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Apple contends Epic’s ban was a ‘self-inflicted’ prelude to gaming the App Store
Apple has filed legal documents opposing Epic’s attempt to have itself reinstated in the iOS App Store, after having been kicked out last week for flouting its rules. Apple characterizes the entire thing as a “carefully orchestrated, multi-faceted campaign” aimed at circumventing — perhaps permanently — the 30% cut it demands for the privilege of doing business on iOS.
Epic last week slyly introduced a way to make in-app purchases in its popular game Fortnite without going through Apple. This is plainly against the rules, and Apple soon kicked the game, and the company’s other accounts, off the App Store. Obviously having anticipated this, Epic then published a parody of Apple’s famous 1984 ad, filed a lawsuit and began executing what Apple describes quite accurately as “a carefully orchestrated, multi-faceted campaign.”
In fact, as Apple notes in its challenge, Epic CEO Tim Sweeney emailed ahead of time to let Apple know what his company had planned. From Apple’s filing:
Around 2am on August 13, Mr. Sweeney of Epic wrote to Apple stating its intent to breach Epic’s agreements:
“Epic will no longer adhere to Apple’s payment processing restrictions.”
This was after months of attempts at negotiations in which, according to declarations from Apple’s Phil Schiller, Epic attempted to coax a “side letter” from Apple granting Epic special dispensation. This contradicts claims by Sweeney that Epic never asked for a special deal. From Schiller’s declaration:
Specifically, on June 30, 2020, Epic’s CEO Tim Sweeney wrote my colleagues and me an email asking for a “side letter” from Apple that would create a special deal for only Epic that would fundamentally change the way in which Epic offers apps on Apple’s iOS platform.
In this email, Mr. Sweeney expressly acknowledged that his proposed changes would be in direct breach of multiple terms of the agreements between Epic and Apple. Mr. Sweeney acknowledged that Epic could not implement its proposal unless the agreements between Epic and Apple were modified.
One prong of Epic’s assault was a request for courts to grant a “temporary restraining order,” or TRO, a legal procedure for use in emergencies where a party’s actions are unlawful, a suit to show their illegality is pending and likely to succeed, and those actions should be proactively reversed because they will cause “irreparable harm.”
If Epic’s request were to be successful, Apple would be forced to reinstate Fortnite and allow its in-game store to operate outside of the App Store’s rules. As you might imagine, this would be disastrous for Apple — not only would its rules have been deliberately ignored, but a court would have placed its imprimatur on the idea that those rules may even be illegal. So it is essential that Apple slap down this particular legal challenge quickly and comprehensively.
Apple’s filing challenges the TRO request on several grounds. First, it contends that there is no real “emergency” or “irreparable harm” because the entire situation was concocted and voluntarily initiated by Epic:
Having decided that it would rather enjoy the benefits of the App Store without paying for them, Epic has breached its contracts with Apple, using its own customers and Apple’s users as leverage.
But the “emergency” is entirely of Epic’s own making…it knew full well what would happen and, in so doing, has knowingly and purposefully created the harm to game players and developers it now asks the Court to step in and remedy.
Epic’s complaint that Apple banned its Unreal Engine accounts as well as Fortnite related ones, Apple notes, is not unusual, considering the accounts share tax IDs, emails and so on. It’s the same “user,” for their purposes. Apple also says it gave Epic ample warning and opportunity to correct its actions before a ban took place. (Apple, after all, makes a great deal of money from the app as well.)
Apple also questions the likelihood of Epic’s main lawsuit (independent of the TRO request) succeeding on its merits — namely that Apple is exercising monopoly power in its rent-collecting on the App Store:
[Epic’s] logic would make monopolies of Microsoft, Sony and Nintendo, just to name a few.
Epic’s antitrust theories, like its orchestrated campaign, are a transparent veneer for its effort to co-opt for itself the benefits of the App Store without paying or complying with important requirements that are critical to protect user safety, security,
and privacy.
