Facebook is firing up its lawyers to try to block EU regulators from forcing it to suspend transatlantic data transfers in the wake of a landmark ruling by Europe’s top court this summer.
The tech giant has applied to judges in Ireland to seek a judicial review of a preliminary suspension order, it has emerged.
Earlier this week Facebook confirmed it had received a preliminary order from its lead EU data regulator — Ireland’s Data Protection Commission (DPC) — ordering it to suspend transfers.
That’s the logical conclusion after the so-called Schrems II ruling which struck down a flagship EU-US data transfer arrangement on the grounds of US surveillance overreach — simultaneously casting doubt on the legality of alternative mechanisms for EU to US data transfers in cases where the data controller is subject to FISA 702 (as Facebook is).
Today The Currency reported that Dublin commercial law firm, Mason Hayes + Curran, filed papers with the Irish High Court yesterday, naming Ireland’s data protection commissioners as defendant in the judicial review action.
Facebook confirmed the application — sending us this statement: “A lack of safe, secure and legal international data transfers would have damaging consequences for the European economy. We urge regulators to adopt a pragmatic and proportionate approach until a sustainable long-term solution can be reached.”
In further remarks the company did not want directly quoted it told us it believes the preliminary order is premature as it said it expects further regulator guidance in the wake of the Schrems II ruling.
It’s not clear what further guidance Facebook is hankering for, nor what grounds it is claiming for seeking a judicial review of the DPC’s process. We asked it about this but it declined to offer any details. However the tech giant’s intent to (further) delay regulatory action which threats its business interests is crystal clear.
The original complaint against Facebook’s transatlantic data transfers dates all the way back to 2013.
This kinda shows (a) how they will use every opportunity to block a case, even before there is a decision and (b) how it is wholly illusionary to get such a case through in a couple of weeks/months in the Irish legal system…
Ireland’s legal system allows for ex parte applications for judicial review. So all Facebook had to do to file an application to the High Court to challenge the DPC’s preliminary order is a statement of grounds, a verifying affidavit and an ex parte docket (plus any relevant court fee). Oh and it had to be sure this paperwork was submitted on A4.
The DPC’s deputy commissioner, Graham Doyle, declined to comment on the latest twist in the neverending saga.
Pinterest’s former chief operating officer has filed a lawsuit accusing the company of gender discrimination. Françoise Brougher, who says she was abruptly fired from the company in April, is suing the company to hold it “accountable for discrimination, retaliation, and wrongful termination in violation of the Fair Employment and Housing Act (FEHA), and the Labor Code,” according to a Tuesday filing in San Francisco Superior Court. (The full text of the filing is embedded below.)
Pinterest said in June this year that it had about 400 million monthly active users, most of whom are women. But its top executives are all men. “Ironically, even though Pinterest markets itself to women as a source of lifestyle inspiration, the company leadership team is male dominated, and gender-biased attitudes are prevalent,” the lawsuit says.
Before joining Pinterest in March 2018, Brougher held executive positions at Square, Google and Charles Schawb. Brougher alleged in her lawsuit that she was hired with a less favorable equity compensation package than her male peers. She claimed that she was also left out of key decision-making by other executives; was subjected to a hostile work environment; and ultimately fired by chief executive officer Ben Silbermann when she spoke up against her treatment.
In a Medium post published today, Brougher wrote, “I have always been a private person, but I am opening up about my experience because if someone of my privilege and seniority is fired for speaking out about these issues, the situation is likely far worse for people earlier in their careers.”
At the time Brougher was hired, the lawsuit says she was told Pinterest’s board directed executives to receive backloaded equity grants. Her equity grant stipulated that only 10% of shares vested in the first year; followed by 20% the second year; 30% the third year; and 40% the fourth year. Brougher assumed this vesting schedule was standard for Pinterest executives.
When the company filed to go public last year, however, Brougher realized while looking at its S-1 filing that her male peers’ equity grants were not backloaded. Brougher’s compensation was adjusted after she raised concerns with Silbermann, who directed her to Pinterest’s human resources department.
Brougher says she was not invited on Pinterest’s IPO roadshow, despite being its COO and knowing many of the company’s investors.
