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October 8, 2014

AT&T to Pay $105 Million for Bogus Cell Phone Fees

AT&T Logo Building AT&T has agreed to pay $105 million for adding unauthorized cell phone charges to its customers bills, the Federal Trade Commission and Federal Communications Commission announced today.

AT&T will pay $80 million to the FTC, which will be used for customer refunds; affected customers can go to ftc.gov/att to seek a refund. AT&T Mobility will also pay $20 million to state governments participating in the settlement, and will make a $5 million penalty payment to the U.S. Treasury.

At issue are bogus charges for monthly subscriptions to things like ringtones, wallpaper, and text messages with horoscopes, flirting tips, celebrity gossip, and more. Most of these charges were $9.99 per month, though in some cases they were as high as $60 per month.

In many cases, customers did not agree to these charges, which were hidden on phone bills, the FTC said. Meanwhile, AT&T colluded with these third-party services to make sure users did not get refunds since AT&T got a 35 percent cut of all sales.

"AT&T told these companies that it would 'help lower refunds' by only providing refunds up to two months worth of charges," Edith Ramirez, Chairwoman of the FTC, said during a Wednesday press conference.

The move comes several months after the FTC filed suit against T-Mobile for failing to stop bogus charges on customers' bills, also known as cramming - charges T-Mobile denies. Will other carriers - like Sprint or Verizon - get also be hit with cramming charges? "Stay tuned," FCC Chairman Tom Wheeler said today.

Chairman Wheeler said the deal is the largest cramming settlement and largest FCC enforcement action in history. It is notable, he said, because it is co-signed by 51 state attorneys general.

"For too long, consumers have been charged on their phone bills for things they did not buy," Wheeler said today. "It's estimated that 20 million consumers per year are caught in this type of [cramming] trap, [but] it stops today for AT&T."

"Today, we reached a broad settlement to resolve claims that some of our wireless customers were billed for charges from third-parties that the customers did not authorize," AT&T said in a statement. "This settlement gives our customers who believe they were wrongfully billed for PSMS [Premium Short Messaging Services] services the ability to get a refund."

AT&T pointed to a pledge it made alongside Sprint and T-Mobile last year to stop charging for spam or "premium" texts.

"In the past, our wireless customers could purchase services like ringtones from other companies using Premium Short Messaging Services (PSMS) and we would put those charges on their bills," AT&T said. "While we had rigorous protections in place to guard consumers against unauthorized billing from these companies, last year we discontinued third-party billing for PSMS services."

When asked about that pledge today, Chairwoman Ramirez said that "the carriers agreed to stop the premium text messaging services as of January 2014," but today's settlement "applies to all forms of billing...like direct-carrier billing, so this continues to be an issue."

As part of the deal, AT&T committed to the FCC that it will obtain express consent from consumers about third-party billing going forward, and revise its billing practices so consumers can easily see what they are paying for, and offer the option on block all third-party services.



September 18, 2014

Report: Apple Needs Another License to Sell iPhone 6 in China

iPhone 6

Apple fanatics are already lining up around the globe to be the first to nab an iPhone 6 on Sept. 19. But consumers will have to wait in China, where Cupertino must obtain more licenses before its new phones can enter the mainland market.

According to Chinese news site Xinhua, Apple won two major regulatory approvals, but still needs a key network access license.

Reuters suggested that the licensing process has "not completely stalled." Apple did not immediately respond to a request for comment.

The iPhone 6 and 6 Plus go on sale Friday in the U.S., Australia, Canada, France, Germany, Hong Kong, Japan, Puerto Rico, Singapore, and the U.K. But Apple has not yet announced a solid launch date for China—one of Apple's most important markets, and home to many of its supplier factories.

Cupertino unveiled the next-generation gadgets earlier this month, showing off its bigger, better 4.7-inch and 5.5-inch handsets, with the new A8 chip and M8 co-processor, as well as NFC support.



August 2, 2014

Microsoft Sues Samsung Over Unpaid Bills

New Microsoft Logo It seems Samsung may be getting a bit careless about paying its bills. At least Microsoft thinks so—the software giant is suing Samsung over unpaid patent royalty payments.

The lawsuit, filed Friday in the U.S. District Court of the Southern District of New York, describes patent royalty payments Samsung agreed to pay for using Microsoft's technology in Android-based smartphones and tablets. The amount Microsoft is seeking from Samsung wasn't named.

In the lawsuit and in a blog post by Microsoft's deputy general counsel David Howard, Redmond cited a confidential agreement reached between the two companies in September 2011 to cross-license their patent portfolios for various products.

