Telegram CEO’s Arrested in Escalation of Fight to Protect Children Online

Report from New York Times

In Brief – Telegram founder and CEO Pavel Durov has been arrested in France and charged with complicity in managing an online platform to enable illegal transactions. The arrest warrant was issued by OFMIN, an arm of the National Police created in 2023 to combat serious offences against minors, including online sexual exploitation. The Paris prosecutor pursuing the case has ordered Durov to post 5 million euros bail and check into a Paris police station twice a week. Telegram is a hybrid platform that includes direct messaging like Meta’s WhatsApp, as well as social media features that facilitate group communications. It is alleged to be popular among criminals, but also among those seeking to avoid repressive governments. Telegram’s social media service engages in less content moderation than most other popular platforms. Most of its 900 million global users use direct messaging, while it claims less than 45 million social media users in Europe that would require content moderation oversight by the European Commission under the Digital Services Act (DSA).

Context – “Free speech”, content moderation, and even encryption are part of the story, but above all this is a flashpoint in the effort by governments to more aggressively combat alleged online harms to young people. The EU’s DSA, the UK’s Online Safety Act, a raft of legislation enacted by US States, and bills in the US Congress, are all examples. But they are generally not criminal statutes. High profile criminal prosecutions of digital business executives in Western democracies have been rare. Ross Ulbricht, the founder of “dark web” platform Silk Road was jailed by the US in 2015 for creating the platform to facilitate illegal conduct and for directly engaging in illegal drug sales. Kim Dotcom, who created and ran Megaupload, a site allegedly made to facilitate entertainment IP piracy, was arrested in 2012 in New Zealand, and has been engaged in an extradition battle since. He is likely to be heading to a US courtroom soon. But neither of those platforms ever had the massive user base or arguably legitimate uses of Telegram. The developments in this case could be similarly groundbreaking.

NLRB Determines Amazon is a Joint Employer of Delivery Partner Drivers

Report from Bloomberg

In Brief – A regional director of the National Labor Relations Board (NLRB) in southern California has determined that Amazon was a “joint employer” of delivery drivers who worked for Battle-Tested Strategies, a small delivery company based in Palmdale, California that worked as a “Delivery Service Partner” (DSP) of Amazon. The labor regulator’s decision followed the cancellation of the delivery company’s contract by Amazon in 2023. The DSP had voluntarily recognized the efforts of several dozen of its drivers who were complaining about working conditions and sought to unionize with the Teamsters. Amazon terminated the contract ten days before the DSP’s owner formally recognized the union, and the NLRB official dismissed the allegation that Amazon cancelled the contract in retaliation against the union drive. However, the NLRB official determined that Amazon and Battle-Tested Strategies were joint employers of the drivers and unlawfully failed to bargain over the effects of Amazon canceling the delivery contract, effectively firing union employees without advance notice, severance, and other conditions often negotiated by unions. Amazon is expected to challenge the NLRB decision in federal court.

Context – The proper classification of contract workers is an ongoing tech industry issue, and not just for Gig-style platforms. Most large digital companies use contract workers employed by third-party firms. The recent NLRB decision involving Amazon DSP drivers is not the first “joint employer” decision involving a tech giant. Last year, the NLRB deemed Google a joint employer of 50 contract workers employed by Cognizant Technology Solutions in Austin, Texas, who voted to unionize. Google argues that the labor relationship is solely between the workers and Cognizant and is challenging the NLRB in court. A Kenyan labor court ruled last year that Meta was similarly a joint defendant with Sama, a California-based contracting firm who employed nearly 200 workers in Nairobi to do online content moderation for the digital giant, but then dropped the work with Meta and terminated the roles.

DC’s Antitrust Suit Targeting Amazon Pricing Practices Back in Play

Report from Courthouse News Service

In Brief – A three-judge panel of the DC Court of Appeals has overturned a 2021 DC Superior Court decision to dismiss the antitrust complaint of the DC Attorney General alleging Amazon engaged in anticompetitive price fixing that harmed online shoppers by pressuring third-party sellers using Amazon’s marketplace to raise their prices on other ecommerce websites to match their price on Amazon even when the Amazon sales involved much higher commissions and fees. The lawsuit will now be returned to the lower DC court for adjudication. The appeals panel found that the AG’s allegations, if true, were sufficient to suggest that Amazon’s seller agreements, including its Fair Pricing Policy, created anticompetitive effects, and so the trial court judge applied the wrong standard in granting Amazon’s motion to dismiss. Amazon’s seller contracts and policies penalizing sellers who do not price match their offerings on lower-fee platforms is now a component of a growing number of antitrust challenges.

Context – The charge that Amazon is engaged in anticompetitive “price fixing” is gaining traction in US courts. Most critics argue that Amazon's product search algorithms penalize retailers who offer lower prices on other websites in order to protect its high seller fees from lower-fee competition. Many sellers say they could profitably sell products at lower prices on other lower-fee venues, but if they do that, they lose their sales on Amazon, which has an 80% share of marketplace sales. So, they raise prices elsewhere instead. A similar consumer class action complaint has survived Amazon’s motion to dismiss in federal court in Washington State, a complaint brought by the California AG survived Amazon’s Motion to Dismiss in California state court, and the same set of Amazon policies is a part of the FTC’s major antitrust complaint scheduled to go to trial in October 2026. Amazon’s role as the largest ecommerce logistics services provider is a central part of the complex debate, with Amazon’s marketplace algorithms rewarding sellers who buy Amazon logistics that are a major component of Amazon fees.

Unanimous FTC Releases Final Rule Targeting Purveyors of Fake Reviews

Report from The Hill

In Brief – The Federal Trade Commission has released rules prohibiting a range of deceptive practices used to promote products and services online. The Final Rule on the Use of Consumer Reviews and Testimonials had bipartisan, unanimous backing by the five FTC commissioners and will go into effect later this fall. The rule prohibits a range of abusive practice by online marketers, endorsers, and businesses the sell online, including creating, purchasing or selling fake reviews and testimonials, incentivizing a consumer to write a review expressing a particular positive or negative sentiment, failing to clearly disclose when a review or endorsement is made by a company officer or employee, and suppressing negative reviews through intimidation or threats. Violations of the new rule could result in FTC enforcement action leading directly to fines, a priority of the FTC following the Supreme Court’s decision in AMG Capital Management v. FTC that pared back the agency’s authority to impose certain fines. While the new rules only apply to the direct participants in the processes of creating and using fake reviews and deceptive testimonials, sparing the digital platforms that host consumer reviews from new duties or liabilities, the regulator clearly believes that digital platforms should continue to invest in efforts to help deal with the problem, noting that they bear “significant responsibility for combatting fake reviews.”

Context – Consumer reviews have been a top benefit of the internet, but frauds and deceits, often powered by an international fake review industry, have been a chronic problem. Regulators and leading online companies are engaged. The new FTC rules follow their updated online “Endorsement Guidelines” released in June. The UK CMA updated its guidance for online influencers last December and the Digital Markets, Competition and Consumers Bill enacted in May includes a section on fake reviews. An initial regulatory consultation is expected this fall. Finally, a collection of the leading review platforms has formed the Coalition for Trusted Reviews to further corporate and government efforts.