Regulators Widen Investigation Into Google’s Pre-Loaded Android Apps

A week after European regulators announced an investigation into Google’s requirements that Android-based devices come pre-loaded with Google apps, a similar stateside probe is finally getting off the ground. 

The Federal Trade Commission began looking into questions surrounding the Google mobile operating system last year, and now the Wall Street Journal reports that the agency has met with several companies in recent months to get to the bottom of concerns that Google abuses its dominance in the smartphone arena through exclusive contracts with device makers and service providers.

The FTC, which opened a probe into the company’s practices after receiving complaints from app developers and tech firms related to Google’s tendency to use its heavy weight status to get exclusive deals, has reportedly requested data from at least two companies in the industry related to contracts.

The sources tell the WSJ that it’s too early to say whether or not the investigation could lead to legal action against Google.

The FTC and Google both declined to provide the WSJ with comment on the investigation.

News of the increased scrutiny into Google’s practices comes after EU officials opened their own investigation and expressed concerns that Google’s exclusive contracts — that sometimes require device makers to pre-load up to 11 Google apps — may be putting up roadblocks that reduce the odds of competing, possibly better and more innovative, software from reaching consumers.

Google said at the time that “anyone can use Android with or without Google applications. Hardware manufacturers and carriers can decide how to use Android and consumers have the last word about which apps they want to use.”

If the Commission ultimately rules against Google, it could mean billions in penalties for the online giant.

However, the WSJ points out that stateside regulators could come to different conclusions with their investigation.

Not only do laws differ between the regulators, but Android has a much greater market share in Europe than in the U.S.: Europe’s competition laws allow for stiffer action against companies, while the FTC is encouraged to give credit to companies if their actions had legitimate business justifications.

Additionally, the WSJ reports that Android runs more than 70% of the smartphones in court of the five largest EU countries, while it runs only 59% in the U.S.

FTC Extends Probe Into Google’s Android [The Wall Street Journal]

by Ashlee Kieler via Consumerist

Brands Aren’t Going To Quit Tweeting About Current Events

When major news event happen, the people who run brands’ social media accounts have a tough choice: should they mention it or not? When things go wrong, people accuse you of using the deaths of beloved celebrities to hawk shoes or cereal. The problem, though, is that the rewards for brands are too great, and they aren’t about to stop trying just because a few people are offended.

Over at Bloomberg, Polly Mosendz looked into why brands have a compulsive need to be relevant. Social media lets them be part of the conversation immediately, even when the conversation isn’t actually about them, or remotely related to their brand.

“They want their communications to hit when people are paying attention to some issue going on in the world,” Matthew Quint, the director of the brand leadership center at Columbia Business School, explained. People are talking about a power outage on their smartphones: why not make them think about Oreos?

Power out? No problem. http://pic.twitter.com/dnQ7pOgC

— Oreo Cookie (@Oreo) February 4, 2013

Prince had a song about a red Corvette: why shouldn’t Chevrolet post a tribute?

http://pic.twitter.com/y2EoqU9wYh

— Chevrolet (@chevrolet) April 22, 2016

The rewards of popular posts like these are great, but the problem is that it’s hard to get the tone exactly right. For now, it seems that social media mavens are tweeting first, then dealing with the rewards or fallout later.

Even if brands take down offending tweets immediately, they still get some free publicity. At least if people are talking about your deleted tweet and sharing screengrabs, they’re still talking about your brand.

Why ‘Thirsty’ Brand Tweets About Dead Celebrities Won’t Go Away [Bloomberg]

by Laura Northrup via Consumerist

Card Reissued Because Of A Breach? Good Luck Finding Out Where The Hack Happened

When a massive data breach happens at a retailer like Target or Home Depot, there’s little mystery as to why your bank is rushing you a new credit or debit card. But when your card is being replaced because of a lower-profile cybercrime, the odds are against you ever finding out why. 

Instead, you’re more likely to go to your mailbox and find a vague explanation that your account may have been “compromised” without any details on how, where, or why.

Those were the questions posed to the Cleveland Plain Dealer’s Money Matters column recently by a reader who was notified by AAA Financial Services, through Bank of America, that their AAA Member Rewards Visa card was compromised at a retailer and that a new card would be issued.

