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New draft guidelines released by U.S. antitrust enforcers lay the groundwork for tougher scrutiny of planned mergers by Big Tech companies like Amazon.com and Alphabet's Google. The guidelines, released by the Justice Department and Federal Trade Commission, highlight the conflict of interest faced by platform operators that are also platform participants, and specify that a merger should not eliminate a potential entrant in a concentrated market. The guidelines also address labor issues, stating that a merger between employers may lower wages or worsen working conditions. "Where a merger between employers may substantially lessen competition for workers, that reduction in labor market competition may lower wages or slow wage growth, worsen benefits or working conditions," the guidelines say. The guidelines will be open for comment for 60 days before they are finalized. 

 

Reuters

NIST CSF: How the Proposed Changes Will Affect You

In January 2023, the National Institute of Standards and Technology (NIST) announced its intent to make new revisions to its NIST Cybersecurity Framework (CSF) document, with an emphasis on cyberdefense inclusivity across all economic sectors. Responding to industry requests on relevant issues, version 2.0 focuses on international collaboration, broadening the scope of industries that can use the CSF, and one entirely new Function. Download our handy ebook to review the updates — and their implications for your business — before they go live.

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Microsoft plans to offer free tools to customers of its lower-cost cloud services to detect cyberattacks. The move comes following a major security breach linked to Chinese hackers which infiltrated Microsoft's cloud-based email system and compromised inboxes at various organizations. The company will make 31 security logs available for free and increase the retention period from 90 to 180 days. While logs don't prevent cyberattacks, they help detect and investigate hacks. The move aims to ensure that every Microsoft customer has the visibility to detect threats targeting American organizations. The effort is a result of collaboration between Microsoft and the Biden administration. China has denied the allegations of cyber espionage.

 

Wall Street Journal

Data breaches through Progress Software's MoveIt tool have affected companies that do not use the product. Hackers exploiting a vulnerability in MoveIt have targeted over 200 companies, with close to 400 organizations being attacked. The Cl0p ransomware group has claimed responsibility for the cyberattacks. Progress Software has issued patches for the vulnerabilities and is working with cybersecurity experts to investigate the issue. The exposure of personal data in MoveIt hacks can have long-term damaging effects for businesses and individuals. “It's massively complex, the downstream impact is difficult to predict, and organizations are not necessarily going to be sure at this point whether they do have any exposure,” observed Brett Callow, threat analyst at cybersecurity company Emsisoft.  Companies like Shell and Genworth Financial have been affected by the data breaches, and several lawsuits have been filed against Progress Software for poor cybersecurity.

 

Wall Street Journal

OpenAI has significantly expanded its in-house legal team in response to the growing legal and regulatory challenges it faces. The San Francisco-based company, known for its ChatGPT creator, has hired lawyers with expertise in regulatory, data privacy, and intellectual property matters. The hiring spree comes as OpenAI deals with a Federal Trade Commission investigation into data security and the generation of false information by its chatbot. Notable recent hires include former FTC lawyer Ben Rossen and Microsoft's former chief intellectual property strategy counsel, Tom Rubin. OpenAI has also recruited talent from major tech firms such as Amazon, Google, and Uber. The company's legal team is expected to negotiate with the FTC to narrow its investigative subpoena. OpenAI's recruitment of legal and policy experts is seen as a strategic move to shape future industry regulation and protect its position as an AI industry leader.

 

Law

The U.S. federal public defenders system may have to cut up to 500 staff due to a budgeting error by Congress, potentially leaving indigent defendants with longer jail stays. The agency is already understaffed and needs to add 250 more people. An appropriations bill moving through the Republican-led House of Representatives would reduce spending during the 2024 fiscal year beginning October 1 for federal public defender services by about $42m from its current $1.49bn budget. A version drafted by the Democratic-controlled Senate would lead to a nearly $71m cut, federal defenders told Reuters. The cuts would strain offices handling high-profile cases, and reduced payments for private lawyers may deter participation. Attorneys and congressional sources said the budgeting error stems from unique circumstances related to the COVID-19 pandemic court closures and travel disruptions.

 

U.S. News

China's ambassador to Washington, Xie Feng, has warned that China will respond if the United States imposes more restrictions on its chip sector. He criticized the way the U.S. defines competition, stating that it is unfair. Xie highlighted existing U.S. prohibitions on Chinese imports of equipment to make advanced chips, and referred to reports that the U.S. is considering an outbound investment review mechanism and further prohibition on the export of AI chips to China. "This is like . . . restricting the other side to wear outdated swimwear in a swimming contest, while you yourself (are) wearing a Speedo," he said. Xie emphasized that China does not want a trade or technological war, but will make a response as necessary. The Biden administration is finalizing an executive order to restrict certain investment in sectors including advanced semiconductors, quantum computing, and artificial intelligence. China previously targeted U.S. chip maker Micron Technology after Washington imposed export controls on American components and chipmaker tools. U.S. Treasury Secretary Janet Yellen has stated that any investment curbs would be highly targeted and clearly directed at specific national security concerns.

