The company's private offering gets the subject's permission before running facial matches.

Amid scrutiny over violations of privacy, Clearview AI seems to be inviting more.

Barely more than two weeks after it agreed to stop selling its existing collection of face prints to private entities, facial recognition firm Clearview AI has a brand new plan to sell its software to private companies instead.

The software isn't exactly what Clearview AI has caught flack for in the past. Since the company's recent settlement with the ACLU bans Clearview from providing social media face matching technology to private entities, the product now on offer obtains the subject's permission to match them to ID photos and other data a client collects, according to Reuters.

The product's aim is to verify individuals' identities to give them access to certain spaces, such as visitor management systems used in schools. A company presenter at Montgomery Summit investor conference said the offering could significantly boost Clearview AI's sales.

Columbian lending app Vaale is reportedly going to use Clearview AI to match selfies to user-uploaded ID photos, replacing Amazon's facial recognition service, Rekognition. Vaale's CEO Santiago Tobón told Reuters that the company "can't have duplicate accounts and we have to avoid fraud."

"Without facial recognition, we can't make Vaale work," Tobón told Reuters.

Clearview's expansion into the private sector follows the company being ordered to to delete all data belonging to U.K. residents and halt data collection in that country for violating its data protection laws. The order was the fourth time the company has been forced to wipe data of an entire country's residents, and followed an investigation by U.K. and Australian privacy watchdogs that found the company failed to use the data it collected in a "fair and transparent" way, collected it without a lawful reason and didn't meet the data protection standards required for biometric data.

The company also settled with the ACLU in mid-May for violating the Illinois Biometric Information Privacy Act, which prohibits companies from taking and using Illinois residents' biometric identifiers without their permission.

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Nat Rubio-Licht is a Los Angeles-based news writer at Protocol. They graduated from Syracuse University with a degree in newspaper and online journalism in May 2020. Prior to joining the team, they worked at the Los Angeles Business Journal as a technology and aerospace reporter.

Apple store workers in Atlanta were reportedly intimidated out of hosting a union election, according to Bloomberg.

The Communications Workers of America, the group that was looking to unionize Apple store employees in Atlanta, said that it withdrew its election application to the National Labor Relations Board "because Apple’s repeated violations of the National Labor Relations Act have made a free and fair election impossible." The group also told Bloomberg that numerous cases of Covid-19 in the city’s Cumberland Mall Apple store have caused issues with the safety of in-person voting.

“Apple has conducted a systematic, sophisticated campaign to intimidate them and interfere with their right to form a union,” the CWA alleged in an email to Bloomberg. The group said they had support from the “overwhelming majority” of the Atlanta store’s workers when originally petitioning.

Because the group withdrew its request to the NLRB to hold an election, it has to wait six months before filing again to represent the same group of workers.

Apple told Bloomberg that the company is "fortunate to have incredible retail team members and we deeply value everything they bring to Apple.”

The news follows Apple increasing its starting hourly wage from $20 to $22 an hour for retail workers while reportedly telling workers that if they unionize, the company may have more difficulty improving worker conditions.

In a leaked video sent to Apple's 58,000 retail employees earlier this week, Apple's Vice President of Retail Deirdre O'Brien said that "because the union would bring its own legally mandated rules that would determine how we work through issues, it could make it harder for us to act swiftly to address things that you raise.”

Atlanta workers first filed a petition to unionize in late April, with around 70% of the store's workers signing cards in support of the election. The group aimed to raise wages to $28 per hour, along with other benefits. They had been slated to hold their election from June 2 through June 4.

Apple retail workers in Louisville, New York City and Towson, Maryland still have plans to unionize as of Friday, though Apple retail workers have not won a union election at any of the company's 272 U.S. retail stores.

A draft of a major crypto bill from Sens. Cynthia Lummis and Kirsten Gillibrand seeks to add more clarity to crypto regulation, and appears to propose a far bigger role for the Commodity Futures Trading Commission.

A draft of the widely anticipated bipartisan bill, reported by the Block, a crypto news site, would give the CFTC a wide remit over digital assets. It reads in part: "Except as otherwise provided by this section, the Commission shall have exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of a digital asset that is offered, solicited, traded, executed, or otherwise dealt in interstate commerce, including market activities relating to ancillary assets."

The CFTC already oversees crypto derivatives, and the agency has pushed for more resources to regulate digital assets in recent budget requests.

The draft language also defines crypto entities such as “digital asset,” “distributed ledger technology,” “smart contract,” “payment stablecoin” and “virtual currency."

Providing a more regulatory definition of crypto, the proposal also defines "ancillary assets" as "an intangible asset that is offered, sold, or otherwise provided to a person in connection with the purchase and sale of a security through an arrangement or scheme that constitutes an investment contract, as that term is used in section 2(a)(1) of the Securities Act of 1933."

The draft bill, expected to be formally introduced in the coming weeks, also details areas of responsibility for crypto that would fall under other agencies such as the Securities and Exchange Commission.

The language assigning primary responsibility to the CFTC matches other reports about the forthcoming bill, expected to be called the Responsible Financial Innovation Act.

Lummis, a senator from Wyoming, has been outspoken on crypto. She and Gillibrand recently appeared on stage together at the D.C. Blockchain Summit to discuss the planned legislation, where Gillibrand said she expected a Senate vote on the bill "next year at the latest."

While the crypto industry has been lobbying for a variety of approaches to regulating digital assets, giving more responsibility to the CFTC and minimizing the SEC's role is a common theme in many proposals.

The SEC would like Elon Musk to explain himself. In a letter the agency sent Musk last month, released Friday, a top SEC lawyer asked pointed questions about filings Musk made about his growing stake in Twitter.

The questions centered on straightforward violations of SEC rules that were readily apparent from the time Musk made filings in April revealing he had accumulated a large stake in Twitter.

