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Spotify hit with $1.6 billion copyright lawsuit

Scott Beale / AP

Wixen Music Publishing, which manages songs by Tom Petty, Stevie Nicks and more, is suing Spotify for $1.6 billion for allegedly using thousands of songs without proper licensing, Variety reports. It's also seeking injunctive relief for damages.

Why it matters: Spotify has been hit with numerous complaints and lawsuits from the music industry in the past for not giving music creators a fair share of revenue, and for distributing music without proper licenses. This suit is one of the biggest, and it's happening as Spotify prepares to go public through a direct listing in the near future.

The lawsuit was filed just before the new year at a federal court in California. Wixen says Spotify didn't adequately compensate the music label or its artists and knowingly distributed its clients' music without the proper licenses. Spotify responded by filing court papers Friday that questioned whether Wixen's clients authorized the record label to include their names in a suit against Spotify without giving them enough opt-out time.

Go deeper: Copyright problems have more commonly plagued video streaming companies like YouTube. YouTube and its rival Facebook have been doubling down on music streaming deals with record labels over the past year. Still, more music is being streamed from audio services than video.

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Apple buys Canadian startup to help developers build iPhone apps

Apple

Apple has acquired BuddyBuild a small Canadian company that helps developers build and test mobile apps.

BuddyBuild, not surprisingly, will be winding down its Android-related work to focus solely on helping with iPhone app development. The team, which includes roughly 40 engineers, will remain based in Vancouver.

Why it matters: Making life as easy and lucrative for developers as possible is key for both Apple and Google, both of which have acquired various startups in the area.

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Airbnb beats landlord company in home-sharing lawsuit

A woman browses the site of US home sharing giant Airbnb. Photo: John Macougall / AFP via Getty Images

Airbnb has defeated a lawsuit by Apartment Investment & Management Company, one of the largest residential landlords in the U.S., that claimed the home-sharing company promoted and profited from tenants who broke their leases through unauthorized sublets.

The ruling: A federal judge in Los Angeles sided with Airbnb's claim that the company is protected under the Communications Decency Act, which ruled that online service providers aren't liable for the content users post, according to Bloomberg. The judge said that the Airbnb hosts, not Airbnb, are responsible for the listing information that AIMCO deemed "illegal."

The backdrop: AIMCO claimed that the suit centered on concerns over that Airbnb guests might damage its properties or bother other tenants. But as Axios' Kia Kokalitcheva pointed out when the suit was first filed in February, AIMCO's financial interest was "hard to miss" — Airbnb makes all of the money in its home-sharing services, while the landlords make none.

In an effort to appease landlords and building owners, Airbnb unveiled a "Friendly Buildings Program" that shared data about the tenant's activity and gave them a cut of the earnings.

Statement from Airbnb: "The partnerships we have established with landlords have made it clear that home sharing can be a win-win situation for everyone," Airbnb spokesman Nick Papas said in a statement. "[The program] allows tenants to leverage their greatest expense to make extra money and can create new economic opportunities for landlords."

Take note: AIMCO also filed a separate lawsuit against Airbnb in Florida, so the fight isn't officially over just yet.

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Ousted SoFi CEO is back with a new startup

Former SoFi CEO Mike Cagney. Photo: Rob Lever/Getty

Mike Cagney, the recently ousted CEO of SoFi, is seeking up to $25 million for a new fintech startup focused on home equity lines of credit, according to Recode. His co-founder is wife June Ou, SoFi's former CTO.

Why it matters: If 2017 was the year in which VCs began to fire controversial execs, 2018 may be the year in which they're forced to decide on quick-turn second acts.

More from Recode:

"Cagney's outreach is said to be aggressive and extensive — and given his controversial past, it has investors talking. He has not admitted any wrongdoing amid the news stories and lawsuits against SoFi, which helps students refinance student loans... Some of the initial money for the startup will come from Cagney's own pockets, people said. That money will likely be enough to launch the startup."
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Report: Amazon in talks with companies to sell products on Alexa

Michel Spingler / AP

Amazon is in touch with companies like Procter & Gamble, Clorox and others to sell their products through its assistant technology called Alexa, according to a new report from CNBC. Early discussions are debating functionality similar to Google's digital search advertising product, where marketers could pay to have their products elevated in search rankings.

Why it matters: The move comes amid a major advertising push by the tech giant to compete with the likes of Google and Facebook for a piece of the $83 billion U.S. digital ad market, and Amazon is well-positioned in the voice sector to experience rapid growth.

  • Amazon's Echo, the voice product that powers Alexa, dominates (70.6% of market share) every other voice-assistant manufacturer, including Google Home, which gives it a clear lead in the voice-assisted advertising market.
  • By 2020, leading technology research firm Gartner predicts that 30% of web browsing will be done via voice. Presumably, a large chunk of those search commands could be monetized. The U.S. search ad market is expected to grow to $45 billion by 2019.
A variety of partnerships are being tested, according to CNBC.
  • One such partnership could feature product recommendations based on purchase history.
  • Another could utilize Amazon Alexa's "skills," or task functions. For example, a user asking Alexa for help packing for a camping trip could be pushed to buy a particular brand's tent.
  • Skills-based advertising could offer enormous opportunities. Alexa has developed more than 25,000 "skills," up from roughly 5,000 one year ago.
  • Some sponsorships have also been set up that don't revolve around user purchase history, but rather brand recommendations.
Currently, Alexa doesn't make much money from advertising, other than audio ads played in response to users asking Alexa to use certain skills, like an ad running before Alexa plays a song.
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Trump admin urges Iran to lift restrictions on social media

Protestors in Tehran, Iran on Dec. 30. Photo: Anadolu Agency / Getty Images

The Trump administration has called on the Iranian government to lift restrictions on social media apps including Instagram and Telegram, AP reports. The restrictions were temporarily imposed to "maintain tranquillity” during the anti-government protests in the country, per Iran's state-sponsored news agency. Iran's government blocked access to social media as part of its "iron fist" response to the pro-reform protests.