The long and the short of it is that Microsoft claims Samsung stopped living up to its end of the deal last fall when the South Korean company refused "to make its Fiscal Year 2 royalty payment on time" and further refused "to pay interest on its late payment."

Microsoft, meanwhile, says it has lived up to its end of its agreement to provide Samsung with unspecified remuneration for using Samsung IP in Microsoft products.

Howard said Samsung was claiming the 2011 cross-license agreement had somehow been rendered void following Microsoft's acquisition of Nokia's handset business for $7.2 billion, a deal announced last September and completed in April.

"In September 2013, after Microsoft announced it was acquiring the Nokia Devices and Services business, Samsung began using the acquisition as an excuse to breach its contract. Curiously, Samsung did not ask the court to decide whether the Nokia acquisition invalidated its contract with Microsoft, likely because it knew its position was meritless," Howard said.

Howard also pointed to the rapid growth of Samsung's smartphone business as a possible factor for Samsung's supposed change of heart about the 2011 agreement.

"Since Samsung entered into the agreement, its smartphone sales have quadrupled and it is now the leading worldwide player in the smartphone market," he said. "Consider this: when Samsung entered into the agreement in 2011, it shipped 82 million Android smartphones. Just three years later, it shipped 314 million Android smartphones. Samsung predicted it would be successful, but no one imagined their Android smartphone sales would increase this much."

Samsung did not immediately respond to a request for comment. However, PCWorld reported Friday that a Samsung spokesperson said "the company would review the complaint in detail and determine appropriate measures in response."



August 1, 2014

With Obama’s Signature, Cell Phone Unlocking Legal Once Again

Roundup: Best Unlocked Phones President Obama this afternoon signed into law a bill that makes it legal for consumers to unlock their cell phones.

"As long as their phone is compatible and they have complied with their contracts, consumers will now be able to enjoy the freedom of taking their mobile service - and a phone they already own - to the carrier that best fits their needs," the White House said in a statement.

The Unlocking Consumer Choice and Wireless Competition Act was approved by Congress last month, and now becomes law. It specifies that consumers can unlock their cell phones without running afoul of copyright laws. It also directs the Librarian of Congress to consider whether gadgets like tablets should be eligible for unlocking.

FCC Chairman Tom Wheeler, whose agency pushed for cell phone unlocking under former Chairman Julius Genachowski more than a year ago, said today the new law is a "positive development."

"When the wireless industry worked with the FCC on a voluntary agreement to unlock devices when consumers' contracts have been fulfilled, they took an important step forward," Wheeler said. "The President's signature today makes greater consumer choice the law of the land."



July 15, 2014

Fox Loses Another Bid to Ban Dish Hopper Features

Dish Hopper with Sling

The Dish Hopper lives on. An appeals court this week rejected Fox Broadcasting's bid to kill certain features on the Dish Hopper Whole-Home DVR platform.

The Ninth Circuit Court of Appeals on Monday upheld a lower court's September ruling, allowing Dish to continue providing its Dish Anywhere and Hopper Transfer tools.

"Dish is pleased that the Court has sided again with consumer choice and control by rejecting Fox's efforts to deny our customers access," general counsel R. Stanton Dodge said in a statement.

Fox accused the lower court of making legal errors and erroneous factual findings in its ruling, but the appeals court did not agree. According to the judges' four-page opinion, the court denied Fox's request due to a lack of evidence that Dish's technology would "irreparably harm" the company.



July 10, 2014

Dish Asks FCC to Block Comcast, TWC Merger

DISH Network Five months after Comcast announced plans to acquire Time Warner Cable for $45.2 billion, competitor Dish Network wants to stop them.

The satellite broadcaster met with officials at the Federal Communications Commission this week to express "serious competitive concerns" about a combined Comcast and TWC.

Chief among them is the "increased incentive and ability to leverage its control over the broadband pipe to undermine these services," Dish said.

Together, Comcast and TWC will have at least three choke points in the broadband pipe, which Dish fears will hinder competing video services. Each point—last mile "public Internet" channel, interconnection point, any managed or specialized service channels—allows for the united company to shut out rivals, like Dish.

If that weren't enough to ruffle Dish Network's feathers, the satellite provider also believes that a combined cable company will shift programming in an anticompetitive direction. As Dish explained in its filing, the joint organization would be able to extort lower prices from programmers, which will, in turn, need to enforce higher rates from smaller pay-TV providers, i.e. Dish.

