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Tech Pick of the Week

EU’s Top Court says Article 17 Directive on Copyright in the Digital Single Market which makes platforms liable for infringing materials (unless best efforts made) not unlawful

…A representative of Google at a conference once said let’s face it, Article 17 was targeted at YouTube. This provision says, in a nutshell, that online-sharing service providers must make “best efforts” to ensure that copyright infringing materials on their platforms are minimised. The bigger the platform, the more effort (ie: resources) must be expended (per the principle of proportionality), though there is no general monitoring obligation.
Poland objected, saying the law conflicted with the freedom of expression and information as guaranteed under Article 11 of the Charter of Fundamental Rights of the EU. Court of Justice of the EU held that there has to be a fair balance between that and right to intellectual property, protected by Article 17(2) of the Charter. In particular, any measures placed by YouTube (or any other online-sharing service provider) must not result in the unavailability of lawful material.
Note 1: As an example, YouTube uses automatic copyright filter called Content ID. This makes it easier for YouTube to automatically capture potentially copyright infringing material that is being uploaded. No doubt YouTube (Google) will say that the provision of this automatic copyright filtering demonstrates that it is making “best efforts”. Critics say that YouTube’s use of Content ID is unbalanced because it will also filter out use of copyright protected material which will qualify for US’ “fair use”, meaning it will be legal. There are also exceptions under EU law as well (see Article 5 of Infosoc Directive), although they are much more circumscribed – having said this there is a risk that YouTube’s automatic copyright filter will prevent lawful use of copyright protected material. This will fall within the sort of complaint raised by Poland.
Note 2: Article 17 appears to work well with the proposed Digital Services Act which stipulates that online intermediaries need to enable users to flag unlawful material for the platform to deal.

BigTech

Twitter reassures advertisers that toxicity on the platform will be controlled

…In preparation for the take over by free speech absolutist Elon Musk, many fear that toxicity (ie: trolling, brigading (co-ordinated campaigns sometimes using bots), doxing (publishing malicious private info) may increase in the name of free speech. Twitter is particularly vulnerable to toxic behaviours because anyone can respond to anyone (though you can block unwanted followers/responders). On the other hand, Musk is expected to clamp down on bots which is said to contribute to toxicity on Twitter (this would decrease the level of daily active users, but that presumably will matter less once he takes the company private). 

What Twitter wants to avoid is the reprise of Stop Hate for Profit campaign against Facebook mounted by big brands such as Unilever, Ford and Coca-Cola which threatened to pull ad spending on Facebook owing to its alleged failure to tackle hate speech. Compared to Facebook, Twitter is particularly vulnerable because its advertising revenues predominantly come from large corporations, whereas Facebook will have small to medium size companies in its books (this is because Twitter is more about raising profile, Facebook more about very targeted advertising, increasing the proportion of people who will click on adverts and convert into a purchase). 

Separately some EV companies have other concerns – as their marketing strategies may leak to Tesla. Henrik Fisker, the CEO of EV maker Fisker has deleted his Twitter account and asked all to follow him on Instagram instead. Others, such as General Motors are sitting on the fence for now. 

Biden administration sets up Counter-Disinformation Board

… With a focus on preventing spread of disinformation from Russia among other things. One would need to ensure – one assumes – that there are proper checks and balances to ensure that information is not being filtered out depending on the politics underlying the messages, and that the board is not being used to benefit whichever political party is in power.
Is this in part a response to Musk’s Twitter takeover? If so, this is a rather speedy response.

Apple charged for antitrust violation by the EU Commission in its preliminary findings over third parties from providing mobile wallet system

..The bit that is subject to the charge is the use of NFC (Near Field Communication) to enable iPhone users to pay by tapping on the merchant’s device. Apple’s iPhones have a chip in it to enable NFC – but Apple has this chip locked in with Apple’s wallet app. You can of course have your credit cards in the wallets – enabling banks etc to have access to the embedded NFC technology, but because the chip is locked into Apple’s wallet system and enables to Apple to take a commission on the transactions. EU Commission is saying that Apple should enable third parties to provide non-Apple wallets. Apple say that the ecosystem is structured in the interests of security and privacy. In any event, suppose Apple were made to allow other mobile wallets – users are going to find it easier to use Apple’s mobile wallets anyway, because their ID and other vital information is locked into the Apple ecosystem.
Apple is charged with two other antitrust breaches by the EU Commission:
Spotify has challenged the 30% commission fee + prohibition on using its own payment system: This time last year, the Commission sent a Statement of Objections to Apple, taking a preliminary view that Apple has abused its dominant position. Spotify’s side of the story is posted on a website called Time to Play Fair.
Similar to Spotify, but relates to eBooks.
If found to be infringing, Apple could face up to 10% of global revenues… how much would that be? Read on…
The next post is along the same theme, about an instance where Apple kicked a certain app out of the App Store…

Apple exonerated from excluding an App by a Californian federal judge

…A currency exchange app developer Konverti sued Apple for excluding it from the App Store claiming it breached competition law. The Konverti app was designed to enable people wanting to exchange currency to meet up in person (eg. US dollar to Pounds Sterling). Apple had excluded Konverti because it saw that there was scope for abuse and danger, with encounters possibly leading to money laundering, fraud, counterfeit currency trading and other financial crimes. On this occasion the claim was dismissed because it lacked specific pleading as to why Apple’s conduct harmed competition or why Apple’s decisions were arbitrary, among other things.  

Californian court dismisses claim against Facebook for displaying scammer’s ad

…The judge so held as he found that Facebook did not do more than just publish the ad. The Plaintiff had sued Facebook on the grounds of negligence, breach of contract, breach of covenant of good faith and fair dealing, and California’s unfair competition law.
Facebook did not contribute to the furtherance of the scam decided the judge. When users complained against one ad publisher, Facebook removed it having decided that the ad violated its policy. However, when the scammer re-posted the same ad but under a different modified name, it was not prevented. The judge gave leave to amend the pleadings in case the plaintiff can plead facts which demonstrate that Facebook did something more than to merely publish an ad (eg. promote the ad) that happened to have deceptive intent.
Now this case is in the US. But in the EU, the proposed Digital Services Act is likely to come into play. Suppose the ad was unlawful. Facebook may have to show that it made sufficient efforts to minimise unlawful content from being displayed again.

Apple posts record breaking revenue of nearly $100 billion in the most recent quarterly earnings report

It is made up of:
50% iPhones
10% Macs
20% Services – Apps, iCloud+, Music, Apple TV+, Apple Arcade (gaming), Apple Fitness+, Apple News+
Remainder: iPad, Wearables, home and Accessories.
The Services business is growing fast. That has to be the way business is moving. One can easily understand this, when you think about the number of users that are using Apple pay (see above), and commission from in-app purchases. No wonder Apple has launched an iPhone at a lower price point. When one thinks about that, it is quite surprising that the proportion of income from services isn’t greater.

Japanese Government considers reigning in BigTechs

…Japan is considering the following:
One issue is that users can’t sue US based companies that easily. Big IT companies have been asked to register their HQ entity in Japan to enable Japanese users who have suffered harm on the platform to sue in the home jurisdiction.

Prohibition against pre-installed apps on iOS and Android phones.

Mandated provision of multiple app stores.

The latter two potential changes will concern Apple and Google in the main. Both of these are issues raised in the US and EU.

Reseller accuses Cisco and its preferred distributor in Texas for forcing SMEs to buy new network equipment in breach of competition law

…Network equipment re-seller Dexon says it is using FUD, or Fear Uncertainty and Doubt coercing SMEs to buy new expensive equipment and refusing to service them, when they want a software update. Cisco deters customers from buying (cheaper) equipment from re-sellers by claiming risks such as malware or spyware the suit says.

Amazon and its C-suites sued for breaching biometric privacy laws in Illinois

…Informed consent and certain information needs to be given before collection, use and storage of biometric information under Illinois Biometric Information Privacy Act. The Complaint says the governance and internal procedures to comply with the regulation is inadequate. The complaint concerns collection of facial data uploaded to Amazon’s photo storage service and features that allow shoppers to virtually try on make up and clothing. The interesting point is that Amazon directors are also sued, which will help pressurise Amazon to settle.

EV

Beijing grants robotaxi licences to Baidu and Pony.Ai

…Baidu (roughly, China’s answer to Google – which has partnered with state owned BAIC group for the autonomous driving venture Apollo) and Pony.Ai (backed by Toyota) can now operate robotaxis around Beijing, meaning the public can now embark. A person must be in the vehicle but not necessarily behind the wheel. Costings, performance and take up by the public would be interesting.

Metaverse

Bored Ape backers to launch the Otherside metaverse game – punters rush to buy land on metaverse

…This time it is real. Last week Bored Ape NFTs were stolen following a hack of Bored Ape official Instagram account announcing the opportunity to claim land on the upcoming Bored Ape’s metaverse, the Otherside.
The launch of the Otherside could set light to more activity on the metaverse, generally. The main metaverse games (meaning games on a blockchain) such as Decentraland and Sandbox reportedly only have a few regular users. This game, which features the most high profile NFT collection, could mark the turning point, and the key to success must rest on how entertaining it will turn out to be. Virtual land sale was launched with the game by venture capital Andreessen Horowitz backed Yuga Labs – in partnership with Animoca Brands, betting big on potential purchasers who might want to get on the speculative bandwagon. Such moves were a-plenty; the Ethereum blockchain crashed as a result of the (virtual) landgrab frenzy which ensued. Bored Apes as well as other collectors’ NFT series, such as Cool Cats and World of Women can appear on the Otherside. ApeCoins (now tradable on crypto exchanges) will be used on the platform.
Note that the Sandbox is owned by Animoca who also has a stake in Decentraland. You can foresee then that these worlds might eventually get more integrated. Meta is probably keeping a watchful eye.

Telecoms

Mobile Virtual Network Operator Mint Mobile may be on the hook for customer’s loss from crypto hack

…Mobile Virtual Network Operator (Provides telecom services by leasing wireless capacity from main carriers to provide services which are usually cheaper than the main carrier) Mint Mobile was sued for negligence by a customer whose crypto currency worth nearly $500k was stolen following a data breach. 

The customer sued Mint Mobile on the basis that its data breach occurred just before the user’s SIM was hijacked (sometimes called SIM port out, SIM swapping – basically transferring your mobile phone number which can be done by third parties using the original owner’s personal data). Customer alleged that crypto hack was enabled as a result of the data breach which disclosed personal information needed to carry out the hack. 

Mint Mobile moved to strike out the claim but a Californian federal judge ruled that the Plaintiff had pled the facts sufficiently, duty of care was established and the damage was foreseeable and the case should proceed, given discovery of documents had not yet taken place. Mint Mobile’s argument that it couldn’t possibly be responsible for an independent third party’s illegal acts was struck down. 

EU Telecoms companies say BigTechs should contribute to infrastructure spend

…The rationale is that streaming and social media companies contribute to about 55% of all traffic on mobile and broadband networks. This costs the EU telecoms companies (Vodafone, Orange, Deutsche Telekom, Telefónica etc) around €15-28 billion each year, it has been reported. It is an acute issue for EU Telecoms companies at present who need cash to prepare for 5G and full fibre rollout. It may well be that, if the infrastructure cost is too much for the EU Telecoms businesses, then the 5G roll out may well become that much slower – indeed over in the US, Telecoms companies are instead updating the old copper network because it is just too costly to do a full upgrade. 

Telecoms companies point to the case of SK Telecom of South Korea which successfully sued Netflix because they were compelled to upgrade the network owing to the very popular Squid Games viewing traffic.   

In the Spotlight

UK’s Digital Regulation Cooperation Forum (DCRF) publishes calls for views on use of Algorithms – Revealing the kinds of regulatory requirements which may be being considered for the future

…The DCRF is an initiative derived from the following 4 digital watchdogs working together:

• Competition and Markets Authority (CMA)
• Financial Conduct Authority
• Information Commissioner’s Office (ICO)
• The Offices of Communications (OfCom)

Calls for Views 1:benefits and risks of how sites and apps use algorithms

Why the need for Call for Views? : Modern Machine Learning and Artificial Intelligence approaches could cause harm (give rise to misrepresentation, distortion of competition, amplification of biases leading to discrimination/inequalities, harm people’s right to privacy) if not used without care. Algorithmic processing is opaque and lack accountability. 

What do the Regulators want?: Increase in understanding of the nature and severity of risks so that they can help businesses use algorithms in a responsible manner. The Regulators can provide meaningful guidance / mandate new rules / regulate businesses not acting responsibly, whilst at the same time promoting effective competition, resilient infrastructure and systems which protect individuals from harm. 

There are 6 Common Areas of Focus: Stakeholders are invited to comment on DCRF’s areas of focus, and alert the DCRF on what other issues ought to be considered, and ideas on how DCRF might be able to assist individuals and consumers to navigate the algorithmic processing ecosystem in a way that serves their interests.

• Transparency of algorithmic processing [most important]: Needed to ensure users know when their rights are being infringed / provide informed consent / ensure fair treatment

For example:

• Providing information to users as to when data is being collected, how it is processed and for what purposes. Are users to which the data belongs, giving informed consent? 
• Providing information on algorithimic processing carried out. For example, what training data used, is a human in the loop? What protocols govern the processing?
• Providing explanation of any decisions made
• Vendors of algorithmic systems (includes sellers of “off the shelf” algorithms) should also inform customers of the limitations and risks associated with their products
• Making clear who is responsible for inappropriate algorithmic processing

• Examples of lack of transparency:

• Users who might be facing higher prices compared to others with a similar profile
• Users who don’t know how their data is being used for targeting advertisement purposes
• Users who are not explained why they have a poor credit score

• Fairness for individuals affected by algorithmic processing: Need to ensure there is trust of consumers and citizens / Ensure compliance with the Equality Act

For example:

• Ensure training data does not embody any bias
• Remove information about sensitive characteristics 
• Consider fairness of personalised pricing – is it fair that businesses work out how much you would afford to buy a particular product and offer that price? Is it fair that those that live in areas with higher incidents of burglary should pay more for say, home insurance?

• Access to information, products, services and rights 

For example:

• Limiting exposure to alternative viewpoints – control over algorithims that result in exposing certain users to harmful content (those that incite violence, antivaxx conspiracy theories) on a repeated basis
• Limiting exposure to economic opportunities – as an example, females may be less exposed to STEM based job opportunities. Controls to be placed to avoid such outcomes. 

• Resilience of infrastructure and algorithmic systems 

For example:

• Ensure datasets on which the AI is trained cannot fall over if a bad actor were to poison the training data
• Ensure personal data cannot be inferred from the training datasets
• Resilience against cyberattacks

• Individual autonomy for informed decision-making and participating in the economy

For example:

• Ensure that targeting does not amount to manipulation leading to users making decisions that they otherwise would not make. Some recommender systems might fall foul of this. 
• Some users are more vulnerable than others to targeted advances by service providers (eg. children, people with learning disabilities, the elderly, those with addictions) – they would need to be safeguarded
• Avoidance of harmful choice architectures – eg. making it difficult for users to unsubscribe, default options
• Provision of option of users not to be targeted based on their profile

• Healthy competition to foster innovation and better outcomes for consumers

For example:

• Making sure that platforms do not have an unfair advantage by recommending their own products over third parties’ (so-called Self-preferencing)
• Making clear which links have been up-ranked (eg. those that are sponsored)
• Ensuring that connected algorithmic systems operate fairly – and for example, don’t lead to tacit collusion such as on price
• Preventing organisations with data power from accumulating granular information on individuals across their online journey that they then use to personalise their offerings, which can exacerbate information asymmetry between consumers and service providers.

