Seeking Alpha’s roundup of statements, announcements, and remarks that could impact the technology sector.
- The FTC said Amazon (NASDAQ:AMZN) will pay $2.5 billion to settle claims that it engaged in deceptive business practices with its Prime subscription service.
Under the agreement, Amazon will pay a $1 billion civil penalty and refund $1.5 billion to around 35 million customers who were impacted by unwanted Prime enrollment or deferred cancellation. The tech giant has also agreed to cease certain business practices regarding Prime enrollment and cancellation.
“Today, the Trump-Vance FTC made history and secured a record-breaking, monumental win for the millions of Americans who are tired of deceptive subscriptions that feel impossible to cancel,” FTC Chairman Andrew Ferguson said in a statement.
“The evidence showed that Amazon used sophisticated subscription traps designed to manipulate consumers into enrolling in Prime, and then made it exceedingly hard for consumers to end their subscription. Today, we are putting billions of dollars back into Americans’ pockets, and making sure Amazon never does this again,” Ferguson added.
- AI developer xAI is suing OpenAI for allegedly stealing trade secrets.
In a lawsuit filed Wednesday, xAI asserted that OpenAI has been hiring former xAI employees to gain access to its trade secrets.
“OpenAI is targeting those individuals with knowledge of xAI’s key technologies and business plans—including xAI’s source code and its operational advantages in launching data centers—then inducing those employees to breach their confidentiality and other obligations to xAI through unlawful means,” the lawsuit said, according to Reuters.
Tesla (TSLA) CEO Elon Musk controls xAI and has been bullish about using its AI technology in Tesla vehicles and robots. Tesla shareholders are scheduled to vote in November on whether to allow Tesla (TSLA) to invest in xAI.
Musk is also a co-founder of OpenAI, which counts Microsoft (MSFT) as a major shareholder.
- The European Commission said Thursday that it is launching an investigation into SAP’s (NYSE:SAP) software support services practices.
“Thousands of companies across Europe use SAP’s software to run their business, as well as its related maintenance and support services,” the EC’s Teresa Ribera said in a statement. “We are concerned that SAP may have restricted competition in this crucial aftermarket by making it harder for rivals to compete, leaving European customers with fewer choices and higher costs.”
- SAP (NYSE:SAP) confirmed Thursday that the EC had started “formal proceedings” involving the company’s on-premise maintenance and support policies.
“SAP believes that its policies and actions are fully in line with competition rules. However, we take the issues raised seriously, and we are working closely with the EU Commission to resolve them,” the company said in a statement.
“We do not anticipate the engagement with the European Commission to result in material impacts on our financial performance,” SAP added.