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Elon Musk threatens to scrap $44bn Twitter deal over ‘material breach’ | Elon Musk

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Elon Musk has accused Twitter of committing a “material breach” of his $44bn (£35bn) agreement to buy the company and has threatened to terminate the deal, in the clearest indication yet that the world’s richest man is preparing to walk away from the takeover.

Musk’s lawyers have written to Twitter accusing it of refusing to provide sufficient information about the number of false users on the service, as part of a simmering dispute over the number of spam and fake accounts that populate the platform.

In a letter to Twitter’s chief legal officer, Vijaya Gadde, lawyers representing the Tesla CEO said he believed the company was “actively resisting and thwarting” his rights to access data and information from the company under the agreement. The letter said Twitter had failed to provide the information requested by Musk since 9 May, adding that a formal response from the social media platform on 1 June was insufficient.

“Twitter’s latest offer to simply provide additional details regarding the company’s own testing methodologies, whether through written materials or verbal explanations, is tantamount to refusing Mr Musk’s data requests,” said the letter from US law firm Skadden, Arps, Slate, Meagher & Flom. Musk’s legal team is arguing that failure to provide information about false accounts breaches a covenant in the agreement, a promise to act in a certain way during the sale process, which would allow him to walk away from the deal.

It said Twitter’s methods for testing fake accounts were “lax” and that Musk needed data from the company to conduct his own analysis, as well as to help him secure debt financing for the deal. It added that the company’s refusal to cooperate indicated a concern for what Musk’s analysis might uncover.

The letter concluded with a warning that Musk reserved all his rights under the agreement, including his right to walk away from the deal and “terminate” it.

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“This is a clear material breach of Twitter’s obligations under the merger agreement and Mr Musk reserves all rights resulting therefrom, including his right not to consummate the transaction and his right to terminate the merger agreement,” the letter said.

Twitter, whose CEO has published a Twitter thread explaining how spam accounts are measured and the difficulties of doing so via a third party, said it continued to cooperate with Musk. It said: “Twitter has and will continue to cooperatively share information with Mr Musk to consummate the transaction in accordance with the terms of the merger agreement … We intend to close the transaction and enforce the merger agreement at the agreed price and terms.”

Musk’s letter, published on the website of the US financial watchdog on Monday, follows a negotiation-by-tweet process undertaken by the billionaire in recent weeks. On 17 May he tweeted that the deal “cannot move forward” until the spam and fake account issue had been resolved.

Fake or spam accounts, known as bot accounts, are automated and not run by human users. They may use the reply function or direct messages to send adverts or scams to users, or represent attempts to influence public discourse by tweeting political propaganda.

Twitter has stated consistently in its quarterly results since 2014 that it estimates its spam account problem to represent less than 5% of its users. However, since striking the deal in April Musk has raised concerns that the number of false accounts could be much higher. The platform currently has 229 million users.

The formal agreement between Musk and Twitter underpinning the takeover would allow the Tesla boss to walk away from the deal without paying a break fee if there is a material breach, according to Brian Quinn, an associate professor at Boston College law school.

Quinn added that Musk’s allegation of a breach was weak and that his argument could ultimately be decided in court. One of the deal covenants states that Twitter must provide information “related to the consummation of the transactions contemplated by this agreement”, while another relates to any information required to secure debt financing for the deal. Quinn said Twitter could go to court to argue that further data and information on bots is not needed to close the deal or secure the debt financing.

“It is possible the board will tire of the back and forth letters and will go to court. The parties might end up renegotiating the price, but I don’t think Musk has a strong case to walk given the abundant evidence of his trying to find an excuse to walk away,” said Quinn.

John Coffee, a professor of law at Columbia University, said Musk was paying the price for trying to rush the deal. He said he expected the Tesla chief to seek a lower price for the deal although “Twitter will not concede that much given Musk’s shaky position”.

“If Musk had felt that this information about the percentage of bots was critical, he could have negotiated for a representation or done due diligence. He did neither. He was in a rush to close and now that market prices have reversed, he is eager to delay,” Coffee said.

Twitter shares had fallen 2.5% to $39.17 by afternoon trading in New York. The Musk agreement values the company at $54.20 a share.