Lastly Apple notes that there is no benefit to the public interest to providing the TRO — unlike if, for example, Apple’s actions had prevented emergency calls from working or the like, and there was a serious safety concern:
All of that alleged injury for which Epic improperly seeks emergency relief could disappear tomorrow if Epic cured its breach…All of this can happen without any intervention of the Court or expenditure of judicial resources. And Epic would be free to pursue its primary lawsuit.
Although Apple eschews speculating further in its filings, one source close to the matter suggested that it is of paramount importance to that company to avoid the possibility of Epic or anyone else establishing their own independent app stores on iOS. A legal precedent would go a long way toward clearing the way for such a thing, so this is potentially an existential threat for Apple’s long-toothed but extremely profitable business model.
The conflict with Epic is only the latest in a series going back years in which companies challenged Apple’s right to control and profit from what amounts to a totally separate marketplace.
Most recently Microsoft’s xCloud app was denied entry to the App Store because it amounted to a marketplace for games that Apple could not feasibly vet individually. Given this kind of functionality is very much the type of thing consumers want these days, the decision was not popular. Other developers, industries and platforms have challenged Apple on various fronts as well, to the point where the company has promised to create a formal process for challenging its rules.
But of course, even the rule-challenging process is bound by Apple’s rules.
You can read the full Apple filing below:
Epic v. Apple 4:20-cv-05640… by TechCrunch on Scribd
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Robocallers face $225M fine from FCC and lawsuits from multiple states
Two men embodying the zenith of human villainy have admitted to making approximately a billion robocalls in the first few months of 2019 alone, and now face an FCC fine of $225 million and a lawsuit from multiple attorneys general that could amount to as much or more — not that they’ll actually end up paying that.
John Spiller and Jakob Mears, Texans of ill repute, are accused of (and have confessed to) forming a pair of companies to make millions of robocalls a day with the aim of selling health insurance from their shady clients.
The operation not only ignored the national Do Not Call registry, but targeted it specifically, as it was “more profitable to target these consumers.” Numbers were spoofed, making further mischief as angry people called back to find bewildered strangers on the other end of the line.
These calls amounted to billions over two years, and were eventually exposed by the FCC, the offices of several attorneys general and industry anti-fraud associations.
Now the pair have been slapped with a $225 million proposed fine, the largest in the FCC’s history. The lawsuit involves multiple states and varying statutory damages per offense, and even a conservative estimate of the amounts could exceed that number.
Unfortunately, as we’ve seen before, the fines seem to have little correlation with the amounts actually paid. The FCC and FTC do not have the authority to enforce the collection of these fines, leaving that to the Department of Justice. And even should the DoJ attempt to collect the money, they can’t get more than the defendants have.
For instance, last year the FTC fined one robocaller $5 million, but he ended up paying $18,332 and the market price of his Mercedes. Unsurprisingly, these individuals performing white-collar crimes are no strangers to methods to avoid punishment for them. Disposing of cash assets before the feds come knocking on your door is just part of the game.
In this case the situation is potentially even more dire: the DoJ isn’t even involved. As FCC Commissioner Jessica Rosenworcel put it in a statement accompanying the agency’s announcement:
There’s something missing in this all-hands effort. That’s the Department of Justice. They aren’t a part of taking on this fraud. Why not? What signals does their refusal to be involved send?
Here’s the signal I see. Over the last several years the FCC has levied hundreds of millions in fines against robocallers just like the folks we have here today. But so far collections on these eye-popping fines have netted next to nothing. In fact, it was last year that The Wall Street Journal did the math and found that we had collected no more than $6,790 on hundreds of millions in fines. Why? Well, one reason is that the FCC looks to the Department of Justice to collect on the agency’s fines against robocallers. We need them to help. So when they don’t get involved—as here—that’s not a good sign.
While the FCC’s fine and the lawsuit will certainly put these robocallers out of business and place further barriers to their conducting more scam operations, they’re not really going to be liable for nine figures, because they’re not billionaires.
