Jun 15, 2022 • 20M

🗞️ UK Takes A Bite of Apple, Capital One's Good Faith Hacker, & The Debt Of Employee Trainings

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This Week: The UK wants to knock down Google and Apple's mobile duopoly, we examine who gets to call themselves a White Hat, and the Feds go after training repayment agreements. Plus, looking at the finances of SCOTUS, the growing wage gap in Big Law, and embracing the hybrid workplace.

🇬🇧 Duopoly Isn't Britain's Cup Of Tea

The UK is cracking down on what they allege is the duopoly of Google and Apple in the mobile industry. The country's Competition and Markets Authority (or CMA) is indicating that it will launch an investigation into the “strong grip on mobile ecosystems” the two tech giants have, for fear that not doing so would “shut out competitors, holding back the British tech sector and limiting choice,” according to Andrea Coscelli, the chief executive of the CMA.

  • The CMA launched a second investigation into Google's requirement that app developers listed on the Google Play Store use Google's proprietary payment system for any in-app purchases, reports Engadget.

  • The CMA is also looking into launching a third investigation, specifically on Apple's blockade of cloud gaming from its app store, notes The Guardian. That is to say, apps that enable iPhone and iPad users to stream games from the cloud rather than download (ie: buy) them from Apple's platform.

  • In response, Apple has stated that it supports “thriving and competitive markets,” while Google defends its model as a “launchpad for millions of apps, helping developers create global businesses that support a quarter of a million jobs in the UK alone.”

A Shifting Tide

Big Tech is facing a growing backlash against its dominance and lack of regulation far beyond just the UK. The EU has passed its own set of rules under the Digital Markets Act (or DMA). The act will come into effect next year and seeks to stop dominant market players (think Google, Facebook, and Apple) from using their status to block competition. The United States is also looking at antitrust regulations for Big Tech. Currently in the Senate is the American Innovation and Choice Online Act, which “would prohibit dominant tech platforms like Amazon, Apple, and Google from giving preferential treatment to their own services in marketplaces they operate,” says CNBC.

The Verdict

Yes, Big Tech has become a unifying force — a boogieman for both the left and right. However, that does not negate the fact that Big Tech has incredible control over our lives and operates basically without regulation. This seems like an overdue reckoning.

🎧 What We’re Listening To

This week we’re listening to Eydís Evensen, a pianist from Iceland. Eydís grew up in a music-obsessed household where she found a place at the piano as soon as her legs could move. At just the age of 7, she composed her first piece after finding inspiration from a great storm outside. As she progressed in style and technique, she found herself coming back again to the unique and harsh landscapes of Iceland. In 2021, she released her debut album, Bylur (literally, “snowstorm” in Icelandic), which she describes as a calming contemporary classical diary of her life to date.”

Bylur - Eydís Evensen

Apple Music / Spotify / YouTube Music / Amazon Music

🎩 Who Gets To Wear The White Hat

There are two kinds of hackers (well, more, but let’s keep this simple): black hat hackers and white hat hackers. Black hats are malicious hackers — think Russian or North Korean state-sponsored hackers looking to destroy infrastructure or steal currency. White hats, on the other hand, claim to be benevolent — people working with companies and institutions to expose weaknesses in their security so that they may be strengthened. Paige Thompson claims to be a white hat hacker. Yet, in a federal trial that began last week, she faces 10 counts of computer fraud, wire fraud, and identity theft for breaching Capital One's database and downloading the personal information of some 100 million users, ultimately costing the company $270 million in multiple settlements.

  • Ms. Thompson, in addition to her software engineering job at Amazon, ran an online community for programmers. Capital One's user data, which she breached, was hosted on AWS, Amazon's cloud service.

  • While Ms. Thompson “is accused of violating an anti-hacking law known as the Computer Fraud and Abuse Act,” reports the New York Times, she has pleaded not guilty claiming her actions were that of a “novice white hat hacker.”

  • The DOJ, which is prosecuting Thompson, is “interpreting a statute so broadly that it captures conduct that is innocent and as a society, we should be supporting, which is security researchers going out on the internet and trying to make it safer,” Brian Klein, her lawyer, said.

Redefining Terms

In late May, the DOJ announced that it would no longer prosecute white hat hackers. “The department has never been interested in prosecuting good-faith computer security research as a crime,” stated Deputy Attorney General Lisa O. Monaco, “and today’s announcement promotes cybersecurity by providing clarity for good-faith security researchers who root out vulnerabilities for the common good.” The policy took effect immediately, and required all federal prosecutors looking to charge a case under the Computer Fraud and Abuse Act (or CFAA) “to follow the new policy, and to consult with CCIPS before bringing any charges.”

The Verdict

Even if Ms. Thompson acted with the best of intentions, she did cause millions of dollars in damages to Capital One and illegally downloaded the personal data of millions. Seems the DOJ’s hands are tied here, but this case could prove to be a valuable precedent for future cases.

😳 Let’s Talk Crypto

Legal & crypto, that is. Tomorrow afternoon, we’ll be chatting with Drew Morris, Senior Legal Counsel at TRM Labs, all about his experience working amongst the blockchain. On the docket? The highs, the lows … anything goes.

RSVP here

🤑 Pay For Fire

The Consumer Financial Protection Bureau has begun looking into cases of employers requiring employees to pay back the costs of training them. The CFPB claims that such agreements can leave employees burdened with thousands of dollars of debt to a company should they choose to leave. A March report by the Treasury Department found that such agreements can prevent employees from seeking higher-paid positions at competing companies, thus reducing workers' bargaining power. 

  • “Employers are basically turning job trainings into debt traps,” a participant of the CFPB's survey on the matter stated, according to the Bureau's blog. The blog described the experience of a fully-registered nurse who was required to complete a company training course that would saddle participants with $10,000 debt if they then did not work full-time for the company.

  • Some argue that training repayment agreements act as de facto non-compete agreements, but with loser terms. However, Sandeep Vaheesan, legal director at the Open Markets Institute, told Bloomberg Law, “in some ways [these agreements] are worse because they restrict workers’ ability to leave for any job.”

California's AB 2588

In 2020, California passed the first bill in the nation taking aim at these training repayment agreements. The state's Assembly Bill No. 2588 outlawed the practice specifically among employees providing direct patient care. It mandated that any employee training costs in this field are “a necessary expenditure or loss incurred by the employee in direct consequence of the discharge of the employee’s duties.” The bill is being considered a model for any federal regulation.

The Verdict

There’s really no excuse for forcing new hires to take mandatory training that may end up costing them thousands of dollars. This practice is absurd, and federal regulation on the matter is welcomed.

📤 What Else We're Forwarding

SCOTUS Earnings: The US Supreme Court Justices have filed their yearly financial disclosures, notes SCOTUSBlog. Chief Justice Roberts reported no outside earnings or travel reimbursements for the year, while Justice Amy Coney Barrett reported that she received $425,000 last year (her first year on the bench) as part of a larger $2 million book deal.

Wage Gap: Income inequality is becoming an issue in Big Law just as it is in the broader economy, reports the ABA Journal. In an attempt to hold on to top talent, the 100 highest-grossing firms in 2021 had a median pay ratio of 9-to-1 between the highest and lowest-paid equity partners, which was up from 8.8-to-1 for the previous year.

Hybrid Work: Above The Law makes the case against returning to the office full-time in favor of a hybrid workplace model. The main point of the argument is that hybrid models help bolster diversity and inclusion among employees.

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See ya next week!

✌🏽 Raad