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Featured May 15, 2023

China Had ‘Supreme Access’ to US TikTok Data, Claims Ex-ByteDance Exec

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China Had 'Supreme Access' to US TikTok Data, Claims Ex-ByteDance Exec

A former top executive at ByteDance claimed in a lawsuit that the Chinese Communist Party (CCP) “maintained supreme access” to data belonging to the TikTok owner, including data stored in the U.S.

Yintao Yu is suing Chinese tech company ByteDance for wrongful dismissal. In a suit filed in San Francisco Superior Court on May 12, Yu said ByteDance “served as a useful propaganda tool for the Chinese Communist Party,” as reported by the New York Times.

“The Committee maintained supreme access to all the company data, even data stored in the United States,” the complaint said. Yu served as ByteDance U.S. head of engineering from August 2017 to November 2018.

Also read: China Wants AI Chatbots To Follow Communist Party Censorship Rules

Enforcing Communist Party values

His allegations come as the U.S. government threatened to ban TikTok amid rising concerns over “national security” and data privacy. Federal officials have repeatedly voiced fears that China could use the popular video sharing app as a tool for espionage.

They are worried TikTok could be used to influence political outcomes in the U.S. In March, Congress questioned TikTok’s CEO Shou Chew about the app’s Chinese ownership. FBI director Christopher Wray, said TikTok “screams out with national security concerns.”

The U.S. is a key market for ByteDance, with over 150 million people using TikTok in the country. But several U.S. states banned the app from government devices since November.

According to the lawsuit, Yintao Yu alleged that inside ByteDance’s Beijing headquarters, the CCP “had a special office or unit, which was sometimes referred to as the ‘Committee’.” It reportedly “guided how the company advanced core Communist values” in its apps.

While the ‘Committee’ did not work for ByteDance, it “played a significan role” in the firm’s operations and had a “death switch” that could turn off the Chinese apps completely. The suit claimed the CCP could also access U.S. user data via a “backdoor channel in the code.”

ByteDance was “aware that if the Chinese government’s backdoor was removed from the international/U.S. version of the app, the Chinese government would, it feared, ban the company’s valuable Chinese-version apps,” it said.

Yu accused the company of promoting “nationalistic content [that] served to both increase engagement on ByteDance’s websites and to promote support of the CCP.”

He claimed that the company responded well to requests from the CCP to share information and to “elevate or remove” content at the party’s bidding.

ByteDance denies wrong doing

In a statement shared with the New York Times, a ByteDance spokesperson denied that the company shared user data with Chinese authorities.

“We plan to vigorously oppose what we believe are baseless claims and allegations in this complaint,” the statement said.

“Mr. Yu worked for ByteDance Inc. for less than a year and his employment ended in July 2018. During his brief time at the company, he worked on an app called Flipagram, which was discontinued years ago for business reasons,” it added.

Meanwhile, Yu accused ByteDance of deliberately promoting anti-Japanese content. The lawsuit says the company is “similarly positioned to exploit nationalistic sentiments in other countries like the United States.”

He also accused the tech giant of pillaging data from rivals such as Snapchat and Instagram without user consent. The suit states that “ByteDance had for years engaged in a worldwide scheme (including in California) to steal and profit from the content of others.”

ByteDance would then post the content on its own services using social media accounts run by bots, it said. Yu revealed that he reported the matter to TikTok’s algorithm head Zhu Wenjia, who was “dismissive” and said that “it was not a big deal.”

TikTok seeks to protect user data

On its part, TikTok has sought to clarify to U.S. lawmakers that China does not influence how it runs its operations. The company has since pledged to spend $1.5 billion on a program to protect U.S. user data and content from Chinese government access or influence.

The plan would seal off U.S. operations, with all data stored within the country at Oracle, the U.S. tech firm. Oracle would have access to TikTok’s “algorithmic code and flag issues for government inspectors.”

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Image credits: Shutterstock, CC images, Midjourney, Unsplash.

AI

ChatGPT’s Bogus Citations Land US Lawyer in Hot Water

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ChatGPT's Bogus Citations Land US Lawyer in Hot Water

A lawyer in the United States is facing disciplinary action after his law firm used popular AI chatbot ChatGPT for legal research and cited fake cases in a lawsuit.

Steven A. Schwartz, who is representing Roberto Mata in a lawsuit against Colombian airline Avianca, admitted to using OpenAI’s ChatGPT for research purposes, and that the AI model provided him with citations to cases that did not exist.

Mata is suing Avianca for a personal injury caused by a serving cart in 2019, claiming negligence by an employee.

Also read: Opera Unveils GPT-Powered AI Chatbot Aria

Bogus all the way

According to a BBC report, the matter came to light after Schwartz, a lawyer with 30 years experience, used these cases as precedent to support Mata’s case.

But the opposing counsel flagged the ChatGPT-generated citations as fake. US District Court Judge Kevin Castel confirmed six of them as non-existent. He demanded an explanation from Schwartz, an attorney with New York-based law company Levidow, Levidow & Oberman.