It’s good that the fines are large enough to bankrupt operations like these, but as Rosenworcel put it back in 2018 when another enormous fine was levied against a robocaller, “it’s like emptying the ocean with a teaspoon.” While the FCC and states were going after a pair of ne’er-do-wells, a dozen more have likely popped up to fill the space.
Industry-wide measures to curb robocalls have been underway for years now, but only recently have been mandated by the FCC after repeated warnings and delays. Expect the new anti-fraud frameworks to take effect over the next year.
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Pentagon asks court for time to reconsider JEDI award to Microsoft
The JEDI contract award process might never be done. Following legal challenges from Amazon after the Pentagon’s massive, $10 billion cloud contract was awarded to Microsoft in October, the Pentagon indicated in court documents last night that it wishes to reconsider the award.
It’s just the latest plot twist in an epic government procurement saga.
Here’s what we know. The Pentagon filing is based on Amazon’s complaints about the technical part of the deal only. Amazon has said that it believes political interference influenced the awarding of the contract. However, the cloud computing giant also believes it beat Microsoft on the technical merits in a majority of instances required in the request for proposals issued by the Pentagon.
In fact, sources told TechCrunch, “AWS’s protest identified evaluation errors, clear deficiencies and unmistakable bias in six of the eight evaluation factors.”
Obviously Amazon was happy to hear this news. “We are pleased that the DoD has acknowledged ‘substantial and legitimate’ issues that affected the JEDI award decision, and that corrective action is necessary,” a spokesperson stated.
“We look forward to complete, fair, and effective corrective action that fully insulates the re-evaluation from political influence and corrects the many issues affecting the initial flawed award.”
As would expect, Microsoft thinks that the DoD made the correct choice, and believes the review will bear that out. “Over two years, the DoD reviewed dozens of factors and sub factors and found Microsoft equal or superior to AWS on every factor. We remain confident that Microsoft’s proposal was technologically superior, continues to offer the best value, and is the right choice for the DoD,” Microsoft VP of communications Frank Shaw said.
The court granted the Pentagon 120 days to review the results again, but indicated it could take longer. In the meantime, the project is at a standstill.
On Friday, the court issued a ruling that Amazon was likely to succeed on its complaint on merit, and that could have been the impetus of this latest action by the Pentagon.
While the political influence piece might not be overtly part of this filing, it does lurk in the background. The president has made it clear that he doesn’t like Amazon founder and CEO Jeff Bezos, who also owns The Washington Post. As we wrote last year:
Amazon, for instance, could point to Jim Mattis’ book where he wrote that the president told the then Defense Secretary to “screw Bezos out of that $10 billion contract.” Mattis says he refused, saying he would go by the book, but it certainly leaves the door open to a conflict question.
As we previously reported, AWS CEO Andy Jassy stated at a press event at AWS re:Invent in December that the company believed there was political bias at play in the decision-making process.
“What I would say is that it’s fairly obvious that we feel pretty strongly that it was not adjudicated fairly,” he said. He added, “I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”
The story has been updated with a comment from Microsoft. We have requested comment from DoD and will update the story should they respond.
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Apple agrees to settlement of up to $500 million from lawsuit alleging it throttled older phones
Apple Inc. has agreed to pay a settlement of up to $500 million, following a lawsuit accusing the company of intentionally slowing down the performance of older phones to encourage customers to buy newer models or fresh batteries.
The preliminary proposed class action lawsuit was disclosed Friday night and would see Apple pay consumers $25 per phone, as reported by Reuters.
Any settlement needs to be approved by U.S. District Judge Edward Davila, who oversaw the case brought in San Jose, Calif.
For consumers, the $25 payout may seem a little low, as a new iPhone can cost anywhere from $649 to $849 (for a lower-end model). The cost may be varied depending on how many people sue, and the company is set to pay at least $310 million under the terms of the settlement.
For its part, Apple is denying wrongdoing in the case and said it was only agreeing to avoid the cost and burden associated with the lawsuit.
