Good morning. Now that President Trump has signed an executive order that blesses a new, spun-out U.S. version of TikTok, it’s time for questions.
Here are just two at the top of my mind:
1. How was the $14 billion deal value cited by Vice President JD Vance calculated, and is any money actually changing hands?
2. If, as reported, one of the new owners is the United Arab Emirate’s state-owned MGX wealth fund, how does that make the new TikTok “owned by Americans,” as Trump said at the signing ceremony?
While we await answers, check out today’s other tech news below. —Alexei Oreskovic
Want to send thoughts or suggestions to Fortune Tech? Drop a line here.
Amazon and FTC settle 'dark patterns' case for $2.5 billion
The Federal Trade Commission on Thursday announced a $2.5 billion settlement with Amazon just days into a trial over alleged deceptive practices.
The case involved "dark pattern" web page designs that the FTC claimed Amazon used to trick online shoppers into enrolling in its $139-a-year Prime program, or make it frustratingly difficult to cancel (the FTC described a “four-page, six-click, fifteen-option cancellation process”).
Amazon’s decision to settle for billions would seem to hand the FTC a big victory (even in the absence of Lina Khan, the former commissioner, who initially brought the case). But Amazon may be the one with the most to celebrate.
The $2.5 billion settlement equals about 13 days of profit for Amazon—or less than two days of sales. Amazon didn’t have to admit any wrongdoing; nor did the executives overseeing Prime, who the FTC sought to hold personally liable.
The company is also now able to avoid further media coverage of an embarrassing case, which had the potential to tarnish its reputation among consumers. The news cycle will move on, and the majority of consumers might never think twice about Amazon's dark patterns case.—Jason Del Rey
U.S. Gov gets Grok for 42 cents
The U.S. government inked a deal to put Elon Musk’s Grok AI inside federal agencies for a rock-bottom price: 42 cents per agency—a bargain the government called “unique” and that could scramble the fight over which models dominate Washington.
It's the latest in a string of deals the U.S. General Services Administration (GSA), has made with the top AI companies – Alphabet’s Google; the ChatGPT maker, OpenAI; and Anthropic — as part of its new initiative, the OneGov agreement. Each of these deals are short-term – to prevent one model dominating, the GSA said – but Grok’s is the longest, with an 18-month contract.
Grok's selection comes despite concerns over past incidents in which Musk's AI chatbot made racist and antisemitic comments. More than 30 advocacy groups urged the Office of Management and Budget to keep the model out of federal systems, and several Democratic lawmakers pressed the GSA on its decision, according to news site Fedscoop. A GSA spokesperson has stressed the agency is weighing all vendors “equally” and that no single deal amounts to a final endorsement. —Eva Roytburg
That iPhone isn't scratched, it has a 'material transfer'
Apple has acknowledged that worn MagSafe charging stands in its retail stores are causing marks on the new iPhone 17 Pro models, addressing concerns that emerged within hours of the device’s launch.
Apple told 9to5Mac that visible imperfections on iPhone demo units are not scratches but rather “material transfer” from aging display equipment that can be removed with cleaning. The durability controversy, dubbed “scratchgate” on social media, first gained prominence through a Bloomberg report published last Friday, the same day Apple launched its new lineup of iPhones.
It’s worth noting that some users say they tried rubbing out the marks on the Apple Store’s demo units, but “nothing happened," claiming “they’re scratches.” Or maybe they just need to rub harder?—Dave Smith
More tech
—Kraken quietly closes $500M round. An unusual CEO pushes toward the IPO finish line.
—I met Sam Altman in Texas. He’s turning the race for AI into a gigawatt arms race.
—Google backs $3 billion deal with Bitcoin miner. Big Tech looks to crypto for compute.
—Apple delaying live translation for Europeans. Blame the red tape.
—Ex–Google CEO Eric Schmidt sounds alarm on competing with China. Working from home isn’t helping.
—China car manufacturer Chery gains in Hong Kong debut. The automaker has been China’s top exporting brand every year since 2003.
