Conservative Activist Sues Meta Over Defamatory AI Hallucinations

Report from the Wall Street Journal

In Brief – Robby Starbuck, a conservative activist notable for successfully pressuring companies to change their DEI practices, has filed a defamation lawsuit against Meta alleging that its AI tool smeared him by falsely asserting he participated in the January 6 Capitol riot and that he was linked to QAnon. Starbuck says he discovered the problem last August when the allegations were posted on X. Starbuck immediately denied the allegations and contacted Meta about the claims, which he says continued to show up in its AI system responses months later. Starbuck’s lawsuit, filed in Delaware Superior Court, seeks more than $5 million in damages. Joel Kaplan, Meta’s chief global affairs officer, took to X to apologize to Starbuck that the company’s fix “didn’t address the underlying problem” and that he was working to “explore potential solutions.”

Context – AI “hallucinations”, the reality that all generative AI systems sometimes produce results that are false and cannot be explained by the system’s creators, provides valuable context for many AI public policy issues. They illustrate that GAI tools are not like traditional databases or search engines. They don’t store and return fixed data, they compile responses by determining which fragments of text best follow other sequences, all based on a statistical model that has ingested and processed many billions of examples often pulled from all over the internet. Starbuck’s defamation case gets in line, with a noteworthy lawsuit in Georgia state court involving OpenAI being farthest along. The fact that all the AI systems create fictions that are presented as real should be presented in AI-related copyright lawsuits as proof that AI systems create new works rather than copy and paste. The issue will likely appear when the question of applying Sec. 230 to AI results is decided because developers cannot ever be sure of outputs. And hallucinations happen at the same time some entities are trying to influence AI outputs by seeding training date with falsehoods. “Fixing” troubling outputs often ends up with an AI developer installing “guardrails”, meaning algorithmically overriding the system in some cases, which has created accusations of ideological biases by the companies.

Google Makes First Payments to Canadian News Media Companies

Report from the Toronto Star

In Brief – The Canadian Journalism Collective, an organization that is distributing some of the funds contributed by Google to pay Canadian news media outlets in exchange for Google being exempted from the media payments scheme created by the Canada’s Online News Act, has announced that they have distributed the first $22 million provided by the online giant. Broadcasters will reportedly receive about 30 per cent of the $100 million per year from Google, while publishers will split the remainder. Qualifying news organizations had to meet several criteria including that they must operate in Canada, have two or more journalists in the country, and be a member of a recognized journalistic association or follow a journalist code of ethics. Canada’s payments regime, which compensates media companies when their news content appears on very large search or social media platforms, currently applies to Google and Meta, but Meta chose to block Canadian news on Facebook and Instagram to avoid having to make payments.

Context – In 2023, Canada was ground zero in the global campaign by media companies to have governments push the largest digital platforms to pay them. The most interesting development was the policy divergence between Google and Meta. Google agreed to make media payments while Meta chose to block news rather than pay a government-set rate for media content. In 2024, the two companies pursued their separate paths in California, and Meta also announced that they would stop media payments in Australia, which was home to the first media payments scheme in 2021. The Australian Government responded to Meta’s plan to stop paying by threatening to enact a new tax in 2025 on large social media companies that won’t voluntarily pay media companies, meaning Meta. One of the Trump Executive Orders threatens trade retaliation against foreign governments that employ taxes or regulations that are “designed to transfer significant funds” from American tech companies to a “favored domestic entities”, which very likely includes the national forced media payments schemes.

DoJ Plans Further Break Up of Google in AdTech Antitrust Case Remedies

Report from the TechCrunch

In Brief – The US Department of Justice has informed the federal judge that recently ruled that Google was guilty of “willfully acquiring and maintaining monopoly power” in the digital ad space that it would ask that Google be forced to sell two major parts of its ad tech business. The DOJ wants Google to sell AdX, its ad exchange product, straightaway, while carrying out a “phased” sale of DoubleClick for Publishers. The agency also wants Google blocked from operating an ad exchange for 10 years and to open its ad buying tools, including AdWords, to work equally well with third-party ad tech products. The DOJ filing says that the comprehensive set of remedies “is necessary to terminate Google’s monopolies, deny Google the fruits of its violations, reintroduce competition into the ad exchange and publisher ad server markets, and guard against reoccurrence in the future.” Google opposes breaking up its advertising business and said in its own filing to US District Judge Leonie Brinkema that doing so would “go well beyond the Court’s findings, have no basis in law, and would harm publishers and advertisers.” The company proposed a more limited set of conduct remedies and has indicated it would appeal Judge Brinkema’s initial decision after the remedies trial, which is set to begin on September 22.

Context – Google is on an antitrust losing streak. Federal Judge Amit Mehta found that Google has a monopoly in general internet search and that its uses of overly long business deals with phone makers, especially Apple and Samsung, preferencing Google Search, were illegal. Google must have taken heart last fall when candidate Donald Trump expressed reticence about breaking up the company, but that’s long past as his DOJ has been pressing Mehta to force Google to sell its Chrome browser in the search case’s remedies trial that wraps up this week. Like with the DOJ’s ad tech business breakup plan, Google argues that a massive, forced divestiture far exceeds the monopoly law violations and would harm online users. Judge Mehta is expected to issue his remedy decision in August and Google’s appeal will proceed from there.

President Trump Indicates He Would Again Extend TikTok Deal Deadline

Report from Bloomberg

In Brief – President Donald Trump said he would give social media video platform TikTok another extension of a deadline to sell to a US owner. Trump has said many times that he likes the platform because it helped his 2024 presidential campaign appeal to younger voters. The federal law that requires TikTok’s US operations be sold by China-based ByteDance to address national security concerns was enacted with overwhelming bipartisan support in April 2024. However, US-China relations have become increasingly tense, with the Trump Administration imposing new tariffs on products from China that can reach 145%, while the Chinese Government has responded with a range of trade retaliations, including tariffs of up to 125% on some US products. Trump has said that a deal to sell TikTok to US buyers was very close before the new tariffs were imposed and that he would consider reducing the levies on China somewhat to facilitate a TikTok sale.

Context – There is no legal clarity surrounding the unprecedented TikTok matter. Instead, the most relevant fact appears to be that President Trump went from the first President proposing to ban the app to its chief US backer. The federal law forcing the sale of the platform survived a review by the Supreme Court, which rejected the First Amendment-based challenges of the company and a group of content creators. The law's deadline for a sale was January 19, but it gave the President the authority to extend for 90 days the provisions that prohibit app stores and hosting providers from supporting TikTok’s US services if he certified that the time was needed to wrap up a qualified deal to divest the company. Trump did so on January 20. Conservative Republican “China Hawks” condemned the initial extension order, which they said exceeded the law’s provisions. He granted a second extension on April 4 with more criticism coming from Democratic backers of the law. Questions remain regarding how the app could operate without the current TikTok algorithm engineered by ByteDance, as well as the implications of the worsening US-China trade relationship on the prospects of a transaction.