Any U.S. owner of the iPhone 6, 6 Plus, 6s, 6s Plus, 7 Plus or SE that ran on iOS 10.2.1 or any of the later operating systems are covered by the settlement. Users of the iPhone 7 and 7 Plus which ran iOS 11.2 or later before Dec. 21, 2017 are also covered by the settlement.
Apple customers said their phone performance slowed down after they installed Apple software updates. The customers contend that Apple’s software updates intentionally degraded the performance of older models to encourage customers to unnecessarily upgrade to newer models or install new batteries.
Lawyers for Apple said that the problems were mainly due to high usage, temperature changes and other issues and that its engineers tried to address the problems as quickly as possible.
In February, Apple was fined $27 million by the French government for the same issue.
As we reported at the time:
A couple of years ago, Apple released an iOS update (10.2.1 and 11.2) that introduced a new feature for older devices. If your battery is getting old, iOS would cap peak performances as your battery might not be able to handle quick peaks of power draw. The result of those peaks is that your iPhone might shut down abruptly.
While that feature is technically fine, Apple failed to inform users that it was capping performances on some devices. The company apologized and introduced a new software feature called “Battery Health,” which lets you check the maximum capacity of your battery and if your iPhone can reach peak performance.
And that’s the issue here. Many users may have noticed that their phone would get slower when they play a game, for instance. But they didn’t know that replacing the battery would fix that. Some users may have bought new phones even though their existing phone was working fine.
Shares of Apple were up more than 9% today in a general market rally.
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Snapchat hits 218M users but big Q4 losses sink share price
Snapchat still isn’t profitable nearly two years after its IPO. In Q4 2019, Snap lost $241 million on $560.8 million in revenue; that’s up 44% year-over-year and an EPS of $0.03. That comes from adding 8 million daily users to reach a total of 218 million up 3.8% this quarter from 210 million and 17% year-over-year.
The big problem was a one-time $100 million legal settlement that pushed it to lose $49 million more in Q4 2019 than Q4 2018. That comes from a shareholder lawsuit claiming Snap didn’t adequately disclose the impact of competition from Facebook on its business. The IPO was soured by weak user growth as people shifted from Snapchat Stories to Instagram Stories.
A rough Q4
Snapchat had a mixed quarter compared to estimates, exceeding the EPS predictions but falling short on revenue. FactSet’s consensus predicted $563 million in revenue and a loss of $0.12 EPS. Estimize’s consensus came in at $568 million in revenue and an EPS gain of $0.02.
Snapchat shares plunged over 11% in after-hours trading following the announcement. Shares had closed up 4.17% at $18.99 today. That’s up from a low of $4.99 in December 2018 when its user count was shrinking under competition from Instagram Stories. It’s now hovering around its $17 IPO price, but it’s still under its post-IPO pop to $27.09.
Snap gave stronger than expected revenue guidance for Q1 2020 of $450 million to $470 million, and 224 million to 225 million users. The company’s CFO Derek Anderson says that “Q4 marked our first quarter of Adjusted EBITDA profitability at $42 million for the quarter, an improvement of $93 million over the prior year.” Still, he predicts an Adjusted EBITDA in Q1 of negative $90 million to negative $70 million. That’s manageable for Snap without raising more money, since it now has $2.1 billion in cash and marketable securities, down $148 million quarter-after-quarter.
Snapchat 2020
“Throughout the course of 2019, we added 31 million daily active users, largely driven by investments in our core product and improvements to our Android application,” said Snapchat CEO Evan Spiegel . “We’ve recently completed our 2020 strategic planning process and have aligned our teams and resources around our goals of supporting real friendships on Snapchat, expanding our service to a broader global community, investing in our AR and content platforms, and scaling revenue while achieving profitability in order to self-fund our investments in the future.”
