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Scott Ertz Apple wins 9/10 of complaints, must still allow external payments
(2021-09-11)
Apple wins 9/10 of complaints, must still allow external payments The Epic Games vs Apple trial has wrapped (ultimately temporarily) with US District Judge Yvonne Gonzalez Rogers ruling mostly in favor of Apple. Of the 10 complaints filed by Epic Games against Apple, the judge ruled in favor of Apple for 9 of them. The one point which fell in Epic Games' favor was an injunction forcing Apple to allow developers to include links to external payment systems. The most common implementation of this will be external links to signup or purchase systems on a website. Netflix previously included a link to its signup page in its app in lieu of allowing new users to signup through the app and was forced to remove it.

However, while this is a minor win for Epic Games, it is not the win they were hoping for. In fact, the company has to pay Apple legal fees and lost revenue for the three months in which the company had implemented its own payment system, in the amount of 30 percent of their iOS revenue. Because Epic Games reported $12,167,719 in iOS revenue, 30 percent would be $3,650,315. Epic Games CEO Tim Sweeney said via Twitter,

Today's ruling isn't a win for developers or for consumers. Epic is fighting for fair competition among in-app payment methods and app stores for a billion consumers.

Fortnite will return to the iOS App Store when and where Epic can offer in-app payment in fair competition with Apple in-app payment, passing along the savings to consumers.

So, the fate of Fortnite on Apple's mobile devices is still questionable, partially because of Epic Games' decision, and partially because the company's developer account is still suspended. What is not questionable is the fact that this case is far from over. As this case was heard in a US District Court, there are a number of levels for appeal, all of which Epic Games plans to use. This is because of the 9 losses that they suffered, not just monetarily. Epic Games still wants to be able to distribute its games through an independent app platform on iOS, and they want to avoid the app Store and its policies entirely. Judge Rogers made it clear that it will likely be a difficult challenge, saying,

While the Court finds that Apple enjoys considerable market share of over 55% and extraordinarily high profit margins, these factors alone do not show antitrust conduct. Success is not illegal.

After the court issued its ruling, Apple released its own statement of support for the decision.

Today, the court has affirmed what we've known all along: the App Store is not in violation of antitrust law. As the court recognized, "success is not illegal." Apple faces rigorous competition in every segment in which we do business, and we believe customers and developers choose us because our products and services are the best in the world. We remain committed to ensuring the App Store is a safe and trusted marketplace that supports a thriving developer community and more than 2.1 million U.S. jobs, and where the rules apply equally to everyone.

This is clearly just the beginning, but it is encouraging for Apple's defense. While they do control a large portion of the mobile space in the US, this court has created a precedent establishing a platform's ability to lock itself to any degree, regardless of its size.
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Scott Ertz Coinbase plans to offer Lend, SEC warns of securities lawsuit
(2021-09-11)
Coinbase plans to offer Lend, SEC warns of securities lawsuit Coinbase has announced plans to offer a new yield product called Lend, which will let users earn interest on their cryptocurrency holdings by lending the assets to others for a fee. The US Securities and Exchange Commission (SEC) has warned the company that if it goes through with the plans to offer the new feature to users, the SEC will sue Coinbase.

The company announced the product offering in June, followed by opening up a waiting list for people who wanted to participate in the program. The original blog post said,

Today we're pleased to announce that after working closely with the SEC staff, we received approval to offer a security-based product called Coinbase Bundle. The bundle consists of any five cryptocurrencies available on Coinbase and weighted by market capitalization (and rebalanced at least once per day). Eligible customers can trade Coinbase Bundle using either their USD Wallet or Coinbase Pro account.

On the same day, SEC released a statement warning investors that Coinbase is planning to offer something called Lend which would be considered as security by the regulator and could lead to lawsuits against the company if it goes through with its plans. The company has received the warning earlier this year, but Coinbase has not yet received specific information on how Lend falls under securities regulations. The SEC statement says,

If a platform offers trading of digital assets that are securities and operates as an 'exchange,' as defined by the federal securities laws, then the platform must register with the SEC as a national securities exchange or be exempt from registration.

Paul Grewal, Coinbase chief legal officer said in an interview with WSJ that the SEC had told Coinbase earlier this year that it considered Lend product a security "but wouldn't say why or how they'd reached that conclusion." He added,

We are considering the implications of the SEC's guidance and will continue to work with them if appropriate. At this point, we have not concluded that Coinbase Bundle is a security.

In a more recent blog post by Grewal, posted this week, he responded to the SEC's threat, saying,

Coinbase's Lend program doesn't qualify as a security - or to use more specific legal terms, it's not an investment contract or a note. Customers won't be "investing" in the program, but rather lending the USDC they hold on Coinbase's platform in connection with their existing relationship. And although Lend customers will earn interest from their participation in the program, we have an obligation to pay this interest regardless of Coinbase's broader business activities. What's more, participating customers' principal is secure and we're obligated to repay their USDC on request.