 

U.S. News

A U.S. congressional committee is investigating four venture capital firms, GGV Capital, GSR Ventures, Walden International, and Qualcomm Ventures, for their investment in Chinese technology companies. The investigation is part of Washington's increasing scrutiny of American funds suspected of helping develop sensitive industries in China. The committee's main concerns are the potential contribution to human rights abuses in China's Xinjiang region and the development of sophisticated technology for the Chinese military. The investigation will inform the committee's policy recommendations on outbound investment. The companies targeted for investments in AI developers and semiconductor firms include Megvii Technology Ltd, SenseTime Group Inc, and Semiconductor Manufacturing International Corp. The committee has subpoena power and is working on a report about U.S.-China policy and U.S. business activity in China. The companies have been requested to respond to questions by August 1.

 

South China Morning Post

JPMorgan Chase will review Elon Musk's emails as part of a lawsuit against Tesla over a bond contract dispute. Musk had tweeted about taking Tesla private, prompting JPMorgan to sue for $162.2m, claiming that Tesla breached a 2014 contract related to stock warrants. The bank believes the warrants became more valuable due to Musk's tweet. JPMorgan plans to depose Musk in December. Tesla countersued JPMorgan, accusing the bank of seeking a "windfall" when it re-priced the warrants. A federal jury in San Francisco found Musk and Tesla not liable for misleading investors with the tweet. Musk, who bought Twitter last year, is seeking to end his agreement with the U.S. Securities and Exchange Commission to get preapproval for some tweets.

 

U.S. News

Reuters

Washington, D.C. Attorney General Brian Schwalb has filed a lawsuit against over 25 chemical manufacturers, including 3M Co. and DuPont de Nemours Inc., for contaminating the district's drinking water and natural resources with "forever chemicals" known as per- and polyfluoroalkyl substances (PFAS). Schwalb accuses the companies of profiting from the production and distribution of dangerous PFAS chemicals that now pollute DC's waterways. The lawsuit seeks clean-up costs, remediation, and damages for the harm caused to public health and the environment.

 

Bloomberg Law

The United States and Mexico have reached an agreement to address workers' rights violations at a Goodyear Tire & Rubber Co plant in San Luis Potosi, Mexico. The Mexican government has committed to implementing various measures, including the distribution and enforcement of a sector-wide labor contract, additional wages and benefits for eligible workers, and backpay for the company's failure to apply the contract previously. Goodyear will also be required to inform workers of their labor rights and respect union activity. Mexico will conduct periodic inspections of the plant and may impose sanctions if necessary. The remediation proceedings are expected to be completed by January 19, 2024. The agreement follows a petition from a Mexican independent union, which discovered that Goodyear was offering employees fewer benefits than required by the industry-wide agreement.

 

Reuters

Apple is reportedly developing artificial intelligence (AI) offerings similar to OpenAI's ChatGPT and Google's Bard. The company has built its own framework called "Ajax" to create large language models (LLMs) and is testing a chatbot referred to internally as "Apple GPT." Apple has subtly incorporated advanced AI in some of its products, such as Apple Photos and on-device texting, but analysts believe the company is lagging its peers in adopting the technology. The company's AI effort is led by John Giannandrea, Apple's head of machine learning and AI, and Craig Federighi, the firm's top software engineering executive. Apple's new virtual assistant, which is being used internally for product prototyping, is said to replicate Bard, ChatGPT, and Bing AI. Apple aims to make a significant AI-related announcement next year.

 

Bloomberg

Google is exploring the use of artificial intelligence (AI) tools to assist journalists in writing news articles. The company is in talks with news organizations, including the Washington Post, News Corp, and the New York Times. The tools could enhance journalists' work and productivity by providing options for headlines and writing styles. However, Google emphasizes that they are not intended to replace journalists' essential role in reporting and fact-checking. The AI tool, called Genesis internally, has been described as unsettling by some executives who saw Google's pitch. The Associated Press recently announced a partnership with OpenAI to explore the use of generative AI in news. While some outlets are already using generative AI, news publications have been hesitant due to concerns about generating incorrect information and differentiating between human and computer-generated content.

 

Reuters

Professional services groups are facing the consequences of aggressive hiring over the past two years, coupled with less attrition than they expected. The Big Four accounting firms - Deloitte, EY, KPMG, and PwC - are trimming their consulting ranks after forecasting slower growth as businesses scale back on third-party help. Layoffs have been focused on the advisory sides of the firms, with KPMG, Deloitte, and EY all making cuts. Despite the layoffs, exits at the four big firms have dropped, falling 11.6% through June from the year-earlier period. The firms are facing changing client demand and a slower economy, with consulting work being more susceptible to revenue fluctuations. The global consulting market is projected to expand by 6% to 10% this year, with the Big Four firms' global advisory revenue collectively more than doubling since 2010.

 

Wall Street Journal