Featured Article : A Big Stink About Ink

After trying to dismiss a lawsuit from HP customers angry at a firmware update (meaning that their HP printers wouldn’t work with third-party ink cartridges), we look at how HP is answering the arguments within the antitrust ink cartridge lawsuit and what the implications could be for customers.

The Lawsuit

Back in January, printing premier HP was sued in a Federal court in Chicago by 11 consumers (a class action lawsuit) who claimed that their HP printers wouldn’t accept replacement ink cartridges made by other manufacturers, thereby forcing them to pay artificially high prices for HP-branded cartridges. The lawsuit accused HP of violating US and state antitrust laws in a bid to monopolise the market for replacement ink.

The plaintiffs allege that they weren’t told that automatic software updates (firmware updates between late 2022 and early 2023) from HP would disable some printers unless HP-branded ink was used and that faced with non-functional printers, they were then forced to purchase more expensive HP-branded ink that they would not otherwise have purchased.

Damages

The plaintiffs, in this case, are seeking damages of greater than $5 million from HP, which include the cost of their useless third-party cartridges (the ones that won’t work in their printers because of the firmware update) as well as an injunction to disable the part of the firmware updates that prevent the usage of third-party ink.

Trying To Get IT Dismissed

HP’s lawyers recently attempted to have all 79 causes of action in the lawsuit dismissed on the grounds that the central premise of the Plaintiffs’ case was wrong, i.e. that HP failed to disclose to consumers that their printers were equipped with “dynamic security” measures designed to prevent the use of third-party printer cartridges that copy HP’s security chips, thereby locking them into an aftermarket where they were overcharged.

HP argued that it goes to great lengths to disclose that its printers are intended to work only with cartridges that “have an HP chip, and that they may not work with third-party cartridges that do not have an HP chip.” HP also argued that “this information is displayed in clear terms on the printer box, on HP’s website, and in many other materials.” It also highlighted that “many third-party cartridges are not affected by dynamic security. HP does not block cartridges that reuse HP security chips, and there are many such options available for sale. Nor does HP conceal its use of dynamic security.”

HP’s lawyers additionally argued that the plaintiffs also didn’t allege that they didn’t authorise firmware updates in their printers and that many plaintiffs also claim that they purchased HP-branded ink cartridges after receiving the software or firmware updates, and that their printers began to again function properly.

In short, HP’s lawyers attempted to find a long list of reasons to have the lawsuit dismissed.

Previously

These types of allegations against HP have gone on for some time now. For example, back in 2019, HP agreed to resolve related consumer claims in a California case, for a $1.5 million payment, without admitting any wrongdoing (as part of the settlement). However, just last year (in California) a judge said that HP must at least face some claims that it designed some all-in-one printers to stop scanning and faxing when the machine was low on ink, thereby forcing consumers to buy cartridges.

The Backdrop

All these antitrust printing arguments are taking place at a time when HP has been through a long period of shrinking revenues, mainly due to enterprise customers affected by the uncertain economic environment, holding off on their hardware purchases a bit longer.

Instant In Subscription & All-in-One service

Following a strategy re-think, two solutions that HP has devised to help it through these difficult times are its ‘Instant Ink’ services and its All-in-One service, both of which see it focusing on a subscription model going forward.

HP’s Instant Ink service is a subscription-based model that is beneficial for users who want to avoid the inconvenience of running out of ink and dealing with last-minute replacements. It also helps in managing printing costs more predictably. With Instant Ink (for a monthly fee, on an agreed plan), the HP printer’s ability to monitor ink levels means that before users’ ink runs low, HP sends replacement cartridges directly to the doorstep. HP claimed to have 13 million sign-ups to the service back in the beginning of March.

As the name suggests, The All-in-One service, which launched in the US last month, includes not just the ink but hardware as well, i.e. the HP Envy or HP OfficeJet models. This is also a two-year subscription contract, based on a printed page plan, with cancellation fees (to raise the barriers to exit).

In addition to trying to reduce its costs, HP’s CEO, Enrique Lores, speaking recently at the Morgan Stanley Technology, Media and Telecom conference outlined HP’s strategy since the 2019 rethink as trying to “protect supplies revenue by upping subscription services, selling hardware loaded with ink, smart models, and charging more for printers when a customer isn’t committing to HP ink.”

AI Apps Too

HP is also hoping that AI will boost PC sales and has indicated that alongside its PCs, it’s developing new AI applications to run on top of its installed base of more than 200 million commercial devices.

Printing Declining Anyway

Despite HP’s court battles over printer ink and its move to a subscription-based model, for many businesses, the need (and demand) for printers and ink has declined in recent years. This has been due to factors like the greater proliferation of digital tools and technologies, advancements in cloud computing and software-as-a-service (SaaS) platforms and businesses are moving towards greener practices (despite printer companies trying to produce more sustainable/greener ink). Also, the need to reduce costs has favoured digital storage over printed documents, alongside a disruption in global supply chains (e.g. for paper), plus the effects of the pandemic also meant a lowering of demand for printers and ink.