After Pinterest’s initial public offering in April 2019, Brougher says she was no longer invited to board meetings, even though members of her team occasionally were — sometimes without her knowledge. “As COO of Pinterest, Ms. Brougher no longer had meaningful engagement with the company’s board,” the lawsuit says.
“The abrasiveness trap”
Brougher’s suit also claims that she began receiving more critical feedback, and cites a study by tech executive Kiernan Snyder called “The Abrasiveness Trap,” which found women are assessed more negatively than men in 248 reviews collected from 28 companies of different sizes. Snyder found that 87.9% of reviews for women contained critical feedback, compared to 58.9% of reviews for men. Their personalities were the focus of criticism in 75.5% of critical reviews for women, compared to just 2.4% of the critical reviews received by men.
The lawsuit says Silbermann criticized Brougher for “not being collaborative and told her that she did not have consistently healthy cross-functional relationships.” When Brougher asked him for more details, she claims “he told her to keep quiet, saying she should ‘be mindful’ of how she acted in a group setting.”
Pinterest’s chief financial officer Todd Morgenfeld also allegedly became “increasingly disrespectful” to Brougher beginning in January 2020, undermining her authority by ignoring her and talking directly to her team members.
In one meeting, Brougher says Morgenfeld sarcastically asked “What is your job anyway?” Silbermann would also wait to make key strategy decisions after meetings Brougher attended, meeting with one or two male colleagues after she had left.
In February, the lawsuit says Brougher received a peer review written by Morgenfeld, even though she had not been asked to review him. Despite Brougher’s work on Pinterest’s IPO, advertiser base and monetization strategy in Europe, the lawsuit says the “Morgenfeld’s only comment on her 2019 achievements was: “Seems to be a champion for diversity issues.”
During a video call with Morgenfeld on February 21, 2020, Brougher says she tried to address his feedback, but that he became angry during the call, raised his voice, called her a liar, and questioned the value she brought to Pinterest before hanging up on her.
After the call, Brougher says she texted Silbermann and told him it had not gone well. On February 24, she met with Pinterest’s Chief Human Resources Officer Jo Dennis and said she wanted to find a way to work with Morgenfeld, but was uncomfortable meeting alone with him. Instead of mediating between Brougher and Morgenfeld, the lawsuit alleges Dennis treated the matter as a possible legal issue, escalating it to Pinterest’s in-house counsel.
On the same day, Brougher also met with Silbermann. The lawsuit says that Silbermann compared the situation between Morgenfeld and Brougher to “an old couple fighting over who would make coffee.”
Then on April 2, Silbermann told Brougher that she was being fired and told her to transfer her responsibilities to Morgenfeld over the next month. He also asked her to tell her team that she had made the decision to leave, which she refused to do. Brougher claims her termination cost her “tens of millions of dollars in lost earnings and equity compensation.”
TechCrunch has reached out to Pinterest for comment. In a statement to The New York Times, a Pinterest representative said the company is conducting an independent review of its culture, policies, and practices.
A state court has dismissed a high-profile case showing unsportsmanlike conduct by Google, which was caught red-handed using lyrics obviously scraped from Genius. Unfortunately for the latter, the complaints amount to a copyright violation — which wasn’t what the plaintiffs alleged, sinking the case.
That’s fair play, except when the lyrics are taken directly from those sites (directly or via an accomplice) without permission or attribution — and Genius proved that Google was doing this by cleverly hiding “RED HANDED” inside lyrics, using Morse code formed from curly and straight apostrophes. Devious!
Caught thus, Google said it would mend its ways, and soon was caught again, doing the same thing using the same method. It’s certainly enough to make you want to see the big G take some licks, and Genius filed a lawsuit hoping to achieve just that.
The problem is this: Genius isn’t the copyright holder for these lyrics, it just licenses them itself. Its allegations against Google, Judge Margo Brodie of the Eastern District of New York determined, amount to copyright violations, in nature if not in name, and copyright is outside Brodie’s jurisdiction.
Plaintiff’s allegations that Defendants “scraped” and used their lyrics for profit amount to allegations that Defendants made unauthorized reproductions of Plaintiff’s lyric transcriptions and profited off of those unauthorized reproductions, which is behavior that falls under federal copyright law.
