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Welcome to The Fineprint, where we sweat the small stuff that makes a big difference.

True or false… You can’t marry the same man four times in Kentucky.
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Now let’s take a look at the most interesting legal developments that took place over the past 7 days, including:

• The EU declares regulatory war on Elon Musk’s X, instigating a battle that could shape the future course of the internet.

• A dangerous TikTok craze escalates to the point of legal action.

• Uber is ordered to hand over thousands of incident reports following accusations that they’ve failed to protect the safety of passengers.

But first…

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REGULATION

What Does EU vs X Mean For The Future Of The Internet?

Why we’re paying attention - In 2022, the EU granted themselves new powers to dictate how online business operate. We’re about to get some clues into whether these new powers will be used to make the Internet a better place or to simply reshape it according to the EU’s political will. The battle between X.com and the EU could have repercussions for users of X, online businesses, and frankly anyone who uses the internet.

If you were active on X last Friday, you may have witnessed a fight break out that could ultimately shape the future of the internet. 

In one corner, you have Elon Musk and X.com

In the other corner, you have the EU and their Digital Services Act (DSA). 

In a nutshell, the DSA is a lonnng list of rules and regulations that the EU wants online businesses around the world to follow. 

The rules first came online in November 2022 and they enforce everything from how content is moderated, to how data is stored, and they even go as far as forbidding “dark patterns” when it comes to how apps and sites are designed. 

What are “dark patterns,” exactly? 

Well, therein lies the future-of-the-internet part. 

Because the most favorable case for the DSA is that its rules make the internet a more transparent and safe place for users. Hear, hear, to that!

But the least charitable take of the DSA is that it: 

• gives unelected bureaucrats in the EU the power to censor online speech

• mandates burdensome compliance requirements that stifle innovation

• uses broad and vague definitions that give regulators excessive discretion, potentially leading to arbitrary enforcement and political bias…

… e.g. dark patterns. 

So the DSA is either a regulatory superhero or the red tape monster hiding under the bed.

It hasn’t been clear yet which version the DSA will grow up to become because the EU hasn’t investigated anyone. 

Until now. 

On Friday, Elon Musk’s X became the first company to find itself in the DSA’s crosshairs. 

The EU issued a report arguing that X runs afoul of the DSA in a few areas.

THE CHARGES

1. Using dark patterns and thus misleading users

The main dark pattern in question is X’s use of blue tick symbols. 

“Since anyone can subscribe to obtain such a ‘verified’ status,” the EU report states, “it negatively affects users' ability to make free and informed decisions about the authenticity of the accounts and the content they interact with.”

In other words, the EU believes that the blue tick system is deceptive and, therefore, no bueno.

2. Failing to provide an adequate ad repository

Social media companies are required to have an online site where users can search for all of the ads running on their platform. 

For example, the Meta Ads Library. 

While X does have an ads library, the EU argues that it contains “design features and access barriers that make the repository unfit for its transparency purpose towards users.”

3. Blocking access to data for researchers

Again, X does allow researchers access to its API and data. 

But presumably the EU is not happy with the fact that researchers have to choose between a basic $100 a month plan or the more advanced $5,000 a month plan. 

THE PLOT TWIST

Musk shot back with, of course, a tweet/X post. 

If Musk’s accusations are legitimate, then it would indicate that the least charitable version of the DSA is true: it can be abused as a political weapon. 

On the other hand, if Musk’s claims don’t hold up to scrutiny, then perhaps the DSA is simply protecting us from X’s nefarious practices. 

Either way, Musk isn’t showing any signs of compliance… 

It’s too early to tell how this regulatory war will pan out. 

But here are some interesting possibilities to consider… 

UNCHARTERED TERRITORY

• What if the EU does, in fact, have some shady dealings exposed by Musk? Could it undermine the authority of the DSA? And could that lead to other companies ignoring its mandates?
  

• What happens if the EU fines Elon Musk for 6% of X’s annual revenue—the maximum penalty for breaching the DSA? Would Musk pay? And if he refuses, would the EU be willing to go as far as banning X from the European internet?
  