Some other highlights:
- 1.3 trillion Snaps were created in 2019
- The average Snapchat user engages for 30 minutes per day
- Snapchat reaches 90% of U.S. 13 to 24-year-olds and over 75% of 13 to 34-year-olds
- Total daily time spent by Snapchatters watching Discover increased by 35% year-over-year, and it’s up 60% for users over the age of 25
- Over 50 Snapchat shows reached a monthly audience of 10 million viewers or more
- 75% of users engage with augmented reality per day
- 20% of Snaps sent with an AR lens were made with commununity-developed lenses
- 5X more users open the Lens Explorer now versus a year ago, and 10% of users open it every day
Snapchat’s user growth has been on a tear thanks to international penetration, especially in India, after it re-engineered its Android app for developing markets. It gained users in all markets. Crucially, it raised its average revenue per user 23% from $2.09 in Q4 2018 to $2.58, though only from $1.24 to $1.35 in the Rest of World region, where it’s growing user count the fastest. Snap will need to figure out how to squeeze more cash out of the international market to offset the costs of streaming tons of video to these users.
Q4 saw Snapchat readying several new products that could help boost engagement and therefore ad views. Cameos, first reported by TechCrunch, lets users graft their face onto an actor in an animated GIF like a lightweight deepfake. Bitmoji TV, which won’t run ads initially but could drive attention to Snapchat Discover, offers zany four-minute cartoons that star your Bitmoji avatar. We could see a bump to engagement from these starting in Q1 2020.
To retain its augmented reality filter creators, Snapchat has pledged $750,000 in payouts in 2020. It also expanded the use of product catalog ads, and now lets advertisers buy longer skippable ads.
Outside of the legal settlement, Snapchat is inching closer to profitability, but still has a ways to go. It has managed to develop a strong synergy between its popular chat feature that’s tougher to monetize, and the Stories and Discover content where it can inject ads. The big question is whether Facebook Messenger, Instagram and WhatsApp will get more serious about ephemeral messaging that’s at the core of Snapchat. If it can hold onto the market and maintain its place as where teens talk, it could ride out its costs and build revenue until it’s sustainable for the long-term.
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In latest JEDI contract drama, AWS files motion to stop work on project
When the Department of Defense finally made a decision in October on the decade-long, $10 billion JEDI cloud contract, it seemed that Microsoft had won. But nothing has been simple about this deal from the earliest days, so it shouldn’t come as a surprise that last night Amazon filed a motion to stop work on the project until the court decides on its protest of the DoD’s decision.
The company announced on November 22nd that it had filed suit in the U.S. Court of Federal Claims protesting the DoD’s decision to select Microsoft. Last night’s motion is an extension of that move to put the project on hold until the court decides on the merits of the case.
Sources tell us that AWS decided not protest the start of initial JEDI activities at the time of the court filing in November as an accommodation made at DoD’s request. DoD declined to comment on that.
As for why they are doing it now, an Amazon spokesperson had this to say in a statement last night: “It is common practice to stay contract performance while a protest is pending and it’s important that the numerous evaluation errors and blatant political interference that impacted the JEDI award decision be reviewed. AWS is absolutely committed to supporting the DoD’s modernization efforts and to an expeditious legal process that resolves this matter as quickly as possible.”
As we previously reported, the statement echoes sentiments AWS CEO Andy Jassy made at a press event during AWS re:Invent in December:
“I would say is that it’s fairly obvious that we feel pretty strongly that it was not adjudicated fairly,” he said. He added, “I think that we ended up with a situation where there was political interference. When you have a sitting president, who has shared openly his disdain for a company, and the leader of that company, it makes it really difficult for government agencies, including the DoD, to make objective decisions without fear of reprisal.”
This is just the latest turn in a contract procurement process for the ages. It will now be up to the court to decide if the project should stop or not, and beyond that if the decision process was carried out fairly.
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AT&T will pay $60 million over fake unlimited data ‘bait and switch scam’
AT&T is being punished at last for its shady claims of plans with “unlimited data” but were in reality nothing of the kind: The company has agreed to a $60 million settlement with the FTC, which has pursued the case for years. Some 3.5 million affected customers can expect partial refunds — little more than pocket money, but it’s something.
