(WASHINGTON) — The Department of Justice has joined an investigation led by the Department of Transportation into Southwest Airlines’ meltdown in December — when the company canceled more than 16,000 flights over an 11-day period — a DOT spokesperson said.
The DOT’s probe is looking into “whether Southwest engaged in unrealistic flight scheduling which is illegal under federal law and whether Southwest Airlines provided timely refunds and reimbursements to affected passengers as required,” the agency spokesperson said in a statement.
“The DOT team … is also closely coordinating with DOJ and FAA,” the spokesperson said.
In a statement, Southwest said it has not received any inquiries yet from the DOJ but is ready to cooperate with the government agencies.
Southwest’s extensive cancellations left thousands of passengers stranded as a result of severe winter storms, staffing shortages and technology issues.
The airline said the breakdown cost more than $800 million in revenue in the fourth quarter of 2022.
At the time, Southwest’s CEO Bob Jordan apologized for the chaos during an interview with ABC News, saying, “This has impacted so many people, so many customers over the holidays, it’s impacted our employees and I’m extremely sorry for that. There’s just no way, almost, to apologize enough.”
In January, the DOT announced that it was investigating and in a February hearing, the company’s COO, Andrew Watterson, addressed the cancellations before the Senate Commerce Committee.
“Let me be clear: We messed up,” Watterson said. “In hindsight, we did not have enough winter operational resilience.”
In March, Southwest unveiled a three-part plan to boost the airline’s operational resiliency in the face of future challenges.
But problems have persisted: Last week, Southwest planes were briefly grounded nationwide and more than 2,000 flights were delayed as a result of a technical issue with an internal system.
“This is another demonstration that Southwest Airlines needs to upgrade their systems and stop the negative impacts to individual travelers,” Washington Sen. Maria Cantwell, chair of the Senate Committee on Commerce, Science and Transportation, said in a statement at the time.
(NEW YORK) — Twitter reversed a major change to its subscription policy over the weekend by reverifying some legacy accounts, including ones belonging to dead celebrities like Michael Jackson and Kobe Bryant.
The Elon Musk-owned social media platform last week removed blue checkmark verification from its legacy users as part of revamp of Twitter Blue, a subscription service that grants purchasers the site’s signature checkmark and additional posting capabilities.
However, the company appeared to return the verification checkmark for some popular accounts over the weekend, eliciting outcry from some widely followed users who clarified that they had not paid for the service.
In addition, Twitter appeared to reverify accounts for some dead celebrities, including Anthony Bourdain, Chadwick Boseman and Norm Macdonald, among others.
It was not immediately known whether Twitter reverified the accounts or individuals operating the accounts on behalf of the deceased figures had subscribed to Twitter Blue.
Twitter did not immediately respond to ABC News’ request for comment.
Musk, the CEO of Tesla and SpaceX, said that he personally paid for subscriptions for accounts belonging to basketball star Lebron James, actor William Shatner and author Steven King. In a tweet, King called on Musk to “give my blue check to charity.”
James received an email from a Twitter employee informing him that Musk had paid for a complimentary subscription but James did not respond to the email, the Verge reported.
Chrissy Teigen, a model with nearly 13 million Twitter followers, reacted to the return of some legacy verification check marks in a tweet: “wait I’m crying they’re giving them for punishment now.”
Teigen, like some other celebrities, appeared to remove the check mark by briefly altering their Twitter handles, the usernames anchored to their accounts.
Previously, Twitter verified celebrities, politicians, journalists and prominent figures on a case-by-case basis in an effort to authenticate their identities and prevent impersonation.
Under Twitter’s new subscription service, users gain access to account verification for an $8 monthly fee, which amounts to $96 per year.
“Until now, Twitter used the blue checkmark to indicate active, notable, and authentic accounts of public interest,” the company said on its website.
Twitter delayed by a few days the initial release of a revamped Twitter Blue in November over concerns about impostor accounts posing as prominent figures or organizations.
To address impostors, Musk said the site would permanently suspend users who attempt to impersonate others, unless the speech is clearly marked as parody.
The reversal of the subscription policy change for some legacy users marks the latest shift at Twitter since Musk acquired the company in October for $44 billion.
Days after Musk purchased Twitter, the company began layoffs that ultimately cut roughly 75% of its 7,500-person workforce, raising concerns about Twitter’s capacity to maintain its platform.
Twitter suffered a user outage in February that lasted for hours and required an emergency fix, prompting an apology from the company.
The outage came hours after Twitter announced that subscribers to Twitter Blue would be permitted to post longer messages than other users.