The above summarises just some of the issues of algorithmic processing that were raised. I think we would all benefit from having at least a superficial understanding of these, as consumers and as business persons. 

Calls for Views 2: auditing algorithms, the current landscape and the role of regulators

The DCRF notes that “while algorithmic auditing is currently not conducted extensively and the market for audits is relatively immature, an audit ecosystem will likely grow in the coming years”. This means that businesses that deploy algorithmic processing ought to set up their systems with an eye to possible audit obligations, and ensure robust governance is in place to enable regulators to clear their systems.  

Indeed, the paper notes that a number of algorithimic audits have so far taken place:

• The CMA has been investigating Amazon and Google over concerns they have not done enough to tackle fake and misleading reviews on their sites including by examining their review moderation and product rating systems
• The ICO and its Australian counterpart investigated Clearview AI Inc’s facial recognition technology due to suspected breaches of UK and Australian data protection laws
• The ICO investigated the use of data analytics and personalised microtargeting in political campaigns in 2017
• The Australian Competition and Consumer Commission inspected Trivago’s algorithms, revealing that the ranking of hotels was weighted towards those hotels that paid higher commissions to Trivago, rather than those providing the cheapest rates available to consumers

The DCRF paper goes into significant detail about the issues for auditing, level of auditing and the process of auditing, existing landscape and thoughts on future landscapes for algorithmic auditing. 

Tech Pick of the Week

EU (Member States, European Parliament and the Commission) Provisionally Agrees Digital Services Act 

…Subject to approval by the European Council and the European Parliament. 

Back in 2015, the European Commission announced the Digital Single Market which in a nutshell concerned taking the Single Market (free flow of people, capital, goods within the single market) concept, which mostly concerned offline activity, into the online world. Online barriers in eCommerce were tackled, and free flow of data, and pooling of data across the member states were facilitated (eg. consumers in Germany can get the same level protection whether it buys goods from Germany or other EU countries). 

This latest proposed regulation, the Digital Services Act is similar in concept, in that it makes content (goods, services and information) which is illegal offline also illegal online. It will be applicable to all online intermediaries (social media / marketplaces / search engines / app stores / payment systems) providing services in the EU (that is, the company does not have to be located in the EU). Its objective is to ensure the EU digital space is safe for citizens and businesses. Further restrictive requirements apply to VLOPs (very large online platforms) and VLOSEs (very large online search engines) – these are services with more than 45 million monthly active users (approximately 10% of EU population).  

Digital Services Act means online intermediaries (among other things):

• Must inform users about the ads / content / recommendations they see (transparency regarding parameters used to decide on which ads are shown / how content is moderated)
• Must enable users to flag illegal content (such as copyright infringing content on video sharing intermediaries) and deal with them. 
• Must not carry out targeted advertising based on a minor’s personal data / ensure minors are protected with the online intermediaries know that the user is a minor. 

But there is no obligation to monitor for illegal content. 

VLOPs and VLOEs’ duty

• Analyse systemic risks they create (such as the following) and to carry out risk reduction analysis on an annual basis
  • dissemination of illegal content
  • adverse effects on fundamental rights
  • manipulation of services which impact democratic processes and public security
  • adverse effects on gender-based violence, minors, and impact on physical/ mental health of users

• Provide ways for users to receive recommended content not based on the service provider’s profiling (eg. chronological order)

There has been a lot of talk on how Twitter ought manage their content amid criticism from free speech proponent Elon Musk who considers that moderation is too heavy-handed. Musk has said, in the event he were able to take over, he would ensure that Twitter remains on the right side of the law. The Digital Services Act might mean Musk will not have the freedom to operate as he might have assumed.  Although the core of what he wants with Twitter – making things open / transparent – chimes with the objectives of the Digital Services Act, a VLOP such as Twitter will have other added obligations such as ensuring adverse effects of fundamental rights of citizens are minimised. Furthermore, implementing measures to minimise the risk is likely not straightforward, both as a matter of striking a balance and also technically. 

The Digital Services Act will tackle issues subject to the class action in Florida against Meta as mentioned below.

BigTech

Former US National Security officials say over-regulation of US Bigtech could weaken national security

…This is because of 

• Cybersecurity threats from abroad
• Increase in disinformation
• Access to data of US persons
• IP theft

Some of the signatories sit on boards on major tech companies, or are legal advisors to them in the US. They have attacked the EU Commission’s Digital Markets Act on the grounds that it failed to consider national security issues. 

Facebook agrees to fund fibre-optic cables installation across Nigeria – why it could be a clever move

…Facebook has invested in other African countries with looser legislation and regulation amid regulatory clamp downs in the west. Senior Government official of Nigeria says Facebook actually loses money on the project but it can gain it back on the user data they generate. This is, of course, the business case for Facebook. In Nigeria only just over half have access to the internet.

Here in the west we are vastly ahead of Africa in terms of economy, infrastructure, availability of medicines and general standards of living. However, as Africa catches up across these indices, they can expect to live longer and survive treatable diseases and be better educated (which will be part facilitated by better internet access). Furthermore, there is something to be said about being a late comer. Other countries have comfortably overtaken UK’s once prized rail network infrastructure – it was the first in the world and enabled the industrial revolution. Same here too. It’s cheaper to upgrade the existing copper networks than install a new fibre network – the former can be the option taken even in developed territories – whereas Africa can go in with the state of the art infrastructure at the outset. All of these facts, combined with the West’s less prolific increase in population are said to mean that it will be a matter of time (and not a long one) before the African economy takes over. The same can be said of India (and read on…). Ergo, Facebook’s investment may well be wise and reflects its long termist approach to building business a la the metaverse.  

Note: Facebook/Meta may not be a cabling installation company, but it and other large tech companies, such as Google are into that business. In December 2021, it was recommended by US security regulators that the Federal Communications Commission clear Meta and Google to operate the Pacific Light Cable Network system to facilitate data flow among US, Taiwan and the Philipines while bypassing Hong Kong. 

Amazon acquires GlowRoad, an Indian social commerce company

…The reasons are exactly the same as Facebook’s African investment as outlined above. GlowRoad sells products to consumers at wholesale price and helps them sell on social platforms such as Facebook. It also assists those consumers with the logistic side of things (shipping/ returns ie: similar to Shopify, and recently, Amazon has set out to compete with Shopify by allowing Buy with Prime merchants to sell through their own websites, not exclusively on Amazon). Amazon may well then get access to vast amounts of data from Indian consumers. However, India does have robust data localisation laws. Still, a wise investment when one thinks about the significant future potential for the Indian economy and, there is commission stacking opportunities through payment services, advertising, referrals as well as logistics services. 

The environment for large tech companies, so called BigTech, to grow by acquisition is becoming increasingly restrictive. It is inevitable that they should seek to grow internationally. 

Having made a tender offer directly to shareholders, the Twitter board agrees to cave into Musk’s buy bid

… Love me Tender, Musk had tweeted to foreshadow his bid.

Apparently, he managed to heavily leverage off his personal wealth (worth about $260 billion). The offer of the self-styled “free speech absolutist” was to buy the outstanding shares of common stock for $46.5 billion, declared directly to shareholders. This was designed to bypass the board of directors. The board of directors were then faced with one of three options:

• Find another buyer with a better price
• Take Musk’s offer
• Do neither (perhaps in an attempt to stay on the board) and risk being sued by investors for breach of fiduciary duty. 

The first option was looking unlikely (though it’s still possible), and the third option was unpalatable. This probably led to the board who had earlier implemented the poison pill to accept. Well played. 

Founder Jack Dorsey who was forced to stepped down as CEO last autumn had tweeted that the board had “consistently been the dysfunction of the company”.  Dorsey will remain on the board until next month. Some say Musk’s bid was timed so that it came before Dorsey’s departure. Others speculate that Twitter could see a return of Dorsey. 

Note it’s all subject to the financials and regulatory clearance. Once through, Twitter will become a private company, meaning Musk can develop Twitter based on long term strategies, devoid of pressures of having to generate positive quarterly results. 

BigTech eats into TV Networks’ consumers’ engagement time and therefore ad revenues

…In a letter to the US Federal Communication Commission, TV Networks complain that they face strong headwinds amid BigTech’s ability to provide content more freely. The TV Networks say that compared to BigTech, they have less freedoms on the content they can deliver as they have duties to remain a trusted source of information (compliance with political advertising rules, disclosure requirements and record-keeping obligations). 

Artists sue Meta for profiting on copyright infringing works in California

…Artists say that counterfeiters are copying images of artists’ protected work and selling them cheaply via ads placed on Facebook. Facebook then receive revenues from those infringing sales. 

Following the Digital Services Act (which only applies in the EU, so not relevant here), Meta will have to see what it can do to minimise infringing activities though it is reported to say that it already pro-actively tries to minimise infringements. 

Causes of action in the US claim are copyright infringement, breach of Visual Artists’ Rights Act, False designation of origin under the Lanham Act, Digital Millennium Copyright Act, Unfair competition.

Drones

Federal Communication Commission asked by software companies to implement new rules carefully

…The concern is that, if the FCC were to block certain equipment being sold in the US on the grounds that the drones are made by companies that are barred from participating in national programs owing to national security concerns, then it would hit the nascent drone industry hard as most small drones are made by such companies. 

EV

England and Scotland Law Commission’s recommendations on Self Driving Cars
…Published in January (so this news has been a little delayed), the Law Commissions recommended a New Automated Vehicle Act. Here are the headline points. Interested readers should review the paper.
Self-Driving

The term “Self-Driving” to indicate a legal threshold
Should mean humans can relax and divert attention and be safe
Offence if you describe a vehicle as Self-Driving if it isn’t authorised as such
Legal accountability will change (ie: drivers on certified Self-Driving cars won’t be liable for not paying attention in certain circumstances)
Victims of traffic accidents do not need to prove fault.

Two types of “Self Driving”

Where you have to have a person in charge (“User in Charge” or UIC)
Immunity from prosecution from breaking traffic rules, dangerous or reckless driving
Limited duties such as arranging insurance, checking loads
Need to be able to take over in response to a “Transition Demand”
Vehicle therefore needs to be able to give a clear and timely Transition Demand.
Backed up by Authorised Self-Driving Entity (ASDE) – which could be a vehicle manufacturer, a software developer or a partnership of the two, or any other suitable entity, but whatever the case, must be involved in ensuring safety of the vehicle.

Where you don’t need a person in charge (“No User in Charge” or NUIC)
Occupants of vehicles are simply passengers [or nobody in the vehicle]
NUIC operator will be responsible.

How safe does Self-Driving cars have to be?

Options are:
Safer than humans?
Fixed percentage (say 5%) better than humans?
Must be acceptable by the public [but what percentage of the public?]

Ultimately a political question and so government should decide, not the law commission
This news segues nicely to…

Musk says it will launch a dedicated robotaxi without any steering wheels or pedals

…The robotaxi will start production in 2024, Musk declared, adding that it aims to be more cost effective than a subsidised bus ticket. Tesla has in fact had stonking financial results for Q1 – it seems to be blind to the supply chain issues many auto companies have been struggling with, as a result of the war in Ukraine (and on this read on below). Certainly it will help silence Musk critics who say the takeover bid controversy over Twitter will distract him.  Part of the success is said to be the direct to customer dealership structure which Tesla has adopted. An increase in the price of the vehicles, directly lines the pockets of Tesla. The auto industry have been trying to follow Tesla’s business model. The other reason is said to be Tesla’s robust foothold in China; car manufacturing in China is more profitable than manufacturing elsewhere.  

He is clearly the sort of person who likes to publicly announce a very high watermark to spur himself on to actually make that mark. I don’t think it matters to him whether he actually achieve his goal [he is famous for not making publicly announced deadlines], but it seems to me that he likes to shoot for the stars to make it to the moon – or rather in his case, shooting for mars to make it to the moon. 

Tesla owner’s smart summon feature leads the driverless vehicle into a private jet…

…Those that don’t have easy access to Tesla may not know that some models have a smart summon features which enables the owner to hail his or her own Tesla from up to 200m away. An owner triggered the feature but failed to recognise a private jet. My guess is that there was not enough information to train the AI to identify a nearby plane. It would be a rather odd situation, certainly my non-Tesla car has never encountered planes on the ground before. Perhaps not if you are in the Tesla owner’s club though…

Group led by Second Largest EV battery maker LG Energy Solution to create mining –to manufacturing supply chain for batteries in Indonesia

…The investment will amount to $9billion. Why this investment in Indonesia of all places? For self-sufficiency, including reducing reliance on China. Indonesia is the largest producer of Nickel. 

Note that the largest EV battery maker CATL (China) signed a $6billion deal with Indonesian companies to also produce batteries there. 

Things are very bad for the auto industry right now, here’s why: 

• Back in Autumn 2021, the industry was expecting around 4-6% increase in demand for new cars but now analysts expect a decrease in sales by about 2% for 2022 and 2023 (cuts in Europe around 9%). 

• Owing to Ukraine/Russia conflict, and also the drive to reduce dependency on China 

• Critical auto parts especially wire harnesses from Ukraine – bundles all wires to connect parts to other parts of the car, sending information and power. Bit like the blood vessel and the nervous system that drive our bodies (ie: absolutely essential).

• Labour intensive because it is an intricate process and can’t be automated.
• Wiring process usually close to production sites – meaning supply chains are built around the wire harness production sites
• There are about 22 auto companies that have invested in Ukraine (especially DE – BMW, Mercedes, VW), half of which entail wire harnessing.

• Fragility in supplies of platinum, palladium, steel, copper, aluminium and nickel – key materials to make cars

• Significant proportion of class 1 nickel (essential in EV battery) comes from Russia

• Elon Musk tweeted : Nickel is our biggest concern for scaling lithium ion cell production. That’s why we are shifting standard range cars to an iron cathode. Plenty of iron (and lithium)!

• Whopping 43% of Palladium comes from Russia (20% if you also account for recycling)
• Pig iron [to make steel] – comes from Ukraine
• Prices of these key materials are sky high – price of palladium is higher than gold

Fintech

Meta’s launch of Whatsapp payment system in Brazil experiences delay – here’s why

…Meta already has a p2p [peer to peer] payments after having cleared regulatory hurdles around competition, data privacy and efficiency.
Meta now wants to set up a p2m [peer to merchant] payment system. Clearly they have the technical infrastructure. The issues are the following:
Approval from central bank
Merchant acquirers [enables merchants to accept digital payments] consider that the fees are too low and legal responsibilities too burdensome.
Meta possibly in a weak position at the moment as they strive to make up for loss in ad revenue following the implementation of the new Apple privacy feature allowing users to block apps tracking them. The deal if it goes through, will allow Meta to gain first party data.

