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The Supreme Court heard arguments Wednesday in a case that will help determine whether social media platforms can be held liable for aiding and abetting terrorism for failing to remove content and accounts promoting it.

The arguments in Twitter v. Taamneh follow those in a case with similar facts, Gonzalez v. Google, that explores whether tech platforms can be held responsible for promoting terrorist posts through their recommendation algorithms. In that case, the justices seemed reluctant to overhaul the key legal liability shield in question, Section 230 of the Communications Decency Act, which protects platforms from being held accountable for hosting their users’ posts. While many appeared sympathetic to a narrower reading of the law, several also seemed to prefer kicking the responsibility over to Congress.

In Wednesday’s case, such a consensus was more elusive, as justices tested a variety of hypotheticals on lawyers for either side as well as a representative for the U.S. government, which generally argued in favor of Twitter. U.S. Deputy Solicitor General Edwin Kneedler represented the U.S. government.

The question in the case is whether Twitter can be held accountable for aiding and abetting a specific international terrorist act because it did not take more aggressive action against terrorist content on its service, given that it generally works to moderate and remove terrorist content under its policies.

Twitter’s lawyer Seth Waxman argued that the company should not be held responsible for aiding and abetting terrorism in instances where it is not directly aware of the specific post or account in question. He said that to satisfy the anti-terrorism law’s standard for liability, Twitter would have had to provide substantial assistance to the act of terrorism and know their actions would provide such assistance.

Waxman tried to draw a distinction between an open and widely used service like Twitter and a bank that provides money to a terrorist, given Know Your Customer laws that would require a bank to collect more information before providing its services, creating a greater level of knowledge than Twitter would have.

Justice Samuel Alito said he could see two different arguments for how Twitter could win, but it’s difficult to say in each where to draw the line. The first argument would be that Twitter did not know its services would be used to carry out a specific attack and the second would be that Twitter didn’t substantially assist in the attack.

Justice Sonia Sotomayor noted that basing a win for Twitter on the knowing standard would be difficult “because willful blindness is something we have said can constitute knowledge.”

Justice Elena Kagan at one point asked Waxman whether Twitter could be held liable if it actually didn’t enforce any policy against terrorist content on its site. Waxman said he doesn’t think it could unless it also provided “affirmative assistance” to the terrorists.

Kagan seemed to disagree with that interpretation, saying it would be obvious in that scenario that Twitter was providing substantial assistance to terrorist activity, asking, “how could it be otherwise?”

Justice Amy Coney Barrett laid out a possible framework for a ruling in favor of Twitter in her questioning of Kneedler. Coney Barrett said such an opinion might say that in order to find Twitter liable for aiding and abetting the terrorist act, the complaint would have to prove that Twitter’s service was directly used toward the terrorist attack, not just general recruitment or radicalizing.

Coney Barrett also hypothesized that the justices could say there needs to be an allegation of specific knowledge of a terrorist act in order to find a service that’s “open to all comers” liable.

Kneedler said it would be important to clarify that some businesses that are theoretically open to all, like banks, would have a more “individualized encounter” with their consumers in the course of doing business, granting them more knowledge than a platform like Twitter.

Eric Schnapper, the attorney for Taamneh, conceded that they were not alleging specific ways Twitter was used to carry out the terrorist attack, but rather general recruitment. Justice Ketanji Brown Jackson asked if it would be illegal to sell Osama bin Laden a phone without knowing it would be used for a terrorist specific terrorist act.

Schnapper said it would not be necessary to prove the phone was used for a specific terrorist act, because it “aids the terrorist enterprise.” He later conceded that alleging bin Laden did in fact use the phone to further his terrorist activity “would be the better way to plea it.” Still, he said, the potential terrorist actions “would be fairly implicit in his name,” he said.

The Supreme Court is expected to make a decision on the case by June.

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X rival Bluesky gains 1.25 million users following U.S. election

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X rival Bluesky gains 1.25 million users following U.S. election

In this photo illustration, the Bluesky Social logo is displayed on a cell phone in Rio de Janeiro, Brazil, on September 4, 2024. 

Mauro Pimentel | AFP | Getty Images

Micro-blogging startup Bluesky has gained over 1.25 million new users in the past week, indicating some social media users are changing their habits following the U.S. presidential election. 

Bluesky’s influx of users shows that the app has been able to pitch itself as an alternative to X, formerly Twitter, which is owned by Elon Musk, as well as Meta’s Threads. The bulk of the new users are coming from the U.S., Canada and the United Kingdom, the company said Wednesday. 

“We’re excited to welcome everyone looking for a better social media experience,” Bluesky CEO Jay Graber told CNBC in a statement.

Despite the surge of users, Bluesky’s total base remains a fraction of its rivals’. The Seattle startup claims 15.2 million total users. Meta CEO Mark Zuckerberg in October said Threads had nearly 275 million monthly users. Musk in May claimed that X had 600 million monthly users, but market intelligence firm Sensor Tower pegged X’s monthly base at 318 million users in October.

