Minimum Competence - Daily Legal News Podcast
Minimum Competence
Legal News for Weds 1/17 - NY vs. NJ vs. CA in AI Dominance, Apple's App Store Payment Policy Change, Coinbase vs. SEC and SCOTUS Takes up Fishing -- And Chevron Deference

Legal News for Weds 1/17 - NY vs. NJ vs. CA in AI Dominance, Apple's App Store Payment Policy Change, Coinbase vs. SEC and SCOTUS Takes up Fishing -- And Chevron Deference

NY and NJ challenging CA in AI, Apple's App Store policy change, Coinbase vs. SEC, and a Supreme Court fishing dispute.

No transcript...

A bunch of judges fishing, pencil sketch.

This Day in Legal History: The United Nations Security Council Convenes its First Meeting

On January 17, 1946, the United Nations Security Council convened for its inaugural meeting, marking a crucial moment in international law and governance. This event symbolized the global commitment to peace and security following the devastations of World War II. The meeting, held at Church House, Westminster, London, brought together representatives from 11 nations, reflecting the diverse political landscapes of that era.

The council's establishment under the United Nations Charter represented a new approach to international conflict resolution and legal diplomacy. Unlike its predecessor, the League of Nations, the Security Council was endowed with the authority to make binding decisions. This feature underscored a collective endeavor towards maintaining international peace and stability.

Discussions at this first meeting set the tone for future operations, emphasizing cooperation and legal frameworks to address global challenges. The Security Council's ability to impose sanctions, authorize military interventions, and make legally binding decisions was a novel development in international law. It signaled a shift from purely diplomatic negotiations to actionable, enforceable resolutions.

Importantly, the Security Council's first session underscored the principles of sovereign equality and non-intervention, foundational elements in modern international law. It highlighted the role of international cooperation in addressing conflicts, a principle that continues to influence global legal practices and policies.

This historic meeting laid the groundwork for numerous legal precedents and interventions in the years to follow. It showcased the potential of international law as a tool for peace and justice, shaping the landscape of global governance in the 20th century and beyond.

California's leading role in the artificial intelligence (AI) industry is being challenged by new initiatives in New York and New Jersey. These states, under their respective governors, are positioning themselves as emerging centers for AI. New York Governor Kathy Hochul announced a partnership with state universities and a $250 million investment over ten years to create a super-computer facility in upstate New York. New Jersey Governor Phil Murphy has aligned with Princeton University and the New Jersey Economic Development Authority for a similar AI endeavor.

Both governors are focused on enhancing research capabilities to attract more AI firms and jobs. New York is already home to companies like IBM and PricewaterhouseCoopers LLP, while New Jersey hosts Panasonic Corp.'s North American headquarters and a major IBM facility. In contrast, California hosts many of the largest AI companies, including OpenAI, Alphabet, and Meta, as well as major research centers like UC Berkeley and Stanford University.

California Governor Gavin Newsom is determined to maintain California's AI dominance, promoting a hands-off approach to AI regulation in the private sector, while ensuring state agencies effectively control AI systems. Other governors are adopting similar administrative strategies, avoiding sweeping regulations that could hinder AI development. These approaches echo federal AI rules introduced by President Joe Biden, allowing government use of AI with monitoring of its impacts.

New York and New Jersey have avoided imposing broad restrictions on AI, focusing instead on facilitating its growth and mitigating potential risks. Their budget processes and collaborations with academic institutions will shape the scope of these AI initiatives. New York Assemblymember Alex Bores highlighted the importance of computing power as a key factor in attracting tech talent and industry growth, aiming to rival California's AI dominance.

Elected officials in other states also express a desire to diversify the AI landscape beyond Silicon Valley. Efforts are underway to ensure wider participation in AI development and to address concerns such as algorithmic discrimination, job losses, surveillance, and misinformation. This national interest in AI underlines its potential to reshape the economy and influence a variety of sectors.