“So, I thought to protect myself, I would try to find out where the data compromise took place,” the reader says. “But, after trying to talk twice to Bank of America and also Visa, I’ve been told that no one has this information.”

While it’s not true that no one has information on the breach — the card associations for Visa, American Express, Discover, and MasterCard know — the Plain Dealer reports there’s a reason no one is providing specific information on the breach to customers: confidentially agreements.

These agreements, which are typical between credit card issuers, banks, and other companies, prohibit the disclosure of when and to whom a data breach has occurred.

But even without these agreements, the chances you’d be able to find out what previously visited merchant was breached is virtually zero.

Krebs on Security, which covers data breaches and fraud of all kinds, notes most banks don’t even know who’s been hacked. Instead, they issue new cards based on a list of compromised account numbers provided by the card association.

So instead of beginning a “fruitless” search for what company you visited was breached, Krebs suggests customers “keep a close eye on their card statements and report any fraud” to their banks.

When your credit card is reissued because of a data breach, why won’t your bank tell you where the breach happened?: Money Matters [The Plain Dealer]
How Was Your Credit Card Stolen? [Krebs on Security]

by Ashlee Kieler via Consumerist

Chipotle To Expand Chorizo, Consider Loyalty Program To Bring In New And ‘Lapsed’ Customers

Last year, Chipotle’s food-safety crisis led the burrito eatery’s business to plummet, with same-store sales plunging as low as 37% in December 2015. In 2016, though, there have been no reported outbreaks, and the company has been mailing and texting out coupons to draw old and new customers. The massive giveaways of food are now over, and the chain is moving on to new promotional methods, including buy one, get one free entrées and potentially a loyalty program.

Executives shared this information during the company’s quarterly earnings call, and they were the side helping to some dismal numbers. Customers have been returning to Chipotle, and a recent survey performed by stock analysts showed that customers who used the freebie coupons were more likely to return to the restaurant more often for meals that weren’t free. The company gave away a total of six million free burritos and burrito bowls to customers who texted in or received coupons in the mail. One million more customers cashed in coupons for free chips and guacamole or salsa.

Comparable restaurant sales weren’t as bad as they were during the worst of the food safety crisis, but they still weren’t great. Comparable restaurant sales fell 29.7%, but comparable restaurant transactions were only down 21.1%, since “transactions” also includes customers who were just there to cash in their freebies.

The company also plans to roll back some of the changes it made to help with food safety. Customers didn’t react well to lettuce that was pre-shredded in a central kitchen, so restaurants have returned to shredding lettuce and slicing bell peppers in-house.

Blanching fresh vegetables (dipping them in boiling water to sanitize them, then immediately into cold water) has been a helpful food safety precaution, and customers are actually complaining less about the steak now that it’s pre-cooked before being grilled.

The chain kept expanding, too, opening 58 new restaurants in the first three months of the year. They plan to open as many as 235 restaurants in calendar year 2016.

To keep customers coming back more often, the company plans what it calls a “limited-time frequency program” this summer, rewarding customers for stopping by often, and perhaps bringing back what the executives have come to call “lapsed” customers who haven’t been back recently.

The food safety crisis delayed expansion of chorizo, a chicken-pork spiced sausage that has been tested in Kansas City but hadn’t rolled out elsewhere. Expect to see chorizo elsewhere soon, though the executives didn’t specify where.

Chipotle Mexican Grill, Inc. Announces First Quarter 2016 Results [More Numbers]

by Laura Northrup via Consumerist

New Bill Could Stop Cable & Phone Companies From Taking Away Customers’ Right To Sue

Five years ago today, the U.S. Supreme Court sided with AT&T, ruling that companies could use a couple paragraphs of legalese buried deep in unchangeable user agreements to strip customers of their right to file a lawsuit. An upcoming piece of legislation seeks to restore that right for telecom customers.

Consumerist has confirmed that Senators Richard Blumenthal (CT) and Al Franken (MN) recently circulated a letter to their colleagues, seeking co-sponsors for their upcoming bill — the Justice for Telecommunications Consumers Act — that would prohibit phone companies, pay-TV providers, broadband services, and others from including mandatory arbitration clauses in their terms of use with consumers.

Arbitration clauses force customers to resolve disputes outside of the legal system in a binding process overseen by a third-party arbitrator.

It’s a process that, for a long time following the enactment of the 1925 Federal Arbitration Act, was largely used as a way to expedite contract disputes between companies.