For his part, Musk has defended his actions at Twitter as part of an aggressive effort to rescue the company from financial peril, which he described in a Twitter Spaces interview in December as an “emergency fire drill.”
“That’s the reason for my actions,” he added. “They may seem sometimes spurious or odd or whatever.”
The policy change over legacy verification came during a difficult week for Musk, who watched on Thursday as a SpaceX rocket Starship exploded minutes after takeoff.
Still, Musk congratulated the workers behind the rocket launch and vowed to try again later this year.
“Learned a lot for next test launch in a few months,” Musk tweeted.
(NEW YORK) — Bed Bath & Beyond filed on Sunday for Chapter 11 bankruptcy.
The company’s 360 stores — along with its 120 buybuy BABY stores — are expected to remain open as the retailer begins its bankruptcy restructuring, according to a statement released Sunday. Online sales are also expected to continue.
Sue Gove, president & CEO, said the company would work “diligently to maximize value for the benefit of all stakeholders.”
“We deeply appreciate our associates, customers, partners, and the communities we serve, and we remain steadfastly determined to serve them throughout this process,” Gove said.
In a filing in U.S. Bankruptcy Court in the District of New Jersey, the company said its liabilities totalled more than $1 billion. The company said in a release it had secured financing of $240 million from Sixth Street Specialty Lending to support its operations during the turnaround process.
The New Jersey-based company listed debt, including long-term liabilities, totalling about $5.2 billion in its most recent quarterly filing with the Securities and Exchange Commission. Its assets were about $4.4 billion, including about $153 million in cash or equivalents.
ABC News’ Darren Reynolds contributed to this story.
(NEW YORK) — Facebook users who had an account at any time from May 2007 to the end of last year can now apply for their share of a $725 million privacy settlement that the platform’s parent company, Meta, agreed to last December.
In a 2018 lawsuit, Facebook was accused of improperly sharing the personal information of 87 million users with third-party advertisers, including Cambridge Analytica, the data firm linked to then-candidate Donald Trump’s 2016 presidential campaign.
Meta denies any liability or wrongdoing, but is agreeing to pay out the large settlement to users whose information may have been comprised during that time. ABC News Radio anchor Michelle Franzen spoke to ABC News correspondent Alexis Christoforous on START HERE to discuss the case’s background and how people can apply for their claim online at facebookuserprivacysettlement.com.
MICHELLE FRANZEN: Alexis, first of all, jog our collective memories on this lawsuit and how it impacted Facebook users at the time.
ALEXIS CHRISTOFOROUS: So, you know, Michelle, this was quite a few years ago now. This lawsuit was filed in 2018 after Facebook disclosed that the information of 87 million users was improperly shared with third-party advertisers, data brokers, namely Cambridge Analytica. That is the political consultant that was used by the presidential campaign of Donald Trump and Sen. Ted Cruz, among others. So in coming to this settlement, you know, Meta, which is the Facebook parent company, denies any liability or wrongdoing, but they are agreeing to pay out $725 million to users whose information may have been compromised during that time.
FRANZEN: So how much money could users receive and what do you have to do if you were a Facebook user to see if you’re due some sort of settlement money?
CHRISTOFOROUS: Well, I think we all hear $725 million and our ears perk up because that sounds like a lot of money. But the fact is, when you divvy it up amongst millions and millions of people, it’s not that much money anymore. So the amount of money that you might get from this claim is still unknown, because it’s going to depend on a couple of things: How many people actually submit a claim and then how long you had your Facebook account for given the years that, you know, make you eligible.
So I guess we should let folks know that you’re only eligible if you had an active Facebook account sometime between May of 2007 and December of 2022. You don’t have to have had it for all that time, just some of that time. You have until August 25 to submit a claim. You can do that right online. You have to go to a website. It’s facebookuserprivacysettlement.com. It’s long. You have to write it all out. Again, don’t expect the money super soon. It has to get final approval from a judge in early September. But at some point at the end of this year or next, your money should be coming to you.
FRANZEN: That span of time listed was during the height of Facebook, right?
CHRISTOFOROUS: It was, so, I mean, you would imagine that, you know, many, many millions of people, tens of millions of people. I mean, according to Facebook, its 87 million users had their information improperly shared with these third parties. So many millions of people could claim this money. And so the more people that tried to claim it, the less amount you would get. I mean, if all 87 million people tried to get a piece of the pie, you know, you’d probably walk away with about $8. But you know what, Michelle? That’s $8 you wouldn’t have had if you didn’t file the claim. That’s how I look at it.
FRANZEN: Exactly. That’s what Twitter is asking for for a month.