As to allegations of unfair business conduct, Brodie says those too are copyright disputes:
Plaintiff has not alleged that Defendants breached any fiduciary duty or confidential relationship, or that Defendants misappropriated Plaintiff’s trade secrets. Instead, Plaintiff’s claims are precisely the type of misappropriation claims that courts have consistently held are preempted by the Copyright Act.
Because all the causes for complaint are preempted by federal law, Brodie really has no choice but to kick the case out:
Given that the Court finds that all of Plaintiff’s state law claims are preempted by the Copyright Act, and Plaintiff has not asserted any federal law claims, the Court dismisses the Complaint for failure to state a claim.
It’s a bit disappointing, of course, to see a company like Google engage in shenanigans and get away with it (though let us not forget that Genius has engaged in some shenanigans of its own). But the legal system is all about crossing your t’s and dotting your i’s. If someone steals your wallet, you don’t accuse them of embezzlement, even though they’re kind of the same thing.
In this case Genius’s legal team needed to bring a copyright complaint, but possibly were unable to due to not being the copyright owners themselves. (Copyright law is notoriously obtuse, especially in questions of digital copies and licensing.)
Genius could file a new lawsuit or just cut their losses, having given Google a very public black eye; the scraping practice even got some play during the recent tech antitrust hearings in Congress. Certainly Google is on notice — but make no mistake, they’re popping champagne in Mountain View tonight.
Emily Kramer joined the Silicon Valley company Carta to build up the company’s brand. Now, the company’s former VP of marketing is looking to shine a light on Carta for another reason: in a new lawsuit against Carta, which makes equity management software, Kramer accuses the eight-year-old outfit of gender discrimination, retaliation, wrongful termination, and of violating the California Equal Pay Act.
Carta declined an interview request today, saying through a spokesperson that it isn’t commenting because the suit is a “pending legal matter.” But we spoke earlier this afternoon with Kramer, and she accuses the company of both unfair labor practices and of being disingenuous in its stated “commitment to transparency and equality in equity.”
The equality piece is certainly the bigger of the two issues, by Kramer’s own telling. She says she learned that she was underpaid when, in the summer of 2018, roughly six months after she joined Carta, it partnered with the women-led investment collective #ANGELS to produce a report that highlighted ownership of venture-backed companies’ equity by gender.
The suspicion driving the report — and later proved out by its findings — is that as with salary, where women continue to earn less than their male peers, they are also given less equity ownership in the startups for which they work. Kramer, who says she spearheaded the effort, posted the report, which included internal analysis that showed that Carta too, was allocating less equity to women than men.
In response, says the report, 40% of the women at Carta received an equity fix, compared to 32% of the men.
Perhaps unsurprisingly, Kramer, the only female executive at Carta at the time, says she discovered she was herself underpaid by $50,000 relative to her peers, and that her original equity grant was just one-third of the same amount of shares paid to comparable employees, who she says were all men.
Indeed, at the crux of her suit against Carta is that equity grant. While on the heels of the report, the company bumped up her pay by $50,000 and provided her nearly 300,000 more stock options in addition to the 150,000 options she was originally provided, it declined to backdate or accelerate the options to account for the previous six months of her tenure.
That might not seem like a big deal. But given Carta’s ever-soaring valuation — it was marked at half a billion dollars when Kramer joined the company and it was more recently assigned a $3 billion valuation by its investors — that’s tantamount to a “significant” amount money, notes Kramer. And she wasn’t about to leave it on the table.
The disparity wasn’t a complete shock to Kramer, who’d previously worked in marketing at Ticketfly, Asana, and Astro Technology (acquired by Slack) . According to her lawsuit, filed by attorney Sharon Vinick, Kramer emailed Carta’s founder and CEO, Henry Ward, when she was initially offered the job, noting that the equity offered was “lower than my expectations.”
According to Kramer, Ward told her that any more equity would be “unfair,” as compensation at her level was uniform for all employees. He also said Carta planned a company-wide review of its salaries and stock options later in the year, and that if it revealed that she was being underpaid, her compensation would be adjusted.