Though Comcast has offered to divest customers to Charter to get the deal done, Dish is not convinced. "There do not appear to be any conditions that would remedy the harms that would result from the merger," Dish said.

Since there is no easy solution to the problem, according to Dish, the merger should therefore be denied. Not everyone agrees, though.



July 10, 2014

FTC Sues Amazon Over Accidental In-App Purchases

The 10 Best Kindle Fire Games Amazon is the latest firm to find itself in hot water over unauthorized in-app purchases.

The Federal Trade Commission today filed suit, asking a federal court to require Amazon to refund customers whose children accidentally made purchases within apps downloaded from the Amazon Appstore. The agency also wants Amazon to forfeit any money it made on those unauthorized purchases since Amazon gets a 30 percent cut, the FTC said.

The FTC said unauthorized in-app purchases amounted to "millions of dollars of charges," including one kid who quickly racked up $360 in charges.

"Amazon's in-app system allowed children to incur unlimited charges on their parents' accounts without permission," said FTC Chairwoman Edith Ramirez in a statement. "Even Amazon's own employees recognized the serious problem its process created."

By now, the Amazon Appstore requires passwords for in-app purchases, but it took a few years to get there.

In-app purchases on the Amazon Appstore date back to 2011 with a beta program; the API was released to all developers several months later. At the time, there were no password requirements for making a purchase, the FTC said, and parents had no recourse if junior racked up charges on their Kindle Fire. The FTC complaint points to internal communications from Amazon employees in Dec. 2011, which said the lack of a password requirement was "clearly causing problems for a large percentage of our customers."

In March 2012, the rules were updated to require passwords on purchases over $20. An early 2013 update required passwords in more situations, but typing in a password once opened up a 15-minute window where a password was not required, allowing for unauthorized purchases. A June 2014 update required consent for in-app charges on newer mobile devices.

When asked for comment, an Amazon spokeswoman pointed PCMag to a July 1 letter that Amazon general counsel Andrew DeVore sent to the FTC's Ramirez.

Amazon held "constructive meetings" with the FTC in recent weeks, so news that it would still be filing a lawsuit was "deeply disappointing," DeVore wrote.

Amazon said the FTC was "unwilling to depart from the precedent it set with Apple despite our very different facts," referring to the $32.5 million settlement the FTC reached with Apple over in-app payments in January.

DeVore said that Amazon did provide refunds to those who complained, but argued that its program has always been lawful. "Pursuing litigation against a company whose practices were lawful from the outset and that already meet or exceed the requirements of the Apple consent order makes no sense, and is an unfortunate misallocation of the commission's resources."

Amazon was last in the news for in-app purchases when it dropped them from the ComiXology apps to avoid paying transaction fees to Google and Apple.



July 8, 2014

Thieves Pull Off Daring Heist at Samsung Factory

Samsung Galaxy S5 Mini In a story that sounds like something out of Ocean's 11, a Samsung factory in Brazil recently fell victim to thieves who made off with millions of dollars worth of merchandise.

As reported by Reuters, armed robbers attacked the factory near Sao Paulo and made off with gadgets worth about $36 million, police said. A Samsung spokeswoman, however, put the value of the stolen goods at a much lower $6.5 million.

Specifically, the thieves carjacked an employee shuttle, held about 100 factory workers hostage, and ultimately stole seven trucks filled with about 40,000 Samsung products - smartphones, tablets, and PCs.

According to MSN, the factory is located in Campinas, a college town about 60 miles north of Sao Paulo. The heist was pulled off by about 20 individuals; none of the Samsung workers were injured.

This is not the first time thieves have targeted pricey gadgets, of course. Last year, on New Year's Eve, armed robbers broke into a central Paris Apple Store, making off with roughly $1.25 million worth of iPhone, iPads, and other devices.

The year before, meanwhile, about $1.9 million worth of iPad mini tablets were stolen from New York's John F. Kennedy International Airport; an employee was later implicated.



June 28, 2014

Aereo Suspends Service, But Not Yet Gone For Good

Aereo: Everything You Need to Know update Well, that didn't take long.

Aereo, the startup whose business practice involved taking free over-the-air TV broadcasts and streaming them online as part of a paid subscription package for its users, has officially disappeared.

It's not gone for good, the company is quick to note. However, those looking to take part in the company's streaming — or access any DVR-like recordings they might have made of broadcast programming — had until 11:30 a.m. (ET) to use Aereo. The service is now on what you might call a bit of a hiatus.

"On Wednesday, the United States Supreme Court reversed a lower Court decision in favor of Aereo, dealing a massive setback to consumers," wrote Aereo CEO and founder Chet Kanojia in a statement posted to Aereo's blog.