CHRISTOFOROUS: Exactly, exactly. So, you know, it’s also, I think the principle of the thing for lots of folks, they feel like, you know, you can’t just go willy-nilly and use my information without my consent, and these are privacy violations and so I want what’s coming to me.
FRANZEN: And those privacy violations that resulted in the CEO and the founder of Facebook and Meta, Mark Zuckerberg, having to go to Congress and testify.
CHRISTOFOROUS: That’s right. That was quite the media circus when Zuckerberg went before lawmakers to really defend his company. But, you know, again, with this settlement, they’re not admitting any wrongdoing, but it is their way to sort of, I guess, put a period at the end of this scandalous time for Facebook.
FRANZEN: And Alexis, this is a pretty big settlement, nearly as big as the $787.5 million dollars that Fox News just agreed to settle in a lawsuit by Dominion Voting Systems. Of course, Dominion alleging Fox knowingly pushed false claims about its voting machines during the 2020 election. What do these settlements signal as we turn the corner to the next general election?
CHRISTOFOROUS: Well, I think it tells us that, you know, people are a lot smarter this time around. I think they are much more careful about their personal information and they’re much more caged about how they’re going to let other entities use their personal information.
For companies like Meta, for companies like Fox, I mean, these sound like huge numbers, but when you look at the revenue that flows into these companies, I would imagine for them and their legal teams, they think that this is, you know, sort of the most prudent thing they can do is to settle for what seems like eye-popping amounts of money.
But for sure, I mean, I think privacy, integrity, I mean, these are going to be things that are going to be top of mind for voters in the upcoming election.
(NEW YORK) — High inflation, interest rate hikes and recession worries pummeled stocks last year.
The market has rebounded in 2023, though, even as each of those problems continues to vex the economy. Compounding those concerns, the banking sector underwent a crisis last month and a debt ceiling dispute in Congress risks financial distress.
Still, the tech-heavy Nasdaq has climbed more than 15% this year, while the S&P 500 has jumped more than 7%. The Dow has ticked up about 2% since the outset of the year.
The gains in recent months owe in part to the poor performance last year, since investors already responded to the grim economic conditions with a sell-off, stock analysts told ABC News.
Investors flocked back to the market as inflation eased and rate hikes slowed, even if those market headwinds persist and the threat of a recession looms, they said.
“The stock market is obviously performing better than the vast majority of people would’ve expected,” Tom Essaye, president of financial data firm Sevens Report Research, told ABC News.
“The market has proven very impressively resilient, despite bad news,” he added.
Analysts differed about the outlook for stocks going forward, however, as some said they expect the rally to endure for the remainder of the year while others predicted a recession that would render the good times short-lived.
Over the last year, the Federal Reserve has imposed an aggressive string of interest rate hikes last seen in the 1980s.
The policy aims to slash inflation but risks slowing the economy and bringing about a recession.
So far, the approach has succeeded in cooling price hikes but fallen short of the Fed’s goal.
Consumer prices rose 5% last month compared to a year ago, extending a monthslong slowdown of price increases but leaving inflation more than double the target rate of 2%.
The progress in slashing inflation has left investors confident that the Fed will soon stop raising interest rates and may even begin to lower rates by the end of the year, analysts told ABC News.
“The theme we’re seeing in 2023 is ‘The end is near,'” Adam Turnquist, chief technical strategist at LPL Financial, told ABC News.
Softening inflation and rate hikes have coincided with resilient economic performance, fueling investor optimism, analysts said.
The U.S. added 236,000 jobs in March, which marks robust job growth but a reduction from an average of 334,000 jobs added each month over the previous six months, according to government data released last week.
Meanwhile, U.S. retail sales fell moderately in February but remained solid, suggesting that households still retain some pandemic-era savings.
When asked about rising stock prices this year, Tigress Financial market analyst Ivan Feinseth said: “The key fundamental reason is the economy is still strong. The world hasn’t come to an end.”
Still, the economy remains under threat of a recession.
Fed economists said in March that they anticipate a “mild” recession later this year, escalating a previous forecast, central bank meeting minutes showed.
Sixty-five percent of economists expect a recession within the next year, according to a Bloomberg survey last month.
Still, many stock investors hold out hope that the economy could avert a downturn or expect that a mild recession would cause little economic upheaval, said Turnquist, of LPL Financial.
“We’re seeing a message from the market that we could still potentially avoid a recession,” he said.
Some analysts said each of the major stock indexes would end the year at a higher price than its current level, since resilient economic activity would buoy corporate profits, the key focus for stock forecasters.
“The market is teetering on a major breakout,” said Feinseth, of Tigress Financial. “I think we’re going to see a powerful second half of the year.”