If Musk breaches the deal agreement by seeking to walk away without a reason covered by the document, Twitter has the option of seeking a $1bn termination fee from him or asking a court to require Musk to complete the transaction at the agreed price.

On Monday afternoon, Texas attorney general Ken Paxton announced he was launching an investigation into Twitter for “potentially false reporting over its fake bot accounts” to determine if doing so had violated the Texas Deceptive Trade Practices Act.

Though he did not mention Musk by name, the investigation echoes talking points used by the Tesla founder regarding the bot issue. Critics have speculated Paxton is trying to appeal to Musk, who moved Tesla’s headquarters to Texas in 2021.



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Meditation app Calm sacks one-fifth of staff | Meditation

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The US-based meditation app Calm has laid off 20% of its workforce, becoming the latest US tech startup to announce job cuts.

The firm’s boss, David Ko, said the company, which has now axed about 90 people from its 400-person staff, was “not immune” to the economic climate. “In building out our strategic and financial plan, we revisited the investment thesis behind every project and it became clear that we need to make changes,” he said in a memo to staff.

“I can assure you that this was not an easy decision, but it is especially difficult for a company like ours whose mission is focused on workplace mental health and wellness.”

The Calm app, founded in 2012, offers guided meditation and bedtime stories for people of all ages. It received a surge of downloads triggered by the 2020 Covid lockdowns. By the end of that year, the software company said the app had been downloaded more than 100 million times globally and had amassed over 4 million paying subscribers.

Investors valued the firm, which said it had been profitable since 2016, at $2bn.

In the memo, Ko went on: “We did not come to this decision lightly, but are confident that these changes will help us prioritize the future, focus on growth and become a more efficient organization.”

More than 500 startups have laid off staff this year, according to layoffs.fyi, a website that tracks such announcements.

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Let there be ambient light sensing, without data theft • The Register

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Six years after web security and privacy concerns surfaced about ambient light sensors in mobile phones and notebooks, browser boffins have finally implemented defenses.

The W3C, everyone’s favorite web standards body, began formulating an Ambient Light Events API specification back in 2012 to define how web browsers should handle data and events from ambient light sensors (ALS). Section 4 of the draft spec, “Security and privacy considerations,” was blank. It was a more carefree time.

Come 2015, the spec evolved to include acknowledgement of the possibility that ALS might allow data correlation and device fingerprinting, to the detriment of people’s privacy. And it suggested that browser makers might consider event rate limiting as a potential mitigation.

By 2016, it became clear that allowing web code to interact with device light sensors entailed privacy and security risks beyond fingerprinting. Dr Lukasz Olejnik, an independent privacy researcher and consultant, explored the possibilities in a 2016 blog post.

Olejnik cited a number of ways in which ambient light sensor readings might be abused, including data leakage, profiling, behavioral analysis, and various forms of cross-device communication.

He described a few proof-of-concept attacks, devised with the help of security researcher Artur Janc, in a 2017 post and delved into more detail in a 2020 paper [PDF].

“The attack we devised was a side-channel leak, conceptually very simple, taking advantage of the optical properties of human skin and its reflective properties,” Olejnik explained in his paper.

“Skin reflectance only accounts for the 4-7 percent emitted light but modern display screens emit light with significant luminance. We exploited these facts of nature to craft an attack that reasoned about the website content via information encoded in the light level and conveyed via the user skin, back to the browsing context tracking the light sensor readings.”

It was this technique that enabled the proof-of-concept attacks like stealing web history through inferences made from CSS changes and stealing cross origin resources, such as images or the contents of iframes.

Snail-like speed

Browser vendors responded in various ways. In May 2018, with the release of Firefox 60, Mozilla moved access to the W3C proximity and ambient light APIs behind flags, and applied further limitations in subsequent Firefox releases.

Apple simply declined to implement the API in WebKit, along with a number of other capabilities. Both Apple and Mozilla currently oppose a proposal for a generic sensor API.

Google took what Olejnik described his paper as a “more nuanced” approach, limiting the precision of sensor data.

