Apr 27, 2022 • 15M

🗞️ Florida Un-Magics Disney, Web Scraping Win, & Intuit's Free Flop

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This week: Disney battles a new villain, LinkedIn gets scraped, and auditing TurboTax's free filing claims. Plus, the EU's latest Big Tech law, Obama appeals for tech regulation, the cost of the Bar, and Musk closes the deal.

💫 The Happiest Place On *Earth

(*Offer Not Valid In Florida) 

The happiest place on earth is embroiled in a battle between lawmakers and Corporate America. Last week, Florida Governor Ron DeSantis signed a bill revoking Disney's 55-year-old special tax designation over a 2,500-acre part of the state known as the Reedy Creek Improvement District (RCID). The move comes as Disney has publicly opposed DeSantis and his party's enaction of the so-called "Don't Say Gay" law. 

  • Disney's Central Florida compound, which includes Disneyworld and Epcot Center, attracts over 50 million tourists to the state annually and generates $5 billion in local and state taxes annually. Disney is also Florida's largest private employer.

  • In March, Disney paused political donations in the state and publicly condemned the "Don't Say Gay" bill, notes the New York Times, prompting Gov. DeSantis's retaliation. “If Disney wants to pick a fight, they chose the wrong guy,” he said, adding that “Disney has gotten away with special deals from the state of Florida for way too long.”

The Culture Wars Goes To The Board Room

Disney has long tried to keep itself out of the culture wars by remaining silent on various hot-button issues. However, Florida's anti-LGBTQ legislation finally pushed the media titan into the fray. Disney employees protested the new bill as well as Disney's neutral position on the matter and effectively pressured board chairman Bob Chapek to take a side. Disney is "a big tent" explained Maurice Schwartz, a professor at the Wharton School of Business, to Vox. “The movies, the resorts, their brand — it’s this broad appeal.” Until now, Disney found that political neutrality was the best for its brand and business, “but that’s hard to keep up, especially as the world changes.”

The Verdict

It’s hard to imagine that Disney, which is not only such a massive employer in Florida, but a major political donor, will ever leave the state. However, DeSantis (who is clearly puffing his chest ahead of a 2024 Presidential bid) is rattling the 800-pound gorilla’s cage.

🎧 What We’re Listening To

This week, we’re listening (and watching, and reading!) to the replay from our last panel, Marketing Your Legal Team as a Team of YES. We were joined by Lydia Cheuk, Arianna Marks, Sarah Ouis, and Ramya Ravishankar as shared their best tips on why it’s important to brand your legal team, how to do it, and what to avoid along the way.

Marketing Your Legal Team as a Team of YES
Apple Podcasts / Spotify / Google Podcasts

👩‍⚖️ The Ninth Circuit Says Scrape Away!

Yes, you can scrape the web. So says a new ruling by the U.S. Ninth Circuit Court of Appeals. Scraping, or pulling publicly accessible data from a website, is at the center of a case between LinkedIn and a competitor hiQ Labs. LinkedIn sued hiQ for scraping individuals' personal data from its site, and the case went all the way to the US Supreme Court. However, the high court sent it back down to the Ninth Circuit Court to re-review the case. Last week, the appeals court reaffirmed its original ruling that scraping publicly accessible information from a website is not in violation of the Computer Fraud and Abuse Act (CFAA). 

  • According to TechCrunch, the Ninth Circuit Court's second pass at the LinkedIn case referenced a 2021 SCOTUS ruling that also centered around the CFAA: “Using a "gate-up, gate-down" analogy, the Supreme Court said that when a computer or website’s gates are up — and therefore information is publicly accessible — no authorization is required.”

  • “We’re disappointed in the court’s decision. This is a preliminary ruling and the case is far from over,” a spokesperson for LinkedIn said in a statement on the second ruling. “We will continue to fight to protect our members’ ability to control the information they make available on LinkedIn.” 

The Computer Fraud And Abuse Act

The CFAA was passed in 1986 when personal computing was still nascent and the worldwide web was still years away from creation. The law has been maligned for years as outdated and poorly worded, with Reason.com pointing to the central flaw: “Does access to a computer become unauthorized and therefore criminal when a person uses a computer in violation of a written restriction like a Term of Service of use policy?  Or is access unauthorized only when a person bypasses some sort of code-based restriction or authentication gate, such as by guessing another user's password or exploiting a security flaw?” With hiQ Labs, Inc. v. LinkedIn Corp., a definition is beginning to take shape.

The Verdict

As Reason.com noted, the issue of what’s allowed under the Terms of Service agreement still seems pretty open. It’ll be interesting to see how CFAA precedent begins to solidify over the coming years.

📣 What We’re Discussing

Tomorrow at 12 pm PT/ 3 pm ET we’re taking a crash course on all things privacy with Peter Day, Jordan Mazur, and fellow Lawtrader Ben Isaacson. They’ll take us through what a beginner needs to know about privacy, from key concepts to trends and implementation strategies. ✍️ Bring a pen and paper, we’ll be learning TONS! And if you can’t make it, no worries. Register anyway so you can get access to the full replay and key takeaways.

RSVP here

💰TurboTax Free Filing? The FTC’s Not In To It 

Tax Day may be officially behind us, but TurboTax isn't in the clear. Intuit, TurboTax's parent company, is facing a suit by the FTC saying that its ads for free filing are deceptive and amount to a scam. As the Hustle reports, the IRS agreed in 2002 to forego its own free tax filing program if for-profit tax services agreed to offer a free option to low- and middle-income people. However, in its March 2022 suit, the FTC alleges that Intuit lures users with advertisements for "Free" filing services, then forces upgrades that can cost $119 or more. 

  • To begin with, TurboTax has cornered 73% of the market on tax preparation services, which means that its actions affect the broad majority of Americans filing taxes. 

  • Last week, Senator Elizabeth Warren along with House Representatives Katie Porter and Brad Sherman sent a letter to Intuit's CEO alleging the company actively obscures its free filing service, changed its website to create confusion, and funneled users into paid services. 

Lobbying History

According to ProPublica, Intuit has a decades-long history of fighting IRS encroachment on its product. “Internal presentations lay out company tactics for fighting 'encroachment,' Intuit’s catchall term for any government initiative to make filing taxes easier — such as creating a free government filing system or pre-filling people’s returns with payroll or other data the IRS already has,” reads the report. However, in 2019, the IRS did change its agreement on free filing to allow for the creation of a government option but has yet to develop it. 

The Verdict

The sheer size of TurboTax’s user pool could mean massive consequences for Intuit if found in violation of the law. However, forced arbitration clauses and other protections may mean a protracted, messy fight.

📤 What Else We're Forwarding

Illegal is Illegal: The EU has added a new piece of legislation taking aim at Big Tech, notes CNBC. This time, the Digital Services Act (DSA) will enforce Google, Facebook, and the like to remove illegal content from their servers or face a hefty fine.

Obama's Fight: In a similar vein, former President Barack Obama is calling for disinformation to be regulated across online platforms, says CNBC. Obama wants Congress to revise regulations known as Section 230, which protects platforms from liability over users' posts even if its misinformation.

Lowering The Bar: When exam fees and test prep can cost $2000 to over $10,000, one has to wonder if the Bar exam (and entrance into the legal field in general) has become too expensive, asks Reuters. An overhaul of the exam to focus more on legal skills rather than memorization won't debut until 2026.

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See ya next week!

✌🏽 Raad