What Does This Mean For Your Business?

Having to constantly renew expensive ink cartridges or running out of ink at the wrong time have long been a significant cost and source of frustration to many businesses. In recent years, however, many businesses, for many of the reasons above, have updated to becoming more reliant on the cloud and digital solutions rather than printed documents. HP itself has had to change its strategy in 2019, moving customers to a subscription model for its ink and hardware in order to weather difficult economic times and falling demand.

This court case around HP’s attempt to curtail consumers’ adoption of cheaper third-party ink cartridges in favour of more expensive HP ones is likely to be unwelcome and reputationally damaging for HP at a time where it needs to protect its position in the marketplace. For competitors, HP’s dominance being challenged is good news and could provide a beneficial commercial outcome for them if events go the wrong way for HP.

For business customers who still need a printer, the ability to have trouble-free operation with their printers and to be able to benefit from the choice of using different, lower-priced print cartridge alternatives are likely to be valuable. Most of us will understand the frustration that printer ink problems can cause.

Looking ahead for HP, its cost-cutting and its shift to a subscription model for its ink/printer products, plus the promise of developing AI apps for its large installed base of commercial devices are ways it hopes to turn around the declining revenues of challenges of recent years. The company has a trusted business brand and the hope for HP is that their valuable brand won’t be tarnished too much by the outcome of the lawsuit that’s currently making the headlines.

Featured Article : Google Deleting Millions Of Users’ Incognito Data

As part of a deal to resolve a class action lawsuit in the US dating back to 2020, Google has said it will delete the incognito mode search data of millions of users.

What Lawsuit? 

In June 2020 in the US, three Californians named Chasom Brown, Christopher Castillo, and Monique Trujill (along with William Byatt of Florida and Jeremy Davis of Arkansas) brought a lawsuit against Google’s Incognito mode. They filed the class-action lawsuit on behalf of themselves and potentially millions of other Google users who believed their data was being collected by Google despite using Incognito mode for private browsing.

The plaintiffs accused Google of capturing data despite assurances that it would not, thereby misleading users about the privacy level provided by Incognito mode. For example, internal Google emails highlighted by the lawsuit appeared to show that users using incognito mode were actually being tracked by Google to measure web traffic and sell ads.

The original lawsuit was seeking at least $5 billion in damages from Google.

What’s Been Happening? 

Since the lawsuit was originally filed, some of the main events of note between the plaintiffs and Google have included:

– Google attempting to have the lawsuit dismissed, arguing that it never promised complete privacy or non-collection of data in Incognito mode. At the time, Google pointed to the disclaimers presented to users when opening an Incognito tab, which stated that activity might still be visible to websites, web services, and employers or schools.

– A judge then rejected Google’s request to dismiss the case. The judge emphasised that Google didn’t explicitly inform users that it would collect data in the manner alleged by the plaintiffs. This decision meant that the lawsuit could again move forward.

– Finally, back in December last year, with the scheduled trial due to begin in February 2024, the lawyers for Google and the plaintiffs announced that a preliminary settlement had been reached, i.e. Google had agreed to settle the class-action lawsuit. In doing so, Google acknowledged that it needed to address the plaintiffs’ concerns (but without admitting wrongdoing).

– In January, however, following the preliminary settlement announcement, Google updated its disclosures, clarifying that it still tracked user data even when users opted to search privately or used its “Incognito” setting.

– Google also said it was trialling a new feature that could automatically block third-party cookies (to prevent user activity being tracked) for all Google Chrome users and had made the block automatic for Incognito just after the lawsuit was filed. It’s also understood that as part of the settlement deal, this automatic block feature will stay in place for 5 years.

Mass Deletions 

Under the terms of the final settlement, the full details of which are not publicly known, Google has agreed to delete hundreds of billions of the private browsing data records that it collected (with incognito).

Google Says…

A Google spokesperson has been quoted as saying that the company was pleased to settle the lawsuit which it “always believed was meritless” and that it is “happy to delete old technical data that was never associated with an individual and was never used for any form of personalisation”. 

What Does This Mean For Your Business? 

This agreement came after extensive legal battles and discussions, which in themselves highlight the complexities surrounding user privacy and data collection practices in the digital age. Part of the complexity in the case appeared to be trying to decide whether, as the plaintiffs’ lawyers argued, Google was misleading users and violating privacy and wiretapping laws or, as Google’s lawyers said, Incognito mode was designed to allow users to browse without saving activity to their local device but not to entirely prevent Google or other services from tracking user activities online.

Google has consistently denied wrongdoing and maintained its stance. However, Google (and its parent company Alphabet) are already facing two other potentially painful monopoly cases brought by the US federal government and had to pay £318m in 2022 in settlement of claims brought by US states over it allegedly tracking the location of users who’d had opted out of location services on their devices. It’s not surprising, therefore, that Google has opted to settle in this most recently concluded case although, in addition to having to delete hundreds of billions of browsing records, there are no public details yet of what else it’s cost.

