Facebook misled the public on how it controls a proprietary algorithm in an effort to “boost its stock and deceive shareholders,” Ohio Attorney General Dave Yost (R) alleged in a lawsuit announced Monday. Facebook and senior executives violated federal securities laws by “purposely misleading the public about the negative effects its products have on the health and well-being of children and the steps the company has taken to protect the public,” the state argued, citing findings in September news reports and testimony from whistleblower Frances Haugen (see 2110050062). Yost filed the suit for the Ohio Public Employees Retirement System and Facebook investors. CEO Mark Zuckerberg and company executives knew they were making false statements, Yost said in the announcement, citing internal documents showing the company said: "We are not actually doing what we say we do publicly." Sen. Richard Blumenthal, D-Conn., previously called for investigation into securities fraud (see 2110260070). "This suit is without merit and we will defend ourselves vigorously," a Meta spokesperson emailed Monday.

Apple’s “unlawful monopolization” of the iOS apps market enabled the iPhone maker to charge and collect a “supracompetitive” 30% fee from device owners “for each and every one of the billions of iOS apps they have bought since the iPhone’s launch” 13 years ago, alleged a complaint Friday in U.S. District Court in San Francisco that seeks class-action status. “Consumers nationwide have paid hundreds of millions of dollars more for iOS apps than they would have paid in a competitive market.” Apple’s “anticompetitive scheme” generated “enormous supracompetitive profits” for the company, it said. It offers more than 2.22 million apps in the App Store, and iOS device owners “have downloaded apps more than 200 billion times since July 2008,” it said. Apple didn’t comment Monday.

Florida’s social media law violates the First Amendment despite the state’s common-carrier arguments, groups argued Monday in supporting the tech industry’s lawsuit (see 2109220064) in case 21-12355 in the 11th U.S. Circuit Court of Appeals. SB-7072 makes it unlawful for sites to deplatform political candidates and requires sites be transparent about policing, unless the site owns a Florida theme park. Groups filing in support of the Computer & Communications Industry Association and NetChoice included tech and telecom interests, consumer advocates, publishers and media representatives. Filers included CTA, Engine, the Information Technology & Innovation Foundation, Chamber of Progress, TechNet, American Civil Liberties Union, Center for Democracy & Technology, Reporters Committee for Freedom of the Press, Cato Institute, TechFreedom and Authors Guild. The law is “a direct threat to healthy and safe online communities by restricting and penalizing online providers’ efforts to exercise their First Amendment rights to moderate content on their private platforms,” CTA argued with 10 other groups, including ITIF, TechNet and the Progressive Policy Institute. The law would open the door to “direct content regulation,” in service of government policing bias, “on the platforms that millions of Americans now use to get their news,” publisher and news associations wrote. The First Amendment “protects the exercise of editorial discretion, including by speakers that host others’ speech,” said CDT. Slapping the label “common carrier” on something doesn’t make it a reality, said TechFreedom: “Even if it did, common carriers retain their First Amendment rights, and they have much broader discretion to refuse service than SB 7072 allows for.”

The three-judge panel at the U.S. Court of International Trade presiding over the Section 301 litigation scheduled oral argument in the sample case for Feb. 1 at 10 a.m. in the court's Ceremonial Courtroom in New York, said an order entered Friday in master case docket 21-cv-52. Chief Judge Mark Barnett had asked lawyers from both sides at a virtual status conference Wednesday to email the court by Friday about schedule conflicts they had in January and February. The panel's original preference was to schedule oral argument for Jan. 13, said Barnett. Its “strong desire” was to hold in-person oral argument with "limited in-person attendance, he said. The court “a little over a month ago” joined the federal judiciary’s “pilot” program to broadcast in-person proceedings on a dedicated YouTube channel, he said. “We’re working out the kinks" of the pilot, and court staff “are working hard to make sure that we’re going to be ready to go,” he said. “Anybody that wants to, without prior registration, will be able to listen in. I’m sure there will be lots of folks intending to do that.” It was Barnett’s strong preference to push oral argument into 2022, said the chief judge to a question from lead Akin Gump attorney Matthew Nicely about whether he had ruled out December. “I want to make sure that, frankly, we all have enough time to be as well-prepared as we can be and should be for the argument, to make it as productive as possible,” said Barnett.

Lawyers for DOJ and Section 301 sample-case plaintiffs HMTX Industries and Jasco Products, “in preparation for scheduling oral argument” in the case, should email the U.S. Court of International Trade by Friday disclosing any “scheduling conflicts that would preclude their attendance at the hearing” in January or February, said an order entered Wednesday in master-case docket 21-cv-52 (in Pacer). Akin Gump attorneys for HMTX and Jasco are to file final written arguments on Monday, the last item on the case calendar in an April 13 scheduling order. Wednesday’s order appeared to dash any possibility of oral argument before year-end, as some lawyers involved in the litigation had thought might happen. Several thousand complaints were filed in the massive Section 301 litigation since September 2020, all seeking to have the Lists 3 and 4A tariffs on Chinese imports declared unlawful and any paid duties refunded with interest.