SEC senior special counsel Nicholas Panos asked:

It is not clear why Musk delayed his initial filing, but the delay allowed him to accumulate more shares of Twitter at a lower price than he would otherwise have paid. That omission has already prompted a shareholder lawsuit against him.

It is likewise not clear how Musk could credibly claim that he didn't intend to change, influence or control Twitter. In the letter, Panos noted his tweets about Twitter's speech-moderation policies, which came as he was quietly accumulating his stake. Twitter has likewise documented extensive conversations between Musk and company officials in March and April as he was buying shares.

The Tesla CEO and the SEC have sparred before, and he is currently bound by a settlement requiring him to have designated officials at the electric car maker vet potentially market-moving tweets about the company before he posts them. Musk has sought to undo that settlement, but a judge recently ruled against him.

The letter's publication confirmed earlier reports that the SEC planned to investigate how Musk accumulated his Twitter stake in the run-up to his striking a deal to buy the company. Panos copied Heidi Steele, a lawyer at McDermott Will & Emery, a firm Musk hired to advise him on the Twitter takeover.

Twitter will not accept the resignation of Egon Durban, a close ally of Elon Musk, from his position on its board, the company said in a filing on Friday.

Shareholders voted to boot Durban from Twitter's board at the company's annual meeting on Wednesday. Durban is to co-CEO of Silver Lake, a venture capital firm that is helping put together Musk's $44 billion takeover of Twitter, according to Reuters. Silver Lake is also an investor in Twitter.

Durban tendered his resignation after shareholders voted to not re-elect him on Wednesday. Twitter is required to have a Silver Lake representative on its board, though it doesn't need to be a partner or employee of the firm.

Durban played a critical early role in connecting Musk with other Twitter board members as Musk and the company discussed his growing stake. Durban also helped Musk attempt to take Tesla private back in 2018 (which didn't work out).

Jack Dorsey, who stepped down from the board at the same shareholders meeting, also played a huge role in those early Twitter takeover conversations.

The shareholders took the recommendation of shareholders advisement boards to not reelect Durban due to the fact that he also serves on six other boards. Because Twitter doesn't want to have to replace him, Durban committed to step down from one of those six boards by May 25, 2023.

Almost 40% of DoorDash’s new U.S. hires last year were either Black or Latino, the company revealed Thursday in its 2021 diversity report. But few of those hires joined in technical roles, where DoorDash’s numbers lag behind companies like Uber and Lyft.

With the influx of underrepresented hires, DoorDash now says that 36% of its U.S. workforce is from an underrepresented background, a list that includes Black or African American, Hispanic or Latino, multiracial, American Indian/Alaska Native and Native Hawaiian or other Pacific Islander employees.

But employees from underrepresented ethnic groups are still few and far between in director-level roles and above (11%) and technical positions. Underrepresented employees make up just 7% of DoorDash’s technical workforce, lagging behind Uber at 13% and 11.6% at Lyft. DoorDash said it plans to increase that 7% number to 10% by 2025, and to increase the percentage of underrepresented people in leadership roles to 20% by 2025.

DoorDash doesn’t break out the job functions of its new hires, but at Uber, Black employees made up the largest group of new hires for support roles last year. Almost 49% of new support hires at Uber identified as Black. (24.3% of Uber’s new hires in all roles last year were Black or Latino.)

DoorDash touted that 19% of its people managers are from underrepresented ethnic groups — an increase of six percentage points from 2020 — and 46% of its new hires were from underrepresented groups, a 12-percentage-point increase from the year before. The company didn’t list its attrition rate by race, but in its first ESG report released last month, DoorDash pointed to a 91% one-year retention rate associated with its diversity-focused Elevate leadership program.

Stop us if you've heard this one before: A Twitter shareholder is suing Elon Musk for allegedly manipulating the company's stock price.

The Verge reported that the lawsuit, filed on Wednesday night in a federal district court in San Francisco, alleges that Musk made statements "designed to create doubt" about the deal and drive Twitter's share price down significantly, including a tweet which claimed that it "cannot move forward" without proof that less than 5% of Twitter's users are bots.

The complaint alleges that Musk did this to "create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price.”

The complaint is a proposed class action lawsuit brought on by a small group of shareholders, though damages would go to all of the company's shareholders.

"As detailed herein, Musk’s conduct was and continues to be illegal," the complaint reads. "Musk's market manipulation worked — Twitter has lost $8 billion in valuation since the buyout was announced."

Though Musk has said he is committed to the deal, he did say recently that renegotiating the deal price was not “out of the question.” The complaint requests an injunctive relief which could potentially force Musk to stick to his original purchase price of $54.20. (Twitter has also said it has no interest in renegotiating that price.)

This complaint marks another lawsuit against Musk related to Twitter. In mid-April, a shareholder sued Musk for failing to disclose his ownership stake in the company during the SEC-mandated window, alleging that hiding this fact kept the company's share price low artificially. According to the complaint, "investors who sold shares in Twitter stock between March 24, 2022 ... missed the resulting share price increase as the market reacted to Musk's purchases and were damaged thereby."

Twitter's shares have fallen this month after peaking at a little over $50 in early May, closing at $39.52 on Thursday.

Yet another tech company is slashing its workforce: PayPal has reportedly started laying off employees in risk management and operations just weeks after laying off more than 80 employees at its San Jose headquarters.

The payments company has laid off dozens of staff members in Chicago, Nebraska and Arizona, a source familiar with the matter told Bloomberg. The corporate layoffs at its San Jose HQ were announced in a filing earlier this month, according to Bloomberg.

The decision follows slowed growth in its first-quarter earnings, with spending on its platform reaching $323 billion, or a 15% increase from the year prior.