Clearly, Ward and Kramer have different views on whether or not that ultimately happened.
In our call with Kramer, she said still believes in the company’s mission to make equity more understandable for its users. She declined to say whether she has exercised any of her shares, but she said that Carta gives its employees a longer window to do this than many other startups. (How much time is is based in part on their tenure with the company, she’d added.)
Kramer also said that she hopes the company can “live up to” how it markets itself externally, as an ally of women who are paid less for the same amount of work.
Kramer says her experience inside of Carta — which still has an exclusively male board of directors — was not of a company that values women as much as men. She alleges that not only was she the only woman who reported directly to Ward during her tenure, but that two other VP-level execs who joined at roughly the same were promoted to C-level positions despite having “less, and less relevant” work experience in their respective fields, whereas her efforts to be promoted went nowhere. (Asked if there were other VP-level male colleagues who were also not promoted during the same period, Vinick said that no one at the time had a comparable role to Kramer, who grew to oversee 27 other people.)
Kramer adds that she stopped being included in meetings where a marketing head would normally be included, fundraising meetings among them, and believes that her efforts to remedy what she perceived as a “sexist culture” within the male-dominated company were at the root of all of these developments.
Eventually, Kramer says, she felt she was forced to resign after a meeting with Ward turned heated and he said Kramer was in violation of the company’s “no asshole policy.” When she wrote him two days later to quit, he wrote back within eight minutes, accepting her resignation and suggesting that they both might learn from their experience working together.
Vinick, Kramer’s attorney, tells us Carta is being sued for emotional, punitive, and economic distress and says that now that her law firm has filed the suit, Carta will be served officially with the complaint within another week or two, at which point the discovery process can begin.
Carta does not ask its employees to sign arbitration clauses in their employment agreements, so unless it settles with Kramer or a judge finds some reason to dismiss the case, it could eventually head to trial.
In the meantime, the decision to sue is a big gamble for Kramer, but Vinick says she is proud of her client. “Standing up to these situations is an extraordinarily difficult and potentially career-limiting move to take,” but will ultimately help “shine a light on the problem of this equity gap.”
Carta has raised more than $600 million from investors to date, including Andreessen Horowitz, Lightspeed Ventures, and Goldman Sachs. In April, as it was sealing it up its newest round of funding, it also conducted its first major layoff, parting ways with 161 employees.
At the time, Business Insider spoke with eight former employees and one investor who described Carta as a “quickly changing company with huge vision but little focus, where hiring and hypergrowth” had become its core priorities.
A U.S. federal court judge ruled on Thursday that WhatsApp and parent company Facebook’s lawsuit against Israeli mobile surveillance software company NSO Group can go forward. Phyllis Hamilton, Chief Judge of the United Stated District Court of the Northern District of California, denied most of the arguments NSO Group made when it filed a motion to dismiss the suit in April (a copy of her decision is embedded below).
Last October, WhatsApp and Facebook filed a complaint alleging that NSO Group exploited an audio-calling vulnerability in the messaging app to send malware to about 1,400 mobile devices, including ones that belonged to journalists, human rights activists, political dissidents, diplomats and senior government officials.
WhatsApp and Facebook also claim that NSO Group developed a data program called Pegasus that extracted data, including messages, browser history and contacts, from phones, and sold support services to customers including the Kingdom of Bahrain, United Arab Emirates and Mexico.
In its motion to dismiss the lawsuit, one of NSO Group’s arguments was that its business dealings with foreign governments, which it said use its technology to fight terrorism and other serious crimes, granted it immunity from lawsuits filed in U.S. courts under the Foreign Sovereign Immunity Act (FSIA). In her decision, Judge Hamilton wrote that NSO Group failed to qualify because it was not incorporated or formed in the U.S.
In an email to TechCrunch, a WhatsApp spokesperson said “We are pleased with the Court’s decision permitting us to move ahead with our claims that NSO engaged in unlawful conduct. The decision also confirms that WhatsApp will be able to obtain relevant documents and other information about NSO’s practices.”
TechCrunch has also contacted NSO Group for comment. When the lawsuit was filed in October, the company stated, “In the strong possible terms, we dispute today’s allegations and will vigorously fight them.”