Essaye, of Sevens Report Research, offered a more pessimistic outlook, saying the S&P 500 could fall as much as 10% by the end of the year if the economy turns downward.
“It’s extremely difficult to execute a soft landing,” he said, referring to an outcome in which the Fed raises rates to bring down inflation but avoids causing a recession. “There has only been one executed successfully in the last 40 years.”
Despite the glum forecast, Essaye said the current moment offers an opportunity for patient investors to jump into the market.
“We’re pricing in the bad news now and getting ready for a positive surprise in the long term,” he said. “The U.S. economy isn’t going to break.”
ABC News’ Elizabeth Schulze contributed to this report.
(NEW YORK) — Billionaire entrepreneur Elon Musk announced plans this week to create an AI-driven conversation tool called “TruthGPT,” after criticizing the popular AI text bot ChatGPT for being “politically correct.”
“There’s certainly a path to AI dystopia, which is to train AI to be deceptive,” Musk, the CEO of Tesla and owner of Twitter, cautioned in an interview with Fox News host Tucker Carlson on Monday.
AI chatbots pose significant risks centered on political bias, since the models can generate vast amounts of speech, potentially shaping public opinion and enabling the spread of misinformation, experts told ABC News.
However, the comments from Musk underscore the fraught challenge raised by the issue, because content moderation itself has become a polarizing topic and Musk has voiced opinions that place his approach within that hot-button political context, some experts added.
“Musk is correct that if we can’t solve the truthfulness problem and the reliability problem, that poses a risk for AI safety,” Gary Marcus, a professor emeritus of psychology and neuroscience at New York University, who specializes in AI, told ABC News.
“But tying that question to political correctness might actually be a mistake,” he added. “You have to separate the truth from the politics if you want to be credible on the truth issue. It’s a mistake to try to tie the two together.”
Created by artificial intelligence firm OpenAI, ChatGPT is a chatbot — a computer program that converses with human users.
Neither Musk nor OpenAI responded to a request for comment from ABC News.
ChatGPT uses an algorithm that selects words based on lessons learned from scanning billions of pieces of text across the internet. The tool has gained popularity for viral posts that demonstrate it composing Shakespearean poetry or identifying bugs in computer code.
But the technology has also stoked controversy with some troubling results. The designers of ChatGPT programmed safeguards that prevent it from taking up controversial opinions or expressing hate speech.
Content moderation on AI poses legitimate challenges for designers, who must determine which messages are sufficiently offensive or odious to warrant intervention, experts told ABC News.
“If a product is being used by millions of people, safeguards are something the designers have to put in place,” Ruslan Salakhutdinov, a professor of computer science at Carnegie Mellon University, told ABC News.
“The question is: How do you make it fair or neutral? That’s a little bit of a judgment of the designers,” he added. “You could imagine a GPT that’s politically biased.”
Further, the responses from AI conversation tools depend heavily on the text with which the model is trained, Kathleen Carley, another professor of computer science at Carnegie Mellon University.
“There’s this view that the majority of information that it was trained on is more left-leaning and has certain political biases and certain political agendas built into it,” Carley said. “That’s where that argument is coming from.”
Musk, who co-founded OpenAI but left the organization in 2018, in a December tweet accused OpenAI of “training AI to be woke.”
While AI chatbots deserve scrutiny over political bias, Musk stands as an imperfect spokesperson for such criticism because of his own high-profile political views, some experts said.
Musk has taken up a slew of conservative stances in recent months, including an expression of support for Republican candidates in the midterm elections last year and repeated criticism of “woke” politics.
“I think what he means by ‘truth’ is ‘agrees with me,'” Oren Etzioni, CEO of Allen Institute for AI and a computer science professor at the University of Washington, told ABC News.
Still, the polarized political environment poses a challenge for any AI chatbot developer attempting to moderate responses, experts said.
“Politics as it exists today doesn’t draw lines that finely,” Eliezer Yudkowsky, a decision theorist at the Machine Intelligence Research Institute, told ABC News. “You would have to know where to draw the line in a sensible place to get AI to draw the line in a sensible place.”
Rafael Henrique/SOPA Images/LightRocket via Getty Images
(SAN FRANCISCO) — Facebook-parent Meta began laying off workers on Wednesday as part of its latest round of job cuts announced in March, the company confirmed to ABC News.
Last month, CEO Mark Zuckerberg released plans for 10,000 job cuts over April and May, as part of what Zuckerberg described as the company’s “Year of Efficiency.”
“This will be tough and there’s no way around that,” Zuckerberg said in March, forecasting job cuts for technical workers in April and enterprise employees in May.
