he alone is responsible for his many misdeeds.” We will update this report when he hear back from Caldbeck and Teo’s legal teams.

Here’s the full lawsuit:

BlackBerry sues Twitter for patent infringement

BlackBerry, the former smartphone maker, is suing Twitter for alleged patent infringement. If this sounds familiar, it may be because BlackBerry filed a patent infringement suit against Facebook last year.

In its complaint, BlackBerry alleges Twitter has infringed and continues to infringe on six of its patents, which cover things like push notifications, silencing notifications for a message thread and mobile advertising techniques.

BlackBerry, which refers to itself as a pioneer in mobile messaging, alleges Twitter “created mobile messaging applications that co-opt BlackBerry’s innovations, using a number of the innovative user interface and functionality enhancing features that made BlackBerry’s products such a critical and commercial success in the first place.”

As noted above, BlackBerry sued Facebook last year alleging patent infringement. At the time, BlackBerry cited seven patents that relate to security, user interface features, battery-efficient status updates, mobile messaging in games and, similarly to its issue with Twitter, silencing notifications. A few months later, in September, Facebook filed a suit of its own against BlackBerry alleging the company infringed on five of its patents. Both of those suits are still in litigation.

BlackBerry was once a smartphone giant but stopped manufacturing its own hardware in 2016. Then, in 2017, BlackBerry revealed the KEYone smartphone, manufactured by TCL, under the company’s new strategy to focus on software.

Both Twitter and BlackBerry declined to comment.

Apple confirms its plans to close retail stores in the patent troll-favored Eastern District of Texas

Apple has confirmed its plans to close retail stores in the Eastern District of Texas — a move that will allow the company to better protect itself from patent infringement lawsuits, according to Apple news sites 9to5Mac and MacRumors, which broke the news of the stores’ closures. Apple says that the impacted retail employees will be offered new jobs with the company as a result of these changes.

The company will shut down its Apple Willow Bend store in Plano, Texas as well as its Apple Stonebriar store in Frisco, Texas, MacRumors reported, and Apple confirmed. These stores will permanently close up shop on Friday, April 12. Customers in the region will instead be served by a new Apple store located at the Galleria Dallas Shopping Mall, which is expected to open April 13.

Apple did not comment on the stores’ dates of closure or the new store’s opening.

However, it’s common for Apple to leave little downtown during retail stores transitions — though most closures are related to renovations or other reasons that aren’t about trying to escape patent lawsuits.

The Eastern District of Texas had become a popular place for patent trolls to file their lawsuits, though a more recent Supreme Court ruling has attempted to crack down on the practice. The court ruled that patent holders could no longer choose where to file.

Apple has had to make big payouts to patent trolls in recent years: $625.6 million to patent holding firm VirnetX in 2016 over protocol patents; VirnetX won $368 million from Apple in 2013; and more recently $502.6 million over four communication patents.

VirnetX tends to be referred to as a “patent troll” because it makes most of its revenue by suing tech companies. In addition to Apple, it sued Microsoft over patents in Skype and has been in litigation with Cisco. Its cases and subsequent wins are often held up as another example of how patent law in the U.S. is in need of reform.

The Apple store closures could have had a notable impact on area jobs, had Apple not offered new positions to its retail staff.

Apple today employs 1,000 people in the Dallas-Fort Worth area, which has been an increase of 33 percent in the past five years.

The company also recently invested almost $30 million in its Dallas area stores.

Outside the Dallas metro area, Apple is also investing in Texas with its $1 billion for the new campus in Austin, which will accommodate an additional 5,000 employees on top of the 6,200 already in the area.

A rep for Apple confirmed the stores’ closures in a statement, but wouldn’t comment on the company’s reasoning:

We’re making a major investment in our stores in Texas, including significant upgrades to NorthPark Center, Southlake and Knox Street. With a new Dallas store coming to the Dallas Galleria this April, we’ve made the decision to consolidate stores and close Apple Stonebriar and Apple Willow Bend. All employees from those stores will be offered positions at the new Dallas store or other Apple locations.

Apple is selling the iPhone 7 and iPhone 8 in Germany again

Two older iPhone models are back on sale in Apple stores in Germany — but only with Qualcomm chips inside.

The iPhone maker was forced to pull the iPhone 7 and iPhone 8 models from shelves in its online shop and physical stores in the country last month, after chipmaker Qualcomm posted security bonds to enforce a December court injunction it secured via patent litigation.

Apple told Reuters it had “no choice” but to stop using some Intel chips for handsets to be sold in Germany. “Qualcomm is attempting to use injunctions against our products to try to get Apple to succumb to their extortionist demands,” it said in a statement provided to the news agency.

Apple and Qualcomm have been embroiled in an increasingly bitter global legal battle around patents and licensing terms for several years.

The litigation follows Cupertino’s move away from using only Qualcomm’s chips in iPhones after, in 2016, Apple began sourcing modem chips from rival Intel — dropping Qualcomm chips entirely for last year’s iPhone models. Though still using some Qualcomm chips for older iPhone models, as it will now for iPhone 7 and iPhone 8 units headed to Germany.

For these handsets Apple is swapping out Intel modems that contain chips from Qorvo which are subject to the local patent litigation injunction. (The litigation relates to a patented smartphone power management technology.) 

Hence Apple’s Germany webstore is once again listing the two older iPhone models for sale…

Newer iPhones containing Intel chips remain on sale in Germany because they do not containing the same components subject to the patent injunction.

“Intel’s modem products are not involved in this lawsuit and are not subject to this or any other injunction,” Intel’s general counsel, Steven Rodgers, said in a statement to Reuters.

While Apple’s decision to restock its shelves with Qualcomm-only iPhone 7s and 8s represents a momentary victory for Qualcomm, a separate German court tossed another of its patent suits against Apple last month — dismissing it as groundless. (Qualcomm said it would appeal.)

The chipmaker has also been pursing patent litigation against Apple in China, and in December Apple appealed a preliminary injunction banning the import and sales of old iPhone models in the country.

At the same time, Qualcomm and Apple are both waiting the result of an antitrust trial brought against Qualcomm’s licensing terms in the U.S.

Two years ago the FTC filed charges against Qualcomm, accusing the chipmaker of operating a monopoly and forcing exclusivity from Apple while charging “excessive” licensing fees for standards-essential patents.

The case was heard last month and is pending a verdict or settlement.