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Zuckerberg Flubs Details of Facebook Privacy Commitments
Legal Opinions | 2018/04/14 07:12
Over two days of questioning in Congress, Facebook CEO Mark Zuckerberg chief revealed that he didn’t know key details of a 2011 consent decree with the Federal Trade Commission that requires Facebook to protect user privacy.

With congressional hearings over and no immediate momentum behind calls for regulation, the biggest hammer still hanging over Facebook in the U.S. is a fresh FTC investigation . The probe follows revelations that pro-Trump data-mining firm Cambridge Analytica acquired data from the profiles of millions of Facebook users. Facebook also faces inquiries in Europe.

The 2011 agreement bound Facebook to a 20-year privacy commitment , and any violations of that pact could cost Facebook a ton of money, even by its flush-with-cash standards. If Zuckerberg’s testimony before Congress is any indication, the company might have something to worry about.

Zuckerberg repeatedly assured lawmakers Tuesday and Wednesday that he believed Facebook is in compliance with that 2011 agreement. But he also flubbed simple factual questions about the consent decree.

“Congresswoman, I don’t remember if we had a financial penalty,” Zuckerberg said under questioning by Colorado Rep. Diana DeGette on Wednesday.

“You’re the CEO of the company, you entered into a consent decree and you don’t remember if you had a financial penalty?” she asked. She then pointed out that the FTC doesn’t have the authority to issue fines for first-time violations.

In response to questioning by Rep. Mike Doyle of Pennsylvania, Zuckerberg acknowledged: “I’m not familiar with all of the things the FTC said.”

Zuckerberg also faced several questions from lawmakers about how long it takes for Facebook to delete user data from its systems. He didn’t know.

The 2011 consent decree capped years of Facebook privacy mishaps, many of which revolved around its early attempts to follow users and their friends around the web. Any violations of the 2011 agreement could subject Facebook to fines of $41,484 per violation per user per day. To put that in context, Facebook could theoretically owe $8 billion for one single day of a violation affecting all of its American users.

The current FTC investigation will look at whether Facebook engaged in “unfair acts” that cause “substantial injury” to consumers.


Facebook to stop spending against California privacy effort
Court Watch | 2018/04/13 19:12
Facebook says it will stop spending money to fight a proposed California ballot initiative aimed at giving consumers more control over their data.

The measure, known as the "California Consumer Privacy Act," would require companies to disclose upon request what types of personal information they collect about someone and whether they've sold it. It also would allow customers to opt out of having their data sold.

The company made the announcement Wednesday as chief executive Mark Zuckerberg underwent questioning from Congress about the handling of user data.

Pressure has mounted on Facebook to explain its privacy controls following revelations that a Republican-linked firm conducted widespread data harvesting.

Facebook had donated $200,000 to a committee opposing the initiative in California - part of a $1 million effort by tech giants to keep it off the November ballot.

Facebook said it ended its support "to focus our efforts on supporting reasonable privacy measures in California."

Proponents of the ballot measure applauded the move.

"We are thrilled," said Mary Ross, president of Californians for Consumer Privacy.

The California Chamber of Commerce and other groups are fighting to keep the measure off the ballot through the "Committee to Protect California Jobs." Google, AT&T, Verizon and Comcast also contributed $200,000 each to that effort in February.

Committee spokesman Steve Maviglio said the measure would hurt the California economy.

"It is unworkable and requires the internet in California to operate differently - limiting our choices, hurting our businesses, and cutting our connection to the global economy," he said.


Retailers hope for certainty as Supreme Court hears tax case
Legal Network | 2018/04/13 19:11
Retailers are hoping for a resolution this year from the Supreme Court, which hears arguments Tuesday in a decades-old dispute: Whether companies must collect sales tax on items sold in a state where they don't have a store or other building.

If the court backs government officials who say they're losing billions of dollars in uncollected taxes, thousands of small companies could be forced to start charging their out-of-state customers for them. Some businesses fear that could alienate customers used to tax-free shopping. On the other side: Retailers who do collect sales tax and believe those who don't have an unfair advantage.

The justices will hear online retailers Wayfair, Overstock.com and Newegg challenging a South Dakota law enacted last May requiring out-of-state retailers that have sales of more than $100,000 or over 200 transactions a year in the state to collect sales tax. Their decision could have national implications on e-commerce, although Congress can pass legislation afterward that broadens or narrows the law.

It's not only about the money, says Stephanie Harvey, owner of exit343design in Conshohocken, Pennsylvania. There are more than 10,000 sales tax jurisdictions in the United States: 35 states, the District of Columbia, counties and municipalities.

"Adding this sales tax isn't just about the tax itself — it's about the cost of time to navigate and file (taxes) or the additional expense of hiring someone to do so on behalf of the business," says Harvey, whose design and printing company has an online store and sells merchandise to other retailers.

The justices are likely to rule by June on whether to overturn a 1992 decision, Quill v. North Dakota, that said companies cannot be forced to collect sales tax from customers in a state where they don't have a physical presence like a store or distribution center. Collecting tax from online sales hasn't been a question for big online retailers like Walmart or Macy's since they have physical stores in most or all states. They also have accounting systems and financial staffs to handle the work.

Small retailers have software options to help collect taxes and do the administrative work, but it's an added cost. Whether it's worth it may depend on how much revenue a seller gets from other states. The most comprehensive software can work with the programs retailers use to process sales transactions. The software sellers determine the correct sales tax rate and submit payments and reports to tax authorities.


Ohio court to decide if ex-player can sue over concussions
Legal Network | 2018/04/12 02:11
can sue the school and the NCAA over allegations her husband was disabled by concussions from his college career in the 1970s.

Steve Schmitz was suffering from dementia and early onset Alzheimer's disease when he and his wife, Yvette, filed a lawsuit in Cuyahoga County in October 2014. The lawsuit alleged both institutions showed "reckless disregard" for the safety of college football players and for their failure to educate and protect players from concussions.

The lawsuit said the link between repeated blows to the head and brain-related injuries and illnesses had been known for decades, but it was not until 2010 that the NCAA required colleges to formulate concussion protocols to remove an athlete from a game or practice and be evaluated by doctors.

Steve Schmitz died in February 2015. The lawsuit said the Cleveland Clinic diagnosed him in 2012 with chronic traumatic encephalopathy, or CTE, a brain disease attributed to receiving numerous concussions.

A judge ruled that too much time had passed for Schmitz to sue, a decision overturned by a state appeals court. The state's high court planned to hear arguments from both sides on Wednesday.

A ruling in favor of Schmitz's widow would allow her to return to court and argue the specific allegations regarding the impact of concussions on her husband, a running back and receiver.

Notre Dame and the NCAA argue the statute of limitations for Schmitz to have sued date back to his playing days when he first realized he suffered head injuries. As such, the two-year window for filing a personal injury claim had long passed, the institutions say.



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