We shared this view and the details of Lend with the SEC. After our initial meeting, we answered all of the SEC's questions in writing and then again in person. But we didn't get much of a response. The SEC told us they consider Lend to involve a security, but wouldn't say why or how they'd reached that conclusion. Rather than get discouraged, we chose to continue taking things slowly. In June, we announced our Lend program publicly and opened a waitlist but did not set a public launch date. But once again, we got no explanation from the SEC. Instead, they opened a formal investigation. They asked for documents and written responses, and we willingly provided them. They also asked for us to provide a corporate witness to give sworn testimony about the program. As a result, one of our employees spent a full day in August providing complete and transparent testimony about Lend. They also asked for the name and contact information of every single person on our Lend waitlist. We have not agreed to provide that because we take a very cautious approach to requests for customers' personal information. We also don't believe it is relevant to any particular questions the SEC might have about Lend involving a security, especially when the SEC won't share any of those questions with us.

It's really unnerving that the SEC felt it was a good idea to request the details of everyone who expressed interest in the feature. There's no telling what they had planned to do with that information, but it was unlikely good. As a user of Coinbase (though not one who showed interest in Lend), I appreciate that the company has rejected the request. However, it is likely part of the reason why the SEC is skipping the regulatory process and jumping right into the litigation pool.

The SEC is playing a double-edged game with the cryptocurrency industry. They constantly say that they want to have discussions about everyone's role in this new space, but if Coinbase is to be believed, their words and actions do not match. Hopefully this is not an actual signal of what is to come for the cryptocurrency industry, and simply an over-anxious regulator not knowing what is going on.
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Scott Ertz Locast fails to convince a judge that it isn't violating the law
(2021-09-04)
Locast fails to convince a judge that it isn't violating the law Over the past few years, as the number of people cutting the cord from cable has increased, many groups have tried to fill the void for people looking for local TV channels. Some of the streaming services offer local (or more importantly broadcast) stations, but many are either too expensive (the same or more than cable) or only offer a portion of the major networks. As a supplement, some organizations have tried a few times to offer this service without working with the networks themselves. The most recent was Locast, a non-profit that made it possible to stream local channels, theoretically for free.

This week, the organization behind the service announced that it was suspending operations following a major loss in court. The ruling came in a case filed by all of the major networks (ABC, CBS, Fox, and NBC), claiming that the organization had violated copyright and redistribution laws with its service. Locast asked the court to dismiss the case on the grounds that it was a non-profit organization and that exempted it from the redistribution rules under Section lll(a) (5). The networks countered, asking for the challenge to be dismissed.

US District Judge Louis Stanton granted the networks' motion, dismissing the request for summary judgment. This ruling is not itself a summary judgment in favor of the networks but does deny a swift dismissal in favor of Locast. The judgment came about after Judge Stanton heard arguments surrounding the business model of Locast, which led him to question whether or not the organization did qualify for the exemption, meaning it was not a matter of pure facts.

The details of the business model that caused Locast to lose its motion is the Wikipedia model: occasionally asking viewers for donations to keep the organization afloat. Under normal circumstances, this wouldn't be an issue. Wikipedia has made it a popular method of fundraising, after all. But, it also leaves the organization open to issues where the funds raised from viewers could exceed the cost of operations, allowing the organization to use the funds for expansion as well. For most non-profits, this is not an issue. But, for those looking to take advantage of redistribution laws, it means they are not exempt.

As a result of this judgment against them, Locast has suspended operations. In a message on the organization's website, they said,

We are suspending operations, effective immediately

As a non-profit, Locast was designed from the very beginning to operate in accordance with the strict letter of the law, but in response to the court's recent rulings, with which we respectfully disagree, we are hereby suspending operations, effective immediately.

This wording leaves open the possibility for the return of the service is a court eventually rules in their favor. But, to protect themselves, they have decided to stop offering their service.

Of course, this is not the first time an online streaming service has been hit by a lawsuit that ended its operations. The most famous previous attempt was from a company called Aereo. This company also took a unique approach to avoiding copyright law, by installing an individual tuner and antenna for each user in a market. This meant that the statistics gathered by broadcast companies would still be accurate, even though the viewers were likely out of market. This service was extremely popular for sports fans wanting to watch teams that were not broadcast in their local market (Floridians watching New York games, for example).