PayPal approved plans for a “strategic reduction of the existing global workforce" in 2020, and the company has spent $20 million to reduce its workforce — mostly to cover severance and employee benefits, according to Bloomberg. The company expects to spend $100 million more on restructuring, but said that cutting staff will end up saving the company $260 million a year.

PayPal told Bloomberg in a statement that the company is "constantly evaluating how we work to ensure we are prepared to meet the needs of our customers and operate with the best structure and processes to support our strategic business priorities as we continue to grow and evolve."

The news comes as other major tech companies like Microsoft, Nvidia, Lyft, Snap, Uber, Meta, Salesforce and Coinbase have announced hiring freezes or slowdowns amid tech stocks slumping. Smaller companies have also laid off workers, including Bolt, Carvana and Cameo.

Facebook parent company Meta is accusing Apple of harming competition in the mobile app marketplace through restrictions on iOS software surrounding game streaming and other related technologies, according to a new filing with the National Telecommunications and Information Administration published Thursday.

"Despite having some of the most popular apps in the world, Meta’s ability to innovate on its products and services and even reach its customers is determined, and in some cases, significantly limited, by the most popular mobile operating systems, such as Apple’s iOS," the filing reads.

Meta submitted the comment as part of an ongoing study the NTIA is conducting for the U.S. Department of Commerce's White House Competition Council, which the Biden Administration established last year as part of an executive order to study market competition across various sectors of the U.S. economy.

Apple responded to the filing with a statement:

Meta's filing focuses on three areas: web browsing, as it relates to Apple's restrictions on what web apps can do versus native iOS software; gaming and the restrictions Apple imposes on developers who try to bundle HTML5 and cloud-based games within existing apps (like the Facebook app); and Apple's App Tracking Transparency initiative, the privacy feature the company rolled out last year that Meta has said will cost it about $10 billion in advertising revenue this year.

"Taken together, Apple’s restrictions on third-party web browsers, its restrictions on third-party gaming apps, and its ATT framework severely limit developers’ ability to create and consumers’ ability to enjoy cross-platform apps that could lower barriers to switching from Apple to Android and other devices," the filing goes on to say. "Apple’s self-serving tactics prevent consumers from realizing the innovation and benefits of a dynamic and otherwise well-functioning mobile app ecosystem."

Meta's feud with Apple over app store restrictions is not a new one by any means, but it has intensified in the last few years as Meta has increased its investments in the gaming sector. The social networking giant tried in 2020 to publish a dedicated Facebook Gaming app on Apple's App Store that would feature livestreaming, similar to Amazon's Twitch, alongside mobile games that could be played instantly with no download required, either using HTML5 technology or via streaming from the cloud.

Apple rejected the app repeatedly due to a series of cloud gaming restrictions the iPhone maker was forced to update for clarity. Still, many of the restrictions remained following the update, resulting in a high-profile back-and-forth between the two companies that has only grown more bitter as Apple has targeted Meta with iOS privacy changes and Tim Cook has taken public shots at Mark Zuckerberg and his company's business model.

Meta ultimately removed the gaming components from the Facebook Gaming app to publish it on the App Store. It later resorted to asking users to try a web version that skirts Apple's restrictions; Apple says web apps for cloud gaming and similar features are allowed on the iPhone, but it has strict rules around including those same features inside apps unless the app is dedicated to something else. (That's why, for instance, you can play HTML5 mini-games inside the main Facebook app — because by Apple's logic, it is primarily a social networking platform and not a gaming one.)

Meta cites switching costs and ecosystem lock-in as reasons why it cannot simply rely on to Google's Android, which has fewer restrictions regarding what apps can and cannot do with regards to gaming. “Restrictions that Apple imposes on cross-platform gaming, web-based, and ad-supported apps prevent them from lowering barriers to switching and lock consumers into iOS devices," the filing says. “Apple’s policies restricting cloud games and HTML5-based games have prevented Meta from introducing features that would enable developers to distribute and monetize, and users of iOS devices to enjoy, a variety of games. …These limitations have curbed Facebook Gaming’s growth and prevented it from emerging as a robust competitor to Apple in game discovery and distribution.”

Meta's filing does not mention Epic Games, the Fortnite creator that sued Apple and Google in 2020 over many of these same restrictions. The comment does however make many of the same arguments as Epic did in those cases. Epic's suit against Apple is currently tied up in appeals, and the similar Google suit has yet to get a court date.

"Apple’s restrictions serve to maintain the App Store as the primary place for users to discover and access games on iOS devices," the filing concludes. "They also have the effect of maintaining high barriers to switching to an Android device, because users’ game data will often be stored in native iOS game apps and cannot be easily transferred outside of the Apple ecosystem, whereas Instant Games and cloud gaming services would allow for a seamless transition between iOS and Android devices."

Update 5/26, 2:08PM ET: Added statement from Apple.

The CFPB has a message for banks and lenders: You've got to explain your algorithms. The agency stressed in a new circular that financial services companies must give a clear explanation for denying a credit application and cannot simply argue that the systems they use are “too complicated.”

“Companies are not absolved of their legal responsibilities when they let a black-box model make lending decisions,” CFPB Director Rohit Chopra said in a statement.

The Equal Credit Opportunity Act requires banks and lenders to offer “specific reasons for denying an application for credit or taking other adverse actions,” the CFPB said.

Technology, including AI, has enabled banks and fintech companies to make credit decisions based on more widely available financial data. “Data harvesting on Americans has become voluminous and ubiquitous, giving firms the ability to know highly detailed information about their customers before they ever interact with them,” the CFPB said.

But the “reasoning” behind these “black-box models” may be “unknown” to those who use them for credit decision-making.

The CFPB said banks and lenders cannot say that they can’t comply with the law because "the technology they use to evaluate credit applications is too complicated, too opaque in its decision-making, or too new.”