“Six of the submitted cases appear to be bogus judicial decisions with bogus quotes and bogus internal citations,” Judge Castel wrote in a May 4 order.

“The court is presented with an unprecedented circumstance.”

The supposed cases include: Varghese v. China South Airlines, Martinez v. Delta Airlines, Shaboon v. EgyptAir, Petersen v. Iran Air, Miller v. United Airlines, and Estate of Durden v. KLM Royal Dutch Airlines, none of which did not appear to exist to either the judge or defense.

Lawyer claims ignorance

ChatGPT is a large language model developed by OpenAI. Launched in November, the AI is trained on billions of data from the Internet and can perform a variety of tasks like generate text, translate languages, and even write poetry, and solve difficult math problems.

But ChatGPT is prone to “hallucinations” – tech industry speak for when AI chatbots produce false or misleading information, often with confidence.

In an affidavit last week, Schwartz said he was “unaware of the possibility that its [ChatGPT] content could be false.” He also said that he “greatly regrets” using the generative AI and will only “supplement” its use with absolute caution and validation in future.

Schwartz claimed to have never used ChatGPT prior to this case. He said he “greatly regrets having utilized generative artificial intelligence to supplement the legal research performed herein and will never do so in the future without absolute verification of its authenticity.”

The career attorney now faces a court hearing on June 8 after accepting responsibility for not confirming the authenticity of the ChatGPT sources. Schwartz was asked to show cause why he shouldn’t be sanctioned “for the use of a false and fraudulent notarization.”

ChatGPT’s confident lies

According to the BBC report, Schwartz’s affidavit contained screenshots of the attorney that confirmed his chats with ChatGPT.

Schwartz asked the chatbot, “is varghese a real case?”, to which ChatGPT responded “yes, [it] is a real case.” When asked for sources, it told the attorney that the case could be found “on legal research databases such as Westlaw and LexisNexis”.

Again, the attorney asked: “Are the other cases you provided fake?” ChatGPT responded “No”, adding that the cases could be found on other legal databases. “I apologize for the confusion earlier,” ChatGPT said.

“Upon double-checking, I found the case Varghese v. China Southern Airlines Co. Ltd., 925 F.3d 1339 (11th Cir. 2019), does indeed exist and can be found on legal research databases such as Westlaw and LexisNexis. I apologize for any inconvenience or confusion my earlier responses may have caused,” the chatbot replied with confidence.

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Cryptocurrencies

Hong Kong Police Launch Metaverse Platform to Fight Cyber Crime

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Hong Kong Police Launch Metaverse Platform to Fight Cyber Crime

The Hong Kong Police Force cybersecurity unit has launched a metaverse platform, CyberDefender, to promote metaverse crime prevention and highlight the risks associated with Web3. The initiative will equip citizens with skills and strategies relevant in tackling technology-related crimes in the digital age.

The city is also ramping up its regulatory efforts to prevent criminals from using crypto to launder money.

Also read: UK Police Record Child Abuse in the Metaverse

To mark the launch, the police force organized an inaugural event titled “Exploring the Metaverse” within the virtual realm.

This is an initiative to raise public awareness regarding the potential risks linked to the metaverse and Web3, at a time when digitalization is fast growing and gaining traction all over the world.

The launch event took place across three virtual venues and was organized on the newly-launched platform with the aim of engaging participants in proactive conversations about ensuring safety within this virtual realm.

During the event, chief inspector IP Cheuk-yu from the Cyber Security and Technology Crime Bureau (CSTCB) presented on the dangers associated with Web3 and urged the public to exercise caution.

Metaverse a breeding ground for criminals

There have been reports on cases of verbal and sexual harassment within VR games that surfaced last year. Later, campaigners said an avatar of a 21-year old researcher was sexually assaulted in Meta’s VR platform Horizon Worlds.

“All crimes in the cyberspace could also happen in the metaverse such as investment frauds, unauthorized access to systems, theft and sexual offenses,” said the chief inspectator.

UK police forces also recorded 45 cases of child abuse in the metaverse while 30,925 individual offences involving indecent images of children on social media platforms were also recorded in 2021-2022, according to figures from the National Society for the Prevention of Cruelty to Children (NSPCC).

The chief inspector further emphasized that the metaverse presents potential dangers such as hacking and theft of digital assets by modern cybercriminals.

“The decentralized nature of virtual assets in Web3 may also increase the likelihood of cybercriminals targeting endpoint devices, virtual asset wallets and smart contracts,” he added.

Attendees at the event were enlightened about the advancements made in combating crypto crime and the ongoing efforts to mitigate its impact, providing valuable insights into the evolving landscape of cybercrime and efforts taken to curb illicit activities involving digital assets.

Increase in cybercrimes

In 2022 alone, the city witnessed a staggering 2,336 virtual asset related crimes, according to the Hong Kong Police Force in a press release that accompanied the launch.

The incidences resulted in financial losses of $1.7 billion for victims. Figures from the police force also show that 663 cases of a similar nature have already been reported during the first quarter of 2023 alone.

