Business
TikTok sues U.S. government, saying ban violates 1st Amendment
TikTok, the popular social video app, sued the U.S. government on Tuesday, saying the country’s new law that could ban the app violates 1st Amendment rights to free speech.
President Biden last month signed into law a bill that would effectively ban the service in the U.S. if its Chinese owner, ByteDance, does not sell TikTok’s U.S. operations. Legislators backing the law said a ban or sale was necessary to address national security concerns posed by the app’s ties to China.
“There is no question: the Act will force a shutdown of TikTok by January 19, 2025, silencing the 170 million Americans who use the platform to communicate in ways that cannot be replicated elsewhere,” TikTok and ByteDance said in their filing, referring to the new law.
The Department of Justice declined to comment.
TikTok and ByteDance said in the court filing that it had been trying since 2019 to work with the U.S. government’s Committee on Foreign Investment to address security concerns. Under the terms of a deal spelled out in a 90-page draft agreement, data collected about Tik Tok users in the U.S. was to be handled by Oracle, the U.S. tech giant. The proposed agreement also called for Oracle to inspect TikTok’s programming code for vulnerabilities and for the platform’s content to be subject to independent monitoring, according to the filing in the U.S. Court of Appeals for the D.C. circuit.
If TikTok did not comply, the draft agreement called for the company to be subjected to financial penalties and also included the possibility of suspending TikTok’s operations in the U.S., the businesses said.
“The terms of that negotiated package are far less restrictive than an outright ban,” ByteDance and TikTok said in its filing.
But TikTok and ByteDance said it is unclear why the committee ultimately determined the proposed agreement was insufficient and in March 2023 “insisted that ByteDance would be required to divest the U.S. TikTok business,” according to the filing.
TikTok and ByteDance also noted the new law “offers no support for the idea” that TikTok’s Chinese ownership poses national security risks.
“Speculative risk of harm is simply not enough when First Amendment values are at stake,” the businesses said in their filing.
TikTok is still moving forward with addressing some of the security concerns by partnering with Oracle “on the migration of the U.S. platform and protected U.S. user data to Oracle’s cloud environment,” TikTok and ByteDance said in the filing.
As part of their lawsuit, TikTok and ByteDance are seeking a court order blocking the government from enforcing the new law.
“These are going to be difficult issues to thrash out,” said Carl Tobias, a law professor at University of Richmond.
Tobias said one of the challenges for TikTok and ByteDance is the government’s national security argument. “Federal courts tend to be pretty deferential to those kinds of assertions, especially from Congress,” Tobias said.
Other legal experts said that they believe TikTok has a strong case. Douglas Mirell, a partner at Greenberg Glusker, said that he suspects the government is going to have a significant burden of trying to prove the law is not unconstitutional under the 1st Amendment.
“If I had to choose which side of the case to be on, I would be on TikTok’s side,” said Mirell, who focuses on 1st Amendment issues.
TikTok is a hugely popular app, with more than 1 billion users worldwide and is a key part of the video creator ecosystem. Small businesses rely on TikTok to tout their products and video creators have moved to L.A. to be closer to its Culver City office. The company employs roughly 500 people in Culver City, according to city data.
In its filing, ByteDance argued that carving out TikTok’s U.S. operations from the rest of the company would not be feasible, in part because of the borderless nature of the social video app that allows for international content to be mixed in with U.S. videos.
“Such a limited pool of content, in turn, would dramatically undermine the value and viability of the U.S. TikTok business,” the filing said.
TikTok’s massive popularity — and value — is due in large part to the algorithm its developers designed that seamlessly feeds content to users based on what they have watched previously. TikTok and ByteDance said in its filing, the “Chinese government has made clear that it would not permit a divestment of the recommendation engine that is a key to the success of TikTok in the United States.”
Still, analysts said have predicted that some companies and private equity firms would be interested in buying TikTok even if the coveted algorithm wasn’t part of the deal. Potential buyers could include Oracle and Microsoft, said Daniel Ives, a managing director at Wedbush Securities in an interview with the Times last month.
Business
MrBeast company sued over claims of sexual harassment, firing a new mom
A former female staffer who worked for Beast Industries, the media venture behind the popular YouTube channel MrBeast, is suing the company, alleging she was sexually harassed and fired shortly after she returned from maternity leave.
The employee, Lorrayne Mavromatis, a Brazilian-born social media professional, alleges in a lawsuit she was subjected to sexual harassment by the company’s management and demoted after she complained about her treatment. She said she was urged to join a conference call while in labor and expected to work during her maternity leave in violation of the Family and Medical Leave Act, according to the federal complaint filed Wednesday in the U.S. District Court for the Eastern District of North Carolina.
“This clout-chasing complaint is built on deliberate misrepresentations and categorically false statements, and we have the receipts to prove it. There is extensive evidence — including Slack and WhatsApp messages, company documents, and witness testimony — that unequivocally refutes her claims. We will not submit to opportunistic lawyers looking to manufacture a payday from us,” Gaude Paez, a Beast Industries spokesperson, said in a statement.