"As a result of that decision, our case has been returned to the lower Court. We have decided to pause our operations temporarily as we consult with the court and map out our next steps. You will be able to access your cloud-based antenna and DVR only until 11:30 a.m. ET today. All of our users will be refunded their last paid month. If you have questions about your account, please email support@aereo.com or tweet us @AereoSupport."

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June 25, 2014

Supreme Court to Police on Cell Phone Searches: Get a Warrant

Supreme CourtThe Supreme Court has spoken: Police must get a warrant before they can search the contents of your cell phone.

There is no ambiguity and no hedging in the unanimous, 38-page opinion which the Supreme Court handed down Wednesday. There's no benchmarking test for when a warrant would not be necessary. It doesn't matter if it is a smartphone or a feature phone (dumbphone). If the cops want to know what is on the phone, they need to talk to a judge.

"The fact that technology now allows an individual to carry such information in his hand does not make the information any less worthy of the protection for which the Founders fought. Our answer to the question of what police must do before searching a cell phone seized incident to an arrest is accordingly simple—get a warrant," wrote Chief Justice John G. Roberts, Jr.

Next Stop, NSA?
The decision is a sweeping endorsement of personal privacy, and confirms Americans have a constitutional right to privacy in the personal information stored on their mobile devices.

"By recognizing that the digital revolution has transformed our expectations of privacy, today's decision is itself revolutionary and will help to protect the privacy rights of all Americans. We have entered a new world, but, as the court today recognized, our old values still apply and limit the government's ability to rummage through the intimate details of our private lives," Steven R. Shapiro, the national legal director of the ACLU, said in a statement.

"The Court today told Americans that the digital information contained in their cell phones is entitled to protection from warrantless government intrusion." said Nuala O'Connor, president of Center for Democracy and Technology. "The Court clearly recognizes the impact that modern technology is having on our daily lives, and the importance of applying Fourth Amendment protections in a digital age. As technology rapidly evolves, the law must also evolve to ensure that our most basic rights are protected as they have been in the past," O'Connor added.

Now that the Supreme Court has affirmed our right to privacy on our phones, perhaps the next step would be the Court weighing in on whether the National Security Agency's phone and computer surveillance methods should also require a warrant. That's something I would like to see.

Lock Your Device Anyway
Roberts acknowledged how dependent we are on our phones. Rather than being "just another technological convenience," cell phones are also our cameras, video players, Rolodexes, calendars, tape recorders, libraries, diaries, albums, televisions, maps, and newspapers, he wrote. "Indeed, a cell phone search would typically expose to the government far more than the most exhaustive search of a house."

There was also an interesting note on password protection:

"Similarly, the opportunities for officers to search a password-protected phone before data becomes encrypted are quite limited. Law enforcement officers are very unlikely to come upon such a phone in an unlocked state because most phones lock at the touch of a button or as a default, after some very short period of inactivity."

While it's great the Supreme Court thinks the majority of American users lock their phones, we know that's not the case. Even though the police are no longer allowed to trawl through your phone, locked or unlocked, we should all go ahead and get better about password protecting our mobile devices. Thieves and snoops still don't need a warrant, so use the fingerprint sensor, set a passphrase, or put some other lock on that device.

What the Police Can't Do Anymore…
The Supreme Court heard Riley v. California and United States v. Wurie in April. In the California case, during a routine traffic stop, the policeman saw guns in Riley's car and searched his phone. The information on the phone implicated Riley as a gang member in a shooting. The companion case, from Massachusetts, concerned a suspected drug dealer whose flip phone was searched after his arrest.

Generally, law enforcement officials are allowed to search a person's wallet or purse, even check the pockets, without a warrant. This was to ensure the person wasn't carrying any weapons that might endanger officials or allow the person to escape custody. The government argued that searching the contents of a phone was a natural extension of that rule.

The justices rejected that claim, noting that "digital data on the phone cannot itself be used as a weapon to harm an arresting officer or to effectuate an arrestee's escape." Police can still inspect the phone itself, so long as they don't try to view the contents. Since there are legal ways to prevent phones from being remotely wiped, or to still extract data afterwards, the police have time to convince a judge to issue a warrant.

According to the ruling, there are some possible exceptions to the warrant requirement. Examples include the person trying to text an accomplice to detonate a bomb, or a suspected kidnapper with information about the victim on the phone.

"We cannot deny that our decision today will have an impact on the ability of law enforcement to combat crime," Roberts wrote for the court. "Privacy comes at a cost."