In the worlds of journalism and publishing, it’s fairly common for the wealthy to attempt to shut down reporting with legal threats. For those publishing on large platforms with plenty of resources, such challenges can be a massive headache. For independent writers and publishers, on the other hand, the consequences can be far more dire.
Citing an example wherein a politician’s lawyers recently went after a Substack writer over reports of business ties, the popular newsletter platform is announcing the launch of Defender. After some months in a closed pilot with a “handful” of writers, Substack is extending the service to interested parties.
There’s a form now on Substack’s site. To qualify, users must be based in the U.S. and use Substack for professional work. Co-founder/COO Hamish McKenzie says the company has no current commitment to extending the program to free users (though that could certainly change), but it’s using the U.S. program to determine when and where to more broadly expand Defender.
Writers also need to publish work “that may attract unreasonable legal pressure, such as abuses of copyright laws, assaults on first amendment rights, and spurious defamation claims.” Once approved, they’ll need to fill out a second form detailing the specific case for which they need support. Substack will approve users on a case by case basis, as well as which cases it ultimately supports.
The company says it’s willing to cover fees of up to $1 million, though “in exceptional cases, we may cover even more.” Such cases will continue to be fascinating tests of the First Amendment, particularly in an era when Section 230 of the Communications Decency Act has come under strong fire from the president of the United States.
“Important writing holds the powerful to account – and quite often, that’s an arrangement that the powerful would rather not support,” Substack writes. “In some cases, antagonists use threats of legal action in an attempt to stop the work that makes them uncomfortable.”
As de-platforming has increasingly become a part of the social media landscape, eyes will no doubt be on Substack as the service decides which cases it ultimately chooses to cover. From the sound of its description, Defender will largely focus on reportage — though in such a fragmented media landscape, even that can be in the eye of the beholder.
Amazon is ramping up its efforts to tackle counterfeiting on its platform by aiming for the higher end of the fashion market. Today the e-commerce giant announced that it has jointly filed a lawsuit with Italian luxury brand Valentino against Buffalo, New York-based Kaitlyn Pan Group, LLC and New York resident Hao Pan for copying a famous Valentino shoe style — the Garavani Rockstud, pictured above — and subsequently selling those products on Amazon and Kaitlyn Pan’s own site, “in violation of Amazon’s policies and Valentino’s intellectual property rights.”
Amazon said that any proceeds that result from the suit will go straight to Valentino itself. We’ve asked how much the companies are seeking in damages and will update this post with more information as we get it. We are embedding the suit below the article.
Notably, this is the first time that Amazon has teamed up with a luxury brand to go after counterfeiters in the courts, although it has partnered with other brands in the past. As with those previous cases, it’s important for Amazon to work with the brands to show it’s a friend to legitimate commerce by working actively to stop illicit sales.
Alongside that, however, Amazon has been making huge efforts to raise its game in fashion, and so it’s extremely important that it fights against the image that its a fertile ground for selling and buying illegal knock-off items of famous brands.
Getting off on the right foot — so to speak — with Valentino is part of that. The Garavani Rockstud (“Garavani” comes from Valentino’s full name, Valentino Clemente Ludovico Garavani) is one of Valentino’s most iconic styles, with its metallic lines of studs making an appearance on a range of Valentino footwear including sandals, heels and flats. They were first introduced in 2010 and Valentino has design patents on the style.
Kaitlyn Pan currently sells a number of models that riff on that basic concept. Typically, authentic Valentino Rockstud shoes retail for between $425 and $1,100, while the Pan versions sell for significantly less, around $100.
You can see where the problem lies.
While the shoes are not being sold as Valentino and do not use the Rockstud branding, they could easily be mistaken for them (and may have even been promoted using that keyword when they were still being sold on Amazon):
One thing that isn’t really covered in the Amazon/Valentino suit, but you have to wonder about, is the role that other play in enabling the illicit sales of the items. In the case of Kaitlyn Pan, the site is powered by none other than Shopify, for example.