Jimmy Donaldson, 27, began MrBeast as a teen gaming channel that soon exploded into a media company worth an estimated $5 billion, with 500 employees and 450 million subscribers who watch its games, stunts and giveaways.
Mavromatis, who was hired in 2022 as its head of Instagram, described a pervasive climate of discrimination and harassment, according to the lawsuit.
In her complaint, she alleges the company’s former CEO James Warren made her meet him at his home for one-on-one meetings while he commented on her looks and dismissed her complaints about a male client’s unwanted advances, telling her “she should be honored that the client was hitting on her.”
When Mavromatis asked Warren why MrBeast, Donaldson, would not work with her, she was told that “she is a beautiful woman and her appearance had a certain sexual effect on Jimmy,” and, “Let’s just say that when you’re around and he goes to the restroom, he’s not actually using the restroom.”
Paez refuted the claim.
“That’s ridiculous. This is an allegation fabricated for the sole purpose of sparking headlines,” Paez said.
Mavromatis said she endured a slate of other indignities such as being told by Donaldson that she “would only participate in her video shoot if she brought him a beer.”
“In this male-centric workplace, Plaintiff, one of the few women in a high-level role, was excluded from otherwise all-male meetings, demeaned in front of colleagues, harassed, and suffered from males be given preferential treatment in employment decisions,” states the complaint.
When Mavromatis raised a question during a staff meeting with her team, she said a male colleague told her to “shut up” or “stop talking.”
At MrBeast headquarters in Greenville, N.C., she said male executives mocked female contestants participating in BeastGames, “who complained they did not have access to feminine hygiene products and clean underwear while participating in the show.”
In November 2023, Mavromatis formally complained about “the sexually inappropriate encounters and harassment, and demeaning and hostile work environment she and other female employees had been living and experiencing working at MrBeast,” to the company’s then head of human resources, Sue Parisher, who is also Donaldson’s mother, according to the suit.
In her complaint, Mavromatis said Beast Industries did not have a method or process for employees to report such issues either anonymously or to a third party, rather employees were expected to follow the company’s handbook, “How to Succeed In MrBeast Production.”
In it, employees were instructed that, “It’s okay for the boys to be childish,” “if talent wants to draw a dick on the white board in the video or do something stupid, let them” and “No does not mean no,” according to the complaint.
Mavromatis alleges that she was demoted and then fired.
Paez said that Mavromatis’s role was eliminated as part of a reorganization of an underperforming group within Beast Industries and that she was made aware of this.
Business
Heidi O’Neill, Formerly of Nike, Will Be New Lululemon’s New CEO
Lululemon, the yoga pants and athletic clothing company, has hired a former executive from a rival, Nike, as its new chief executive.
Heidi O’Neill, who spent more than 25 years at Nike, will take the reins and join Lululemon’s board of directors on Sept. 8, the company announced on Wednesday.
The leadership change is happening during a tumultuous time for Lululemon, which had grown to $11 billion in revenue by persuading shoppers to ditch their jeans and slacks for stretchy leggings. But lately, sales have declined in North America amid intense competition and shifting fashion trends, with consumers favoring looser styles rather than the form-fitting silhouettes for which Lululemon is best known.
“As I step into the C.E.O. role in September, my job will be to build on that foundation — to accelerate product breakthroughs, deepen the brand’s cultural relevance, and unlock growth in markets around the world,” Ms. O’Neill, 61, said in a statement.
Lululemon, based in Vancouver, British Columbia, has also been entangled in a corporate power struggle over the company’s future. Its billionaire founder, Chip Wilson, has feuded with the board, nominated independent directors and criticized executives.
Lululemon’s previous chief executive, Calvin McDonald, stepped down at the end of January as pressure mounted from Mr. Wilson and some investors. One activist investor, Elliott Investment Management, had pushed its own chief executive candidate, who was not selected.
The interim co-chiefs, Meghan Frank and André Maestrini, will lead the company until Ms. O’Neill’s arrival, when they are expected to return to other senior roles. The pair had outlined a plan to revive sales at Lululemon, promising to invest in stores, save more money and speed up product development.
“We start the year with a real plan, with real strategies,” Mr. Maestrini said in an interview this year. “We make sure decisions are made fast.”
Lululemon said last month that it would add Chip Bergh, the former chief executive of Levi Strauss, to its board to replace David Mussafer, the chairman of the private equity firm Advent International, whom Mr. Wilson had sought to remove.
Ms. O’Neill climbed the organizational chart at Nike for decades, working across divisions including consumer sports, product innovation and brand marketing, and was most recently its president of consumer, product and brand. She left Nike last year amid a shake-up of senior management that led to the elimination of her role.
Analysts said Ms. O’Neill would be expected to find ways to energize Lululemon’s business and reset the company’s culture in order to improve performance.
“O’Neill is her own person who will come with an agenda of change,” said Neil Saunders, the managing director of GlobalData, a data analytics and consulting company. “The task ahead is a significant one, but it can be undertaken from a position of relative stability.”