“My hope is to make these org changes as soon as possible in the year so we can get past this period of uncertainty and focus on the critical work ahead,” Zuckerberg added.
The personnel changes at Meta include the closure of 5,000 additional open roles that the company hadn’t hired, Zuckerberg said.
Meta has faced challenges in recent months as the company contends with a widespread drop in online ad spending and rising competition from TikTok.
The company’s shares fell 64% last year but have recovered a significant portion of those losses this year amid cost-cutting measures.
Sales at top tech firms, including Facebook, have retreated from the blistering pace attained during the pandemic, when billions across the world were forced into isolation.
Customers stuck at home came to rely on delivery services like e-commerce and virtual connections formed through social media
In turn, companies across the tech industry have announced layoffs this year affecting tens of thousands of workers.
In early January, Amazon announced plans to eliminate just over 18,000 roles, including layoffs that had been announced in November.
Alphabet Inc., the parent company of Google, said in January that it would cut roughly 12,000 jobs from its global workforce.
Meta drew criticism last year from some investors over its large investment in its metaverse project, which has yet to deliver significant returns.
Brad Gerstner, whose fund Altimeter Capital holds hundreds of millions of dollars worth of Meta stock, sharply criticized the company’s strategy in an open letter in October.
“Meta has drifted into the land of excess – too many people, too many ideas, too little urgency,” Gerstner wrote.
Meta’s most recent quarterly earnings report, reflecting a three-month period ending in December, recorded a third-consecutive quarter of falling revenue but exceeded analyst expectations.
The company reported 2 billion daily active users — a figure that also surpassed expectations.
“There’s going to be some more we can do to improve our productivity, speed and cost structure,” Zuckerberg said on the earnings call in February.
(WASHINGTON) — The Justice Department on Tuesday charged a Hezbollah financier and eight others with evading sanctions and laundering almost $160 million, in some cases through artwork and diamonds.
Prosecutors alleged that Nazem Ahmad continued to acquire high-level artwork and diamonds through U.S. entities and provided access to international financial markets to a terrorist organization.
Ahmad was also an associate of high-level members of Hezbollah, a Lebanon-based terrorist group that was designated by the United States as a Foreign Terrorist Organization and Specially Designated Global Terrorist, the Justice Department said.
He was also sanctioned by the Treasury Department in 2019, barring him from doing any business in the United States.
At a news conference on Tuesday, senior leaders from the Department of Homeland Security, Department of Commerce, Treasury and State made clear they want him captured, even offering a $10 million reward for his capture.
“Ahmad and his network used a complex web of unlawful business entities to buy valuable artwork and secure U.S. based diamond grading service all while hiding their involvement in and benefit from these activities to the tune of approximately $160 million, while also providing the terrorist organization Hizballah access to U.S. and international financial markets,” Deputy Secretary of Homeland Security John Tien told reporters.
Court documents allege that Ahmad used a U.S.-based diamond-grading service to affect the sales price of certain diamonds he would allegedly give to have serviced. He also obtained artwork after he was sanctioned in 2019 valued at more than $450,000, prosecutors said, while an additional $780,000 in artwork from U.S. persons located outside the United States was also acquired in violation of terrorism sanctions.
“The defendants and other conspirators engaged in this scheme to benefit Ahmad and themselves while at the same time evading terrorism-related sanctions, to avoid the payment of taxes to foreign governments on the import of valuable goods into foreign countries, and to make it more difficult for the United States government to carry out its lawful functions,” a press release from the Justice Department said.
Netflix announced Tuesday that it would be sending its last red envelope on Sept. 29, 2023, ending its DVD mailing service after 25 years.
“Our goal has always been to provide the best service for our members but as the business continues to shrink that’s going to become increasingly difficult,” the company said in part of a statement shared with ABC News.
The now-ubiquitous streaming company began sending rented DVDs by mail in April 1998. Nearly a decade after its first disc was shipped out in a red envelope (that movie was Beetlejuice, by the way), the company introduced its online streaming and video service in 2007.
Since then, Netflix says it has sent over 5.2 billion mailer DVDs and accrued more than 230 million paid memberships for its streaming services. The company is currently valued at around $150 billion.
The move comes as the streaming giant continues to make its foray into producing and investing in original content. In March, Netflix won six major Oscars at the 95th Academy Awards, including best international feature for All Quiet on the Western Front and best animated feature film for Guillermo del Toro’s Pinocchio.
“We feel so privileged to have been able to share movie nights with our DVD members for so long, so proud of what our employees achieved and excited to continue pleasing entertainment fans for many more decades to come,” the company said in a statement on Tuesday, in part.
Netflix released its Q1 earnings report on April 18 at 6 p.m. ET.