The move highlights the growing concern of federal regulators about the use of AI and other technologies both in the financial system and more broadly. Congress is concerned as well: Sen. Ron Wyden reintroduced a bill, the Algorithmic Accountability Act, that would require companies using AI to examine the impact of those systems.

Last year, five agencies, including the CFPB, the Federal Reserve Board and the Office of the Comptroller of the Currency, began soliciting comments on the use of data technology in financial services and to find out if AI is being deployed “in a safe and sound manner.”

Microsoft is slowing hiring for its Windows, Office and Teams software groups, Bloomberg reported Thursday, joining a growing list of tech companies that have pumped the brakes in the light of the economic downturn.

All new hires must now be approved by Rajesh Jha, Microsoft's executive vice president, and his leadership team, a company spokesperson told Bloomberg. The hiring slowdown is not companywide and is specific to those teams, as they've expanded recently. The spokesperson said that Microsoft will continue to grow its headcount overall this year and "will add additional focus to where those resources go.”

“As Microsoft gets ready for the new fiscal year, it is making sure the right resources are aligned to the right opportunity,” the company said in a statement to Bloomberg.

The company's fiscal year starts on July 1.

Microsoft is the latest name on an ever-growing list of major tech companies to have changed their hiring plans, another sign that the slumping stock market is taking a toll. Nvidia announced in its earnings call on Wednesday that the company will slow hiring later this year as a way "to focus our budget on taking care of existing employees as inflation persists." Other companies like Lyft, Snap, Uber, Meta, Salesforce and Coinbase have made similar moves amid tumbling share prices.

Microsoft's share prices are down this year, from around $330 at the beginning of January to around $265 today.

While tech giants have the ability to simply slow down their rapid pace of hiring to adjust to the market, smaller tech companies and startups have had to take more drastic measures. Carvana, Mural, Klarna and Cameo have all laid off a not-insignificant number of employees. Several of those layoffs took place on video calls because workers are largely still remote, which isn't ideal.

As inflation levels continue to rise and with retail labor union drives around the country, Apple is increasing its starting hourly wage from $20 to $22 an hour for retail workers.

Meanwhile, Apple's Vice President of Retail Deirdre O'Brien sent a video to all of Apple's 58,000 retail employees yesterday, saying that if workers unionize, Apple may have more difficulty improving worker conditions.

“Apple moves incredibly fast,” she can be heard saying in the leaked video. “And I worry that, because the union would bring its own legally mandated rules that would determine how we work through issues, it could make it harder for us to act swiftly to address things that you raise.”

Apple also watermarked the video, presumably so that any copies would identify which store it was leaked from.

As of today, Apple retail workers in Louisville joined retail workers in New York City, Atlanta and Towson, Maryland, in announcing union drives. No Apple retail workers have won a union election at any of the company's 272 retail stores in the U.S., but their push comes in the wake of a growing labor union movement within the retail and tech sectors, most prominently involving Starbucks and Amazon warehouse workers.

Apple announced the pay raise in the wake of growing employer concerns nationally around worker retention and satisfaction brought about by low unemployment, high inflation and this growing union push. Apple corporate employees have also pushed back vocally against the company's return-to-office plans.

“Supporting and retaining the best team members in the world enables us to deliver the best, most innovative products and services for our customers ...This year as part of our annual performance review process, we’re increasing our overall compensation budget," an Apple spokesperson said in a statement to The Wall Street Journal.

A well-funded startup in the cybersecurity industry, Lacework, has become the latest tech firm to disclose a major round of layoffs amid fears of a broader economic slowdown.

In a statement provided to Protocol, Lacework confirmed that the layoffs impacted 20% of its employees, in connection with what it called a "decision to restructure our business."

The company did not disclose how many employees in total have been laid off. Lacework had previously disclosed having more than 1,000 employees as of March 2022.

A Lacework representative said that a figure for the total number of employees affected by the layoffs shared on Twitter on Wednesday was a "significant overestimate."

In a blog post Wednesday, the cloud security vendor said that "today, we made the very difficult decision to say goodbye to some of our colleagues, as part of a restructuring and modification to the company plan."

The company has "taken every effort to provide those impacted with severance encompassing compensation, healthcare coverage, and access to outplacement support. As they pursue opportunities outside of the company we will help in whatever way we can," the company said in its blog post, signed by co-CEOs David Hatfield and Jay Parikh.

Lacework has raised $1.85 billion in funding since its launch in 2014, most of which was announced in 2021. The company disclosed raising $525 million in January 2021, followed by a $1.3 billion funding in November 2021 that brought with it an eye-popping valuation of $8.3 billion. Lacework touted the fundraise as "the largest funding round in security industry history," and the firm ranks at No. 3 in terms of the biggest valuations for privately held security companies, according to CB Insights.

The company has said that its customer base grew by 3.5X in 2021. Between the massive funding and rapid expansion of its business, Lacework went on a hiring spree last year — going from 200 employees in January 2021 to more than 1,000 as of March.

However, "over the past several weeks and months, a seismic shift has occurred in both the public and private markets," the co-CEOs said in the post. "While we do not have control of the environment around us, we do have a responsibility to control how we operate our business and make changes as needed to best position the company for continued and long-term success."

Lacework offers a "data-driven" service that aims to stand out in the fast-growing cloud security market by collecting and analyzing data from across a customer's cloud environments. The goal is to to provide customers with crucial security insights, such as which threats should be prioritized for action, the company has said.

The Lacework platform supports AWS, Google Cloud, Microsoft Azure and Kubernetes (Amazon EKS) environments. Previously disclosed customers include VMware, Snowflake and Pure Storage.