Business
Angry Altadena residents ask officials to halt Edison’s undergrounding work
Eaton wildfire survivors’ anger about Southern California Edison’s burying of electric wires in Altadena boiled over Tuesday with residents calling on government officials to temporarily halt the work.
In a letter to the Los Angeles County Board of Supervisors, more than 120 Altadena residents and the town’s council wrote that they had witnessed “manifest failures” by Edison in recent months as it has been tearing up streets and digging trenches to bury the wires.
The residents cited the unexpected financial cost of the work to homeowners and possible harm to the town’s remaining trees. They also pointed out how the work will leave telecommunication wires above ground on poles.
“The current lack of coordination is compounding the stress of a community still reeling from the Eaton Fire, and risks causing further irreparable harm,” the residents wrote.
The council voted unanimously Tuesday night to send the letter.
Scott Johnson, an Edison spokesman, said Wednesday that the company has been working to address the concerns, including by looking for other sources of funds to help pay for the homeowners’ costs.
“We recognize this community has already faced a number of challenges,” he said.
Johnson said the company will allow homeowners to keep existing overhead lines connecting their homes to the grid if they are worried about the cost.
Edison’s crews, Johnson said, have also been trained to use equipment that avoids roots and preserves the health of trees.
The utility has said that burying the wires as the town rebuilds thousands of homes destroyed in the fire will make the electrical grid safer and more reliable.
But anger has grown as work crews have shown up unexpectedly and residents learned they’re on the hook to pay tens of thousands of dollars to connect their homes to the buried lines.
Residents have also found the crews digging under the town’s oak and pine trees that survived last year’s fire. Arborists say the trenches could destroy the roots of some of the last remaining trees and kill them.
Amy Bodek, the county’s regional planning director, recently warned Edison that a government ordinance protects oak trees and that “utility trenching is not exempt from these requirements.”
Residents have also pointed out that in much of Altadena, the telecom companies, including Spectrum and AT&T, have not agreed to bury their wires in Edison’s trenches. That means the telecom wires will remain on poles above ground, which residents say is visually unappealing.
“While our community supports the long-term benefits of moving utilities underground, the current execution by SCE is placing undue financial and planning burdens on homeowners, causing irreparable harm to our heritage tree canopy, and proceeding without adequate local oversight,” the residents wrote.
They want the project halted until the problems are addressed.
Edison announced last year that it would spend as much as $925 million to underground and rebuild its grid in Altadena and Malibu, where the Palisades fire caused devastation.
The work — which costs an estimated $4 million per mile — will earn the utility millions of dollars in profits as its electric customers pay for it over the next decades.
Pedro Pizarro, chief executive of Edison International, told Gov. Gavin Newsom last year that state utility rules would require Altadena and Malibu homeowners to pay to underground the electric wire from their property line to the panel on their house. Pizarro estimated it would cost $8,000 to $10,000 for each home.
But some residents, who need to dig long trenches, say it will cost them much more.
“We are rebuilding and with the insurance shortfall, our finances are stretched already,” Marilyn Chong, an Altadena resident, wrote in a comment attached to the letter. “Incurring the additional burden of financing SCE’s infrastructure is not something we can or should have to do.”
Other fire survivors complained of Edison’s lack of planning and coordination with residents.
“I’ve started rebuilding, and apparently there won’t be underground power lines for me to connect with in time when my house will be done,” wrote Gail Murphy. “So apparently I’m supposed to be using a generator, and for how long!?”
Johnson said the company has set up a phone line for people with concerns or questions. That line — 1-800-250-7339 — is answered Monday through Saturday, he said.
Residents can also go to Edison’s office in Altadena at 2680 Fair Oaks Avenue. The office is open Monday to Friday from 8 to 4:30.
It’s unclear if the Eaton fire would have been less disastrous if Altadena’s neighborhood power lines had been buried.
The blaze ignited under Edison’s towering transmission lines that run through Eaton Canyon. Those lines carry bulk power through the company’s territory. In Altadena, Edison is burying the smaller distribution lines, which carry power to homes.
The government investigation into the cause of the fire has not yet been released. Pizarro has said that a leading theory is that a century-old transmission line, which had not carried power for 50 years, somehow re-energized to spark the blaze.
The fire killed at least 19 people and destroyed more than 9,400 homes and other structures.
-
Technology3 minutes agoBEWARE SOFTWARE BRAIN
-
World9 minutes agoLandlords allegedly posting ‘Muslim-only’ apartment ads in violation of country’s equality act: report
-
Politics15 minutes agoLeavitt explains why Iran’s seizure of two ships doesn’t violate Trump’s ceasefire
-
Health21 minutes agoHighly contagious stomach bug spreads fast, hitting certain patients hardest
-
Sports27 minutes agoWWE to hold premium live event in Saudi Arabia amid Iran ceasefire
-
Technology33 minutes agoToyota’s CUE7 robot shoots hoops using AI
-
Business39 minutes agoMrBeast company sued over claims of sexual harassment, firing a new mom
-
Entertainment45 minutes agoDataland, the world’s first museum of AI arts, sets opening date and first exhibition