Life Sciences

Janssen to enter into arbitration over Alkermes’ NanoCrystal technology

…There are different types of NanoCrystal technologies, those that are used in solar panels and filtering crude oil. But this one relates to pharma. NanoCrystals are, as you might imagine, are tiny crystals (nanometer range) and in the pharma application, they are pure drug crystals which are stabilised or surrounded by a coating of a surfactant. It improves better absorption into the bloodstream.
The dispute arose because Janssen decided to terminate the licence agreement to use Alkermes’ intellectual property. Probably, Janssen thinks that the patents subject to the licence are invalid or they consider to have found a way to not infringe the patent. Alkermes say that Janssen’s lawsuit over its medications against Intas and Teva use Alkermes’ technology. Janssen has won its suit against Teva.

Space

SpaceX’s Starlink to provide internet services to Hawaiian Airlines

…Rejoice! Downloading films before a flight will become a thing of the past. Business persons may groan at the prospect of having no excuse to relax on flights. 

Starlink satellites will deliver high speed internet to Hawaiian Airlines meaning passengers should have good WiFi access during the flights. Starlink already has a deal with private jet charter flights provider JSX, but a deal with a major airline is a first.  Starlink terminals will be installed on the planes next year, and it will go live pending certification. Hawaiian Airlines said the services will be offered free to its passengers possibly increasing pressure on other airlines to do the same. No doubt this will not be the last of Starlink/Airline deals we will hear about.

Artificial Intelligence

Google’s new language model PaLM can apparently understand humour and common sense

…Training general intelligence, such as humour, common sense, common knowledge to an AI system is one of the hardest things to do. Google seems to have made headway in the area. 

EV

CATL, the largest EV battery producer of Chinese origin bids to set up factory in the US

…CATL (Contemporary Amperex Technology Limited) has been told that it can do so provided that it brings manufacturing technology and know how to the US, not just low-wage assembly jobs. It is known to be a supplier to auto majors such as Tesla and Volkswagen. It is also investigating the possibility of setting up factories in Canada and Mexico. 

Lithium extraction commences in Cornwall, UK

…This will use an innovative method to process Cornish geothermal waters to extract lithium, for use in among other things, EV batteries. 

Atlantic IP/Magnetar Capital subsidiary Scramoge sues Auto charging patents against charging device manufacturers Anker, Belkin, Morphie, Google, Apple and Samsung

…The patents originally belonged to LG.

BigTech

Google sued by various companies in US for massive price increases for using Google Maps API

…App developers complain about the following alleged anticompetitive actions of Google:

• Unfair bundling issue: Complainants use digital mapping service, but are made to purchase associated services such as
  • Google Places API: provides information about the destination on the maps 
  • Working out the distances between two locations
  • Routes Directions API – provides navigation information

• Prohibition of combining Google Maps API with third party services
• Offering free digital-mapping APIs allowing the provision of free maps from 25,000 per day to 930 per day – app services which were free became unviable
• Purchase of smaller competitors, such as Waze (navigation app)

US House antitrust committee reported that Google’s market share for digital mapping APIs was 80%. Google is most certainly likely dominant in the market (which means antitrust rules apply). 

In a preliminary ruling, US Ninth Circuit says it’s not contrary to Computer Fraud and Abuse Act to scrape public information from websites

…Data analytics company HiQ had scraped volumes of profiles from publicly available Linked-in network. Linked-in complained that this was unlawful, and inter alia contrary to Computer Fraud and Abuse Act. There was no hacking (meaning circumvention of access measures such as passwords) involved on the part of HiQ, and so the Ninth Circuit, applying a Supreme Court decision called Van Buren, denied Linked-in’s complaint.  It doesn’t mean HiQ is clear (and any event, this is a preliminary ruling). There are other privacy laws and also contractual obligations in play. 

UK youths fall victims to impersonators on Instagram

…A common tactic is a fraudster impersonating as one of their friends, claiming their phones were stolen and they have a new phone number. UK’s Online Safety bill, which imposes duty of care by the platforms to users, to the rescue. 

DC Attorney General asks Court to reconsider decision to toss Amazon antitrust case alleging Amazon is in breach of competition law by prohibiting sellers to sell goods at a price point cheaper than Amazon prices

What’s the problematic conduct?

Amazon prohibits sellers from selling goods at a cheaper price point on other platforms. It means third party platforms can’t compete with Amazon because they are prohibited from lowering their prices. Sellers have the burden to continuously monitor various platforms to make sure that products are not sold on other platforms more cheaply. 

Why is it said to be anticompetitive? 

Claimants say that Amazon’s term means Amazon’s high commission and fees are mandated on other platforms. Consumers are prohibited from being offered lower prices. Therefore, the term is anticompetitive. [note that, the EU Commission, have already stamped down on Amazon on the issue for its e-Books ]

What does Amazon say?

The term ensures prices are kept low on Amazon, and so it is pro-consumer. 

Google makes it easier for users to jump ship from iOS to Android

…Switch to Android app is being launched on the Apple App Store [at the time of writing, not yet available]. This will transfer all contacts, calendar, photos and videos to a new Android phone, via the iCloud [Apple’s Cloud]. The reverse (Android to iOS) has been possible using Move to iOS app since September 2015. Note that EU Commission’s proposed Data Act provides that services providers must enable data portability (meaning users must be able to switch between different services). 

Copyright

Instagram settle claim alleging Newsweek infringed copyright by embedding an Instagram post

…Newsweek had copied Instagram’s embed code from Instagram’s post. Newsweek had relied on a previous Ninth Circuit decision which held that websites do not “display” a protected image if it is stored on its original website and merely embedded in search results. Copyright owner had alleged that Newsweek had published and hosted the photo. 

NFT

Texas and Alabama seek to prevent NFT sales to fund the development of virtual casinos on the metaverse

…The opposing states say that the NFTs considered are unregistered securities, contrary to security law. Sand Vegas Casino Club offered the NFTs for sale in return for share of the profits on the virtual casinos (to be built on Decentraland and Sandbox metaverses). The states say that the NFTs are stocks in all but name, and so security laws needed to apply. 

Telecoms

Dish manoeuvres to shift Space X out of the running for US FCC’s Rural Digital Opportunity Fund

…Rural Digital Opportunity Fund, set up by the US Federal Communications Commission is a $20 billion subsidy fund  set up to encourage businesses to deliver network services in the 12GHz band [this is the best bit of the spectrum for 5G communication] to rural areas, to reduce the digital divide between richer connected areas and rural areas which are not. Dish says that SpaceX’s satellite constellation will interfere with direct broadcast satellite operators that already operate in the band, like Dish. 

In the Spotlight

Metaverse

Metaverse to take 47.5% of all Horizon World (Meta’s version of metaverse, formerly Facebook Horizon) virtual assets transactions

…It includes a 30% commission levied for purchases via Meta Quest App Store where apps and games are sold on Oculus (Meta manufactured VR headsets). Note however, the transactions do not relate to sales of NFTs, just digital assets (virtual items, costumes (so-called skins) on avatars). Horizon World is a free virtual reality online video game which lets users build and explore the virtual world. 

Compare with:

Decentraland (blockchain metaverse with NFTs): levies creators 2.5%

Sandbox (same also as Decentraland): levies creators 5% 

OpenSea: 2.5%

Extortionate!!! Or is it???…The answer is in the market reaction in the months to come. 

What is Meta’s possible justification for this high commission fee? 

Meta’s defence echoes the same message Apple is pushing out in its epic fight against the games maker Epic, which is all about whether the 30% commission levied on app developers on in-app purchases made on apps downloaded via the Apple’s App Store is too high and anticompetitive (ie: abuse of dominant position).  Meta has had to, and is investing and risking colossal amounts of capital to build the infrastructure, devices, and the immersive world:

• last year, Meta invested $10 billion on the Reality Labs project [ie: Oculus],
• hired 18,000 employees – including those most skilled – in ALL areas from technology, infrastructure to supply chain – which demands high salaries
• building semiconductor fabs in Asia, 
• building custom silicon 
• purchased technology, such as CTRL Labs which cost around $500million -1billion [no antitrust issues in this area yet so get in quick!]

and remember, metaverse will likely not be properly realised for the next 10 years, if at all. Risking $10billion per year without any guarantee that metaverse will ever be a thing, is pretty gutsy. 

Meta’s challenge will be to properly convey the reasons why the commission rate is so significant. Currently the VR devices (here, Oculus) need to be sold at a price point accessible to the masses, which means Meta makes a loss per sale of Oculus. Decentraland, Sandbox, OpenSea do not need to do that. 

How are Meta doing in the VR space?

They seem to be doing OK.

• Oculus is already on the market, and sold more than Xbox, and its app was most downloaded app in the US over Christmas 2021. 
• The VR device does not have to be connected to a phone which is a huge advantage
• The next iteration will have eye tracking – the avatar will reflect this – which makes the Oculus experience more immersive. 
• CTRL Labs have cool tech – you can control your phantom limb (you need to strap it on your arm) – so you don’t need to control your VR device and eventually, Meta seeks to make an AR device which can also be controlled in the same way. 
• Smart watch will be on sale this year which links up to Oculus

What is going for Meta vs other VR /AR competitors?

The biggest competitors in this space for Meta, be it Apple (apparently the clear second after Meta in this race), Google, Microsoft. The difference between Meta and the rest is that Meta has to succeed to survive, and hence the level of investment is reported to be way beyond other competitors. This could be the key to Meta’s ultimate success. Certainly, that is what Meta is banking on.  Apple is though a formidable competitor, as master of hardware and supply chain.  

Will antitrust law mean that Apple will have to allow Meta apps on their phone / Apple VR/AR glasses? Or would Apple welcome Horizon World to be made available on its apps/ Apple’s VR/AR headset if it means there is scope to charge Meta a sufficient level of commission?

BigTech

Elon Musk offers to buy Twitter (market cap = $37 billion around about the time of bid) for $54.20 a share (would amount to $43.2 billion valuation)

…Good deal right? But Twitter board is rejecting the offer. How could this be? [Check out Musk’s pointed jabs on Twitter]. 

What is Musk’s position?

In summary he says (in his letter to SEC and the TED speech he made soon after the announcement):

• Wants it to be a platform for free speech – which is a “societal imperative” [but Musk says he will ensure that Twitter operates within the legal framework; in which case free speech, the way he envisions it, is not really possible]

• Wants to privatise Twitter [note – as I understand it, SEC (Security and Exchange Commission – the US agency that controls securities markets)] can muzzle Musk on Twitter as long as it is public –once Twitter is privatised, SEC might find it more difficult to do that…]

• No confidence in Twitter’s management

• If not accepted he will sell his shares

• Wants it to run on open algorithm [this means that the code which decides what feeds are shown more prominently can be made available e.g on Github for anyone to examine and comment on – it could put an end to platforms’ practise of prioritising extremes/disinformation, co-ordinated campaigns sometimes using bots (activity known as “brigading”) to increase engagement (ie: profit), – note significant proportion of growth on Twitter activity owes itself to bots, spam accounts, unaccountable accounts]. One commentator says that it would allow users to game the algorithm and manipulate the content. Practically too, it might not be that easy to implement an open algorithm platform, let alone adjust the algorithms in accordance with the user’s desires. 

• Not interested in making money out of Twitter [ie: not really interested in increasing share price for Twitter, though the fact that Musk being in charge may incidentally buoy share price]

Why have the board rejected the offer?

• The board may have considered that the offer is not generous enough – share price has slumped now, but it peaked at $77 early 2021. [Musk tweeted a screenshot of Goldman Sachs report from February showing an objective valuation of Twitter at $30 per stock with a “hmm” emoji]

• Musk not interested in money – might be motivated to make Twitter a better tool for himself / power users; note Tesla has zero advertising budget thanks to Musk’s high profile + public comms nous + Twitter [though he does say – it wants it to be beneficial to society as a whole, which may be right if the algorithms are opened up]. 

• Founder Jack Dorsey wants Twitter to be controlled by the people (ie: web3 – decentralised) – contrary to what Musk might want (that he controls Twitter centrally – though he does say he wants to bring the current shareholders along “as much as the law allows”). 

• Hasn’t exactly endeared himself to the Twitter board and staff [plus most of the board will be sacked if not all and staff redundancies will ensue if Musk were allowed to takeover].

• In reality, free speech platform is just not possible, and a level of content moderation is essential. Plus Twitter is a global platform, and other countries have cultural ideas which do not involve free speech, which will make Twitter unusable if content moderation were abolished [except, combined with opening up the algorithm, you could end up with a similar result to content moderation – if this is practically possible]. 

Other knock on effects

• Free speech policy jars with Chinese speech policy – which could impose measures against Musk and his businesses there [and Tesla desires to expand in China]. 

• Tesla’s share prices dips due to potential distraction for Musk 

• Furthermore opens up Musk’s other companies for backlash generally given the toxic nature of social media (especially Twitter) 

• All of the above a problem for Twitter’s institutional shareholders who will likely have some form of stake in Tesla as well. 

• Privatising Twitter could result in removing share options for highly skilled, highly sought after engineers – it could result in a brain drain from Twitter. 

• Lower morale within the Twitter workforce

• He may possibly sell his shares which he has just bought – as he proposes, creating a further downward pressure. 

• Lawsuit against the board members by the shareholders for breach of fiduciary duty (this extends to shareholders as a whole, including the minority shareholders – Twitter board members do not have sufficient level of share ownership, and  their interest may be to remain on the board, and so there may well be a conflict of interest) –  Musk tweeted: It would be utterly indefensible not to put this offer to a shareholder vote (then he took a poll on Tweet to survey whether Twitter users agreed – it was a resounding yes, unsurprisingly). 

Will Musk up the offer?

• This is the best and final offer, he says. A tactic used by Warren Buffet – known to stick to best and final offers on the opening gambit because he doesn’t want to spend the time further negotiating. But unlike Buffet, Musk is known to make u-turns – the offer to join the board only to reject the idea being one of them.

• He could potentially lower the offer if share price of Twitter takes a downturn as a result of the maelstrom caused by Musk himself.

The board defends the hostile takeover bid by establishing a poison pill

In this case, if Musk acquires more than 15% share of the company without board approval, Twitter can issue more shares to enable existing shareholders to buy more at a discount. This would then dilute Musk’s share, which will prevent him from buying the company. 

Musk no longer the biggest shareholder

Vanguard is now the biggest shareholder with 10.3% holding. But they may agree with Musk in terms of vision going forwards. Not necessarily bad news for Musk. 

What does the market think?

The market is not entirely sure about what happens next. Share price is, at the time of writing, nowhere near Musk’s offer. 

And there is a query whether Musk has sufficient funds or have the means to gather sufficient funds. Though he intends to bring with him as many shareholders as he can (which will help with the funding – but will they if Musk has no desire to increase share value?). 

Delving Deeper

Intellectual Property

A licensed Bluetooth component manufacturer sells infotainment system to Fiat group company. Can Fiat etc sell its cars incorporating the infotainment system without a trademark licence from Bluetooth?

…It depends, said the US Ninth Circuit, remanding the case back to the District Court. 

What does the First Sales Doctrine / Exhaustion of intellectual property rights mean?

This is the rule where, if you sell a product protected by intellectual property right (eg TM right), which would usually involve a premium (a good example is say, Gucci – Gucci and its licensees are the only ones allowed to put the Gucci mark on its garments entitling Gucci to sell products at a premium) once that product is first sold by the intellectual property owner, all its intellectual property rights protecting that product is exhausted. 