However, as we recently detailed, multiple Supreme Court decisions over the last four decades have made the use of arbitration clauses more attractive as a method for restricting consumers’ access to the legal system.

Because of these rulings, forced arbitration now applies to lawsuits filed in both federal and state courts; arbitration clauses can be used to prevent consumers from resolving disputes together as a class, even through arbitration, and even if a class action is the only possible way to prove their case; and arbitrators’ decisions are final, even in situations where an obvious legal error was made that would have changed the outcome.

And while defenders of arbitration clauses argue that they are a fast and easy way to resolve disputes, the numbers indicate that companies tend to use these clauses to primarily shut down class actions.

As noted in the letter sent by Blumenthal and Franken, companies allow most lawsuits involving dollar amounts under $2,500 to be heard in court rather than shunt them off into the arbitration process.

The issue of arbitration is particularly worrisome for the telecom industry because not only do almost all telecom providers use these clauses, but these same companies “have been accused of a plethora of consumer protection law violations, including unauthorized charges, fraud, and false advertising.”

Some companies have begun highlighting their arbitration clauses by putting notes at the top of their user agreements, but the senators note that this is ultimately pointless.

“[E]ven if the clauses were in bold letters, it would make little difference,” explains the letter. “For one, these are adhesion clauses — customers cannot negotiate the terms. Second, customers cannot refuse and sign up with a company that preserves their rights because virtually all telecommunications companies use arbitration agreements.”

The legislation — expected to be introduced tomorrow — would not outlaw the use of arbitration. If a customer and a telecom company both choose to resolve a dispute outside of the courtroom, that would be their choice. It merely seeks to restore the ability to make that choice for hundreds of millions of American consumers.

“Arbitration can be a useful tool,” the senators acknowledge, “but these clauses are predatory and serve to benefit corporations at the expense of consumer rights.”

by Chris Morran via Consumerist

ClassPass Ticks Off NYC Customers By Raising Unlimited Membership Prices

For folks who want to jump, dance, spin, cycle, and otherwise get their workout on in an exercise class, it’s not always affordable to buy a monthly membership at a gym or studio. That’s where a startup fitness company called ClassPass comes in: it offers monthly memberships that give customers unlimited access to as many exercise classes at participating studios in their city as they want. But with prices going up for New York City ClassPass memberships, many irked customers say they’re better off paying a gym or studio directly for their workouts.

ClassPass customers in the Big Apple received an email this morning alerting them to the change in membership rates: existing customers will now pay $190 per month for unlimited access to classes, up from $125, while new customers will fork over $200 for that membership tier.

The company is reconfiguring its membership plans as follows:
• Base (5 classes): $75
• Core (10 classes): $125 existing members/$135 new members
• Unlimited: $190 existing members/$200 new members

Unless current unlimited customers opt in to pay more, they won’t have to — but will instead be limited to 10 classes per month at the old rate.

“Your current plan and rate are valid through the end of your May cycle,” ClassPass wrote in its email. “To transition to the Core membership (10 classes for $125/mo.+tax), there’s nothing you need to do. We’ll automatically enroll you beginning with your June cycle.”

ClassPass blames the change on rising rates for studio classes in New York City, noting that many charge $35 for drop-in customers, saying that the company “can no longer sustain a one-size-fits-all Unlimited membership at our current rates.”

The company has “realized that a one-size-fits-all membership is not diverse enough to serve all of our members’ unique needs, which is why we have decided to roll out new plans,” CEO Payal Kadia says in a statement provided by a ClassPass spokeswoman. “We wanted an easier entry point for new users who have an appetite for boutique fitness as well as the ability to keep offering an exceptional experience to those who love our unlimited product.”

Predictably, customers aren’t exactly over the moon at thew news: a gym membership is often less than $200, customers point out, with free classes included as well as access to exercise equipment and other amenities. This is the second time the company has raised prices in NYC, customers point out, after raising rates from the original $99 for unlimited access to workout classes to the current $125.

When you find out @classpass is raising their prices again #NYCproblems http://pic.twitter.com/ZWHKJZf3JY

— Meredith Rowe (@mererow) April 27, 2016

@classpass raising their prices… Say it isn't so. Come on y'all, you're supposed to be a company for the movers and shakers!!!

