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5 Top Tech Scandals From 2016

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By Casey C. Sullivan, Esq. on December 30, 2016 1:02 PM

The past year has been good for technology and its fans. The tech industry has let us find Pokemon on our front porch, brought artificial intelligence into law firms, even given us smart speakers that know not to snitch.

But it's not all happy unicorns, robots, and black turtlenecks in the tech world. The past year has seen its fair share of failure, scandal, and schadenfreude. Here are our top five for the year.

1. Peter Thiel Takes to Secret Litigation Funding

This year saw the death of Gawker, the website that was a pioneer in online blogging. But Gawker's demise had a secret backstory. The company declared bankruptcy after it lost an invasion of privacy lawsuit to Hulk Hogan. Only after that loss was it revealed that Peter Thiel, the Silicon Valley billionaire, libertarian, and "Don of the PayPal Mafia," had secretly funded the suit.

Why? As revenge for outing Thiel years before, when Gawker ran a post with the headline "Peter Thiel is totally gay, people." After his success with Gawker, Thiel may have moved on to other targets.

2. Lawyers Continue to Fight Online Reviews -- Sometimes With Fake Defendants

Online review sites like Yelp can be a double-edged sword. They're a great way to get business, but also a platform for public criticism, some illegitimate, some false. Lawyers have successfully sued over misleading reviews and helped clients to do the same. But some attorneys may have gone beyond legitimate litigation in order to get negative reviews removed. A review of 25 court cases conducted by the Volokh Conspiracy and Public Citizen earlier this year identified a suspicious pattern of lawyers suing missing and possibly fake defendants in litigation over online reviews.

3. Theranos Comes Tumbling Down

Theranos built a nascent empire on the promise that a tiny drop of blood could be used for multiple medical tests, an idea that promised to upend the medical testing industry. Its rise was fueled by grand claims, alongside the story of it's black-turtleneck-wearing, Stanford-drop out founder, Elizabeth Holmes.

Then an investigation by the Wall Street Journal raised questions about the science behind Holmes' tech. Everything fell apart. In June, Forbes removed Holmes from their list of American's Richest Self-Made Women, declaring her to be essentially worthless. Federal regulators banned Holmes from operating medical labs. Thousands of tests were recalled. And the lawsuits starting piling up. Indeed, they still haven't stopped.

4. Uber's $100 Million Settlement With Drivers Tossed

The long-running debate over the legal status of Uber drivers (Are they employees? Are they independent contractors?) was almost solved this summer. Uber, facing an employment classification lawsuit that could upend its whole business model, offered to pay drivers up $100 million to settle  -- and to keep them classified as contractors. That settlement wasn't good enough for U.S. District Judge Edward Chen, who said it fell short of what's "fair, adequate, and reasonable."

Since then, Uber has taken steps to get rid of drivers altogether, a move that was itself not free from scandal.

5. Tesla Has First Autopilot Fatality

Consider Tesla's autopilot feature to be self-driving-lite. When on autopilot, Tesla vehicles can drive, steer, and stay in their lane. But it's only semi-autonomous, requiring constant monitoring by drivers. And this year, Tesla had its first fatality, when Joshua Brown's autopiloted Tesla collided with a tractor-trailer, killing him and causing the National Highway Traffic Safety Administration to open an investigation.

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