Created in 2019 as a project inside Twitter, when Jack Dorsey was still CEO, Bluesky doesn’t show ads and has yet to develop a business model. It became an independent company in 2021. Dorsey said in May of this year that he’s no longer a member of Bluesky’s board.

“Journalists, politicians, and news junkies have also been talking up Bluesky as a better X alternative than Threads,” wrote Similarweb, the internet traffic and monitoring service, in a Tuesday blog.

Some users with new Bluesky accounts posted that they had moved to the service due to Musk and his support for President-elect Donald Trump. 

“It’s appalling that Elon Musk has transformed Twitter into a Trump propaganda machine, rife with disinformation and misinformation,” one user posted on Bluesky. 

This is Bluesky’s second notable surge in the last couple of months. 

Bluesky said it picked up 2 million new users in September after the Brazilian Supreme Court suspended X in the country for failing to comply with regional content moderation policies and not appointing a local representative.

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Cisco reports fourth straight quarter of declining revenue

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Cisco reports fourth straight quarter of declining revenue

Cisco CEO Chuck Robbins speaks at The Wall Street Journal’s Future of Everything Festival in New York on May 21, 2024.

Dia Dipasupil | Getty Images

Cisco reported a fourth straight quarter of declining revenue even as results topped analysts’ estimates. The stock slipped 2.5% in extended trading.

Here’s how the company did in comparison with LSEG consensus:

  • Earnings per share: 91 cents adjusted vs. 87 cents expected
  • Revenue: $13.84 billion vs. $13.77 billion expected

Cisco’s revenue dropped 6% in the quarter ended Oct. 26, from $14.7 billion a year earlier, according to a statement. Net income fell to $2.71 billion, or 68 cents per share, from $3.64 billion, or 89 cents per share, in the same quarter a year ago.

Networking revenue plunged 23% to $6.75 billion, slightly below the $6.8 billion consensus of analysts surveyed by StreetAccount.

Security revenue doubled to $2.02 billion, topping the StreetAccount consensus of $1.93 billion. Cisco’s revenue from collaboration was $1.09 billion, a bit below the $1.04 billion consensus estimate.

Cisco CEO Chuck Robbins said on the earnings call on Wednesday that orders from large-scale clients for artificial intelligence infrastructure exceeded $300 million in the quarter. Server makers such as Dell and HPE have also focused on sales of hardware that can help clients implement generative AI.

“We have earned more design wins and remain confident that we will exceed our target of $1 billion of AI orders this fiscal year from web-scale customers,” Robbins said.

Cisco has announced hardware containing Nvidia’s graphics processing units, which are widely used for training AI models, Robbins said.

“Over time, you’ll see us support other GPUs as the market demands,” he said. “But that partnership is still going fine. It’s still early. And I think 2025 is when we’ll start to see enterprise real deployment of some of these technologies.”

For now, enterprises are updating data center infrastructure to prepare for AI and the widespread deployment of AI applications, Robbins said.

U.S. government agencies have delayed deals with Cisco, rather than scrapping them altogether. The Fiscal Responsibility Act of 2023, which became law in June of last year, has limited U.S. government spending, said Scott Herren, Cisco’s finance chief.

Herren said that with Republicans poised to control the White House and both houses of Congress, he expects “to get a budget in place relatively soon.”

During the quarter, Cisco acquired security startups DeepFactor and Robust Intelligence.

Cisco lifted its full-year guidance to $3.60 to $3.66 in adjusted earnings per share on $55.3 billion to $56.3 billion in revenue, up from a prior forecast of $3.52 to $3.58 in EPS and $55 billion to $56.2 billion in revenue. Guidance would indicate projected revenue growth of 3.3% at the middle of the range.

Analysts expected adjusted earnings for the year of $3.58 per share on $55.89 billion in revenue.

As of Wednesday’s close, Cisco’s stock was up 17% year to date, while the S&P 500 index is up around 26% over that stretch.

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Trump victory may provide TikTok a lifeline to remain in the U.S.

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Trump victory may provide TikTok a lifeline to remain in the U.S.

Republican presidential nominee, former U.S. President Donald Trump, (C) greets attendees during a campaign stop to address Pennsylvanians who are concerned about the threat of Communist China to U.S. agriculture at the Smith Family Farm September 23, 2024 in Smithton, Pennsylvania. 

Win Mcnamee | Getty Images

After Donald Trump won the U.S. presidency last week, tech CEOs including Apple‘s Tim Cook, Meta‘s Mark Zuckerberg and Amazon‘s Jeff Bezos publicly praised the president-elect.

One name was conspicuously missing: TikTok CEO Shou Zi Chew.