This means the purchaser is entitled to sell that product to any third party and Gucci can’t claim trademark right infringement against the purchaser/on-seller. It happens a lot in eBay for example, people buying branded products from discount stores and selling it with a slight mark up on eBay. The original brands owner can’t generally complain (there are various exceptions which is beyond the scope of this note). 

How Does Bluetooth licensing work?

We all know and have used Bluetooth. It’s short range wireless communications technology. There is a body called Bluetooth SIG which licences the use of the technology and Bluetooth TM. To use the Bluetooth TM, you have to get a licence from Bluetooth (which involves payment) and component manufacturers have to carry out and pass certain testing. End product manufacturers don’t have to carry out further testing to incorporate the qualified component. 

What was the issue? 

FCA – who sells cars under brands such as Fiat, Chrysler, Jeep, Dodge and Ram purchased infotainment systems (which utilises Bluetooth technology) from licensed component manufacturers.  But FCA did not seek a licence from Bluetooth and nevertheless sold cars with infotainment systems bearing the Bluetooth trademarks. 

Bluetooth sued FCA for TM infringement. FCA said Bluetooth’s TM rights are exhausted. 

What’s the law

Essentially as stated above, but there are jurisdictional differences. In the US (where this claim was advanced), a purchaser who does no more than stock, display, and resell a producer’s product under the producer’s trademark is not infringing. 

Why did the Ninth Circuit remand the case back to the District Court?

The panel said it all depended on whether FCA had adequately disclosed its relationship with, and qualification to use, Bluetooth technology. The issue is whether purchasers of the cars would be confused. This is fact sensitive which ought to have been considered by the District Court. 

Incidentally in the UK the question of exhaustion may well depend on factors such as

• licensing terms between the TM owner and the component producer
• how the component product has been modified 
• notices given to the purchaser
• where the transactions are taking place

Note: in the US it’s trademark, in Europe, it’s trade marks. 

Tech Pick of the Week

Uber adds trains and planes to its offering

…This development is not surprising at all. It’s the ultimate mobility as a service, envisioned by founder Travis Kalanick from the outset. The idea that you get picked up by an Uber, dropped off at the station at the right time, the right entrance, you get on the train, then get to the airport, get dropped off, and an Uber is waiting for you to take you to your hotel. Preferably, your hotel knows your estimated time of arrival and prioritises making your room up before other rooms. Preferably, it will have a wallet on the mobile phone with all the tickets in, so there is no fumbling for tickets. Preferably any ongoing travel gets adjusted easily if there is any delay in any of the legs that constitute the journey. Preferably it will give you recommendations (eg. restaurants) in your destination based on which restaurants you have been on in your other Uber journeys. I’m not entirely sure whether the last four asks will be implemented (they are just my own desires), but I’m sure it will be offered at some point if not now. In respect of every feature Uber has scope of adding a commission (either that, or perhaps it gets users to subscribe to the service – or both). Uber will then gain more first party data from which to offer targeted services. Note that Uber CEO Dara Khosrowshahi was previously CEO of Expedia. 

The surprising news is that it will be piloted in the UK first. It is the biggest market outside North America – but then why not do it in North America? I’m sure there is a reason. 

Artificial Intelligence

Open AI’s incredible Dall-E2 can create images from text descriptions

…You really just have to check out the Dall-E2 website to see. For example: painting of a fox sitting in a field at sunrise in the style of Claude Monet. The AI will create it, and it looks great. Open AI has Elon Musk as one of its founders. It was developed by training a neural network on images. Dall-E2 spells out why it’s noteworthy:

• It can help users express themselves visually in any way they want. [So no more searching for the right image on Getty?]
• It can show you how the AI understands how our world is organized – and whether it’s accurate or not.
• AI can demonstrate to you whether it actually understands us or whether it is just repeating what was taught. 

Huge implications for the development of games and the metaverse in the future.  

BigTech

Platforms must check information is false before de-referencing, says the Advocate General to the CJEU

…It’s Freedom of Expression vs Privacy rights of individuals kinda case.
Reference from the German Court. Claimant individuals had asked Google to take down some articles about individuals. The individuals asked Google to de-reference because it contains information which is false and it is defamatory.
The Advocate General said that Google must look at the evidence suggesting that it is false / defamatory first before taking down, or temporarily de-reference / indicate that accuracy is contested. There will need to be cogent evidence in the case of public figures.
CJEU will then rule on the point.

Were Intel’s Rebates anticompetitive? European Commission appeals the decision to the CJEU

What did Intel do? Intel gave rebates to computer manufacturers for buying most of their chips from Intel.

What was the Commission’s case? The Commission said the rebate scheme was designed to exclude Intel’s rivals, in particular AMD, and therefore anti-competitive. 

What has happened so far? The EU Commission penalised Intel for what is considered was anti-competitive behaviour. That decision was successfully challenged, leading to the re-assessment of whether a competitor as efficient as Intel would have been able to compete with Intel’s rebates. The General Court (one Court lower than the CJEU) held that damage incurred as a result of Intel’s rebates could not be ascertained and annulled the fine. That decision is being appealed now to the CJEU. 

Google unleashes BigLake – allowing enterprises to analyse data across multi-cloud data warehouses and data lakes

…Google’s new product removes the separation between data warehouses and data lakes, and enables enterprises to carry out data analytics across the various storage systems. 

Data Warehouse – This is a large, organized structured data storage space. It enables different departments in an enterprise to share data. Machine learning and AI use would use data warehouses on the whole, because the data is easy to prepare for training the AI system. 

Data Lake – This is a large repository of raw data in the original format. There is no organized structure within it. 

Google has also established the Data Cloud Alliance, which enables data portability, meaning users can move data across different platforms belonging to the members (these are Google, Confluent, Databricks, Dataiku, Deloitte, Elastic, Fivetran, MongoDB, Neo4j, Redis, and Starburst).  [Portability is a big requirement of EU Commission’s proposed Data Act]

Google penalised by French antitrust regulator for abusing power over advertisers

…Google has been found to suspend Google ad accounts of advertisers without applying rules in a transparent, objective and consistent manner. 

Microsoft comes under criticism from rival Amazon for bundling Office with Azure (Microsoft cloud service)

…Whatever Microsoft decides to do, I’m sure it will have one eye on the pending Digital Markets Act (as it could be seen to potentially favour its own services over others). 

Cloud landscape

The two dominant companies are Amazon (strictly, AWS) and Microsoft (Azure). Google is distant third.

What is the complaint?

• Offering of favourable terms to Microsoft Office if the customers used Azure cloud service. [Note that Microsoft Office can be run on other cloud services]
• Levy of additional charge on data centres of AWS, Google and Alibaba when using Microsoft Office on their data centres – same charges levied on Azure but customers given discounts that cushions the charges. 
• Removal of technical support

Other issues include

• Offering highest level of security given to customers that buy Windows 365 that also buy a premium version known as E5. 
• Bundling of Teams with Office 365 tools – subject of complaint filed to the EU Commission by Slack (workplace messaging app). 

Crypto

Dubai proves itself to be just the ticket for crypto industry as new licensing regime lures crypto institutions

…Virtual Asset Regulatory Authority launched only this month, appears to be merrily issuing licences. Whilst I am unsure about the specific rules and how they compare to other jurisdictions, it is for sure much less strict, or crypto friendly than other jurisdictions. Major crypto names setting themselves up in Dubai include Binance, FTX and Crypto.com among others.  

UK Court decides on Crypto software dispute

Claimant: Tulip (company owned by Dr Craig White, who is famously litigious in the crypto circle – he once claimed to be Satoshi Nakamoto) 

Defendant: several cryptocurrency software developers

Issue: There was a hack and Claimant lost billions.

Claim: Defendants owes Fiduciary Duty, if not Duty of Care, which was breached and an order to implement patches which would restore the Claimant’s assets. 

Finding:

• Claimant incurred economic loss, which means no duty of care unless there is a special relationship 
• No general duty to protect others from harm, no duty to prevent third parties from inflicting loss to others
• Defendants are a fluctuating body of individuals – no duty to continue being involved with provision of software services
• No Fiduciary Duty owed to Claimant

Appeal is sought. 

See also case of McKimmy and OpenSea (in the NFT section below). 　

Meta pivots from Diem digital currency to in-app tokens dubbed Zuck Bucks

…Having failed to set up a digital currency (Diem, formerly known as Libra) Meta Financial Technologies are now looking at distributing in-app tokens which would be centrally controlled by Meta (ie: not on a blockchain unlike Diem). Creators will be able to sell digital items on Meta’s virtual world, Horizon Worlds and will be rewarded for engaging in the space.  

It is also looking at providing financial services, such as giving loans to small businesses. Meta has deep understanding of how the metaverse might work, will have extensive knowledge on NFTs and blockchain economies, it would be in a good position to assist small businesses to grow in the web3 era by using new channels to reach out, build businesses. 

German Police and US Enforcement together manage to shutdown Hydra, one of the biggest criminal marketplace on the darknet

…Not much information on how they managed to track Hydra down, but here is what they did/what they found. 

• Seized €23 million worth of bitcoins [not much, compared to other heists?]
• 17 million customer accounts [I am though sure most customers have multiple, multiple accounts, but still the scale is mega]
• 19,000 vendor accounts
• Predominantly transactions between Russians
• Purveyor of narcotics, stolen financial information, forged identity, money laundering and mixing [mixing up crypto transactions so it is difficult to trace]. Mixing was a major money generating service for Hydra
• Use of Tor encryption network to hide identity of users
• Accounts for over 80% of cryptocurrency transactions on the darknet. 

Payment app Bolt (bit like Stripe) acquires Crypto platform Wyre

…It means Bolt can offer crypto payment services as well as normal fiat for eCommerce. Wyre owns crypto-to-fiat payments system. Metaverse here they come. Shoppers paying with crypto typically pays a significant premium compared to those making credit card payments – Bolt attempts to make it less burdensome for crypto users. 

EV

Honda and GM partner up to cut down on EV manufacturing costs, following increasing demand and competition in the EV space

…As an IP lawyer, I would say that the IP sharing terms would be interesting. 

Honda + GM: Global production system using GM’s Ultium battery technology + standardise equipment to cut down on costs. Honda is an investor in Cruise (self-driving car company), which spun out of GM. Honda has though separately said that it’s not all in on EV, with focus on petrol/diesel/electric hybrids. Honda is not alone in its hedging strategy. 

Other partnerships include

Volkswagen + Ford: VW’s platform will be used

Renault + Nissan

Nissan + NASA: on developing quick charging solid state batteries. 

All very well, but Lithium supply (which is highly dependent on China, South America and Australia) is very difficult to come by…remember EU has banned sales of fossil fuel cars by 2035… [note that less well developed countries without the requisite infrastructure will be using internal combustion engine cars for some time – and so there certainly will be a demand for legacy cars for some time]. 

Tesla opens Giga factory in Texas

The new plant (which is one of the biggest in the world) will make

• Cybertrucks
• Tesla Semi [another kind of EV truck]
• Tesla’s Model Y and 3

Bosch buys Five.ai (autonomous driving start up)

Bosch – partnered with Daimler to develop autonomous vehicles and supplier to many car manufacturers. It has vast amount of data
Five – UK based start up with focus on software development. Would benefit hugely from access to Bosch’s data.
Similar sorts of acquisitions are likely to follow.

Gaming

What is the scope of ” not to use compromised elements” in a settlement agreement following copyright and trade dress suit? Could be potentially very wide – PUBG v NetEase

The suit was in California. Any lawyer would need to take note of this case. I myself had a case once around this sort of issue.
Claimant: PUBG (Krafton Inc’s division, a South Korean company). Publisher of game PlayerUnknown’s Battlegrounds
Defendant: NetEase (Chinese company). Gaming company, publisher of Rules of Survival and Knives Out.
Why did Claimant sue?: NetEase’s Rules of Survival and Knives Out were said to infringe PUBG’s copyright and trade dress in PlayerUnknown’s Battlegrounds. Parties settled the litigation.
What did the Settlement Agreement say? NetEase agrees “not to use the compromised elements in the advertisements for the specific games”. [emphasis added].
The Claimant applied for an interim injunction because the Defendant had not removed ALL the advertisements – that included the past. The Defendant said “to use” is prospective – so what the Defendant agreed, was to no longer use the compromised elements in the advertisements. It was not obliged to backtrack and remove compromised elements from past advertisements, that is, all adverts published before the settlement was struck.
The Defendant said, what the Claimant is asking for it to do was to go to a library and look at past advertisement in old magazines and remove the ads from them. Online ads which were posted long ago are not really in front of consumers anymore.
The Claimant said, “the advertisements we are talking about do not mention a particular version of the game, the settlement agreement says nothing about the publication date of the advertisement and these old advertisements are still pointing to and referencing the games…So, whether it’s an advertisement from 2019 mentioning Rules of Survival, it’s still an advertisement for Rules of Survival in its current existence”
The Court of Appeal said the Defendant had an uphill struggle to defend its position.

Metaverse

UK Metaverse tech company, Improbable succeeds in securing $150m investment

…Improbable’s offering is a platform to enable anyone to make their own metaverse and to build on other people’s.

Traditional finance firms pile into the metaverse – and in different ways

…With the metaverse economy anticipated to amount to $8-10tn by 2030, financial firms want to get themselves a foothold for now.
Mastercard – held a metaverse event on the Roblox platform
JPMorgan – opened a lounge in Decentraland
HSBC – buys virtual land on Sandbox
AmEx – files patents for electronic transactions in the metaverse, systems for trading NFTs

Fortnite maker Epic gets funding amounting to $1bn each from Sony, and from the investment firm behind Lego

…Sony and Lego will get stakes in Epic to:

• Build immersive experiences
• Enable creators to build own virtual world/community
• Child-friendly metaverse [which must mean there will be lots of controls that must be programmed into the metaverse – however to account for every eventuality will be impossible]

This is good news for Epic and Sony (Playstation) in particular – as the gaming space is getting quite competitive with Netflix, Apple, Amazon and Microsoft building streaming services for gamers. 

NFT

What is an NFT? Apple says Sticky isn’t one of them

…A self-styled NFT App called Sticky (it says you can make and collected NFTs) has been booted out of the Apple App store because its digital collectibles were not minted (ie: made) on a public, decentralized blockchain. Apple said it was misleading to call it an NFT App. 

Sticky’s NFT can only be minted and sold on Sticky’s centralised ledger – creators found they could not sell it on the NFT marketplace OpenSea for example. It also means Sticky could do whatever it wanted with the “NFTs” – meaning it could have shut down the ledger on its own whim.

UK High Court orders asset freeze of NFT for the first time

…Two NFTs representing digital artworks were stolen from the Claimant’s MetaMask wallet. In its first ever case, the High Court ordered the NFT – as a cryptoasset –to be frozen for the first time. The High Court has previously ordered the freezing of cryptocurrencies, but this was the first time NFT was recognised as a cryptoasset, and by extension the proprietary rights of the NFT holder. The case is Lavinia Deborah Osbourne v (1) Persons Unknown (2) Ozone Networks Inc. trading as OpenSea  

Theft victim sues OpenSea for negligence

…The victim, McKimmy, claims that his NFT of a Bored Ape was stolen. He sued OpenSea for negligence, breach of fiduciary duty, breach of trust, breach of contract and breached of implied contract. Claims OpenSea had vulnerabilities, and OpenSea knew about them. The case is currently pending. 