“The vast majority of sellers in our store are honest entrepreneurs but we do not hesitate to take aggressive action to protect customers, brands, and our store from counterfeiters,” said Dharmesh Mehta, vice president, Customer Trust and Partner Support, in a statement. “Amazon and Valentino are holding this company accountable in a court of law and we appreciate Valentino’s collaboration throughout this investigation.”
Amazon said that it shut down Kaitlyn Pan’s seller account in September 2019, and it did not specify how many pairs of Pan’s shoes were sold via Amazon before then. As of today, the Pan models are still being sold directly on Kaitlyn Pan.
And rather audaciously, despite getting forced out of Amazon’s marketplace and being slapped with cease and desist orders from Valentino, Kaitlyn Pan has applied to the USPTO to trademark the style.
Valentino, like other expensive luxury brands, regularly gets copied and counterfeited, and that has been the case for decades. But arguably, the rise of e-commerce, where it can be harder to trace sellers and products have a higher chance of being disseminated more widely, has compounded that problem.
So the company has made a more concerted effort to fight back. In the past three years, it’s worked with US Customs to seize more than 2,000 counterfeit products and work on a surveillance system to detect counterfeit products on sale in the US market, leading to the removal of more than 7,000 listings across multiple marketplaces, 360 websites and more than 1,000 social media accounts.
“The Maison Valentino is one of the main protagonists of International fashion and plays a major role in the luxury division by sustaining Made in Italy,” Valentino said in a statement. “The brand represents in the global market, one of the Italian excellences in the execution of the industrial process in Italy and of the artisanal and handmade workmanship that are entirely produced in the historic Atelier of Piazza Mignanelli in Rome. We consider Made in Italy to be a fundamental value to be fully endorsed, respected and at the forefront of our business and creations. Valentino is an Italian brand operating globally and is a mirror of society. One of our core missions is to safeguard our brand and protect the Valentino Community by celebrating inclusivity and with creativity at the heart of everything we do. We feel this connection with Amazon will highlight the importance also in fashion for greater awareness, knowledge and understanding by shielding the brand online and its resources.”
Amazon’s role in creating an avenue for counterfeit items to be sold has been a problematic one for the company for years: it has invested in building technology to tackle the problem — in 2019, it said that it had invested over $500 million and dedicated 8,000 employees working on fraud and abuse (which includes IP infringement and counterfeit goods) — and it works with law enforcement and collaborates with authorities to build cases against infringing companies and people. But its critics continue to call out the company and its track record, saying it still has not done enough to address the issue — which of course still results in sales, and thus revenues — on its platform.
Indian online travel booking company Yatra has terminated a pending merger agreement with Atlanta-based software firm Ebix and filed a litigation seeking “substantial damages” over alleged breach of deal terms.
In July last year, Ebix announced its plan to acquire Yatra, giving the Indian firm an enterprise value of $337.8 million, in a move to strengthen its position in India’s hotel and flight ticketing market.
Late Friday, Ebix said it had provided a notice to terminate the deal. In its complaint, Yatra said it seeks to “hold Ebix accountable for breaches of its representations, warranties and covenants in the merger agreement and an ancillary extension agreement, and seeks substantial damages,” it said in a statement.
“As detailed in the complaint, Ebix’s conduct breached material terms of the agreements and frustrated Yatra’s ability to close the transaction and obtain the benefit of Yatra’s bargain for Yatra’s stockholders,” it added.
Ebix did not respond to a request for comment.
On Friday, Yatra also shared an update on its financials, saying it had implemented several cost-saving measures including cutting management salaries by half across the company to steer through the coronavirus pandemic that has put a halt on most travel and hospitality activities worldwide.
The company said as of June 4 it had $32.5 million in total available liquidity and its current monthly run-rate operating fixed cost was about $1.2 million.
Yatra, which went public in 2016 following a reverse-merger with listed company Terrapin 3 Acquisition Corporation, counts India’s Network18, Reliance Capital, Macquarie Group and Rotation Capital among its shareholders. It handles real-time bookings for more than 108,000 hotels and home stays in India and over 1.5 million hotels around the world, it said.
WeWork co-founder Adam Neumann accused SoftBank Group of abusing its power in a new lawsuit filed Monday that alleges breach of contract and breach of fiduciary duty for pulling a $3 billion tender offer for WeWork shares.