The settlement, therefore, will be seen by many as a victory in terms of forcing dominant technology companies to be more honest in their representations to users about how they collect and employ user data. For big tech companies such as Google, privacy and tracking have become a difficult area. Google had already moved to free itself from other volatile privacy matters around browsing by announcing back in 2020 that it would be looking to eliminate third-party cookies within two years anyway (which has been delayed) and cookies have been subject to greater regulation in recent years.

This latest settlement is bad news for Google (and advertisers) however it is likely to be good news for the many millions of Google Chrome users whose interests were represented in the class-action lawsuit.

Tech News : Copyrights Conundrum: OpenAI Sued

It’s been reported that a trade group for U.S. authors (including John Grisham) has sued OpenAI, accusing it of unlawfully training its chatbot ChatGPT on their work.

Which Authors? 

The Authors Guild trade group has filed the lawsuit (in Manhattan federal court) on behalf of a number of prominent authors including John Grisham, Jonathan Franzen, George Saunders, Jodi Picoult, “Game of Thrones” novelist George R.R. Martin, “The Lincoln Lawyer” writer Michael Connelly and lawyer-novelists David Baldacci and Scott Turow.

Why? 

The Guild’s lawsuit alleges that the datasets that have been used to train OpenAI’s large language model (LLM) to respond to human prompts include text from the authors’ books, which may have been taken from illegal online “pirate” book repositories.

As proof, the Guild alleges that ChatGPT can generate accurate summaries of the authors’ books when prompted (including details not available in reviews anywhere else online), which indicates that that their text must be included in its database.

Also, the Authors Guild has expressed concerns that ChatGPT could be used to replace authors and instead could simply “generate low-quality eBooks, impersonating authors and displacing human-authored books.” 

Threat 

The Authors Guild said it organised the lawsuit after witnessing first-hand, “the harm and existential threat to the author profession wrought by the unlicensed use of books to create large language models that generate texts.”  

The Guild cites its latest author income survey as an example of how the income of authors could be adversely affected by LLMs. For example, in 2022 authors (according to the survey) earned just over $20,000, including book and other author-related activities, and although 10 percent of authors earn far above the median, half earn even less.

The Authors Guild says, “Generative AI threatens to decimate the author profession.”  

The Point 

To illustrate the main point of the Guild’s allegations, Scott Sholder, a partner with Cowan, DeBaets, Abrahams & Sheppard and co-counsel for Plaintiffs and the Proposed Class, is reported on their website as saying : “Plaintiffs don’t object to the development of generative AI, but Defendants had no right to develop their AI technologies with unpermitted use of the authors’ copyrighted works. Defendants could have ‘trained’ their large language models on works in the public domain or paid a reasonable licensing fee to use copyrighted works.”  

Open Letter With 10,000 Signatures 

The lawsuit may have been the inevitable next step considering that back in July, the Authors Guild submitted a 10,000 signature open letter to the CEOs of prominent AI companies (OpenAI, Alphabet, Meta, Stability AI, IBM, and Microsoft) complaining about the building of lucrative generative AI technologies using copyrighted works and asking AI developers get consent from, credit, and fairly compensate authors.

What Does Open AI Say? 

As expected in a case where so much may be at stake, no direct comment has been made public by OpenAI (so far) although one source (Forbes) reported online that an OpenAI spokesperson has told it was involved in “productive conversation” many creators around (including the Authors Guild) to discuss their AI concerns.

Where previous (copyright) lawsuits have been filed against it, in its defence OpenAI is reported to have pointed the idea of fair use that could be applied to LLMs.

Others 

Other generative AI providers are also facing similar lawsuits, e.g. Meta Platforms and Stability AI.

What Does This Mean For Your Business? 

Ever since ChatGPT’s disruptive introduction last November with its amazing generative abilities (e.g. with text and code, plus the abilities of image generators), creators (artists, authors, coders etc) have felt AI’s negative effects, expressed their fears about it, and felt the need to protest. For example, the Hollywood actors and writers strikes, complaints from artists that AI image generators have copied their styles, and now the Authors Guild are all part of a growing opposition who feel threatened and exploited.

We are still in the very early stages of generative AI where it appears to many that the technology may be running way ahead of regulation, and where AI providers may appear to be able to bypass areas of consent, copyright, and crediting, and in doing so, use the work of others to generate profits for themselves. This has led to authors, writers, actors, and other creatives fearing a reduction or loss of income and fearing that their skills and professions could be devalued, and that they can and will be replaced by AI. Also, they fear that generative AI could be preferred by studios and other content providers to reduce costs and complication, leading to the inevitable, multiple legal fights that we’re seeing now to clarify boundaries and protect themselves and their livelihoods. In the case of the very powerful Authors Guild, OpenAI will need to bring its ‘A’ game to the dispute as the Authors Guild points out it’s “here to fight” and has “a formidable legal team” with “expertise in copyright law.”

This is not the only lawsuit against an AI provider and there are likely to be many more and many similar protests until legal outcomes provide more clarity of the boundaries in the altered environment created by generative AI.