Copyright wranglings between designers of Bored Ape spin off Caked Apes

…Designers are accusing each other of copyright infringements and there are arguments over how the revenues ought to be split. The case will need to examine the Bored Ape licence terms. 

Jay-Z and Record label part owner Dash in NFT related litigation

…This is a dispute in which Dash sought to sell an NFT of copyright in Jay-Z’s album “Reasonable Doubt”. 

Jay-Z’s /Record label’s case: Dash doesn’t have right to sell the copyright. The copyright belongs to the record label, not part owner’s of the record label. 

Dash’s Defence: I’m just trying to sell my stake in the Record Label. 

Take away: If you are a seller, make clear what you are selling and make sure you have the rights to do that, if you are a buyer make sure you know what you are buying and that the seller has the rights to sell. Dash should have made his shares to the Record Label as subject of NFT. In a potential settlement, a joint letter has been filed with Dash admitting he doesn’t own the copyright or part thereof. Similar confusion arose in the case of Miramax v Tarantino (see Tech News Digest of 22 November). See also the case of F1 Delta Time (below) 

Incidentally, Dash has just lost a law suit for claiming that he owns the copyright to the film “Dear Frank”.

F1 ceases licensing agreement over the F1 Delta Time game devaluing a whole load of F1 branded NFTs on the platform

…F1 Delta Time is a game based on the Ethereum blockchain. Players can convert Eths into the game’s own token (REVV) and trade digital items which was on NFTs. The beauty of the game was that the publisher of the game (Animoca) was given licensing rights, so that F1 branding was allowed in the NFT. That licensing deal is now terminated. This forced the game to shutter and render the NFTs worthless. Similar learning point as the previous post follows. 

Satellites

Amazon also launching satellite broadband-services as future competitor to Starlink

…The satellite internet service will come under Amazon not Jeff Bezos’s space company Blue Origin, interestingly. I guess the internet services are more closely tied with eCommerce than space. Starlink in contrast comes under SpaceX (but then again Musk does not have an eCommerce company). 

Wearables

Fitbit gets FDA approval for device which detects irregular hearbeats

…The new tech means that the monitoring will always be on rather than what it used to be – where checks were only made periodically. 

In the Spotlight

Snapchat’s Investors sues Snap Inc and executives over covering up the impact of Apple’s privacy change on Snap’s business

…This is a pure tech newsletter, not an investment one. But this issue is so very interesting for any tech lawyer that is interested in how access to data might change in the future – which will have a different regulatory landscape to the one we have now. Companies which have access to data are at an advantage – hence why there is so much jockeying around for first party data (Facebook for one – read on). 

Apple changed its privacy policy in June 2020 for iOS, allowing users to block tracking by Apps. Most users took the opportunity to opt out from tracking. The introduction of this new privacy feature impacted Snap (like many other Apps) badly – the allegation is that the impact was downplayed and was misleading. If the claim is successful, it could lead to similar sort of actions against other Apps by investors. 

Why do the Apps need access to your data?

This has impacted Apps large and small. The biggest one is Facebook. Facebook needs to be able to access your information – device ID, cookie ID, IP address and your activity – what websites have you visited,  what did you buy there, (“tracking data”) to build a profile of you. 

Armed with that information Facebook can work out whether you are a football fan, or a parent? What income bracket might you be in? What kind of clothes you like? All of these pieces of information feed into Facebook to work out what advertisement ought to be displayed on your Facebook feed using your identification – to get you to buy items in the ads that are displayed on Facebook (“targeted advertising”). If you click onto it, Facebook will have a record to show the advertisers (eg. GAP) that paying Facebook to display advertisement on Facebook is very effective. It is possible to combine your different kinds of tracking data in clever ways to target better. An example might be the use of geolocation data, so you might get a GAP advert if you are in a shopping mall with GAP in it. That is how Facebook, and other Apps (which display ads) have earned money to date. Apple’s policy change and users opting out of tracking means that ads are less well targeted and advertisers don’t pay Facebook (and other Apps) as much.  

How does this benefit Apple?

For three reasons. 

One is, it is known that Apple is gunning to profit more in advertising. If Apple is the most effective advertiser, it can attract more advertisers (ie: brands). It has the mobile ecosystem in iOS which enables it to have access to user data (so called first party relationship because the data you generate feed into Apple direct – whereas for Apps, the data have to go via iOS or Android operating software – so they lack first party relationship). Apple can combine this with ensuring privacy – you can store all your personal data in your iPhone –your search history on the web, your iMessages, Gelocation, photos, everything – can be stored and processed in the device, using algorithms that nobody has access to – because it does it without needing to upload on the cloud. So you can carry out searches which returns to you a personalised and more relevant search result on your device. It means, if I look up EPC, I get the link to European Patent Convention (being an intellectual property lawyer), not Energy Performance Certificate – as I do now. If I look up McDonald’s, I might get the information about the nearest McDonald’s with directions to it, not information about restaurant chain as a whole. If I search for a restaurant to book a lunch with one of my contacts it may use my contact information to work out a location convenient to both of us. If I search for Ethereum, not only might I get what the price the market rate for it is now, but it might display how much of Eth I hold in my cryptowallet, with a link to my wallet in case I want to carry out some transactions. 

Reason two is, it impacts Facebook, one of Apple’s future rivals.

This might be a bit surprising at first – you might pit Apple against Google more than Facebook. But the next platform may well be AR / VR, and in this space, Facebook is a strong contender against Apple (more so than Google at the moment, though Google is also very much in the race). Incidentally, the collection of first party data may also be the motivation behind Facebook wishing to expand into the metaverse – Facebook has been hamstrung by the latest move because unlike the other BigTechs it lacks a platform. Apple has just withdrawn funds away from its potential future rival by a click of a button. That is what you can call power. 

Reason three is, it enables Apple to lean on its strength, meaning security and privacy. 

This week at the IAPP Global Privacy Summit Apple CEO Tim Cook argued against sideloading (transferring files between devices; eg. PC to mobile) – which will allow users to download apps without going to the Apple App Store and third parties to be able to use their own payment systems to facilitate in-app purchases –  which competition authorities (ie: EU Commission and its Digital Markets Act + US’s Open App Markets Act – and note also that the issue is subject to the pending Epic v. Apple appeal) are forcing platforms to allow, which circumvents Apple’s App store. He said that allowing sideloading would let “data-hungry” companies to avoid Apple’s privacy rules and allow them to track Apple users against their will, in the surveillance economy. There is also the issue that malware can more easily infiltrate users’ devices if downloading onto mobiles were possible through potentially less security stringent third party app stores. 

US FTC – should it strengthen right to repair laws?

The Issue

Because these days, a lot of products are complex and electronic (ie: run by software), users are finding that they need to go back to the OEM to get the product fixed. OEMs, knowing they’ve locked in the customer – can charge high prices for repairing. In the US, there is the Magnusson – Moss Warranty Act which prohibits OEMs from tying warranties provided that all repairs are carried out by OEMs themselves. 

Should OEMs be forced to provide diagnostic tools and information to independent repairers? That’s what the proposed Fair Repair Act tries to do. Note that the new Data Act proposed by the EU Commission envisages exactly this.

In the US and Europe, auto industry have the obligation to open data and the diagnostic tools already to allow independent repairers to service – but should it extend to the wider industry?  

Concerns

OEMs are concerned about keeping customer data safe, forced disclosure of trade secrets (including proprietary data) and cybersecurity. Not to mention – if they are handling electronic goods, or cars powered by lithium batteries there may also be general safety issues that go with handling these goods. 

Tim Cook’s speech (noted above) at the IAPP would support concerns of OEMs. 

Litigation

There are a couple which are highlighted below – I’m sure there are many others. 

Farmers that own John Deere tractors v. John Deere: Antitrust action. Plaintiff alleges that John Deere does not make available software and repair tools to enable plaintiffs to repair tractors. They have to go via Deere’s network of independent dealerships. Farmers have the experience to repair tractors but it cannot repair newer generation tractors without the right kit.  The claim says that such arrangements are anticompetitive. 

Kytch v. McDonald’s : McDonald’s McFlurry machines can allegedly only be repaired by Taylor, a partner of McDonald’s, which is claimed to be anticompetitive by Kytch. Kytch also says that McDonald’s have made disparaging remarks about Kytch to persuade McDonald’s franchisees to get Taylor to repair the McFlurry machines.  

It is anticipated that similar sorts of litigation will follow in the coming few years. 

Delving Deeper

Having gotten a 9.2% share, Elon Musk becomes board member and then decides against it

…So what happened after Musk’s stake in Twitter was revealed? Twitter shareprice rose by 30% and then dipped a little – it is clear that Musk isn’t in it for the money. He has his own mission, which is to harness Twitter back to its free speech roots, and possibly make Twitter even more usable for power users like himself (which is not the majority of Twitter users – he has over 80 million followers). He is likely not interested in ensuring better returns for shareholders. He was invited to get on the board, and now has decided not to. 

Some Twitter employees, it seems, were also not altogether embracing of Musk’s possible arrival. So the internal AMA (Ask Me Anything) opportunity that was planned in the anticipation that Musk would assume a board seat would have been interesting (unlikely happening now). Expected questions to Musk apparently included:

• If an employee tweeted some of the things Elon tweets, they’d likely be the subject [of an HR investigation]…Are board members held to the same standard?

• We know that Musk has caused harm to workers, the trans community, women, and others with less power in the world… How are we going to reconcile this decision with our values? Does innovation trump humanity?

These highlight the thorny issues of Musk being on the board well. Censorship and free speech issues are terribly difficult (so much so that Nick Clegg- former UK Deputy prime minster, now head of global affairs, whose job is to deal with these issues at Meta has almost as much power a Mark Zuckerberg in the company) and it jars with Musk’s staunch belief in the promotion of  free speech. But content moderation is inevitable today, certainly in Europe and also in the US following the uprising in Capitol Hill. Horrendous abuse cases are rife in gaming and social media with reports that a staggering 64% of players feeling emotionally affected and 11% reporting depressive or suicidal thoughts. My bet is that the statistics won’t be that different on Twitter, a unique platform in one sense where posts can be answered by anyone, not just your followers (for example, in Facebook where you can control this, though on Twitter as I understand it, you can block people) – the closest thing you can get to a digital Town Hall. Bots on the platform have been known to troll specific target or users that have a specific message. Maybe Musk thought it’s all a bit too complicated – and he may have thought he might not be the right person to solve the content moderation issue. 

Or perhaps board members in Twitter thought better of this idea. His recent Tweets (Is Twitter dying? …since no one shows up anyway / Should we delete the W in Twitter?)  it has to be said, haven’t done any favours to Twitter confirming some people’s beliefs that he might struggle to act in accordance with fiduciary duties imposed on board members, or simply doesn’t want to be muzzled. Was he trying to drive the value of Twitter shares down before he acquires more?  Other reasons are – he wants more than 14.9% share of Twitter – the limitation that would have applied had he become board member (it may be a rule specific to Twitter).  Twitter (in the form of Musk tweeting) shoulders practically all of Tesla’s PR/ advertising. In short it has huge influencing power and he has seen Trump being banned. Perhaps he feared he could be next.  By him holding an influencing share he can ensure that it will remain available for him to utilise. 

Interestingly nobody seems cite being too busy as a reason not to go on the board (CEO of Tesla, SpaceX, Neuralink, Boring [any others?], and being a parent of a number of children, including little ones). 

Tech picks of the week

EU Commission announces European Green Deal proposal – what’s in the package?

…Not exactly tech news, but as business people in tech, we should all be aware. There are three proposals (I’ve paraphrased)  

• Make almost all physical goods sustainable – from the design phase to end-of-life

• Labels to let consumers know the environmental impact of the product [a bit like traffic light food labels?] – not just about energy efficiency but also environmental footprint as a whole
• Digital Product Passports to make it easier to repair and recycle products
• End destruction of unsold goods 

• EU Strategy for Sustainable and Circular Textiles – Tackle fast fashion

• Educate consumers about sustainability and protect them from greenwashing. 

My bet is that, eventually, the EU Commission will start taxing not very sustainable goods, especially if goods could be made sustainable but the company does not do its best – a bit like taxing fatty foods and fizzy drinks, or road tax which increases with polluting levels, perhaps.  

UK Open for Crypto Business

…It aims to be a “global hub” 

• New Regulations for Stablecoins, to be under the purview of Financial Conduct Authority – requirement to hold equal reserves of pounds sterling for the tokens issued

• Royal Mint NFT (as a digital collectible)

• Implementation of crypto regulation to cover off trading of crypto, taxation

• Consider legal status of Decentralised Autonomous Organisations (DAO)

What is a DAO?:

DAOs are, in short, a company/partnership on a blockchain. 

It standards for 

Decentralized – no one authority. No partners, CEO, no central management. 

Autonomous – operates according to pre-set rules, like smart contracts 

Organization – all forms of organizations (can be anonymous)

Once you go through KYC (know your customer) and other compliance checks, you can participate.  Again as stated above, your profile can be a pseudonym. As I understand it, corporate structures and relevant law are programmed into the blockchain, so that a company can be automatically gain huge savings in legal costs), and rules can be programmed (ie: smart contracts) so that it can operate autonomously. 

As a use case, suppose you meet a few like-minded individuals who are deep in a particular area at a conference. You can set up a fund with your new “friends” to invest in say, start ups that specialise in designs for a metaverse. You can set up rules (eg. % voting for execution), who does the due diligence and reports back, and once you fulfil the conditions set by the rules, the investment happens using the amount locked in an escrow – automatically, without a central administrator/general partner.  You don’t need to necessarily trust the folks you are in the venture with because the capital (generally provided using crypto) is safeguarded as the rules on investing and spending are programmed into the structure. 

Elon Musk becomes biggest shareholder in Twitter as he buys minority share (9.2%)

purchased by Musk (albeit minority shareholding) with similar beliefs.  He has also started a poll asking users whether they wanted an edit button. His tweet says “Do you want an edit button?”.  So simple. A great communicator himself, it reminds us all the effectiveness of simplicity in communciation. As a frequent and power user, Twitter could develop functions to make communications more user friendly and effective. 

In another Tweet, Musk asked whether users thought whether Twitter algorithm should be open source (anyone can review the underlying source code). Dorsey replied that it should. 

Most will know that Musk’s Twitter use has led him to sticky situations. The latest issue came when he asked users whether he should sell his 10 percent stake in Tesla. The SEC took issue and demanded that Musk’s tweeting activities should be under some governance. Musk’s filing in response said “The (SEC) won’t let me be or let me be me so let me see; They tried to shut me down . . . ” [borrowed from lyrics of Eminem track Without Me]. 

Ukraine/Russia conflict

Russia to allow imports of branded goods without brand owner’s consent

…Government Commission on the Sustainable Development of the Russian Economy Amid the Sanctions announced that it is planning to allow the imports of branded goods, even if it is outside the limits of trade mark law. It appears to only extend to grey goods, not counterfeit goods. As a result of the devalued Rouble, one wonders whether the impact might be limited (because parallel imports concern genuine goods that are being imported from a cheaper country). A list of products subject to the new rule is going to be published soon. In a different decree, Russia also allowed for the same with respect to patent rights.