Acer America and its repair and service subsidiary joined the massive Section 301 litigation, alleging in a complaint Monday (in Pacer, case 21-00575) at the U.S. Court of International Trade that the Office of the U.S. Trade Representative violated the 1974 Trade Act and the 1946 Administrative Procedure Act when it imposed the Lists 3 and 4A tariffs on Chinese imports. Acer’s complaint cites tariff exposure to 16 classifications of goods on List 3 and four on List 4A, including for PCs, speakers and projectors. Acer’s law firm is Akin Gump, which crafted the first-filed HMTX Industries-Jasco Products complaint in September 2020 that springboarded the roughly 3,800 nearly identical actions to follow, all seeking to have the tariff rulemakings vacated and the duties refunded with interest. HMTX-Jasco is the designated sample case, and Akin Gump’s deadline is Nov. 15 for filing papers supporting its Aug. 2 motion for judgment on the agency record. It’s the final entry on the court’s April 13 scheduling order. Oral argument is expected next, possibly as soon as December.

Samsung concealed a “known material defect” in its Chromebook Plus 2-in-1 device with a 360-degree rotating touch screen “that can be folded to the back of the chassis along two hinges so the device can be used as a tablet and in various positions,” alleged a complaint Monday in U.S. District Court in Newark, New Jersey, that seeks class-action status. “Unbeknownst to consumers,” the hinges can “detach from their mounting point within the display and break through the screen when the display is moved,” said plaintiff Tony McCoy, a Norman, Oklahoma, resident who, according to the complaint, bought a Chromebook Plus from Best Buy for about $600 in December 2018. Attempting to open the device or change the display angle “causes the screen to split, rupture, or suffer other serious damage,” the complaint said. Samsung “failed to disclose” the defect, and “continues to misrepresent the capabilities” of the device. Even when consumers contact Samsung about the problem, the company “typically denies” that the defect exists, “and asserts hinges only fail when misused,” it said. “Defendant unjustly profits from this scheme by routinely refusing to provide repairs free of charge.” The lawsuit alleges Samsung violated the Magnuson-Moss Warranty Act and breached “the implied warranty of merchantability,” among other infractions. Samsung didn’t comment.

Federal authorities arrested a Portage, Michigan, man on a felony indictment filed in U.S. District Court in Grand Rapids, charging him with mail and wire fraud, interstate transportation of stolen property, aggravated identity theft and making false statements to the FBI, said DOJ Friday. Geoffrey Mark Hays Talsma, 36, allegedly rented thousands of textbooks from Amazon’s rental program for five years with no intention of returning them or paying the established buyout price for the textbooks, said DOJ. He’s accused of selling them on the internet and defrauding Amazon by repeatedly creating new Amazon accounts “and using variations of other data to avoid detection,” it said. “Fraud undermines the trust of our customers, and jeopardizes the value and selection that entrepreneurs, authors, and publishers provide to millions of customers through our stores,” said Amazon. Efforts to reach Talsma’s lawyers for comment Monday were unsuccessful.

Don’t let internet companies hide behind groups, Texas Attorney General Ken Paxton (R) urged Thursday. NetChoice and the Computer and Communications Industry Association lack associational or organizational standing, so their complaint against the Texas social media law should be dismissed, said Paxton’s motion at U.S. District Court in Austin (case 1:21-cv-00840). “Consistent with how they avoid accountability to the public at large, Plaintiffs’ members have attempted to shield themselves from the burdens of challenging a law they do not like by getting their lobbying groups to do it for them,” he said Thursday. “But Plaintiffs cannot meet standing requirements based on bare assertions that their members protect the public from harm, let alone their claims that these behemoths of the tech world should be exempt from all transparency requirements in their intentional practices currently affecting Texas’ citizens’ free access to information.” NetChoice didn’t comment. Friday, Judge Robert Pitman extended until Oct. 22 a deadline for Texas to respond to the industry groups' preliminary injunction motion. The groups urged the court Wednesday not to delay the case by two months (see 2110130056). The judge in the similar Florida case dispensed with the state's standing objection in one sentence, said CCIA President Matt Schruers in a statement: “CCIA and NetChoice unquestionably have legal standing as trade associations whose members are affected by these unconstitutional laws that violate the First Amendment and federal law."

The U.S. Chamber of Commerce disagreed with Maryland's argument last month that the Tax Injunction Act bars federal challenge of the state's digital advertising tax (see 2109140027). “The case is ripe, tax comity does not apply, and plaintiffs have a cause of action to enforce” the Internet Tax Freedom Act, the chamber wrote Wednesday in 1:21-cv-00410-DKC. In Massachusetts, the Joint Revenue Committee will hear testimony on a digital ad tax bill (H-3081) at a virtual hearing Monday at 10 a.m. EDT.