The complaint was filed almost exactly five years ago, after customer complaints from previous years had piled up. AT&T, after offering truly unlimited data plans for a few years, made changes to how the plans worked but not to how they were advertising. Starting in 2011, the company began throttling to a fraction of the speed they normally got customers with “unlimited data” who hit data caps. We’re talking kilobits here.
Naturally that’s not quite in line with the “unlimited” claims, and some people took AT&T and others to court early on over it. But the FTC’s 2014 complaint indicated that the feds were taking this seriously.
Because the complaint was so obviously true, AT&T attempted to thwart it via process, claiming that the net neutrality rules adopted in 2015 moved the authority to regulate mobile carriers from the FTC to the FCC, retroactively mooting the case. They pursued this ridiculous argument until last year, when a federal court slapped it down and the FTC’s process was allowed to continue unimpeded. And here we are 18 months later with a $60 million settlement.
“AT&T’s bait-and-switch scam is a good window into the many harms that result from dominant companies operating without the discipline of meaningful competition,” said FTC Chairman Rohit Chopra in a spicy statement accompanying the announcement. “Their market power, financial resources, and one-sided information gives them license to ignore their own contractual obligations while aggressively enforcing every little clause in the fine print. Consumers can accept the bad deal, walk away, or fight it, but each choice carries a cost, with dominant firms prevailing almost every time.”
Although $60 million is a drop in the bucket for a company the size of AT&T, the FTC action and other pressure also put executives on warning for prioritizing profits over customers with scams like this one.
“The company could have upheld its obligations to its customers by making the right infrastructure investments,” Chopra continued. “It certainly had the money to do so. In 2012, as the company boasted to investors that customers were fleeing its unlimited plan for tiered plans, it spent more on share buybacks than it invested in its wireless network. The bottom line is that AT&T fleeced its customers to enrich its executives and its investors.”
Unfortunately those customers will remain fleeced, as there are some 3.5 million of them and only $60 million to distribute. This will be divided between current and former AT&T customers as follows, according to the proposed settlement:
- $7.5 million to be split by current AT&T customers who experienced throttling to 128 kbps
- $29.7 million to be split by current AT&T customers who experienced throttling to 256 or 512 kbps
- $6.3 million to be split by former AT&T customers who experienced throttling to 128 kbps
- $16.5 million to be split by former AT&T customers who experienced throttling to 256 or 512 kbps
All this will be done “pro rata,” so if you were an early adopter who got throttled to 128 kbps every month of your year-long contract, you’ll get a bigger share than someone who only went over once and got throttled to 512 kbps.
There’s no need to fill anything out or submit a claim; if you’re currently an AT&T customer, you’ll get a bill credit, and if you’re a former customer you should get a check in the mail.
Naturally AT&T is barred from pulling anything like this again: The company can’t claim something is “unlimited” without prominent disclosure of the actual limitations on the service.
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Walmart reaches settlement with Tesla over solar panel fires, drops lawsuit
Walmart has dropped a lawsuit that accused Tesla of breach of contract and gross negligence after rooftop solar panel systems on seven of the retailer’s stores allegedly caught fire.
A settlement has been reached and stipulation of dismissal has been filed with the court, a Walmart spokesperson said in an email. It is unclear what the settlement entails. TechCrunch has requested more information and will update the article if new details emerge.
The two companies issued a joint release Tuesday announcing that the issues raised by Walmart have been resolved.
“Safety is a top priority for each company and with the concerns being addressed, we both look forward to a safe re-energization of our sustainable energy systems,” the emailed statement reads.
The resolution comes just three months after Walmart filed the lawsuit in New York state court. The lawsuit was aimed at Tesla Energy Operations, a division within the clean energy and electric vehicle automaker that was formerly known as SolarCity.
Days after the lawsuit was filed, the two companies announced efforts were underway to try to reach an agreement that would keep the solar installations in place and put them back in service, according to a joint statement issued at the time.
While the announcement signaled progress, the specter of a lawsuit still loomed. Until now.