Ukraine/Russian conflict leaves Huawei torn

…Western sanctions on Russia leading to the exit of Apple, Google, Nokia, Ericsson etc means that Chinese firms such as Huawei, Xiaomi and ZTE are enjoying rising sales in Russia. However, all is not that simple for Chinese companies as their products, particularly phones, but infrastructure too, are still heavily reliant on US technology to manufacture them, and high end semiconductors certainly contain US technology. Continued sales to Russia may violate sanctions, which could mean their access to US technology may be removed.  

Ukraine uses chatbots on Telegram to identify whereabouts of Russian troops

…To minimise fake or spam sightings, only authorised users can upload.  

Fiesta, Russia’s answer to Instagram becomes most downloaded app in Russia

…Unlike Insta, you can also find, join and create events. 

Yandex, Russia’s answer to Google embeds code into apps to suck information about

users

…The code concerns Yandex’s software called AppMetrica, which enables developers to create apps to run on iOS/ Android (such software is called software development kits, of SDK). Many SDKs are provided for free in return for user data. The dangerous thing is that, SDKs can use permission the user has given the app, not knowing SDKs can also utilise it. 

Yandex acknowledges it collects device, network and IP address information stored in Finland and Russia. It is though said to be difficult to track information back to the user. Yandex software is reportedly used on 52,000 apps. Some of these apps are specifically for the Ukrainian population, one of which is a free messaging app called Called Ukraine. Yandex may be able to see the user’s identification and access its contacts through this app. 

Such fact damages Apple and Google’s claim that they need to run the App Stores on their operating systems in the interests of users’ safety and privacy. 

Artificial Intelligence

Baxter’s medical pump patent infringement enabling automatic adjustment depending on the patient’s condition against Becton can go on says judge

…The seven year case trundles on as judge could understand that the expert report might support the plaintiff’s claim that the Defendant is using the same algorithm. 

Northwestern University’s Collaboration Robot (Cobot) Patents survive patent ineligibility allegations in the US

…The Judge said “The claims appear to be directed to an improved intelligent system with a particular modular architecture, not an abstract result or effect that merely invokes generic processes or machinery”.
Northwestern had also sued robot leaders Fanuc, Kuka and Mitsubishi Electric. Only the Mitsubishi Electric case continues, with others having reached settlement.

BigTech

Third party litigation funded consumer class action attacks Apple in the Netherlands for abuse of dominant position by charging the excessive 30% commission on App Stores which are then passed onto consumers

…In its suit, the Consumer Competition Claims Foundation demands €5 billion. The consumers say that Apple are charging 6 times as much as it would charge if the market were more competitive.

Facebook looks able to settle its privacy claim for $90m for tracking browsing activity from logged off users

…The cause of action was the breach of federal Wiretap Act and California Invasion of Privacy Act. 

Should US Copyright law give power to Copyright Office to force internet service providers to use technology to block copyright infringing materials?

…Yep, this is very similar to EU’s controversial Art 17 of the Copyright Directive in the Digital Single Market. Understandably there is lobbying going at both sides; Amazon, Google, Apple, Redbubble, Vimeo, Etsy and Pinterest are against, and content providers such as Netflix, Disney and Sony are for.

UK Consumer Group Which? seeks to sue Qualcomm for anticompetitively overcharging on chips for damages amounting to £480m in a 29million person class action in the UK

…Which? complains that Qualcomm refused to licence rival chipmakers standard essential patents that enable the chips to wireless communicate and refused to sell chipsets to device makers unless they paid the licence for the patents (No Licence No Chips policy), in an anticompetitive practice.

Digital Economy

Chinese Authority thinking about giving US regulators full access to audits of Chinese listed firms

…If so, it will mean Chinese companies may be able to keep their US listings.

US DOJ urges Judge not to block digital copyright law

…In the US, it is a crime to circumvent technical protection measures (eg. bypass passwords) to access copyright protected material, in accordance with s.1201 Digital Millenium Copyright Act (in UK, it is unlawful, but not a crime). Some researchers in the areas of electronic security and digital video technology complained because it impeded their research.
“The statute is focused on conduct rather than speech, restricting the use of technological means to obtain unauthorized access to digital content. Just as there is no First Amendment right to break into a bookstore to read a book, there is no First Amendment right to breach a paywall to access online content without paying for it” said the DOJ.

Medical Device Group applies to invalidate a rule which exempts individuals that bypass technical protection measures for the purposes of repairing the medical devices

…In October, the US Copyright Office published a final rule which exempts individuals who circumvent the technical protection measures for the purposes of repairing medical devices. The Medical imagining & Technology Alliance says that this is arbitrary and capricious. Advanced Medical Technology Association also agrees, stating in its Complaint “by issuing a rule that enables unregulated, for-profit service providers to piggyback off the creative efforts and intellectual property of medical device manufacturers, it not only thwarts the purpose of the Copyright Act, but also puts patient safety, device integrity, and device cybersecurity at risk”. 

Intel buys cloud optimisation company Granulate (Israel)

…Big company acquisitions can often reveal how they picture the future.
Granulate is a start up company but appears to have a number of impressive partners, such as Google, Microsoft, IBM. What Granulate is able to do, is to understand the customer’s application and autonomously and in real-time improve compute workload performance by deploying software on smaller computing clusters. The description is so abstract it is difficult to understand, but I imagine that data centers will be efficiently able to deploy computing power which means it can handle more commands more efficiently.
Granualate will end up in Intel’s Datacenter and AI unit.

Drones

Texas was wrong to ban drone photography says Texas federal Judge, handing a win to plaintiff journalists

…Texas argued that the right to gather and disseminate news was nowhere in the First Amendment (freedom of expression etc) contrary to plaintiff journalist position, which was that the prohibition of drone photography violated the First Amendment. The Judge sided with the plaintiffs. 

EV

Biden to invoke Defense Production Act aimed to supporting extraction for minerals required to make EV batteries

…This is in part response to lack of oil supplying owing to the Ukraine/Russian conflict. Batteries are thought to provide long term energy storage. Minerals include Cobalt, Nickel, Lithium, Graphite and Manganese. The Act has been around since the days of President Truman, giving powers to the president the authority to prioritise critical materials for domestic production in case of emergency. 

AutoX, Chinese autonomous driving company unleashes fully autonomous car in Vegas without safety features

…Although there was a person in the driving seat, allegedly it had no ability to allow the driver to take over, according to nameless insiders and employees. The company has the backing of Alibaba and Softbank. Although the company states safety is of highest priority, it has been said that AutoX deliberately gets the cars to carry out near collision operations to get more critical data and allowed cars to drive the streets of San Jose without the ability to engage any safety features.
In 2021 AutoX became the first company in China to be allowed to self-drive (ie: no driver) ahead of better funded rivals such as Baidu’s Apollo or Didi.

Nio, Chinese EV company in discussions in Europe about adoption of battery swapping

…One of the issues with EVs is the time to re-charge. Even Tesla’s superchargers can take up to one hour to re-charge. Nio’s idea (which has already been implemented in China) is to swap batteries at battery swap stations:

• Takes 5 minutes instead of an hour
• Carried out by robots which unscrews the bottom of the car and replacing the battery through a hatch in the floor of the station
• Knocks off £££ from the price of the car (battery accounts for about one third of the price of the car at the moment) [critically though what would be the life-time cost of the car?]
• Battery station requires dedicated grid connection of 650MW, size of a small power station. 

Nio is currently in talks with several auto manufacturers about licensing out this battery swapping technology. It was attempted by Tesla, but was abandoned. 

Nio has already launched in Norway, because of available subsidies. 80% of cars sold in Norway are EVs. 

Gaming

Famed choreographer sues Fortnite for infringing copyright by permitting characters to do his protected dance movements

…These programmed moves on games are called “emotes”. Plaintiff Hanagami claims that one of the emotes is identical to one of his dance sequences. This not the only dance move complaints Fortnite publisher Epic has ever had.

NFT

Nike doesn’t understand NFTs says StockX in its Answer

…StockX is originally an online global marketplace for physical products (typically valuable goods) which are validated for authenticity (sometimes using AI). StockX now offers Vault NFTs which are NFTs tied to physical authenticated products. The Vault NFT has no value as such (unlike the digital image NFTs that are fetching handsome prices) – it is simply just a key to the item, embodying proof of ownership. Because it’s a hassle and costs money and there is a risk to shipping authenticated, expensive physical products to the owner, those investors who only seek to own these physical products for investment purposes can choose to have the physical item securely stored by StockX, and have an NFT certifying that it is the owner. Incidentally, it’s also much easier (no need for further shipping, re-authentication etc) for the owner if it wants to re-sell onto to the next buyer in this way.
StockX displays a picture of goods (eg. rare Nike sneakers) together with the description to show that it is available for purchase. Nike has sued StockX for trade mark infringement. StockX says Nike misunderstands the various functions of NFTs, and what it is trying to do by the suit is to prohibit StockX from lawfully describing what it is selling.
The key question in the case is whether NFT is the actual underlying image or just a code the purchaser obtains (a bit like a receipt). If it is the underlying image, then it is possible for StockX’s use to infringe.

What made NFT Game Axie Infinity so hackable? – second largest ever cryptohack amounting to theft of about $600m

What is Axie Inifinity?

According to Wikipedia, Axie Infinity is an non-fungible token-based online video game (some people might call it blockchain games) developed by Vietnamese studio Sky Mavis, known for its in-game economy which uses Ethereum-based cryptocurrencies. It is one of the most popular in the world. Players fight monsters called Axies to earn cryptocurrency. 

Axie Inifinity owes its popularity due to the opportunity to play to earn cryptocurrencies (it used to be Eths), and the increase in the value of Eth further fuelled its growth. There are some controversies around this because in order to play, you need to buy said monsters first (several hundred $ as I understand it) – what appears to be happening is that wealthier players are loaning these monsters to poorer players (notably in the Philippines) via a “scholarship scheme” who are earning to play, with the lender of the monster earning commission off the loan (about 30-50% of earnings apparently). Players can earn tokens when they beat the monsters and complete quests. You can then change your earnings to fiat. 

What made Axie Inifinity vulnerable to attack?

Axie Inifinity however faced the issue of high “gas fees” (amount of Eths required to do something on the Ethereum blockchain – to pay the miners to verify transactions, maintain network security). The gas fees of Ethereum, which is one of the more securer blockchains, is very high (the calculation of this is quite complicated, and depends on how congested the Ethereum blockchain is at any time). 

What Axie Infinity decided to do, was to lower the transaction fees, by going off-chain by building its own blockchain, the Ronin network (“Layer 2 blockchain”) on the Ethereum blockchain and making its own token (called SLP, or Smooth Love Potion). The Ronin network has a “Bridge” which allows it to interact with the Ethereum blockchain, but it does so only when a transaction has to be completed. In this way, you can then earn to play and not get too much commission taken away on the Ronin network. In order to utilise this Bridge to authenticate the transfer of cryptocurrencies between different blockchains, you need to execute a smart contract. That required 5 keys to effect it, and 5 out of the 9 signatures (or keys) appear to have been compromised and used to carry out the hack. Ronin said that the validator threshold will be increased from 5 to 8 from now on. 

The great majority of the stolen cryptocurrencies remain on Binance, a cryptocurrency exchange, but unless you know the private key to the wallets that store the stolen assets, you cannot recover them. There is nothing one can do until the culprit transfers the assets along to eventually, exchange them into fiat. So much for a decentralised system, cryptocurrencies users still rely on a central authority. 

Visa launches NFT program for small businesses – here is why

…What Visa observes is that it has digitally enabled small businesses to participate in eCommerce, but the world is moving – there are gig workers and creators that are using the NFT ecosystem to propel themselves, a form of eCommerce 2.0. And Visa is aiming to continue being relevant in this sphere. The new program aims to establish relationships with individual creators to help them with commerce using NFTs.
Says Visa, they observe that businesses needed assistance in eCommerce, providing the infrastructure which allowed them to sell physical goods to users via the internet, and then in the recent times, the concept of digital services evolved (ie: any service you get from an App). This form of commerce is a little different because purchasers can’t resell them, being a service. The NFT, it says, is a bit of a hybrid of the two, it is like digital service in that it gives you access to experiences such as being a member of something by virtue of having an NFT (see example below), but it has similar characteristics like a physical thing in that you can sell them, or build on top of them.

Flyfish Club – the world’s first NFT private dining club

…Buy this NFT and you can get access to exquisite dining in NY. You can re-sell it, lease it, (and yes, the restauranteur will have a slice of those transactions) or just enjoy the exclusive dining experience (when it opens in 2023) or perhaps rub shoulders with undisclosed number of celebrities who are members. Cheapest membership costs 2.5Eth, or about $10k at the time of writing. The premium Omakase class costs 4.25Eth. All sold out though – you’ll have to go to the secondary market at this time, such as OpenSea.
The “How it works” section on the website is worth taking a look, giving you step by step guidance on how an NFT is purchased. You have to show your NFT to show you are a member to get access to the restaurant.

Inside the workings of money making by Musicians through NFTs

…A record company gives a musician $1m deal. Do you actually know what it means? The musician gets $1m for signing up to the record label, right? No. That’s not the case I was surprised to learn this week.
That $1m is merely an advance on future royalties. So suppose a musician has 20% share of the royalties of its music. That gets paid to the record label to payback the advance it has been given. So if you have a $1m deal, and you are entitled to 20% royalty, then the musician has to earn $5m in royalty to pay the record label back. All copyrights, including master recording are also owned by the record label with the deal. That $1m will have quickly gone with costs of setting yourself up – marketing, studio rentals, hiring managers, hiring venues, travel, branding, living expenses etc. You can now see why Prince, George Michael, Taylor Swift have fought the unfairness of the deals in the past. But record labels say most bets don’t make it, so the successful ones need to in part, provide the revenue to plug the losses.
But this is 2022. Artists don’t need so much money to produce music any more. So you don’t need that $1m advance. Musicians can loan a small amount, and produce, distribute and market music on a streaming platform at a lower cost.
What musicians are trying to do now, is to offer a portion of their royalty with an NFT [you could do it without an NFT but I am imagining that because a smart contract can be embedded, it is much easier to make your distributions]. For example, DJ Diplo offers the following NFTs to his fans for his track Don’t Forget My Love:
$99 for 0.004% of streaming royalty rights
$999 for 0.05% of streaming royalty rights plus more music
$9999 for 0.7% of streaming royalty rights plus a meeting with Diplo.
In most cases, you are most likely not to be able to recoup your investment (you get about $0.0027 per stream on Spotify, rates differ on the platform), but if you are a fan, that might not matter too much. Either that or you might end up feeling a bit exploited by the artist you supposedly admire…

Decentraland hosts Metaverse Fashion Week

…Not a lot of surprising features if you ask me. Here are what was available if you had attended

• Avatars wearing clothes which would be impractical in the physical world
• Physical brands opting to display on digital runways
• Limited communication with other avatars
• Selfridges launches shop
• Possibility to attend talks about future of digital fashion
• Links to “web2” (that’s the internet sites that we are all used to) sites such as Instagram, marketplaces and homepages

Software

Microsoft UK tries to exit from competition case concerning practices relating to second hand software

…The plaintiff is ValueLicensing which buys and re-sells perpetual second hand software licences. ValueLicensing says that Microsoft’s practice of giving discounts to companies that sign up to subscriptions to their software if they agree not to sell the perpetual licences, is anticompetitive. 