But those working on the W3C specification and on the browsers implementing the spec recognized that such privacy protections should be formalized, to increase the likelihood the API will be widely adopted and used.

So they voted to make the imprecision of ALS data normative (standard for browsers) and to require the camera access permission as part of the ALS spec.

Those changes finally landed in the ALS spec this week. As a result, Google and perhaps other browser makers may choose to make the ALS API available by default rather than hiding it behind a flag or ignoring it entirely. ®



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4 supports that can help employees outside of work

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Everyone has different situations to deal with outside of the workplace. But that doesn’t mean the workplace can’t be a source of support.

Employers and governments alike are often striving to make workplaces better for everyone, whether it’s workplace wellbeing programmes or gender pay gap reporting.

However, life is about more than just the hours that are spent in work, and how an employer supports those other life challenges can be a major help.

Family-friendly benefits

Several companies have been launching new benefits and policies that help families and those trying to have children.

Job site Indeed announced a new ‘family forming’ benefit package earlier this year, which is designed to provide employees with family planning and fertility-related assistance.

The programme includes access to virtual care and a network of providers who can guide employees through their family-forming journey.

Vodafone Ireland introduced a new fertility and pregnancy policy in February 2022 that includes extended leave for pregnancy loss, fertility treatment and surrogacy.

And as of the beginning of 2022, Pinterest employees around the world started receiving a host of new parental benefits, including a minimum of 20 weeks’ parental leave, monetary assistance of up to $10,000 or local equivalent for adoptive parents, and four weeks of paid leave to employees who experience a loss through miscarriage at any point in a pregnancy.

Helping those experiencing domestic abuse

There are also ways to support employees going through a difficult time. Bank of Ireland introduced a domestic abuse leave policy earlier this year, which provides a range of supports to colleagues who may be experiencing domestic abuse.

Under the policy, the bank will provide both financial and non-financial support to colleagues, such as paid leave and flexibility with the work environment or schedule.

In emergency situations where an employee needs to immediately leave an abusive partner, the bank will help through paid emergency hotel accommodation or a salary advance.

In partnership with Women’s Aid, the company is also rolling out training to colleagues to help recognise the symptoms of abuse and provide guidance on how to take appropriate action.

Commenting on the policy, Women’s Aid CEO Sarah Benson said employers who implement policies and procedures for employees subjected to domestic abuse can help reduce the risk of survivors giving up work and increase “feelings of solidarity and support at a time when they may feel completely isolated and alone”.

A menopause policy

In 2021, Vodafone created a policy to support workers after a survey it commissioned revealed that nearly two-thirds of women who experienced menopause symptoms said it impacted them at work. A third of those who had symptoms also said they hid this at work. Half of those surveyed felt there is a stigma around talking about menopause, which is something Vodafone is seeking to combat through education for all staff.

Speaking to SiliconRepublic.com last year, Vodafone Ireland CEO Anne O’Leary said the company would roll out a training and awareness programme to all employees globally, including a toolkit to improve their understanding of menopause and provide guidance on how to support employees, colleagues and family members.

In Ireland, Vodafone employees are able to avail of leave for sickness and medical treatment, flexible working hours and additional care through the company’s employee assistance programme when going through the menopause.

Support hub for migrants

There are also initiatives to help people get their foot on the employment ladder.

Earlier this year, Tánaiste Leo Varadkar, TD launched a new service with education and employment supports for refugees, asylum-seekers and migrants.

The Pathways to Progress platform is part of the Open Doors Initiative supporting marginalised groups to access further education, employment and entrepreneurship in Ireland.

As part of the initiative, member company Siro offered a paid 12-week internship programme for six people who are refugees. The internships include job preparation, interview skills and access to the company’s online learning portals.

Open Doors Initiative CEO Jeanne McDonagh said the chance to land a meaningful job or establish a new business is key to people’s integration into Ireland, no matter what route they took to get here.

“Some are refugees, some are living in direct provision, some will have their status newly regularised, and others will come directly for work,” she said. “Our new service aims to support all migrants in finding a decent job as they prepare to enter the Irish workforce, and to support employers as they seek to build an inclusive culture in their workplaces.”

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