Walmart said it sued Tesla after years of gross negligence and failure to live up to industry standards by Tesla, according to court documents. Walmart asked Tesla to remove solar panels from all 240 locations where they have been installed, as well as pay for damages related to fires that the retailer alleges stem from the panels. The lawsuit points to several fires on the retailer’s rooftops that allegedly stem from Tesla solar panels.
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Lawyers for former Tinder execs file to dismiss ‘retaliatory’ defamation lawsuit
Last week, former Tinder CEO Greg Blatt filed a defamation lawsuit against Sean Rad and Rosette Pambakian, who are part of a group of Tinder founders and former executives who accused Blatt (pictured above) of sexual harassment and assault as part of a broader suit.
Now Rad and Pambakian’s attorneys have filed their own motion to dismiss the suit, arguing that it “seeks to chill protected speech through costly litigation” — in other words, that it’s the kind of lawsuit prohibited under California’s anti-SLAPP law.
“This lawsuit is intended to muzzle Rosette and Sean from telling the truth about how [IAC chairman] Barry Diller and Greg Blatt stole from their employees and covered up sexual assault allegations,” said Rad and Pambakian’s attorney Orin Snyder in a statement. “Unfortunately, unlawful retaliatory lawsuits like this one designed to silence victims and violate their First Amendment rights are all too common in the #metoo era.”
In the filing, Rad and Pambakian’s attorneys also argued that Blatt filed the suit “solely to launch a public smear campaign against Pambakian and the person who reported the assault to Match, Sean Rad. At the same time, and now that Blatt’s public court filings have served his media objective, Blatt says that the complaint that he himself chose to file in court should actually be sent to private arbitration.”
In response, Blatt’s attorney Vineet Bhatia sent the following statement:
We fully expected this run-of-the-mill, procedural smoke screen to be made by Rad and Pambakian. These arguments are legally wrong and we expect to prevail in Court. The bottom line is, Rad and Pambakian conspired to defame Mr. Blatt and should be held responsible.
Both Blatt’s suit and the new filing seek to connect the case to the broader #metoo movement (which, as Snyder alluded to, has seen a number of high-profile figures accused of sexual assault, and who then fought back through defamation lawsuits).
Blatt’s lawyers argued that “Rad and Pambakian have attempted to weaponize an important social movement, undermining the plight of true victims of sexual abuse by making false accusations in cynical pursuit of a $2 billion windfall.”
In contrast, Rad and Pambakian’s attorneys said the “ensuing crescendo of retaliation — reminiscent of many Hollywood #MeToo cases — included [Tinder’s parent company] Match circling the wagons around Blatt, publicly belittling Pambakian by chalking up the assault to ‘consensual cuddling,’ and firing her months later after she refused to sign an NDA.”
In a lawsuit filed in the summer of 2018, Rad (Tinder’s co-founder and former CEO), Pambakian (who was then the company’s vice president of marketing and communications), Rad’s fellow co-founders Justin Mateen and Jonathan Badeen and others sued Match and its controlling shareholder IAC, accusing them of manipulating financial data and removing Rad as CEO in order to create a “fake lowball valuation” and strip the founders and executives of their stock options.
The suit also accused Blatt — who served as an executive at IAC and as CEO of Match before replacing Rad as CEO of Tinder — of sexually harassing Pambakian at a company holiday party in 2016.
IAC and Match have called this suit meritless. And in Blatt’s defamation lawsuit, his attorneys said the encounter between Blatt and Pambakian at the holiday party was consensual and that Rad and Pambakian subsequently “conspired to make false allegations of sexual harassment and sexual assault against Blatt with the specific intent to damage Blatt’s good name, personal and professional reputation, and credibility.”
In a footnote, Rad and Pambakian’s attorneys say that because they’re making a free speech argument, their motion to dismiss Blatt’s suit does not require the court to “delve into the facts.” However, they add:
Blatt’s false narrative — that this was consensual, and that Pambakian and Rad concocted the assault allegations to aid their valuation lawsuit — is patently false and offensive. The evidence shows that Blatt admitted being drunk at the holiday party, making inappropriate comments to Pambakian, and “snuggling and nuzzling” her in a hotel bed. It further shows that Blatt apologized to Pambakian the following week, and later offered to resign over his misconduct. These are not the actions of an innocent man, nor is it the first time Blatt has been accused of mistreating women in the workplace.
