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Data Sheet—Friday, July 8, 2016

The next time your company is about to splurge on the latest hot tool for crunching data, take a deep breath and channel your inner lawyer. Cutting-edge technology could conflict with old-school laws.

Garry Mathiason, a longtime litigator at the labor and employment law firm Littler Mendelson, can remember a key moment that cemented his interest in how fast-changing technologies intersect with law.

A few years ago, Japanese technology company NEC unveiled a robot named Sophie that its inventors said could conduct job interviews. Sophie not only asked questions of job candidates, but it also studied their faces for changes in expressions that could indicate whether they may be fibbing. The robot could even be programmed to monitor changes in the candidates’ blood pressure and perspiration, just in case someone happened to have a poker face.

“All of a sudden, what you got is a lie detector,” Mathiason said. “And so then, the lie detector laws come into effect,” which could put companies at risk of violating laws that ban subjecting job candidates to polygraph tests.

Additionally, Sophie was outfitted with the ability to sift through data to identify the key traits of the best workers at companies. The robot could then try to determine whether candidates it interviewed had those traits.

Although this “sounds excellent and in fact highly useful,” Mathiason explained, the technology could potentially lead to a legal headache. If Sophie determined that more successful workers lived in certain areas, and it asked people where they lived, it could end up weeding out candidates who lived in poorer or minority-heavy areas.

Sophie, like many predictive analytics technologies, is not immune to bias, and that bias could lead to potential discrimination lawsuits. That doesn’t mean that Sophie or similar data-crunching technologies are to be avoided at all costs. It just means that companies must do their due diligence and consult with legal and human resources to ensure they don’t unwittingly create problems down the road.

Jonathan Vanian is a writer at Fortune. Follow him on Twitter or reach him via email.

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BITS AND BYTES

Polycom walks away from Mitel into the arms of another suitor. The videoconferencing company has opted for a $2 billion offer from private equity firm Siris Capital, which represents a 14% premium over the amount it had negotiated with the Canadian telecommunications company. The new deal is subject to shareholder approval and will force a $60 million termination fee. (Bloomberg)

Huawei sues T-Mobile over wireless patents. The huge Chinese network equipment and smartphone company is moving aggressively around the world to protect its intellectual property. Its mission is to dramatically expand its international licensing revenue. (FortuneWall Street Journal)

The IRS wants Facebook financial records. The agency has requested more information about the social network’s decision to transfer certain assets to its Irish subsidiary, a move calculated to reduce its U.S. tax burden. (Fortune)

Microsoft COO departure sparks big reorg. Kevin Turner, a Microsoft veteran who was passed over for the CEO post that eventually went to Satya Nadella, was named to the top spot at Chicago investment bank Citadel Securities. He won’t be replaced. Instead, Nadella appointed two new executive vice presidents, Judson Althoff and Jean-Philippe Courtois, who will share global sales and marketing strategy—and report directly to him. (Fortune, Wall Street Journal)

Uber lands $1.15 billion loan. The move comes just one month after the ride-sharing company, valued at $62.5 billion, closed a $3.5 billion round from Saudi Arabia’s sovereign wealth fund. The earlier investment represents the single-biggest infusion ever into a venture-backed company. (Reuters)

Google buys cloud video startup. It is paying an undisclosed sum for Anvato, which sells software used by media giants like NBCUniversal, Bravo, and Telemundo to distribute content. The technology could make Google’s cloud services more attractive for companies looking for a place to host their videos. (Fortune)

Business software startup Coupa moves closer to IPO. It has hired bankers to study a potential offering before the end of the year, reports Reuters. Valued at more than $1 billion after its last venture round, Coupa sells software that helps companies manage spending on everything from travel to facility supplies. (Reuters)

Let’s play the iPhone 7 sales guessing game. One aggressive projection suggests at least half of current iPhone owners will upgrade to the new model quickly, once it comes out this fall. But forecasts vary dramatically. (Fortune, Bloomberg)

Android co-founder will lead Google’s new education project. Rich Miner is leaving his post at Alphabet’s venture arm to spearhead research into educational apps and services. (Fortune)

Amazon wants you to pay for podcasts. It has introduced a new service, called Channels, that comes ad-free if someone buys a monthly subscription. The new offering is part of the company’s audiobooks service. (Fortune)

THE DOWNLOAD

How banks will stop snoops from using blockchain to front-run trades. Dozens of banks are seeking to transform the business of record-keeping with blockchain technology. The industry wants to take millions of transactions—settlements, transfers, swaps, and so on—and record them on a shared digital ledger. Working prototypes are in the works but financial services firms are still sorting a tricky question: How will banks ensure the new tool doesn’t let competitors spot sensitive transactions involving them or their clients? Here’s one possible scenario.

IN CASE YOU MISSED IT

White House Gives $55 Million to Build Genetic Database,
by Laura Lorenzetti

Scrappy Database Startup Says New Execs Will Help It Take On Oracle,
by Barb Darrow

GoPro Gets First Female Board Member, by Jonathan Vanian

Read Microsoft’s Cringeworthy Millennial Bait Email,
by Tom Huddleston, Jr.

Wearing a Smartwatch Could Help Hackers Steal Your ATM PIN,
by Don Reisinger 

Suit Accuses Snapchat of Showing ‘Profoundly Sexual’ Content to Minors, by Kia Kokalitcheva

Adobe Trumpets Need for Digital Signature Standards, by Heather Clancy

ONE MORE THING

Who says robots can’t have hearts? Researchers have developed an artificial stingray that is controlled by heart cells engineered from laboratory rats. The living tissue responds to light, which (in turn) makes the robot’s fins move, propelling it through water. (Wall Street Journal)

MARK YOUR CALENDAR

Inforum: Infor’s annual user conference. (July 10-13; New York)

Fortune Brainstorm Tech: The world’s top tech and media thinkers, operators, entrepreneurs, innovators, and influencers. (July 11-13; Aspen, Colo.)

Sage Summit: For fast-growth businesses. (July 25-28; Chicago)

Gartner Catalyst: Takeaways for technical professionals. (Aug. 15-18; San Diego)

Oktane 16: Explore the role identity plays in connecting people and technology. (Aug. 29-31; Las Vegas)

BoxWorks: Box’s annual customer conference. (Sept. 6-8; San Francisco)

Women in Product: A gathering of experienced female product managers. (Sept. 13; Menlo Park, Calif.)

Oracle OpenWorld: The future of the cloud is now. (Sept. 18-22; San Francisco)

Gigaom Change: 7 transformational technologies. (Sept. 21-23; Austin)

Workday Rising: Talent management in the cloud. (Sept. 26-29; Chicago)

Microsoft Ignite: Product road maps and innovation. (Sept. 26-30; Atlanta)

Dreamforce: The Salesforce ecosystem gathers. (Oct. 4-7; San Francisco)

DellWorld: Dell’s annual global customer conference. (Oct. 18-20; Austin, Texas)

Grace Hopper Celebration of Women in Computing: The world’s largest gathering of women technologists. (Oct. 19-21; Houston)

TBM Conference: Manage the business of IT. (Nov. 7-10; San Diego)

Drone World Expo: Commercial apps for unmanned aircraft. (Nov. 15-16; San Jose, Calif.)

AWS re:Invent: Amazon’s annual cloud conference. (Nov. 28-Dec. 2; Las Vegas)

 

This edition of Data Sheet was curated by Heather Clancy.