CHALLENGE TO TEXAS AGE-VERIFICATION LAW RETURNED TO LOWER COURT
The U.S. Court of Appeals for the Fifth Circuit has sent a challenge to Texas’s controversial online age verification law back to district court for additional clarification, while leaving the lower court’s injunction blocking the legislation in place. In its current form, the law requires that companies (including social media platforms) that host or distribute digital content verify a user’s age if more than one-third of the content is “sexually harmful to minors.”
In its opinion, the Fifth Circuit wrote that the lower court failed to properly resolve who is covered by the law and the type of content under its purview. Though the law was set to go into effect on September 1, 2024, a challenge filed in July 2024 by Computer & Communications Industry Association and NetChoice LLC secured a partial injunction in the U.S. District Court for the Western District of Texas, which effectively blocked implementation on First Amendment grounds. Texas Attorney General Ken Paxton immediately appealed the decision, which brings us to where we are today. Privacy concerns are at the heart of the case, with critics maintaining that this type of age verification law would put all users at significant risk for exploitation as a result of the data collected for verification. Proponents argue that the proliferation of smartphones has made pornographic content easily available to children and only legislation can protect them from themselves. Similar legislation has been proposed or enacted in many states, prompting a slew of challenges.
FTC GOES AFTER SITEJABBER FOR FAKE PRODUCT REVIEWS
As we reported last month, the Federal Trade Commission (FTC) is not playing around when it comes to fraudulent online reviews. It wasted no time when taking action against online review platform Sitejabber for violations of new FTC rules prohibiting false or deceptive customer testimonials and has issued a proposed consent order in a 5–0 decision. According to the complaint, Sitejabber collected ratings and reviews for its online business clients from consumers at the time of purchase, rather than after purchasers had an opportunity to actually use the products, and used this data to deceptively inflate its clients’ ratings. Commissioner Melissa Holyoak pointed out in her concurring statement that Sitejabber’s embeddable web widget for instant product reviews is “an inherently deceptive tool.” Commissioner Andrew Ferguson agreed, adding: “These widgets had no purpose other than to represent that those product ratings were derived from the reviews of consumers who had received and had a chance to use the product in question.” If it does not comply with FTC rules before a final consent order is issued, Sitejabber could be subject to fines of up to $51,744 for each violation.
OMAR ABDULAZIZ LOSES APPEAL AGAINST X
Omar Abdulaziz, a dissident Saudi blogger, activist, and longtime associate of Jamal Khashoggi, has lost his appeal against X. Abdulaziz alleged that X (known as Twitter at the time) improperly shared his private information with the Saudi government, leading to his arrest and torture. Abdulaziz filed the appeal after a California district court dismissed the complaint for failure to plead the causation needed for Article III standing and negligence. The Ninth Circuit Court of Appeals disagreed with the lower court’s Article III stance, finding that the allegations in the complaint were sufficient for standing, but still rejected the appeal on statute of limitations grounds. The court ruled that Abdulaziz’s claim was barred by California’s statute of limitations since it was not filed until 2019, though X notified him as early as 2015 that state-sponsored actors may have targeted his account.
TIKTOK ORDERED TO SHUTTER OFFICES IN CANADA
Citing national security concerns, the Canadian government has issued an order requiring TikTok to shut down operations and close its offices in Canada. Though the order is light on details, Canadian intelligence agencies have long expressed apprehension over the app’s data security and ties to the Chinese government. Canada has banned the app on government-issued devices since 2023 (like many other countries), but this new order requires TikTok to completely end operations at their Toronto and Vancouver offices. In a statement, TikTok pointed out that this action will result in the loss of hundreds of high-paying jobs and have pledged to fight it in court. The order does not block the app for Canadian citizens and content creators, though other countries have proposed exactly that. University of Ottawa professor Michael Geist found the ruling misguided, writing “[B]anning the company rather than the app may actually make matters worse since the risks associated with the app will remain but the ability to hold the company accountable will be weakened.”
OPENAI TAKES PROACTIVE MEASURES FOR ELECTION INTEGRITY
OpenAI’s wildly popular generative AI chatbot, ChatGPT, actively blocked more than 250,000 requests to generate images of U.S. presidential candidates ahead of the election and redirected millions of users to trusted news sites such as Reuters and the Associated Press when the chatbot was asked for candidate information. In a blog posted on its official site, OpenAI detailed the steps taken to ensure its product would not be used for nefarious purposes, writing: “Protecting the integrity of elections requires collaboration from every corner of the democratic process, and we want to make sure our technology is not used in a way that could undermine this process.”
DOMAIN NAMES CONTINUE TO INCREASE IN VALUE
In other OpenAI news, the company has purchased the domain chat.com for reportedly more than $ 10 million. The simpler URL is likely to position OpenAI's ChatGPT tool at the forefront of consumer awareness, and “Chat it” may soon become as ubiquitous as “Google it” in the online lexicon. Though the price tag may seem steep, this is probably a savvy move. URL familiarity has become crucial in the digital marketplace and simple, memorable domain names are now extremely valuable properties. Former MTV VJ Adam Curry was quite possibly the first person to realize this, which may be the weirdest sentence you’ll read this month. He started mtv.com way back in 1994, but the network was uninterested in getting involved with this newfangled internet thing, so they let him have the domain. When they realized what a staggering mistake they made, lawsuits soon followed.