Lacework is also notable for having been just the third company to be incubated out of Sutter Hill Ventures, following a model that was used to launch Pure Storage and Snowflake. The company is led by Hatfield, who was formerly the president of Pure Storage, and Parikh, previously Facebook's vice president of engineering.

"Despite the broader economic environment – demand for cloud security will remain strong, and it is critical to all online, cloud businesses," the co-CEOs said the post Wednesday.

Nvidia plans to slow hiring later this year, following similar moves from Lyft, Snap, Uber, Meta, Salesforce, Coinbase and others.

“We have been successful in hiring this year and expect to slow hiring in the second half of fiscal 2023 as we integrate our new employees,” Nvidia CFO Colette Kress said in her CFO commentary, which the chipmaker released Wednesday with its Q1 earnings report. Nvidia disappointed investors with lower expectations for its Q2 sales, sending shares dropping 6.5% in after-hours trading.

The New Indian Express first reported on a “hiring pause” at Nvidia on Friday, citing an internal Slack message reportedly sent to hiring managers that instructed them to only make offers to the top 10% of interviewees.

“Onsite interviews (basically any onsite that’s already planned) — continue, BUT, we will raise our standard to the highest levels,” the Slack message read, according to the India-based newspaper. “We were told that leadership wants to take a pause to onboard the thousands of new hires we’ve recently made.”

Hiring managers interviewing candidates who are considered “diversity candidates” should “proceed as usual,” the Slack message reportedly read.

In an email to Protocol, an Nvidia spokesperson said the company is also slowing hiring "to focus our budget on taking care of existing employees as inflation persists."

Hiring slowdowns have quickly become the norm among publicly traded tech companies adjusting to a market downturn. Nvidia is the first major chipmaker to announce a pause like this, which isn’t a surprise, given that its fiscal year is on a different schedule than many of its competitors.

No word of a slowdown just yet from Intel — which, unlike Nvidia, manufactures its own chips — and is facing a manufacturing labor shortage dire enough that the company recently decided to allow the re-hiring of employees it had previously laid off.

The Federal Trade Commission is charging Twitter for "deceptively" using security data — the phone numbers and emails it asked users to input to secure their accounts — to actually target ads to them, the agency announced Wednesday. The FTC will require that the company pay $150 million.

Under an order proposed by the FTC and the Department of Justice, Twitter will also be prohibited from "profiting from its deceptively collected data," the FTC said in a press release. The agency alleges that Twitter asked users to give the company their phone numbers and email addresses to protect their accounts, then gave the data to advertisers for targeted ads.

"Twitter obtained data from users on the pretext of harnessing it for security purposes but then ended up also using the data to target users with ads," FTC Chair Lina Khan said in a statement. "This practice affected more than 140 million Twitter users, while boosting Twitter’s primary source of revenue."

The practice violates a 2011 order from the FTC, in which Twitter was banned from "misrepresenting its privacy and security practices," the FTC said. The original order alleged that pitfalls in the company’s data security gave hackers to access to have unauthorized administrative control of Twitter, and that the app "deceived consumers and put their privacy at risk."

Facebook got in trouble with the FTC under similar circumstances in 2019, settling with the agency for a historic fine of $5 billion. Though the fine was for a litany of charges, one part of the order prohibited the company from using telephone numbers obtained to enable two-factor authentication for advertising.

“Consumers who share their private information have a right to know if that information is being used to help advertisers target customers,” U.S. Attorney Stephanie M. Hinds for the Northern District of California said in a statement. “Social media companies that are not honest with consumers about how their personal information is being used will be held accountable.”

Sonos just launched its Sonos Radio service on the web, albeit in a somewhat limited fashion: A new Sonos Radio website features 45-minute samples from some of the service’s channels, as well as individual shows and mixes. The service was previously only available on Sonos speakers. The site was first spotted by a Reddit user.

The Sonos Radio website launched earlier this month when the company also announced a new voice assistant as well as a new sound bar product, a company spokesperson told Protocol. “Our new Sonos Radio site [...] gives Sonos owners a holistic view of our diverse content, including over 100 exclusive original stations and shows, and lets fans everywhere preview select programming,” the spokesperson said via email.

Sonos first launched Sonos Radio as an ad-supported music service on its speakers in April 2020. The company followed up with an ad-free premium tier later that year. Taking the service beyond its own speaker hardware could Sonos help grow its ad revenue and mirrors the way TV makers like Samsung have approached advertising-supported services.

However, at least for now, bringing Sonos Radio to the web seems to be more about showcasing it to advertisers than growing listening hours. On a separate Sonos advertising site, the company touts the service as a way to reach “millions of listeners” through traditional ads as well as branded stations.

Bolt told employees Wednesday that the company would undergo “several structural changes” — in other words, layoffs — in an effort to secure its financial position.

The message from CEO Maju Kuruvilla also detailed plans for the layoffs, which will arrive as calendar invites titled “Bolt Restructuring” to individuals or groups affected. Those who are staying will receive an invite to a town hall meeting. It is unclear how many employees are affected.

The startup reportedly cut over 100 positions across its engineering, sales, marketing, and talent teams, according to a tracker posted online. Though the tracker's contents couldn't immediately be verified, it's increasingly common for laid-off employees to share details and contact information in an effort to help former colleagues find jobs.

This isn’t the first time the once high-flying startup has run into trouble. In March, Authentic Brands Group sued Bolt for breach of contract, alleging that the tech provider failed to deliver on promised features and integrations, resulting in only two of its units, Forever 21 and Lucky Brand, being able to use Bolt’s software.

Several other fintech companies have also laid off employees recently as they brace for the consequences of an economic downturn. On Monday, “buy now, pay later” firm Klarna told its employees through a prerecorded video call that it was laying off 10% of its workforce. Robinhood laid off 9% of its workforce last month.