In its application to strike out the claim against Microsoft UK, Microsoft accepts that there is a serious issue to be tried, but that the complained of practice was carried out by Microsoft Ireland, not Microsoft UK. If Microsoft UK is out of the picture, then it can argue that the case should be heard in Ireland and not the UK.  

Tech News Pick of the Week

Digital Markets Act, EU’s weapon against the BigTechs

The Digital Market Act is now out. It will concern significant platformers that control “core platform services” which meet certain thresholds. It’s really an act targeted at GAFAM (Google, Amazon, Facebook, Apple and Microsoft) – though some EU players may also be in the frame [it is suggested that the thresholds were lowered to ensure that those that are subject are not all those from the US]. Those qualifying are called Gatekeepers. They are not happy. Serious negotiations ongoing. 

Minimum you need to know

• The agreement reached between Council and the European Parliament is provisional and subject to approval by the same. Expected to come into force October [though the rules will apply to the companies 6 months after that]. 

• Tougher than expected

• Core platform services include marketplaces and app stores, search engines, social networking, cloud services, advertising services, voice assistants and web browsers

• Certain obligation on emerging gatekeepers

• Huge fines, up to 10% of worldwide turnover [note: not profits] and up to 20% for repeat offenders [so what Apple’s doing right now, with the finding (currently on appeal) that it has breached Dutch competition law in the online dating app market (Apple prohibits in-app purchases via third party payment system across the board but the finding only bites on online dating market only), is to pay the penalty amounting to €5 million per week rather than make changes to its system – will become untenable]. 

• There is also available structural remedies [eg. unwinding acquisitions, splitting companies up –it is said that companies like Amazon can undercut all its e-commerce competitors by operating without much profit because it can fuel its operations from the profits from elsewhere, such as the cloud service AWS –and therefore, query has been raised whether Amazon should be split up]

Gatekeepers have the positive obligation to do the following:

• Users must be able to unsubscribe easily as subscribing [no more “dark patterns” such as “if you leave, you will no longer get X Y and Z, are you sure?]

• Refrain from pre-installing important software (eg. Chrome) by default upon installation of an operating system. [Google pays Apple to make it iOS search engine default – this practice is likely to be prohibited under the DMA – there is currently US class action for breach of competition law – the deal between the two is said to incentivise Apple not to make its own search engines]

• Ensure interoperability of instant messaging services’ basic functionalities [so you need to be able to send group messages, such as Apple’s imessage to those that have an Android device – or you will be able to send an WhatsApp message to a Facebook Messenger user – but serious issue is technically, how is this achieved? What if the encryption methods are different? Or proprietary?] In short, the DMA tries to make the ecosystem work more like the Internet where I can send an email from my Hotmail account to someone with a Gmail account – this is all doable because the protocols for internet messages are standardised. 

• Allow App developers to have access to supplementary functionalities of smartphones (eg. NFC chip)

• Sellers to get access to marketing performance data 

• Inform the EU Commission on mergers and acquisitions. 

Gatekeepers can no longer do the following:

• Self-preferencing [Amazon can’t put their own products at the top when the user searches for an item]

• Re-use private data collected for one service for another service [So Google can’t use the geolocation collected to advertise eg. swimwear on the side bar of Google search, where Google knows the user is a keen swimmer, or about to go on a holiday to a tropical destination]

• Impose unfair conditions for business users

• Require app developers to use certain services [can’t force users to pay by Apple Pay, for purchases made on a third party app].  

Did you know?

There is a new acronym for the US semiconductor giants, MANGO, that stands for Marvell, AMD, Nvidia, Global Foundaries, On Semi. Bonus points to you if you wondered where Intel is. I am not sure. 

Artificial Intelligence

Google Parent Alphabet’s quantum software unit Sandbox AQ spins out

…Sandbox AQ is a software company providing solutions at the intersection of Quantum Computing and Artificial Intelligence. The use cases for Sandbox’s software are in the following areas that require high performance computing power:

• Cybersecurity
• Healthcare (drug development)
• Energy and the environment
• Telecom
• Financial services
• Government

BigTech

Google allows third party apps to use its own in-app payment system

…Spotify is trialling its own payment system on Google’s app store. Surely there’s added pressure on Apple. Google and Apple enjoy enormous benefits from the 30% commission it gets from users making in-app purchases including subscriptions.  The question is how much commission Spotify will have to pay when using a third party payment system on the Google platform. 

Following the fall out from the dispute between Match.com and Apple in the Netherlands, Apple suggests that such commission should then be reduced from 30% to 27% to account for the fact that Apple is no longer providing the payments services (ie: removing the sums related to payment processing and related activities – with developers responsible for collection and remittance of taxes & VAT – it may well be cheaper for the developers to accept the 30% commission). 

Google has reduced fees for smaller companies to 15%. Microsoft store charges 12%.

Yesterday’s enemy is Today’s friend: New York yellow cab drivers agree to be listed on Uber

…I do hope Uber will make friends with the London Taxis soon. It has been impossible to get cabs in the city centre these days. Uber will get a commission and be able to meet the demand and the legacy taxi drivers will receive intel on where supply is likely to arise and serve Uber’s users. It’s a win-win for all.

FTC probes Microsoft’s proposed acquisition of Activision Blizzard

…There is no surprise here really. Microsoft proposes to buy the third largest gaming company for about $70billion. To increase the chance of the acquisition being accepted, Microsoft has made some promises to try and pre-empt any fierce regulatory interventions:

• Open App Market Principles laid out for its gaming store [which overlaps a lot with the Digital Markets Act]

• Developers can use third party payments systems
• Own products won’t be given preferential treatment
• Refrain from using private information from third party apps to sell its own software

• Coming into agreements with Sony and Nintendo so that they may offer popular Activision Blizzard titles on their platforms.  

Microsoft’s cloud service (Azure) hit with antitrust complaint in the EU

…Complainant is OVHcloud, a French cloud service provider. There are two unidentified complainants alongside. The allegation is as follows:

• Microsoft’s licensing arrangement makes it more expensive for user to switch between cloud providers
• Microsoft software does not perform well on non Azure cloud platform

Microsoft is subject to another complaint, by NextCloud (a European company) which complains of Microsoft’s bundling of Onedrive and other Microsoft services. 

Cloud market

Microsoft Azure, Amazon’s AWS and Google’s Google Cloud account for nearly 70% of the European cloud market. 

Deutsche Telecom is Europe’s top cloud provider, which accounts for 2% market share, and OVHcloud accounts for 1%. 

Data

US – EU Agree Transatlantic Data Privacy Framework – in principle

…In 2020, CJEU ruled that US surveillance practices in the US meant that EU citizens’ data could not be adequately protected, such that businesses have thus far been prohibited from transferring personal data of EU citizens to certain non-EU countries with inadequate protection under GDPR. The new agreement seeks to allow for data to flow between the regions, as a result of certain changes to US law and practice, ensuring that government access to EU citizens’ data is proportionate and restricted to instances to only where necessary. 

EV

Jaguar Land Rover in talks with battery supplier Envision to set up battery gigafactory in the UK

…Envision makes car batteries and supplies to Nissan. The take away point is that the OEMs based in the UK are setting these factories for parts, in the UK. This could be to reduce supply problems, and the whole concept of striving for national self-sufficiency. It is said that the UK is preferred although Hungary and Spain are also in the running. In other words, it could be a sign of de-globalisation.

Fintech

Apple buys fintech start up Credit Kudos (UK)

…Credit Kudos, lending platform using alternative credit scores (bit like Tesla’s motor insurance offering then – it uses the driver performance collected by the Tesla car to decide the premium). It suggests Apple will be getting into banking services, beyond Apple Pay (eg. general loans, or even mortgages, student loans?). With the information gleaned from Apple Pay, Apple can decide who to loan money, and at what rate [or does that infringe the provisions of the Digital Markets Act I wonder – you aren’t allowed to collect data for one service and use for another]. Rumours also suggest that Apple will get into BNPL (Buy Now Pay Later). Apple pay already does Apple cards which enables users to BNPL for Apple devices (ie: buy iPhones with 0% interest).

Litigation

Google accused of training employees to deliberately make documents privileged when they need not be

…The US DOJ says that Google has been instructing employees to label documents as being privileged and seeking in-house counsel’s advice on a high level basis even where no advice is needed.  Email chains show that in-house lawyers do not respond to the questions asked of them, leading to the allegation that in-house legal involvement is engineered in an effort to manufacture false privilege claims. Google is said to have provided this arrangement under the moniker “Communicate with Care”, stipulating that the employees ought to add an “artificial indicia of privilege” to documents, including those that concern revenue sharing and distribution agreements. 

Metaverse / AR / VR

Snapchat owner Snap buys NextMind

…Nextmind is a “neurotech” company concerning brain/computer interface, based in Paris. Its ultimate aim is to enable the control of VR and AR headsets, hands-free. It monitors neural activity in your brain allowing you to push a virtual button. Snap is developing the VR and AR headset Spectacles, which is subject of a trade mark litigation in the US (vs TM issuing office, the USPTO). 

It is evocative of Elon Musk’s Neuralink which is an implant designed for your brain that allows you to control iOS, keyboard and mouse just by thinking about it. 

Semiconductors

Nvidia throws down the gauntlet as it announces a new Arm based chip

…It’s a challenge against Intel and AMD as the chip is designed to have a level of performance which can be used  for the CPU (central processing unit, ie: the brains of a device) to power the data centres. Nvidia’s main objective behind the ARM acquisition has been believed to be to enter the data centre CPU market. They appear to have done that without having to acquire ARM.

Nvidia are investing heavily in making an “operating system for AI”, and with it software so that its GPU (Graphics Processing Unit, the bit that does very complicated processing, such as graphics rendering and AI data processing involving huge volumes of data) can be used more widely. It has developed the Cuda software which enables developers to use new forms of advanced computing based on its GPUs, in particular in the area of autonomous vehicles and metaverse. 

Trade Secrets

Trade secret misappropriation through acquisition of company

…Most trade secret misappropriation cases are about employees stealing trade secrets of an employer and then transferring that to a rival company. Sometimes you also get companies working on some joint venture or collaboration and one of the collaborators use knowledge gained from the joint activity to use it for a different purpose. But this is a case where there is an allegation of trade secret misappropriation that have arisen as a result of company acquisition.
Aristotle, a data mining company, had bought the services of Acuant Inc, a fraud prevention company. Acuant sought confidential information (to do with layered software security, among other things) from Aristotle, but unbeknown to Aristotle, Acuant was in discussions for an acquisition by Aristotle’s rival, GB Group. Aristotle says it would not have transferred the confidential information were it made aware that Acuant was being bought by its rival.

Delving Deeper

Drug discovery and Artificial Intelligence

…Drug discovery is horrifically expensive. I remember learning at some point – I cannot remember the source – that the average cost of drug discovery is $2billion, when you account for the fact that the great majority of candidate drugs fail to make it (either they are not effective or not toxic). I am sure there are variations on the figures but no doubt that the sum is vast, however you cost it out.
AI could hold the key to cutting down that cost. But how is it done?
First phase
AI can be used to narrow down the number of drug candidates, based on inputs provided by the scientists to identify a candidate which is likely to succeed in clinical trials.
Second phase
Robots are then used to carry out the routine experimental process. They carry out the routine experiments and record the process and the result.
Third phase
AI can be used to identify the right patients for the drug.
Examples in the past
Benevolent AI – trawled through 50 million medical journals searching for approved drugs that could be repurposed for other diseases (Jan 2020).
Dai Nippon Sumitomo Pharma – Puts drug DSP-1181, a treatment for obsessive-compulsive disorder to test after having identified it using AI – with Exscientia (Feb 2020)
Eli Lilly – AI was used to narrow down the candidates to barcitinib – a drug for rheumatoid arthritis, taking only 4 days for the narrowing down process, and then put to clinical trial. Barcitinib was already known, but again the drug was identified as being helpful for repurposing (Jul 2020).

Microsoft goes one step further on Confidential Computing

…So what is Confidential Computing? 

Everyone uses the power of cloud at the moment. Businesses will collate huge amounts of data, upload into the cloud for storage or further processing. Data that is uploaded can be massively confidential – my personal email account contains sensitive information about my health and finances for example. The problem is even more acute for hospitals and banks who has control of such data pertaining to a large number of people.

In order to ensure privacy and security of such data, confidential computing has become essential. It:

• Isolates user data in the computer memory, thereby keeping it unexposed to operating systems, applications and different users of a cloud server

• That part of the memory (Trusted Execution Environment, or TEE) is only accessible by certain computer programs which can read and write data. 

• Data in the TEE is encrypted always – during transit, rest, when in use.

Intel and AMD are implementing TEE in their CPU, Microsoft offers this in their cloud computing offering, Azure. Microsoft is now teaming up with Nvidia to apply the concept to GPUs, which are used in more complicated data processing (typically, graphic processing and AI – it can carry out large number of complicated calculations in parallel), and typically work with CPUs (which isn’t as fast as GPUs, but can carry out more instructions, or commands) to carry out whatever high order task it is set to do. Nvidia will be developing GPUs that can work with CPU TEE, ensuring encryption end to end, even when GPUs are involved. 

Russia/Ukraine conflict

The Russia/Ukraine conflict is accelerating de-globalisation

… I really do think that de-globalisation is the big change you might see in the next coming decade. 

ESG issues, Covid and the Ukrainian war are changing business models. This is because:

• Mounting geopolitical pressures
• Supply chain disruption – causing companies and factories to shut down temporarily, and sometimes permanently
• Difficulty paying staff
• Environmental issues
• Growing sense of nationalism (eg. take back control, make America great again etc)

This has led to decentralisation, and implementing redundancies in the supply chain:

• Localise production to where the consumers are
• Vertical integration (if you can afford it)
• Buffering the inventory (if you can afford to)
• Maybe less stock market floatation – less dependent on quarterly results, and more flexibility
• Use of new technology to plug supply chain gaps (eg. 3D printing)

Viasat – satellite communication service provider subject to cyber attack

…Viasat is a service provider to Ukrainian military. It also provides services to Germany and the attack has disconnected approx. 6000 wind turbines there. 

Ukraine’s “Digital Blockade” – approach to and use of crypto is so carefully thought out

…First, it is trying to adopt cryptocurrencies fast:

• On the second day of invasion, official government wallets set up to receive cryptocurrency
• Implementation of legal structures (this week – yes, amid war):
  • Passes bill to legalise virtual assets such as cryptocurrency
  • Provides consumer protection against fraud
  • Appointment of regulators (National Bank of Ukraine, National Securities and Stock Market Commission) with the following powers:
    • Ability to create policies
    • Issue licences to businesses that deal in crypto
    • Act as financial watchdog
  • Crypto exchanges required to register with the government 
  • Banks allowed to open accounts for crypto firms
• Ukraine crypto exchange Kuna will be able to convert crypto to fiat [at the moment, Bahama based exchanged FTX is converting crypto to fiat for then to be deposited into the National Bank of Ukraine]
• Accelerating the creation of Central Bank Digital Currency 
• Setting up agreements with military suppliers so that transactions can be done using crypto currency
• Setting up official Ukrainian Aid website to enable doners to send money in 9 different cryptocurrencies – previously, the call for donations was confined to Twitter. 
  • Gavin Wood, co-founder of crypto currency Polkadot (DOT) had previously said if Ukraine wallets would accept DOT, he will personally donate $5 million. He stuck to his word. 
• Issuing NFTs – which apparently now has the working title Meta History: Museum of War – NFTs of footages of the invasion with art work relating to the incidents of each day. It will result in an immutable record of the war. 

