Business briefs
By NewsPress Now
French authorities issue preliminary charges against Telegram CEO
PARIS | French authorities handed preliminary charges to Telegram CEO Pavel Durov on Wednesday for allowing alleged criminal activity on his messaging app, and barred him from leaving France pending further investigation.
Both free-speech advocates and authoritarian governments have spoken out in Durov’s defense since his weekend arrest. The case has also called attention to the challenges of policing illegal activity online, and to the Russia-born Durov’s own unusual biography and multiple passports.
Durov was detained on Saturday at Le Bourget airport outside Paris as part of a sweeping investigation opened earlier this year, and released earlier Wednesday after four days of questioning. Investigative judges filed preliminary charges Wednesday night and ordered him to pay 5 million euros bail and to report to a police station twice a week, according to a statement from the Paris prosecutor’s office.
Allegations against Durov, who is also a French citizen, include that his platform is being used for child sexual abuse material and drug trafficking, and that Telegram refused to share information or documents with investigators when required by law.
The first preliminary charge against him was for ‘’complicity in managing an online platform to allow illicit transactions by an organized group,’’ a crime that can lead to sentences of up to 10 years in prison and 500,000 euro fine, the prosecutor’s office said.
Preliminary charges under French law mean magistrates have strong reason to believe a crime was committed but allow more time for further investigation.
There was no immediate comment from Durov or Telegram to the charges.
Prosecutors said that Durov is, “at this stage, the only person implicated in this case.” They did not exclude the possibility that other people are being investigated, but declined to comment on other possible arrest warrants. Any other arrest warrant would be revealed only if the target of such a warrant is detained and informed of their rights, prosecutors said in a statement to the AP.
French authorities opened a preliminary investigation in February in response to ‘’the near total absence of a response by Telegram to judicial requests” for data for pursuing suspects, notably those accused of crimes against children, the prosecutor’s office said.
Durov’s arrest in France has caused outrage in Russia, with some government officials calling it politically motivated and proof of the West’s double standard on freedom of speech. The outcry has raised eyebrows among Kremlin critics because in 2018, Russian authorities themselves tried to block the Telegram app but failed, withdrawing the ban in 2020.
In Iran, where Telegram is widely used despite being officially banned after years of protests challenging the country’s Shiite theocracy, Durov’s arrest in France prompted comments from the Islamic Republic’s supreme leader. Ayatollah Ali Khamenei weighed in with veiled praise for France for being “strict” against those who “violate your governance” of the internet.
French President Emmanuel Macron said Monday that Durov’s arrest wasn’t a political move but part of an independent investigation. Macron posted on X that his country “is deeply committed” to freedom of expression but “freedoms are upheld within a legal framework, both on social media and in real life, to protect citizens and respect their fundamental rights.”
In a statement posted on its platform after Durov’s arrest, Telegram said it abides by EU laws, and its moderation is “within industry standards and constantly improving.”
“It is absurd to claim that a platform or its owner are responsible for abuse of that platform,” Telegram’s post said. “Almost a billion users globally use Telegram as means of communication and as a source of vital information. We’re awaiting a prompt resolution of this situation. Telegram is with you all.”
In addition to Russia and France, Durov is also a citizen of the United Arab Emirates and the Caribbean island nation of St. Kitts and Nevis.
The UAE Foreign Ministry said Tuesday that it was “closely following the case” and had asked France to provide Durov “with all the necessary consular services in an urgent manner.”
Kremlin spokesman Dmitry Peskov said he hoped that Durov “has all the necessary opportunities for his legal defense” and added that Moscow stands “ready to provide all necessary assistance and support” to the Telegram CEO as a Russian citizen.
“But the situation is complicated by the fact that he is also a citizen of France,” Peskov said.
Telegram was founded by Durov and his brother after he himself faced pressure from Russian authorities.
In 2013, he sold his stake in VKontakte, a popular Russian social networking site which he launched in 2006.
The company came under pressure during the Russian government’s crackdown following mass pro-democracy protests that rocked Moscow at the end of 2011 and 2012.
Durov had said authorities demanded that the site take down online communities of Russian opposition activists, and later that it hand over personal data of users who took part in the 2013-2014 popular uprising in Ukraine, which eventually ousted a pro-Kremlin president.
Durov said in a recent interview that he had turned down these demands and left the country.
The demonstrations prompted Russian authorities to clamp down on the digital space, and Telegram and its pro-privacy stance offered a convenient way for Russians to communicate and share news.
Telegram also continues to be a popular source of news in Ukraine, where both media outlets and officials use it to share information on the war, and deliver missile and air raid alerts.
Western governments have often criticized Telegram for a lack of content moderation.
Court revives Sarah Palin’s libel lawsuit against The New York Times
NEW YORK | A federal appeals court revived Sarah Palin’s libel case against The New York Times on Wednesday, citing errors by a lower court judge, particularly his decision to dismiss the lawsuit while a jury was deliberating.
The 2nd U.S. Circuit Court of Appeals in Manhattan wrote that Judge Jed S. Rakoff’s decision in February 2022 to dismiss the lawsuit mid-deliberations improperly intruded on the jury’s work.
It also found that the erroneous exclusion of evidence, an inaccurate jury instruction and an erroneous response to a question from the jury tainted the jury’s decision to rule against Palin. It declined, however, to grant Palin’s request to force Rakoff off the case on grounds he was biased against her. The 2nd Circuit said she had offered no proof.