These losses amounted to $570 million, an alarming increase of 75% compared to the same period last year. The police stated that most of the cases involved virtual asset investment.

“Criminals took advantage of the public’s lack of knowledge about virtual assets and lured them into non-existent investments,” they warned.

According to the police, such figures underscored the urgent need for proactive measures to address the rising trend in virtual asset-related crimes and protect individuals from significant financial harm.

City gets tough on money laundering

Concurrent with the introduction of the new metaverse platform, the Hong Kong Securities Regulatory Commission (HKSRC) released revised anti-money laundering (AML) guidelines.

The guidelines outline the tactics employed by offenders to launder money through digital assets and offers comprehensive measures for financial institutions to shield themselves from illicit engagements. Changes include enhanced Know Your Customer (KYC) and due diligence requirements.

Enforcing the enhanced KYC rules means Hong Kong is stepping up efforts to prevent dirty money from flowing through the city, which will also make it less attractive for criminals to use crypto for their illicit transactions.

Under the updated guidelines, institutions that facilitate crypto transactions valued at 8,000 RMB or more must collect identifying information about both sender and receiver.

International efforts

The increase in cyber-related crimes is pushing authorities to aggressively tackle the problem and raise awareness among the public.

Aside from Hong Kong, other jurisdictions adapting their AML guidelines to keep up with the use of digital assets by criminal networks include Japan, which recently announced stricter AML rules for crypto transfers. The country will specifically impose what is known as the “travel rule,” whereby exchanges must ensure details about the sender are shared with other parties.

If effective, efforts to fight crime are expected to be as international as the criminal networks themselves. Last month, reports suggested the International Revenue Service (IRS) would deploy cyber agents internationally to investigate the use of crypto in financial crimes.

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Business

Microsoft Accuses CMA of Irrationally Blocking $68.7bn Activision Takeover

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Microsoft Accuses CMA of Irrationally Blocking $68.7bn Activision Takeover

Microsoft has blamed Britain’s Competition and Market Authority (CMA) for “irrationally” blocking its $68.7 billion takeover of Call of Duty video game maker Activision.

The tech giant announced its plan to acquire Activision to “bring the joy and community of gaming to everyone, across every device,” back in January 2022. The proposed takeover aimed to bring Activision’s popular franchises, like Call of Duty, under Microsoft’s umbrella.

“Microsoft will acquire Activision Blizzard for $95.00 per share, in an all-cash transaction valued at $68.7 billion, inclusive of Activision Blizzard’s net cash,” stated the company.

Read Also: Google Opens Up Access to its Search Labs with Generative AI

However, its bid faced regulatory obstruction amid concerns over industry consolidation. The deal’s block provoked Microsoft to appeal, heightening anticipation for the outcome and its potential implications on the gaming landscape.

The regulatory body blocked Microsoft’s takeover of Activision in April, saying it would encourage market monopolies and stifle competition in the growing video game streaming market.

EU offers favorable conditions for businesses

The company has accused the regulator of making “fundamental errors” while blocking its deal.

Microsoft has claimed the CMA had not taken “proper account of three long-term commercial agreements which Microsoft had entered into with the other party” in the filing with the Competition Appeal Tribunal.

After the ruling, Microsoft president Brad Smith slated the regulator, suggesting the decision conveyed a “clear message” that the European Union (EU) offered more favorable conditions for starting a business in comparison to Britain.

Additionally, Activision, which is also the creator of the popular mobile game Candy Crush, accused the UK of having an unwelcoming business environment, stating that it was “closed for business.”

Hence, while the CMA has halted the acquisition, the EU has given the green light for the merger.

Need for broader understanding

Chancellor Jeremy Hunt expressed his belief that regulators should understand their “wider responsibilities for economic growth” following the blockage of the deal.

“I would not want to undermine that at all, but I do think it’s important all our regulators understand their wider responsibilities for economic growth” stated Hunt.

One of the reasons companies like Microsoft and Google are interested in investing in the UK is due to the presence of independent regulators that are not influenced by politicians, argued Hunt.

‘Takeover won’t be unfair’

The fact that the deal was blocked by the UK but welcomed by the EU has made headlines. Evidently in giving the green light, EU officials believe Activision’s takeover by Microsoft won’t be unfair.

In the meantime, it is still awaiting a confrontation with the US Federal Trade Commission which has filed a lawsuit to block the deal. The trial is scheduled to start in early August, with a decision expected by the end of the year.

“Where we diverged with the CMA was on remedies,” stated Margrethe Vestager, the EU’s competition chief.

She stated that a 10-year free license was granted to consumers, enabling them to stream all Activision games they hold licenses for via any cloud service.

“And why did we do this instead of blocking the merger?” she questioned.

“Well, to us, this solution fully addressed our concerns. And on top of that, it had significant pro-competitive effects.”

However, the Chief Executive of the CMA Sarah Cardell reiterated her support for the decision, emphasizing the regulator’s objective to establish favorable conditions for competition that would foster the growth of both large and small companies.

“I don’t find that we are operating sort of, broadly speaking, in a hostile environment,” stated Sarah.

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