Silicon Valley Tech News Roundup – December 26th

Meta to pay $725 million settlement over class action Cambridge Analytica lawsuit – 12/23

On Thursday, Meta settled the class action lawsuit connected with Cambridge Analytica. The settlement is worth $725 million, and the Northern District of California court has to approve it.

The class action lawsuit claimed Meta gave third parties access to user data without their consent. It represents between 250 and 280 million Facebook users in the United States.

In 2018, Facebook disclosed it improperly shared information from 87 million users with the consultancy firm Cambridge Analytica. The firm had links with Donald Trump’s 2016 election campaign. Since the scandal broke, Facebook paid a $5 billion settlement to the FTC and $100 million to settle with the Securities and Exchange Commission.

The lead lawyer for the plaintiffs stated: “This historic settlement will provide meaningful relief to the class in this complex and novel privacy case.”

Meanwhile, Meta spokesperson said to CNBC: “We pursued a settlement as it’s in the best interest of our community and shareholders. Over the last three years we revamped our approach to privacy and implemented a comprehensive privacy program.” As a part of the settlement, Meta did not admit any wrongdoing.

Congress passes a spending bill – 12/23

On Friday, both chambers of Congress passed a bipartisan spending bill. New measures include forcing big companies to pay more to file with the antitrust agencies when completing large mergers. Likewise, the bill bans TikTok from government devices. Congress did not pass more aggressive measures like the new regulation that would offer more protection for kids online and antitrust legislation that would force companies like Apple to provide more payment options for developers.

The decision to ban TikTok on government devices highlights the growing concerns among lawmakers that US data is vulnerable (China-based companies may have to submit their data to the government). TikTok was working with the government on the Committee on Foreign Investment to tone down national security fears. After the bill passed, the TikTok spokesperson stated: “We’re disappointed that Congress has moved to ban TikTok on government devices — a political gesture that will do nothing to advance national security interests — rather than encouraging the Administration to conclude its national security review.”

Another part of the bill is the INFORM Consumers Act which wants to prevent counterfeit, harmful or stolen items from being sold online. Online marketplaces will have to collect and verify bank and contact details from “high-volume third-party sellers.”

The Merger Filing Fee Modernization Act raises the cost for companies looking to complete big mergers. The bill lowers the cost of smaller deals and fees are subject to adjustment based on the consumer price index.

RANSOMWARE Act requires the FTC to report to Congress the number and types of ransomware attacks or complaints it receives.

The package also includes the Children and Media Research Advancement (CAMRA) Act. It instructs the Department of Health and Human Services to conduct and support research on the impact of technology on children.

Sam Bankman-Fried released on $250 million bail – 12/23

At the court hearing in New York, Sam Bankman-Fried (the former CEO of FTX) was released on $250 million bail. His parents’ home secured the bail. Bankman-Fried will stay in detention in San Francisco with his parents and has to wear an electronic monitoring device. He also had to surrender his passport while the court scheduled his next hearing for January 3rd in New York.

He faces eight criminal charges and civil suits filed by CFTC and the Securities and Exchange Commission.

Meanwhile, two of Bankman-Fried’s former colleagues – Caroline Ellison (CEO of Almeda Research) and Gary Wang (former CTO and co-founder of FTX) – pleaded guilty to the federal charges and are cooperating with the federal prosecutors. Ellison and Wang pleaded guilty to charges of commodities, wire, and securities fraud. Ellison also pleaded to charges of money laundering.

Bankman-Fried denied any deliberate wrongdoing so far.

Elon Musk looking for new Twitter CEO – 12/20

According to sources, Elon Musk is looking for a new Twitter CEO. He ran a Twitter poll asking users whether he should stay as the CEO or step down. 57.5% of 17.5 million users voted for Musk to stand down.

In a tweet on Tuesday, Musk wrote: “I will resign as CEO as soon as I find someone foolish enough to take the job! After that, I will just run the software & servers teams.”

Sources revealed to David Faber (CNBC), Musk began searching for a new CEO before the poll. But according to Musk, it is challenging to find someone willing to take over the job. Musk tweeted: “No one wants the job who can actually keep Twitter alive. There is no successor.”

Some names mentioned as possible replacements include Jack Dorsey (Co-founder of Twitter who resigned in November 2021), Sheryl Sandberg, Jared Kushner, and Sriram Krishnan.