California Tech Dominance Challenged By AI Initiatives in NY, NJ

Apple Inc. is adjusting its US App Store policies to include external payment options, following the Supreme Court's decision not to hear its appeal in an antitrust lawsuit. This change will allow third-party apps to use links directing to external websites for processing in-app purchases, thereby bypassing Apple's own payment system which typically charges a 15% to 30% commission. However, Apple intends to collect a revised revenue share of 12% or 27% from developers opting for external payment systems.

The Supreme Court's choice left in place a 2023 appeals court ruling, which found Apple's business model compliant with antitrust laws but in violation of California’s Unfair Competition Law due to restrictions on developers' communication about alternative, potentially cheaper, payment systems.

The decision comes amidst the legal battle between Apple and Epic Games, with both companies having sought the court's review. The ruling impacted Apple's stock, which experienced a temporary decline.

Developers will now need to apply for an "entitlement" to access external payment options. Apple had previously allowed reader apps to direct users to external websites for subscriptions. The company will issue a warning to customers about external transactions before proceeding.

Epic Games CEO Tim Sweeney criticized Apple's plan to charge a fee on external transactions, arguing it would prevent developers from offering lower costs to consumers. Sweeney also disapproved of Apple's warning message to customers, calling it a "scare screen," and plans to challenge Apple's compliance approach in court.

The stakes are high, with in-app spending projected to reach $182 billion in 2024 and $207 billion by 2025. Competitors like Microsoft Corp. are already considering entering the mobile app market, with a focus on gaming.

The decision aligns with previous court findings largely rejecting claims by Epic that Apple's App Store policies violated federal antitrust law, while acknowledging some issues with its business practices. This ruling also concludes the temporary stay in the case, allowing Apple to proceed with its new policy. The case is one among several global challenges Apple faces, including pending antitrust cases in Europe against its App Store rules.

Apple to Allow Outside Payments for Apps After US Decision (4)

Coinbase, a major cryptocurrency exchange, is set to argue in federal court that the U.S. Securities and Exchange Commission (SEC) should not regulate the tokens traded on its platform as securities. This hearing marks a significant development in the ongoing legal battle between Coinbase and the SEC, which could have major implications for the digital asset sector. The SEC's lawsuit against Coinbase, filed in June, claims the exchange facilitated trading in at least 13 crypto tokens that should have been registered as securities. The agency also targeted Coinbase's "staking" program, asserting it should have been registered. Coinbase has requested the dismissal of the lawsuit, referencing a separate case where a judge ruled in favor of Ripple Labs, while the SEC cites another case to support its stance.

Coinbase, SEC set to face off in federal court over regulator's crypto authority | Reuters

The U.S. Supreme Court is set to hear a case that could significantly impact the regulatory powers of federal agencies, centered on a dispute over a government program monitoring overfishing of herring off New England's coast. Two fishing companies, Loper Bright Enterprises and Relentless Inc, are challenging the National Marine Fisheries Service's requirement for commercial fishermen to help fund this program. This case presents an opportunity for the Court's conservative majority to reconsider the 1984 "Chevron deference," a legal doctrine that directs judges to defer to federal agencies' interpretations of ambiguous U.S. laws. 

If you have any interest in Chevron deference and learning a bit more about what might be at stake, see our Max Min episode on the topic

The Supreme Court case, seen as part of a broader effort to limit federal bureaucratic power, involves the cost of monitoring fishing activities, with implications for other cases concerning agency authority, including those involving the Securities and Exchange Commission and the Consumer Financial Protection Bureau. Decisions in these cases are expected by the end of June.

Supreme Court may reel in US agency powers in fishing dispute | Reuters

Minimum Competence - Daily Legal News Podcast
Minimum Competence
The idea is that this podcast can accompany you on your commute home and will render you minimally competent on the major legal news stories of the day. The transcript is available in the form of a newsletter at
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