The lawsuit, filed in Delaware Court of Chancery, included a motion to consolidate his case with a lawsuit filed last month by a Special Committee of WeWork’s board. Both lawsuits focus on SoftBank Group and its Vision Fund’s decision to back out of a deal to buy shares of the co-working company.
SoftBank Group pulled its $3 billion tender offer for WeWork shares April 1, citing COVID-19’s impact on the business but also closing conditions not being met. Specifically, it pointed to outstanding regulatory investigations, a growing body of litigation against the company and the failure to restructure a joint venture in China as reasons to torpedo the agreement.
“SoftBank will vigorously defend itself against these meritless claims,” Rob Townsend, senior vice president and chief officer at SoftBank, said in a statement. “Under the terms of our agreement, which Adam Neumann signed, SoftBank had no obligation to complete the tender offer in which Mr. Neumann – the biggest beneficiary – sought to sell nearly $1 billion in stock.”
A deal was struck in October 2019 to buy out some of the equity held by Neumann, as well as the venture capital Benchmark Capital and many individual company employees. Neumann was set to receive almost $1 billion for his shares.
WeWork and Neumann gave control of the company to SoftBank, which increased its ownership at a significantly reduced price, according to the complaint.
“SoftBank has abused its position of power to “renege on its promise to pay [Neumann, shareholders, and hundreds of employees] for the benefits it already received,” the complaint said. The lawsuit claims that SoftBank was “secretly taking actions to undermine it” by pressuring investors not to waive certain rights and preventing the China roll-up transaction from closing.
The lawsuit further alleges that SoftBank’s financial condition influenced the company’s decision to terminate the tender offer.
The lawsuit alleges that SoftBank “abused its power” after WeWork’s special committee filed a lawsuit by insisting that only the board, which is controlled by SoftBank, could take legal action.
“In real time, SoftBank Group and SoftBank Vision Fund are abusing their control of WeWork in an effort to stop the Special Committee’s meritorious lawsuit from being heard,” the complaint reads.
Just two weeks ago Facebook settled a lawsuit alleging violations of privacy laws in Illinois (for the considerable sum of $550 million). Now controversial startup Clearview AI, which has gleefully admitted to scraping and analyzing the data of millions, is the target of a new lawsuit citing similar violations.
Clearview made waves earlier this year with a business model seemingly predicated on wholesale abuse of public-facing data on Twitter, Facebook, Instagram and so on. If your face is visible to a web scraper or public API, Clearview either has it or wants it and will be submitting it for analysis by facial recognition systems.
Just one problem: That’s illegal in Illinois, and you ignore this to your peril, as Facebook found.
The lawsuit, filed yesterday on behalf of several Illinois citizens and first reported by Buzzfeed News, alleges that Clearview “actively collected, stored and used Plaintiffs’ biometrics — and the biometrics of most of the residents of Illinois — without providing notice, obtaining informed written consent or publishing data retention policies.”
Not only that, but this biometric data has been licensed to many law enforcement agencies, including within Illinois itself.
All this is allegedly in violation of the Biometric Information Privacy Act, a 2008 law that has proven to be remarkably long-sighted and resistant to attempts by industry (including, apparently, by Facebook while it fought its own court battle) to water it down.
The lawsuit (filed in New York, where Clearview is based) is at its very earliest stages and has only been assigned a judge, and summonses sent to Clearview and CDW Government, the intermediary for selling its services to law enforcement. It’s impossible to say how it will play out at this point, but the success of the Facebook suit and the similarity of the two cases (essentially the automatic and undisclosed ingestion of photos by a facial recognition engine) suggest that this one has legs.
The scale is difficult to predict, and likely would depend largely on disclosure by Clearview as to the number and nature of its analysis of photos of those protected by BIPA.
Even if Clearview were to immediately delete all the information it has on citizens of Illinois, it would still likely be liable for its previous acts. A federal judge in Facebook’s case wrote: “the development of face template using facial-recognition technology without consent (as alleged here) invades an individual’s private affairs and concrete interests,” and is therefore actionable. That’s a strong precedent and the similarities are undeniable — not that they won’t be denied.