Bigger companies are feeling the heat as well. Coinbase management seemed determined to carry out a pre-downturn plan to triple the size of its workforce this year, but after reporting weak first-quarter results, they backed down last week, imposing a short-term hiring freeze and making other cost cuts.

This article was updated to add the number of employees laid off.

A federally funded AI research cloud is moving forward, and startups should be able to join the party.

A task force set up to design The National AI Research Resource, or NAIRR, a repository of data, tools and computing power needed to develop machine learning and other AI systems, published a preliminary report today outlining plans and expectations for the service.

Following months of public meetings, the task force, which is overseen by the White House Office of Science and Technology Policy and the National Science Foundation, said the resource should be operated by an independent, non-governmental entity.

And, despite expectations by some that the NAIRR would be available solely for academic research, task force leaders reaffirmed interest in opening it to startups.

The NAIRR is intended primarily for academia, said Lynne Parker, director of the National AI Initiative Office within the White House Office of Science and Technology Policy and co-chair of the task force. However, during a press conference today, she said, “Certainly the task force is open to enabling startups that have, for instance, received federal grants.” She specifically mentioned Small Business Innovation Research and Small Business Technology Transfer grant programs. Exactly who will be able to access the NAIRR has been in question throughout the initial development phase of the resource. Some supporters of the NAIRR, including the Stanford Institute for Human-Centered Artificial Intelligence (HAI), have pushed against the idea of opening it to private corporations, noting that it should focus on the needs of academic and nonprofit researchers.

In their report, the task force also supported creation of “an independent, non-governmental entity with dedicated, expert staff” to manage the NAIRR’s infrastructure, resource allocation, user support and security. They called for federal agencies to make new or existing infrastructure resources — including some from private sector providers — available to the NAIRR for AI research and development, including data, compute and testbeds.

Several corporations including the big three cloud providers — Amazon's AWS, Google Cloud and Microsoft's Azure — have all submitted proposals for the project.

“Importantly, NAIRR computational resources should span the full range of possible offerings, including commercial cloud, high-performance and high-throughput computing, on-premise (at academic and/or government sites) resources, ‘edge’ computing resources and devices, and novel computing approaches and platforms,” stated the task force report.

Task force co-chair Manish Parashar, office director for the Office of Advanced Cyberinfrastructure at the National Science Foundation, pointed to existing NSF facilities that could serve as models for managing NAIRR’s shared infrastructure. “We can look at those over the next few months to see how can we learn from those, and see how effective they will be for a resource such as what's envisioned as the NAIRR," he said.

NAIRR planners have emphasized the need for the resource to be accessible to a diverse and inclusive group of people, and to incorporate responsible and trustworthy AI principles in data resources and AI developed using them. “The task force recommends that the NAIRR establish an ethics review process to vet all resources included in the system, and the research performed with it. NAIRR users will be required to complete regular updated ethics training modules before being granted access to the network,” said Parashar.

The task force is seeking public comments on the report and a public listening session will be held on June 23.

Carbon dioxide removal will soon be written into Finnish law: In a historic Wednesday vote, the country’s Parliament approved a new Climate Change Act that would commit the country to carbon neutrality by 2035, and carbon negativity by 2040.

Assuming it is signed by President Sauli Niinistö, the law would make Finland the first country in the world to make its commitment to carbon negativity legally binding.

University of Eastern Finland international law professor Kati Kulovesi called the new targets “remarkable,” particularly the carbon negativity commitment. The targets are based on a scientific analysis of the country’s nationally determined contributions, which Kulovesi also commended.

“However, other details of the act could have been stronger,” Kulovesi told Protocol. “There is an important gap between current measures and those required to reach the targets, and now there is a legal obligation to act.”

The new law also updates absolute emissions reduction targets, requiring at least a 60% reduction by 2030 and 80% by 2040, as compared with 1990 levels. Finland had previously committed to an 80% reduction by 2050, so this change catapults the country’s progress forward by a full decade.

Combining those reductions with the new legally mandated carbon negative goals in less than 20 years will require the country to rely on carbon dioxide removal in addition to simply lowering its overall emissions.

CDR comes in many stripes: from the land-based (reforestation, conservation) to the highly technical (direct air capture). The Intergovernmental Panel on Climate Change has made it clear that CDR in some form will be a “necessary element” if we want to keep the planet’s warming to below 2 degrees Celsius (or, ideally, lower).

However, most countries have so far only made carbon neutrality commitments, trumpeted at international gatherings like the Conferences of the Parties on climate change. While some of these are legally binding — Finland cites the laws of Sweden, Denmark and the United Kingdom as examples — many are not.

There are other, smaller countries that have already brought their emissions to below zero, such as Bhutan and Suriname. These members of the carbon negative club are largely forested and manage to absorb more carbon dioxide than they emit through a combination of land protection and aggressive measures to keep their emissions down.

Joining the club may prove difficult for Finland, however, given that the country still relies heavily on fossil fuels for its energy needs. And according to preliminary data from Statistics Finland, the country’s land use sector emitted more greenhouse gases than it absorbed for the first time in 2021, to the tune of 2.1 million metric tons of carbon dioxide equivalent.

But in holding itself legally accountable to its international commitments, the country will soon have no choice but to transform.

This story was updated on May 25, 2022, to clarify the measurement of carbon dioxide equivalent.

Peter Thiel has officially stepped down from Meta's board, a position he's held since Facebook was in its infancy. The company announced that Thiel would be leaving the board in February.

Now, Thiel looks poised to spend even more of his time, attention and money on backing conservative political candidates ahead of the midterms. He's already a top donor to Ohio senate candidate J.D. Vance and Arizona senate candidate Blake Masters, former president of the Thiel foundation. Thiel recently spent another $3.5 million on Masters' campaign.