The libel lawsuit by Palin, a onetime Republican vice presidential candidate and former governor of Alaska, centered on the newspaper’s 2017 editorial falsely linking her campaign rhetoric to a mass shooting, which Palin asserted damaged her reputation and career.
The Times acknowledged its editorial was inaccurate but said it quickly corrected errors it called an “honest mistake” that were never meant to harm Palin.
Shane Vogt, a lawyer for Palin, said in an email that Palin was “very happy with today’s decision, which is a significant step forward in the process of holding publishers accountable for content that misleads readers and the public in general.”
“The truth deserves a level playing field, and Governor Palin looks forward to presenting her case to a jury that is ‘provided with relevant proffered evidence and properly instructed on the law,’” Vogt added, quoting in part from the 2nd Circuit ruling.
Charlie Stadtlander, a spokesperson for the Times, said the decision was disappointing. “We’re confident we will prevail in a retrial,” he said in an email.
The 2nd Circuit, in a ruling written by Judge John M. Walker Jr., reversed the jury verdict, along with Rakoff’s decision to dismiss the lawsuit while jurors were deliberating.
Despite his ruling, Rakoff let jurors finish deliberating and render their verdict, which went against Palin.
The appeals court noted that Rakoff’s ruling made credibility determinations, weighed evidence, and ignored facts or inferences that a reasonable juror could plausibly find supported Palin’s case.
It also described how “push notifications” that reached the cellphones of jurors “came as an unfortunate surprise to the district judge.” The 2nd Circuit said it was not enough that the judge’s law clerk was assured by jurors that Rakoff’s ruling had not affected their deliberations.
“Given a judge’s special position of influence with a jury, we think a jury’s verdict reached with the knowledge of the judge’s already-announced disposition of the case will rarely be untainted, no matter what the jurors say upon subsequent inquiry,” the appeals court said.
In its ruling Wednesday, the 2nd Circuit said it was granting a new trial because of various trial errors and because Rakoff’s mid-deliberations ruling against Palin, which might have reached jurors through alerts delivered to cell phones, “impugn the reliability of that verdict.”
“The jury is sacrosanct in our legal system, and we have a duty to protect its constitutional role, both by ensuring that the jury’s role is not usurped by judges and by making certain that juries are provided with relevant proffered evidence and properly instructed on the law,” the appeals court said.
Nvidia stock stock slips
LOS ANGELES | Nvidia may have exceeded Wall Street estimates as its profit jumped — buffeted by the chipmaking dominance that has cemented Nvidia’s place as the poster child of the artificial intelligence boom — but investors seemed less than impressed.
The company reported a net income of to $16.6 billion. Adjusted for one-time items, net income was $16.95 billion. Revenue rose to $30 billion, up 122% from a year ago and 15% from the previous quarter.
By comparison, S&P 500 companies overall are expected to deliver just 5% growth in revenue for the quarter, according to FactSet.
However, Nvidia shares slipped nearly 4% in after-hours trading.
Nvidia has led the artificial intelligence sector to become one of the stock market’s biggest companies, as tech giants continue to spend heavily on the company’s chips and data centers needed to train and operate their AI systems.
The company reported second-quarter adjusted earnings per share of 68 cents per share, up from 27 cents a year ago.
Demand for generative AI products that can compose documents, make images and serve as personal assistants has fueled sales of Nvidia’s specialized chips over the last year. In June, Nvidia briefly rose to become the most valuable company in the S&P 500. The company is now worth over $3 trillion.
Through the year’s first six months, Nvidia’s stock soared nearly 150%. At that point, the stock was trading at a little more than 100 times the company’s earnings over the prior 12 months. That’s much more expensive than it’s been historically and than the S&P 500 in general. That’s why analysts warn of a selloff if Wall Street sees any indication that AI demand is waning.
The Santa Clara, California-based company carved out an early lead in AI applications race, in part because of founder and CEO Jensen Huang’s successful bet on the chip technology used to fuel the industry. The company is no stranger to big bets. Nvidia’s invention of the graphics processor unit, or GPU, in 1999 helped spark the growth of the PC gaming market and redefined computer graphics.
FAA grounds SpaceX after rocket falls over in flames at landing
SpaceX launches are on hold after a booster rocket toppled over in flames while landing Wednesday.
The Federal Aviation Administration grounded the company’s Falcon 9 rockets and ordered an investigation following the predawn accident off the Florida coast. No injuries or public damage were reported.
It’s too early to know how much impact this will have on SpaceX’s upcoming crew flights, one private and the other for NASA. A billionaire’s chartered flight was delayed just a few hours earlier because of a poor weather forecast.
The rocket blasted off from Cape Canaveral Space Force Station and got all 21 Starlink internet satellites to orbit. But the first-stage booster fell over in a fireball moments after landing on an ocean platform, the first such accident in years. It was the 23rd time this particular booster had launched, a recycling record for SpaceX.
The FAA said it must approve SpaceX’s accident findings and corrective action before the company can resume Falcon 9 launches. A launch from California with more Starlinks was immediately called off following the accident.
SpaceX’s Jon Edwards, a vice president, said the company is working “ASAP” to understand what went wrong.
“Losing a booster is always sad. Each one of them has a unique history and character. Thankfully this doesn’t happen often,” Edwards posted on X.
Besides the private spaceflight awaiting liftoff from Florida’s Kennedy Space Center, SpaceX is due to launch a pair of astronauts for NASA late next month. Two seats will be set aside for the two astronauts who launched in June aboard Boeing’s new Starliner capsule, deemed unsafe by NASA for their return.
—From AP reports