• How would EU citizens react to a ban of X? Would it be cheered or seen as a violation of their ability to express themselves? 

The DSA has the potential to reshape the internet. 

But this first confrontation with Musk, someone no stranger to legal battles, will likely determine the future of the act. 

Stay tuned…

SNIPPETS

American restaurant chain Chili’s ran an ad campaign in 2022 that used the hit 1994 song “Sabotage” by the Beastie Boys. Unfortunately, the chain did not get permission from the band. So now the boys are suing for two counts of copyright and trademark infringement—one for using the song ‘Sabotage’ in their ads, and one for using elements from the "Sabotage" music video. The band is seeking a jury trial with at least $300,000 in damages. This isn't the first time the Beasties have fought a copyright battle either; winning against Monster Energy and GoldieBlox in 2014 for similar musical misdeeds. #fightforyourright.

In 2023, 14-year-old Harris Wolobah tragically passed away after participating in the TikTok craze “One Chip Challenge.” The One Chip Challenge involved participants eating a single, exceptionally spicy Paqui Carolina Reaper chip without eating or drinking anything else afterward. On July 12th, the Wolobah parents began pursuing legal action against Paqui and the store where the teenager purchased the snack. They allege that Paqui negligently released a dangerous food product and marketed it towards children. Additionally, they accuse the store of selling the product to a minor, despite it being intended for adult consumption and meant to be kept out of reach of children.

Elon Musk scored a legal win on July 11th as a California court dismissed a lawsuit from Courtney McMillan, a former Twitter executive. She insisted Twitter owed eX-employees $500 million in extra severance pay after Musk axed 80% of the workforce post-2022. Ultimately, the legal battle came down to a technicality. McMillion’s case leaned on a federal law called ERISA that offers protection to pension plans. But ERISA does not apply to one-time severance payments. The irony that McMillan was head of benefits has not been lost on some commentators!

The U.S. District Court has finally given the green light to a $7 billion class action lawsuit against Apple, with a jury trial set for February 2026. This lawsuit, representing all U.S. Apple customers who spent $10 or more on iOS apps since 2008, alleges that Apple monopolized the iPhone app market by banning purchases outside its App Store, leading to inflated prices and forcing consumers to overpay. Many millions of Americans could qualify for a payout if Apple loses. But that also means the payout would be quite small once the 7 billion is divvied up into so many pieces, representing a big loss for Apple, and a small win for consumers.

On the other side of the world, Apple is being investigated by India's Competition Commission (CCI) for allegedly abusing its dominant position in the App Store market since 2021. On July 12th, they found that Apple’s practice of forcing developers to use its own payment system is classified as "abusive conduct and practices." Apple’s closed ecosystem has long been a key advantage and differentiator for the company. But it’s now becoming an ever larger magnet for lawsuits. Can we expect to see Apple’s legal bills become one of its fastest growing line items of 2024!?

In recent years, thousands of Uber passengers have reported being sexually assaulted by their drivers. An ongoing class action, comprised of 250 unique lawsuits, argues that Uber has been ignoring this problem and has failed to take appropriate measures to protect passengers. Last week, a Californian judge ordered Uber to hand over all safety reports that occurred between January 2017 and Dec. 31, 2020. “The Safety Reports,” writes the judge, “bear on what Uber knew, when it had notice of widespread sexual assault and harassment committed by its drivers against its passengers, and what response the company undertook.” Uber insists it has taken the matter seriously, pointing to the specialized training undertaken by their Incident Response Team, the fact that 99.9% of trips end without safety-related issues, and a year-over-year decline in sexual assault incidents. A pivotal issue in this case revolves around whether Uber bears vicarious liability for its drivers' conduct. While past cases have established that companies can be held accountable for their employees' actions, the gig economy introduces distinct challenges in defining such liability due to the classification of drivers as independent contractors rather than employees. Gig economy platforms are facing mounting pressure to treat their workers as the latter.

MEME

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The answer to today’s “did you know” is…

True. The third time had better be the charm in Kentucky or else the next attempt is considered a crime.

Remember: always read the Fineprint!