Thiel has been by far one of Meta's most controversial figures. Even as conservatives have accused Facebook of censorship and liberal bias, liberals have often charged Thiel will tipping the scales in conservatives' favor and pressuring the social media giant to capitulate to former President Donald Trump and his supporters. Shortly after the 2016 election, calls mounted for Facebook to cut ties with Thiel over his close relationship with President Trump.

Mark Zuckerberg publicly rejected that idea in a 2017 livestream, saying, "I personally believe that if you want to have a company that is committed to diversity, you need to be committed to all kinds of diversity, including ideological diversity.

"I think the folks who are saying we shouldn't have someone on our board because they're a Republican, I think that's crazy."

As Trump and his acolytes soured against the tech industry — particularly after Trump was banned from Facebook, Twitter and YouTube in the aftermath of the Jan. 6 riot — Thiel's place on the board looked increasingly awkward. Suddenly, he was backing candidates for office — Vance and Masters among them — who were openly campaigning against Big Tech. Masters, in particular, was among the attendees at a recent screening at Mar-a-Lago of Rigged, a documentary that alleges Zuckerberg bought the 2020 election for President Biden through a $419 million election infrastructure donation.

But Thiel's departure won't cure Meta's board of controversy. The company also counts Marc Andreessen as a board member. Andreessen, who is a billionaire, has also been ramping up attacks against what he calls the "elite ruling class." His firm a16z has teamed up with Elon Musk in his bid to acquire Twitter, which could create a potential conflict of interest. Earlier this year a group of Meta shareholders moved to oust Andreessen from the board, as well as Peggy Alford, another board member the shareholders argued was too conflicted to be considered independent.

Thiel has been part of Facebook's story since its earliest days when he invested $500,000 in the company and secured a seat on its board in 2005. In a statement earlier this year when Thiel's departure was announced, Zuckerberg said, “Peter is truly an original thinker who you can bring your hardest problems and get unique suggestions.”

Thiel returned the compliment: "Mark Zuckerberg's intelligence, energy, and conscientiousness are tremendous. His talents will serve Meta well as he leads the company into a new era."

In an expected move, Twitter co-founder Jack Dorsey is leaving the company's board of directors, effective Wednesday. He made his resignation as a director formal at the company's annual shareholder meeting, where he did not stand for reelection, but had set his departure from the board in motion last fall when he stepped down as Twitter CEO.

In November, he handed the CEO reins to Parag Agrawal, and said he would also leave the board when his term expired at the next annual meeting of shareholders.

He left Twitter in part to focus on his work at fintech company Block, originally Square, where he serves as "Block Head." At Block, Dorsey has refocused the company’s efforts on cryptocurrencies.

Dorsey is a fan of Twitter's prospective buyer, Elon Musk, and though Twitter acknowledged in a recent regulatory filing that Musk had approached him about remaining at the company in some capacity, including staying on the board, Dorsey tweeted that he'd "never be [Twitter] CEO again."

In leaving Twitter, he said founders shouldn’t lead their own companies indefinitely, and often become a “single point of failure” for tech firms, according to Axios.

“I want you all to know that this was my decision and I own it. It was a tough one for me, of course.... There aren’t many companies that get to this level,” Dorsey said in an internal memo to staff when he left as CEO. “And there aren’t many founders that choose their company over their own ego.”

Dorsey founded Twitter with Noah Glass, Biz Stone and Ev Williams in 2006.

Amazon successfully beat back a record-high 15 proposals from activists and worker advocates at its annual shareholder meeting today, maintaining the company’s track record of winning votes despite increased enthusiasm for the proposals.

The proposals ranged widely, including one asking for reports on worker injury rates and warehouse safety and another wanting a human rights audit for Amazon’s contracts with government entities. Amazon employees (including warehouse workers) and union representatives with groups including the International Brotherhood of Teamsters (which has made organizing Amazon a national priority) spoke at the meeting, condemning the company’s safety record, working conditions and government contracts.

Shareholder proposals have become an increasingly popular tool for tech workers and activists who see them as a way to force investors and companies to reckon with their concerns. Before 2019, the average number of proposals for an Amazon meeting hovered between three and four; since then, the number has jumped above 10 and stayed there. Other major tech companies like Microsoft, Alphabet and Meta have experienced a similar pattern.

The proposals at various tech companies have also achieved more success in the last year than ever in tech industry history; Microsoft, Apple and Amazon are among the companies that have agreed to conduct civil rights or human rights audits of their services in response to shareholder pressure.

“At Amazon, Alphabet, Meta, there are record numbers of proposals. The number of proposals this year at each one of them is just off the charts,” Michael Connor, the director of the corporate accountability advocacy group Open Mic, told Protocol.

“The shareholder proposals and these campaigns, they are often multi-year efforts. A proposal that goes out for the first time doesn’t usually win a majority vote, oftentimes these things take more than a couple of years,” he said. “For the companies in some ways, some of these proposals are like the canary in the coal mine. We are alerting the company to important issues.”

A new comprehensive report has found that many remote learning apps used during the pandemic tracked students and shared their information with advertisers for targeted ads.

The report by Human Rights Watch examined 164 ed tech tools and websites used in the US and 48 other countries and found that 89% of the apps "appeared to engage in data practices that put children’s rights at risk.” Some of those apps were found to be sharing that data with marketers and data brokers.

The researchers added that “these products monitored or had the capacity to monitor children, in most cases secretly and without the consent of children or their parents, in many cases harvesting data on who they are, where they are, what they do in the classroom, who their family and friends are, and what kind of device their families could afford for them to use.” Some of that data was sent to companies including Google and Facebook, according to the report.

In the US, companies are required to “obtain verifiable parental consent before any collection, use, or disclosure of personal information from children.”