— Jane Jourdan (@janejourdan) April 27, 2016

@classpass raising prices AGAIN?! Heading back to @Equinox which is even cheaper now.

— Missy McMinn (@MissyMcMinn) April 27, 2016

@classpass is raising their prices for NYC in May. Over $200 each month? Nope. It's officially cheaper to belong to a studio. #bye

— d. (@devdenn) April 27, 2016

Yup, using this gif again: How I feel about @classpass raising prices. cc @KateSmithMuni @KaitlynnFish @taralach http://pic.twitter.com/4JEF0LyTxb

— Julie VerHage (@julieverhage) April 27, 2016

.@classpass feel good about raising prices 90% in less than a year? You're about to lose so many customers and everyone's loyalty #classpass

— Alyssa Mazzei (@alyysss) April 27, 2016

So bummed @Classpass is raising the price to $190 in NYC. That's more than Equinox + they have free classes…https://t.co/fKqxkHA8Cx @MONEY

— Hillary Frazier (@HillaryxFrazier) April 27, 2016

@classpass is raising its prices again?! 😑

— lisa lindey (@cmmnflk) April 27, 2016

Wonder if more people are going to go back to their gyms, now that @classpass is raising prices to $190 a month in NYC. It's outrageous!

— Shelly Banjo (@sbanjo) April 27, 2016

.@classpass you keep raising prices but don't offer reasons to stay. How do you see this working for your members?? http://pic.twitter.com/UjkJE2CwzT

— Kristen Wasko (@kwask0) April 27, 2016

Thus far, the change only affects New York City customers. When we asked if the company has plans to raise rates elsewhere in the country, a ClassPass spokeswoman said there are no “specific cities or timelines to share at this point, but we will continue to monitor and analyze to determine what’s best for each city given the varied dynamics of each market.”

Earlier this month, however, ClassPass also raised rates in Boston: a typical unlimited membership went from $119 to $180 for new members, and $150 for existing. A five-class bundle costs $65 and a 10-pack is $120, as Business Insider reported.

by Mary Beth Quirk via Consumerist

VW Exec Created A Power Point Presentation On How To Cheat Emissions Tests In 2006

Back in September, shortly after Volkswagen admitted it had equipped 11 million vehicles worldwide with “defeat devices” in order to evade emissions tests, an internal investigation found that some employees of the carmaker knew of the illegal software in 2011. But, according to a new report, at least one person with the company knew how to cheat emissions tests in 2006, and that person allegedly created a study guide of sorts to share his information. 

A top executive at VW allegedly created a PowerPoint presentation 10 years ago, highlighting how the carmaker could cheat emissions tests if it equipped vehicles with certain software, The New York Times reports.

The PowerPoint was supposedly created after the company realized emissions equipment in its latest diesel vehicles would wear out too quickly if calibrated to the more stringent American pollution standards.

The presentation offered a fairly simple solution: make the emissions tests work in VW’s favor.

Because the emissions tests conducted by U.S. regulators mimicked conditions on the open road, they were predictable, the Times reports.

And with a little added software, the company’s vehicles could recognize those test patterns and then activate equipment to reduce emissions.

Over time, the software was updated to better detect regulator tests, but continued to allow the vehicles to spew nitrogen oxide emissions that were up to 40 times the legal limit during regular use.

While it’s unclear how many people received the presentation, the existence of the detailed plan suggests that several people at the company knew VW vehicles did not properly contain pollutants.

In fact, two employees with the company tell the Times that executives repeatedly rejected proposals to improve emissions equipment, and instead continued to install the defeat devices.

This isn’t the first time investigations into VW’s use of defeat devices found the company knew it was breaking the law.

In February, it was reported that several VW managers, including now-former CEO Martin Winterkorn, were warned by employees that regulators would likely look into the company’s diesel engine software during an investigation into pollution levels in May 2014.

Before that, in September 2015, VW’s internal investigation found at least two incidents in which the carmaker was made aware that the use of defeat devices were against the law.

An engineer allegedly expressed concern in 2011 that using defeat devices was illegal. Separately, another source uncovered internal communications between parts supplier Bosch and VW, with the parts supplier insisting that the software was for test purposes and that using it in regular operation would be against the law.

VW Presentation in ’06 Showed How to Foil Emissions Tests [The New York Times]

by Ashlee Kieler via Consumerist