To back that up, the motion points to a Gawker article describing supposed harassment and verbal abuse by an unnamed “CEO of a major dating site” owned by a corporation “in a glass building on the far side of town” (subsequent coverage has suggested that the piece was about Blatt).
Pambakian withdrew from the initial suit due to an arbitration agreement, but is now suing Blatt and Match for wrongful termination and sexual assault.
You can read the full motion below.
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Oracle files new appeal over Pentagon’s $10B JEDI cloud contract RFP process
You really have to give Oracle a lot of points for persistence, especially where the $10 billion JEDI cloud contract procurement process is concerned. For more than a year, the company has been complaining across every legal and government channel it can think of. In spite of every attempt to find some issue with the process, it has failed every time. That did not stop it today from filing a fresh appeal of last month’s federal court decision that found against the company.
Oracle refuses to go quietly into that good night, not when there are $10 billion federal dollars on the line, and today the company announced it was appealing Federal Claims Court Senior Judge Eric Bruggink’s decision. This time they are going back to that old chestnut that the single-award nature of the JEDI procurement process is illegal:
“The Court of Federal Claims opinion in the JEDI bid protest describes the JEDI procurement as unlawful, notwithstanding dismissal of the protest solely on the legal technicality of Oracle’s purported lack of standing. Federal procurement laws specifically bar single award procurements such as JEDI absent satisfying specific, mandatory requirements, and the Court in its opinion clearly found DoD did not satisfy these requirements. The opinion also acknowledges that the procurement suffers from many significant conflicts of interest. These conflicts violate the law and undermine the public trust. As a threshold matter, we believe that the determination of no standing is wrong as a matter of law, and the very analysis in the opinion compels a determination that the procurement was unlawful on several grounds,” Oracle’s General Counsel Dorian Daley said in a statement.
In December, Oracle sued the government for $10 billion, at the time focusing mostly on a perceived conflict of interest involving a former Amazon employee named Deap Ubhi. He worked for Amazon prior to joining the DOD, where he worked on a committee of people writing the RFP requirements, and then returned to Amazon later. The DOD investigated this issue twice, and found no evidence he violated federal conflict of interest of laws.
The court ultimately agreed with the DOD’s finding last month, ruling that Oracle had failed to provide evidence of a conflict, or that it had impact on the procurement process. Judge Bruggink wrote at the time:
We conclude as well that the contracting officer’s findings that an organizational conflict of interest does not exist and that individual conflicts of interest did not impact the procurement, were not arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law. Plaintiff’s motion for judgment on the administrative record is therefore denied.
The company started complaining and cajoling even before the JEDI RFP process started. The Washington Post reported that Oracle’s Safra Catz met with the president in April, 2018 to complain that the process was unfairly stacked in favor of Amazon, which happens to be the cloud market share leader by a significant margin, with more than double that of its next closest rival, Microsoft.
Later, the company filed an appeal with the Government Accountability Office, which found no issue with the RFP process. The DOD, which has insisted all along there was no conflict in the process, also did in an internal investigation and found no wrong-doing.
The president got involved last month when he ordered Defense Secretary Mark T. Esper to look into the idea that, once again, the process has favored Amazon. That investigation is ongoing. The DOD did name two finalists, Amazon and Microsoft, in April, but has yet to name the winner as the protests, court cases and investigations continue.
The controversy in part involves the nature of the contract itself. It is potentially a decade-long undertaking to build the cloud infrastructure for the DOD, involves the award of a single vendor (although there are several opt-out clauses throughout the term of the contract) and involves $10 billion and the potential for much more government work. That every tech company is salivating for that contract is hardly surprising, but Oracle alone continues to protest at every turn.
The winner was supposed to be announced this month, but with the Pentagon investigation in progress, and another court case underway, it could be some time before we hear who the winner is.
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