The researchers behind the report described the unchecked adoption of ed tech tools by governments, school and teachers as offloading “the true costs of providing education online onto children, who were forced to pay for their learning with their fundamental rights to privacy.”

A Google spokesperson told The Washington Post the company would investigate the claims, and a Facebook representative said it restricted the targeting of ads to children.

This issue is increasingly on the radar of regulators in the US. Last week, the Federal Trade Commission voted to approve a policy reminding ed tech providers of the current rules around collection of children's data. President Joe Biden applauded the new policy adding that "the agency will be cracking down on companies that persist in exploiting our children to make money."

Even as the pandemic has begun to subside, remote learning tools have stuck with many schools, who are increasingly using it during snowstorms and other extraordinary weather events.

The Human Rights Watch report was shared with a consortium of global news organizations under the moniker EdTech Exposed.

Just weeks after one of the Terra blockchain's signature cryptocurrencies collapsed, here comes the reboot.

Token holders approved a plan to relaunch the Terra blockchain and distribute new tokens of the luna cryptocurrency by a wide margin Wednesday morning. Do Kwon, the crypto entrepreneur behind Terra, offered the plan as a way to salvage the Terra blockchain after luna and the connected UST algorithmic stablecoin, also known as TerraUSD, lost nearly all value in a sell-off after it lost its peg to the dollar earlier this month.

Under the approved plan, the original blockchain will henceforth be known as Terra Classic and its luna token renamed luna classic. New luna tokens hosted on the relaunched Terra blockchain will be airdropped to holders of the original luna token and UST coins starting May 27. UST will be left behind on the old blockchain.

The crisis for Terra started May 7 with a sharp drop in value for UST, which was supposed to be pegged one-to-one to the U.S. dollar, and exchangeable for luna dollar for dollar. It sank below $1 twice over the span of a few days and soon fell to 35 cents on the dollar.

Unlike most stablecoins, which are backed by reserves of fiat currency or commercial paper, UST relies on algorithms that dynamically seek to control the supply of UST and luna to maintain the stablecoin’s value at $1. As UST fell, luna fell too, in what some called a death spiral.

UST is currently trading at about 8 cents, according to CoinMarketCap.

"While UST has been the central narrative of Terra’s growth story over the last year, the distribution of UST has led to the development of one of the strongest developer ecosystems in crypto," Kwon wrote in the proposal. "The Terra ecosystem and its community are worth preserving."

Applications built on Terra Classic would migrate over to the new blockchain under the proposal.

The attempt to restart Terra and recoup some value for investors will be watched closely in crypto policy circles. The UST crash caught the attention of Treasury Secretary Janet Yellen, who called it a “bank run” in a Senate Banking Committee hearing this month. EU regulators are considering banning large-scale stablecoins altogether.

Lyft has joined Uber, Meta, Robinhood and a slew of other tech companies in slowing hiring and focusing on critical open roles, though the company is reportedly not planning layoffs, according to a Wall Street Journal report.

Lyft President John Zimmer told staff in a Tuesday memo that the company would be cutting costs in response to "an economic slowdown and the dramatic change in investor sentiment," according to the Journal. Both Zimmer and Uber CEO Dara Khosrowshahi cited investors looking for safety in their justifications for the slowdowns, and Zimmer said that Lyft would be focusing on accelerating profits in the near term to meet investor demands.

In sharp contrast to the last two years, tech investors are now focused heavily on seeing profits from companies that have been burning cash. "Meeting the moment means making trade-offs," Khosrowshahi said in a May 9 email to employees. "The hurdle rate for our investments has gotten higher, and that means that some initiatives that require substantial capital will be slowed. We have to make sure our unit economics work before we go big."

But despite the steep decline in tech stocks, startup layoffs and the hiring freezes, tech recruiters are still optimistic that the extremely tight labor market will, at worst, loosen just a little. Although compensation packages might change, the last several years' worth of pent-up demand for tech jobs means the market should remain robust regardless of specific tech company financial concerns.

Tesla is pushing for changes to Texas’ energy market rules that would allow anyone with solar panels or battery storage to essentially sell excess power back to the grid. The company wants residential owners to be able to participate in the market, including, of course, owners of Tesla's residential products, like its Powerwall.

Tesla is framing its ask as a bid to insulate the Texas grid from the kinds of demand spikes that have caused major blackouts in the past: a gesture of good corporate citizenship, if you will. It doesn’t hurt that it would come with the added benefit of making Tesla’s products even more attractive.

Tesla filed a request for a rule change with the Electric Reliability Council of Texas, which is in charge of the state’s independent grid, asking that it allow utility customers sell excess power back to the grid as they’re allowed to do in most other electricity set-ups nationwide.

This would be a major financial benefit for those with solar panels or battery storage technology at home. For instance, Tesla’s Powerwall products allow people to store their own solar power to use as their own backup — individual storage capacity means that “when the grid goes down your power stays on," the company says.

And in Texas, the grid going down is far from a remote possibility. Texas’ independent grid is particularly vulnerable to blackouts, as evidenced by the major outage caused by a cold snap and spiking power demand in February 2021.

If regulators were to change the rule as Tesla is requesting, homeowners could collectively serve as a backup for the grid as a whole, preventing it from shutting down entirely in the case of excess demand.

According to a LinkedIn post from Tesla’s energy markets policy lead Arushi Sharma Frank, the company keeps hearing that it will take 4-6 years to change the state’s rules. Tesla wants to speed it up — i.e. this year — and so the company is asking the ERC to expedite the filing process accordingly.

Tesla’s previous lobbying has been focused primarily on being allowed to deploy its Megapack batteries at the utility level, an effort that would have virtually no impact on users of the company’s residential energy products. Should this latest effort succeed, however, Tesla is potentially making it a lot more attractive for individual Texans to generate and store their own renewable energy: a boon both for their wallets and for the grid.