His absence was notable considering that of all the top tech companies, TikTok faces the most immediate and existential threat from the U.S. government. In April, President Joe Biden signed a law that requires China’s ByteDance to sell TikTok by Jan. 19. If ByteDance fails to comply, internet hosting companies and app store owners such as Apple and Google will be prohibited from supporting TikTok, effectively banning it in the U.S.

Trump’s return to the White House, though, may provide a lifeline for Chew and TikTok. 

Although both Republicans and Democrats supported the Biden TikTok ban in April, Trump voiced opposition to the ban during his candidacy. Trump acknowledged the national security and data privacy concerns with TikTok in a March interview with CNBC’s “Squawk Box,” but he also said “there’s a lot of good and there’s a lot of bad” with the app.

Trump also leveraged TikTok’s shaky future in the U.S. as a reason for people to vote against Democrat Vice President Kamala Harris.

“We’re not doing anything with TikTok, but the other side is going to close it up, so if you like TikTok, go out and vote for Trump,” the president-elect said in a September post on his Truth Social service.

Since his election, Trump hasn’t publicly discussed his plans for TikTok, but Trump-Vance transition spokeswoman Karoline Leavitt told CNBC that the president-elect “will deliver.”

“The American people re-elected President Trump by a resounding margin giving him a mandate to implement the promises he made on the campaign trail,” Leavitt said in a statement. 

Trump’s rhetoric on TikTok began to turn after the president-elect met in February with billionaire Jeff Yass, a Republican megadonor and a major investor in the Chinese-owned social media app.

Yass’s trading firm Susquehanna International Group owns a 15% stake in ByteDance while Yass maintains a 7% stake in the company, equating to about $21 billion, NBC and CNBC reported in March. That month it was also reported that Yass was a part owner of the business that merged with the parent company of Trump’s Truth Social.

TikTok’s CEO Shou Zi Chew testifies during the Senate Judiciary Committee hearing on online child sexual exploitation, at the U.S. Capitol, in Washington, U.S., January 31, 2024. 

Nathan Howard | Reuters

If ByteDance doesn’t sell TikTok by the January deadline, Trump could potentially call on Congress to repeal the law or he can introduce a more “selective enforcement” of the law that would essentially allow TikTok to continue operating in the U.S. without facing penalties, said Sarah Kreps, a Cornell University professor of government. “Selective enforcement” would be akin to police officers not always enforcing every single instance of jaywalking, she said.

At TikTok, meanwhile, Chew has remained quiet since Trump’s victory, just as he had been in the lead-up to Election Day. 

The Chinese-owned company may be taking a neutral approach and a wait-and-see strategy for now, said Long Le, a China business expert and Santa Clara University associate teaching professor.

Le said it’s hard to foresee what Trump will do. 

“He’s also a contrarian; that’s what makes him unpredictable,” Le said. “He can say one thing, and the next year he’ll change his mind.”

TikTok didn’t respond to requests for comment.

Mark Zuckerberg, CEO of Meta testifies before the Senate Judiciary Committee at the Dirksen Senate Office Building on January 31, 2024 in Washington, DC.

Alex Wong | Getty Images

‘Facebook has been very bad for our country’

When it comes to social media apps, Trump’s campaign comments suggest he’s more concerned with TikTok rival Meta. 

In his March interview with “Squawk Box,” Trump said Meta, which owns Facebook and Instagram, posed a much bigger problem than TikTok. He also said a TikTok ban would only benefit Meta, which he labeled “an enemy of the people.”

“Facebook has been very bad for our country, especially when it comes to elections,” Trump said.

But Trump’s negative views on Meta may have changed after comments by CEO Mark Zuckerberg over the past few months, Cornell’s Kreps said. 

Zuckerberg described the photo of Trump raising his fist following a failed assassination attempt in July as “one of the most badass things I’ve ever seen in my life.” And after Trump’s win, Zuckerberg congratulated him, saying he was looking forward to working with the president-elect and his administration.

“My sense as an armchair psychologist of Trump is that he really likes people who sing his praises, and so his view on Zuckerberg and Meta, I would imagine, has changed,” Kreps said. “He might then just revert to his American economic nationalism here and say, ‘Let’s protect American industry and continue with the Chinese ban.'”

Meta didn’t respond to a request for comment.

Maintaining support of the TikTok ban could also win Trump political favor with lawmakers concerned about China’s global political and business influence, said Milton Mueller, a professor at Georgia Tech’s School of Public Policy.

“I don’t see him scoring big points politically by standing up for TikTok,” Mueller said, noting that few lawmakers, like Sen. Rand Paul, R-Ky., have opposed the ban.

Even if Trump does provide a lifeline for TikTok, it’s unclear how much damage that would do to his administration since many politicians are reluctant to publicly criticize him, Le said.

“They’re not going to challenge him because he just got so much power,” Le said. 

Since launching his TikTok account in June, Trump has amassed over 14 million followers. Given his social media savvy, Trump may not want to make a decision that results in him losing the public attention and influence he’s gained on TikTok, Le said.

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