Why it matters: Tech platforms have allowed groups to organize around ideas in ways that they could not before. Many argued that access to social media helped facilitate protests that led to democratic revolution during the Arab Spring in 2012.

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Facebook, YouTube double down on music rights

Youtube Rego Korosi via Flickr CC

Facebook and Universal Music struck a multi-year licensing deal just before the holiday to let users across all Facebook media properties use recorded music and publishing catalogs for video across Facebook.

Just days before, YouTube and Universal Music Group announced a "global, multi-year agreement," and Bloomberg reported that the tech giant also struck a deal with Sony Music giving YouTube music licenses from three of the biggest record labels: Universal, Sony and Warner.

Why it matters: The negotiations are a sign of improving relations between the music industry and tech giants. Labels have argued for years that YouTube in particular did not offer strict copyright protections or pay music creators fairly.

  • For YouTube, the deals should give the tech giant more access to content to sell subscriptions. The company announced last month that it will launch its own subscription music program.
  • For Facebook, Universal is the first major music company to license its recorded music and publishing catalogs for video and other social experiences. Until now, users couldn't upload videos with non-licensed music in them, making it harder for users to post their content and providing less exposure for artists whose songs are commonly used in user-generated videos.
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FTC approves settlement with Lenovo over advertising software

Eric Risberg / AP

The Federal Trade Commission said on Tuesday it has given a final approval to a settlement with Lenovo regarding the company's practice of preinstalling an advertising software program on some laptops that caused "serious security vulnerabilities" in order to show ads to consumers.

What this means: In its decision, the FTC said Lenovo is prohibited from misrepresenting any features of software it preinstalled on laptops that would "inject advertising into consumers' Internet browsing sessions or transmit sensitive consumer information to third parties."

  • If Lenovo preinstalls this type of software, the company would be required to get consumers' consent before the software runs on their laptops, the FTC said in a statement.
  • The company is also mandated for 20 years to implement a software security program for most consumer software preloaded on its laptops. The security program will be subjected to third-party audits, the FTC said.
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Surveillance and sex-trafficking on Congress' to-do list

People walk and jog across the East Plaza of the Capitol as Congress prepares to return from the Christmas recess on Tuesday, Jan. 2, 2018. Photo: Bill Clark/ CQ/ Roll Call via Getty)

Lawmakers are coming back later this month. So are the big battles over tech policy.

The most urgent: The Section 702 surveillance law — used by the intelligence community to justify warrantless surveillance of electronic communications of foreign nationals located abroad — expires in mid-January, thanks to a short-term extension Congress passed before leaving for the holidays.

That debate pits hard line intelligence hawks against people like Sens. Rand Paul and Ron Wyden, who have threatened a filibuster when faced with the prospect of a long-term extension of the law. In the middle are lawmakers who are pushing for light reforms that won't satisfy the privacy advocates.

Also on the radar:

  • Net neutrality: The battle over net neutrality has moved back to Capitol Hill. There are several bills released or in the works that would aim to put compromise net neutrality rules in place after the FCC rolled back regulations that took effect in 2015. Those haven't gotten pickup from Democrats — who are coalescing behind a plan to pull back the FCC's repeal through congressional action.
  • Self-driving cars: Lawmakers in the Senate have been slowly moving forward with legislation meant to encourage the deployment of self-driving cars, but it's met some resistance from their colleagues. California Sen. Dianne Feinstein said shortly before the end of 2017 that she was holding the bill back from being approved through a streamlined process that bypasses debate on the floor of the Senate because she was concerned about the nascent nature of the vehicles.
  • Sex-trafficking: Supporters of a Senate anti-trafficking measure that would create more legal liability for services that post user generated content online are pushing forward. However, they suffered a setback late last year when a tech-backed alternative proposal moved forward in the House.

Go deeper: There are a number of broader issues that matter to tech, including potential legislation on immigration and infrastructure. Axios' Caitlin Owens has a rundown of what's next on Capitol Hill here.

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Twitter suspends German politician in hate speech crackdown

Twitter suspended the account of Beatrix von Storch of the right-wing Alternative for Germany (AfD) for violating hate speech rules. Photo: Alexander Koerner / Getty Images

Twitter temporarily suspended the account of Beatrix von Storch, a far-right member of Germany's parliament, shortly after she sent an anti-Muslim tweet on New Year's Eve, per CNN. Twitter said the message, in which von Storch accused police of appeasing "barbaric, gang-raping Muslim hordes of men," violated its rules on hate speech.

Why it matters: A new German law, which was enacted in October but went into full effect Monday, requires that social media companies like Twitter and Facebook remove hate speech and fake news from their platforms within 24 hours of being flagged or face fines up to €50 million. Twitter's suspension of von Starch signals that the law is being taken seriously.