As with Locast, Aereo was hit with a major lawsuit which led to a spectacular Supreme Court loss, which eventually led to the company's shutdown in 2015. When Locast first got up and running, we predicted that a lawsuit would be inevitable, and that a loss in court would cease their operations. With this week's hit, it seems even more likely that Locast will follow Aereo into the trashcan of copyright infringement.
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Scott Ertz Yik Yak is back, and the internet is a little meaner as a consequence
(2021-09-04)
Yik Yak is back, and the internet is a little meaner as a consequence If you are fortunate, you may have completely missed the former social network Yik Yak. This platform, which shut down 4 years ago, was focused on local and anonymous communication. People were able to post anonymously, as well as view and comment anonymously on other users' posts within a 5-mile radius. If this seems like a terrible idea, you're paying attention. In fact, this is exactly why the network was shut down. However, some bad ideas just can't be killed, as a new group has purchased the brand and is bring it back to life.

The original showdown came about because the platform was filled with tons of sexual harassment, and even some bomb threats, just for good measure. The app was such a problem that schools had to ban the app because it gave easy access through its hyper-local features for students to bully one another without any idea who was doing the bullying. It was the original completely toxic social network, and potentially paved the way for the likes of Twitter and Facebook to descend from only mostly useless to completely useless.

According to the company's website, the platform (or maybe just its assets) was purchased by new owners in February 2021. The new owners are looking to position the platform somewhere in the void between where existing platforms are willing to take action and where they are not. The problem, of course, is that the premise of the platform - anonymous and hyper-local - are still there. The likelihood that the new owner will be able to hold back the flood gates against a raging storm of hate and anger is not great. But they have a plan.

The new Yik Yak is being governed by Community Guardrails (read community standards) that will prohibit bullying and hate speech. According to their stance on bullying and hate speech,

If someone bullies another person, uses hate speech, makes a threat, or in any way seriously violates the Community Guardrails or Terms of Service, they can be immediately banned from Yik Yak. One strike and you're out.

If you see someone bullying another person or making a threat, please immediately downvote and report the message. Message posts (yaks) that reach -5 total upvote points are instantly removed from the feed. When you report a post, our team reviews it as soon as possible and takes action when necessary.

All of that sounds nice and all, but it's been proven to not work in the past. YouTube believes that it has strong community standards, and yet they actively prohibit researchers from discussing their findings and encourage videos that target sexually inappropriate content to children. If the company that has indexed all of the information ever produced throughout human history cannot figure out how to keep people from threating one another or making sexually suggestive comments, how will a startup with absolutely no history be able to figure it out? My guess is that they won't.

If the new owners really wanted to make a local and anonymous social network, creating a new name would have been the better bet, because Yik Yak is tainted. Yik Yak should have stayed dead and buried.
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Scott Ertz Pokemon Go developers respond to community feedback over changes
(2021-09-04)
Pokemon Go developers respond to community feedback over changes It's been just over five years since Niantic released Pokemon Go, the augmented reality game that spawned an entire industry. While other games have come and gone (Minecraft Earth, anyone), Pokemon Go has managed to keep its spot at the top of the stack. A lot of this has been because Niantic has been willing to listen to players' complaints about the game and respond to them. The company has also been willing to respond to the reality of the world, particularly in response to the COVID lockdowns around the world. But, in responding to the lockdowns, the company has made some mistakes.

During the lockdowns, Niantic changed the way the game was played. They changed the range from stops and gyms in an attempt to maintain additional distance between players. They added remote raid passes so that players could remain at home while still interacting with the more advanced aspects of the game. Players really appreciated the changes, and have taken advantage of them to great effect. In the office, we have been grateful for the remote raid passes, and often invite people from out of state to participate in our large raids.

But, when these features went into effect, we suspected that they would eventually be revoked. The intention was never for all of them to be a permanent addition, despite how much better the changes have made the gameplay, or how many people came back to the game during the lockdowns. It truly was a sign of just how much the company had considered their players' needs and looked for ways to meet those ever-changing needs.

However, recently, the company began rolling back some of the changes that were implemented over the past 18 months. They started by reducing the range markers for gyms and stops back to their initial states. While this was expected, the company's communication with players was absolutely terrible. We noticed it ourselves only because a stop that we used to be able to hit while leaving the office was now out of range. So, we looked at the map and noticed that all of the circles had been reduced, and we could no longer hit a stop and a gym from places where we used to stand in the past.

The company has finally recognized that they made a mistake in making these changes without major communications with players. Pokemon Go Executive Producer Steve Wang wrote in a blog post,

We should be communicating and engaging more with Trainers. I hope that, with your patience and understanding, we can do better here. There are many ways we can improve, but to start, we're making the following commitments to you:

  • Starting in October, we will begin publishing a developer diary every other month to share the latest priorities, events, and features for the game.
  • We are going to set up regular conversations with community leaders to continue the dialogue we began this month.
  • We will continue our work on updating the Known Issues page and in those efforts, will prioritize bringing greater visibility into the status of existing bugs for Trainers.

As per usual, the company is listening to its community and making promises and changes based on the feedback. This attitude towards players is why the game continues to be #1 and why it will likely continue to have that honor.
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