Second, its dealings in cryptocurrencies donations (over $100million) is clever.

• Using half in non-military use so as not to deter future donors such as bullet-proof jackets, food rations, medicines. 
• Reaching out to Russians on the ground by use of media campaigns on social networks

Ukraine’s vice Prime Minister and minister of Digital Transformation says government will resemble tech companies in the future. This is something I have not thought about.  

David Beckham hands over Instagram account to a Ukrainian doctor working amid Russian shelling

…He has 71 million followers and he has handed over the Instagram account to highlight the good work doctors and nurses are doing, risking their lives. It will no doubt reach so many fans (possibly also Russians – but Instagram is banned in Russia) who may have paid little notice to the Ukrainian crisis. He has called to donate, setting an example by donating £1million.

Starlink becomes most downloaded free app in Ukraine

…It is incredible that Starlink (which requires hardware into Ukraine for it to work) has actually been reported to work.

Popular Ukranian App Reface uses its clientbase to spread information about the invasion

…The top rated face swap app have used its popularity asking users to disseminate information about the war by easy uploading of videos of footages, making it easy to call for donations. 

Deepfake of President Zelensky surrendering ridiculed by Ukrainians

…Fortunately, the mock up was unconvincing and so easily detected, but the Ukrainian government had already warned its citizens that this may well happen. Platformers have promptly removed it but it has also led to criticisms as to why they aren’t moving as fast on other pieces of misinformation that remain on the platforms. 

How do we know when it’s authentic? 

IP Rights owners (particularly brands) face copycat TM applications and usage in Russia as the country decides that IP Rights of owners from unfriendly countries cannot be enforced

…Quite predictable. These include McDonalds, Starbucks, Peppa Pig….

Artificial Intelligence

AI-created toxins

…If AI has capability of discovering new drugs, it can also have the ability to discover toxins. It is proving to be pretty adept. Obviously much easier than developing new medicaments in which you have to prove efficacy (actually tackling the illness) and safety. 

Autos

Porsche to build own EV charging stations

…They are to have a lounge nearby for Porsche owners to relax (as has Audi). It is a departure from plans to have shared charging points with other auto makers. Tesla started off with own supercharging stations but it has opened up its infrastructure to other EVs.  

Covid

Pfizer and Moderna sued for patent infringement by Alnylam Pharmaceutical for using their mRNA technology

…The technology in question is the creation of lipid nanoparticles that protect the fragile mRNA. Pfizer’s website is claimed to have said that without lipid nanoparticles, there would have been no mRNA vaccine. 

Data

UK Online safety bill – what does it mean?

Objective: Prohibit online harms such as scamming, bullying and child abuse but also protecting free speech. 

Penalty for not complying: executives may be jailed, 10 percent of global annual turnover

Regulator: Ofcom

Powers of Ofcom:

• Audit algorithms of outputs of searches and social media posts
• Legal but harmful abuses such as bullying to be set out in secondary legislation 
• Cannot mandate the implementation of proactive tools on private messaging or legal content
• Prevention of fraud through paid adverts
• Criminalisation of cyber-flashing
• Ability of users to block anonymous accounts

Australia’s competition authority sues Meta for misleading crypto- ads

…Cause of action is breach of consumer and investment laws. This sort of issue would fall squarely within UK’s online safety bill. The charge concerns unauthorised celebrity (loosely defined – can include business leaders) images used to advertise crypto schemes. Facebook is liable as publisher of these ads, it is claimed. 

Meta fined €17 million for breaching GDPR by Irish Data Protection Regulator

…This is in relation to Meta’s response to data breaches, which was said not to meet GDPR’s standard. 

Meta was found to have been in breach of GDPR Articles 5(2) [such as processing data in a manner that ensures appropriate security of the personal data] and 24(1) [implement appropriate technical and organisational measures to ensure and to be able to demonstrate that processing is performed in accordance with GDPR].

White House inching closer to the EU on Data policies – sort of?

…President Biden has issued an executive order mandating those running critical infrastructure to report cyber attacks.  Obama had failed to get US companies to collaborate (it felt to be forced to share data was anti free-market), but the Ukranian/Russian conflict has catalysed the initiative. Note that under EU rules, member states are to share cyber attack information. 

Brazilian Supreme Court orders the suspension of Telegram for spreading misinformation

…Apple and Google were ordered to ban the Telegram app. This was in response to Telegram failing to respond to orders to remove profiles of President Bolsanaro’s supporters for spreading misinformation. Bolsanaro had been encouraging people to migrate from Meta to Telegram. Apparently the Supreme Court sent the order to the general email address, and the outcome is rather disastrous. To be fair to Telegram, there are all sorts of actions going on concerning Ukraine/Russian conflict. The Supreme Court email probably got accidentally missed off…Telegram did say they will set up a special take down email address. Telegram has apologised for not handling requests more promptly.  

50% of Brazilian users are said to have installed Telegram [it may well be because in the past WhatsApp got suspended temporarily owing to owner Facebook’s IT configuration change]. Telegram is said to account for Bolsanaro’s popularity. 

Ban now lifted. Knock on effects on Ukranians too (including the government) that uses Telegram.

Drones

UK Civil Aviation Authority to consider implementing an open access regulatory framework for drones

…One vision is to create a drone superhighway linking towns across the UK. 

Metaverse

Sony backed start up H2L displays arm strap that stimulates muscles to mimic pain

…There are no elaborate gloves to put on, just a strap on the arm. It is a contender for a closer physical experience in virtual reality/Metaverse. 

Google buys Raxium, a Micro LED start up – turns up the heat on the AR race

…Raxium develops LEDs for use in AR/VR, no doubt for Project Iris, the AR headset project. Micro LEDs are apparently the next thing after OLEDs. Samsung is already selling Micro LED TVs. Meta is partnering with Plessey for Micro LED projects. Apple bought screen-tech start up LuxVue in 2014 and have been since developing its own AR/VR products. 

NFTs

Former Disney chief Bob Aiger joins board of Genies – a digital avatar and accessories company

…Bob Aiger, formerly CEO and then Chairman of Disney’s first venture since retiring from Disney has been to bet on Genies. This is significant because Aiger is a celebrity CEO, and for good reason. Disney grew internationally and changed tack into digital (Disney+) under his leadership. Anyone wanting to learn about being a better leader is recommended his book The Ride of a Lifetime. I have heard many business leaders quote snippets from it. 

Anyway, he is an expert in monetizing IP, which is what Disney is successful at, and it is suspected this is the reason why he has decided to join the customisable avatar making company [see the popularity of this service in China – In the Spotlight, below]. Plus, despite its issues he must see potential in NFTs. Genies have very interesting partnerships in place:

• With Giphy (company that provides short animated GIF images to social media platforms – Facebook bought Giphy but UK Competition Market Authority has ordered that the deal should be unwound, also US antitrust investigations ongoing): This is how it works: 

• User downloads Genies app–> Create customisable avatar–>Giphyd–>Use in Social Media (Facebook)d

• With Dapper Labs: blockchain company, which is responsible for creating NFT collectibles, for example the popular NBA Top Shot

• With Warner Music group: Genies to create NFTs of say, Ed Sheeran, Bruno Mars, Daft Punk etc for people to use. The partnership can also enable these artists to further monetize their brand. An artist can sell limited NFTs with their concert ticket – those with the NFT can have access to backstage, for example. Profits from this highly priced concert tickets could enable cheaper seats for the hoi pollois. 

Plus in the future, it would seem logical if the vehicle moved into NFTs in gaming. Gamers are spending so much on avatars’ accessories/ costumes (called skins). It is a matter of time that gamers start building their own avatar AND own the underlying Intellectual Property. Key is Genies’ stake in that IP. How will the rights be structured? Readers interested in this area should take a look at Honnverse (see also In the Spotlight, below). 

Spotify to sell NFTs

…Spotify’s aim is to support creators, as most of the licensing revenues go to record labels. Kings of Leon and Grimes have sold NFTs of their music. 

This craze will be with us for some time, despite a lot of “pumping” (inflating prices based on pure speculation and wash trading (where you buy your own NFT repeatedly to give the illusion that it is worth something) going on; Instagram, Reddit and Twitter are all working on web 3.  

Did you know? Warner and Universal have partnered with NFT projects, including a virtual band featuring Bored Ape Yacht Club. 

Bored Ape owner releases ApeCoins in a high profile “airdrop”

…Many will know Bored Ape NFTs have become very high profile collectibles which includes celebrity owners having purchased them for enormous prices. A consortium, in which Bored Ape creator Yuga Labs has majority single shareholding, has released 1 billion ApeCoins in a high profile “airdrop” – which is the process by which free tokens are given away to stakeholders of a project. Thus, ApeCoins were distributed following consultation with stakeholders and industry experts:

• Yuga Lab (150 million tokens – worth more than ($2.2 billion)
• Investors (such as well-known Andreessen Horowitz)
• Owners of NFTs (150 million tokens)
• Environmental charity
• ApeCoin organisation ((ie: a DAO) treasury, 470 million)
• Founders of Yuga Labs who were thus far known by their pseudonyms such as Gargmel and Gordon Goner (8%). 

Some figures

• $9 billion worth of ApeCoins traded within 24 hours on crypto exchanges
• Bored Ape token has sold for $250 initially to $250,000.
• Ape Coins swung [pun intended] from $7 to $39
• Yuga Labs gain about 2.5% royalty for every Bored Ape that gets traded thereafter

Patent

Which law applies to determine disclosure? – AutoStore v Ocado

…AutoStore (Norway) has sued former business partner Ocado for the infringement of 4 patents concerning grid robotics systems. Ocado had purchased AutoStore’s system in 2012 for use in the UK, which came with various technical details and software. Ocado then developed its own system using those details. 

Ocado says that the patents lack novelty because AutoStore disclosed critical information (for the purposes of the patent case) to the Central Russian bank in relation to supplying its system to them. Information was sent by email without an NDA. It is saying that Russian law should apply whilst AutoStore consider that Norwegian law should. 

Streaming

Amazon buys MGM

…With the addition of MGM, Amazon’s Prime Video will be able to compete more effectively with Disney+, Netflix, Sky etc with titles like James Bond and Rocky among the 4000 film titles (it also comes with 17k TV episodes).  Lack of overlap in business between the two was key to clearing antitrust hurdles. MGM titles available on competing streaming services are likely to be withdrawn. 

However, Amazon has been put on notice by the FTC that, depending on how Amazon behaves, it could always think about unwinding the deal…

Supply Chain

Apple proves to be king of supply chain resilience as Chinese Shenzhen lockdown hits tech businesses hard

…Even before the pandemic, Apple always had multiple suppliers. This kept the suppliers on their toes (in terms of quality, price) and it meant that its supply chain was resilient. Apple displayed its might when Apple iPhone 12 launch was delayed by only a month amid shut down of the entire country from Covid. 

Following the temporary Shenzhen shut down owing to covid last week, Tesla shut its factory down for two weeks. But Apple has managed to sustain its business better. The secret is the multiple assembly centres situated close to production (Airpods – in Vietnam, lower iPhone models – Brazil and India), weeks of inventory built in to cushion any supply chain disruptions. 

Semiconductor supply chain

When it comes to the most critical chip supply chain, we see the reporting of not one but two of Chinese iPhone assemblers (Luxshare and Goertek) pivoting into semiconductor packaging space. Semiconductor packaging is not the same as normal packaging you see on everyday products; it is highly specialised. These two companies are names we do not hear often, but are really rather successful:

• Luxshare: Assembler of iPhones, AppleWatch
• Goertek: Manufactures Meta’s VR headsets, Sony PlayStation 5. It has spun off its chip related division, Wingtech which has floated in the Shenzhen stock market. 

ASE (world’s biggest chip packaging and testing service in Taiwan – it has an affiliate called Universal Scientific Industries), Intel, Samsung, TSMC and Qualcomm are setting up a consortium to standardize chip packaging called Universal Chiplet Interconnect Express (UCIe) concerning how to combine chiplets to create more powerful chips. Google, Microsoft and Meta will also join. 

Trade Marks

EUIPO and OECD publish a report saying 60 percent of counterfeit goods imported into EU is dangerous

…Products include pharmaceuticals and cosmetics

EU Advocate General says Denmark in breach for not prohibiting ex-EU exports of Danish cheese under PDO protected Feta

…So held the opinion whilst acknowledging the importance of free trade.

Trade Secrets

Qualcomm sues former engineer for stealing trade secrets by screenshotting

…Confidential information is said to contain chipset software architecture and design. 

In the Spotlight

The Metaverse in China: Who are Zheli, Honnverse, what’s the score?

…BigTechs have dominated news relating to the Metaverse but what’s going on in China? It’s not the BigTechs of China (the so called BATH – Baidu, Alibaba, Tencent and Huawei) that are creating the headlines, but newcomers, though as you can see, hopefuls are backed by BATH (rather, Baidu and Tencent in the main). No reason why new entrants can’t make it outside China, but we haven’t come across much headline news from them thus far. Having said this, watch this space as regulatory authorities in China may step in to restrict things going out of hand.

Zheli

• Who are Zheli?: In short, it’s a social networking app for Avatars.  An App which enables users to make customisable avatars (lots of fashionable outfits) and share basic information such as where they are, what they are doing (at school, shopping mall etc). Users can add friends via the app. 

• What’s the big deal?: Replaced WeChat [China’s answer to Whatsapp] as the most downloaded App from the Apple App Store only one month after launch. WeChat had held the number one spot since 2019. 

• What’s the issue?: 

• Operational issues [probably can’t cope with so many people wishing to use] has meant use is being suspended.

• Privacy concerns – Zheli has denied it has collected data when users use third party messaging tools like WeChat to make friend referrals. 

• Technically constrained – not possible to upload short videos, long texts, emojis. 

Honnverse / Rainbow Universe (in English) created by Tianxa Show

• Who are Tianxa Show?: Developed Honnverse, which is a 3D virtual life community. You can buy virtual property within Honnverse. Oceanfront house has sold for around $100k. Residents include superstar influencer Fish Too Free. 

• What’s cool?: Users can build own IP Rights [I would say this as an IP lawyer – I think this is key to success in the metaverse] by building own avatar and building content which would be converted into digital assets and recorded on a blockchain. 

• What’s the issue? Similarly to Zheli, too many users owing to popularity has somewhat crashed the service. 

Chinese government led metaverse industry group: The Metaverse Industry Committee

• Committee set up under the auspices of China Mobile and Communication Association (CMCA)
• CMCA members include state run companies such as China Mobile and China Unicom

• Tasks include
  • Strengthening technological innovation
  • Application integration
  • Training of professionals
  • Thought leadership 

• Focus on developing infrastructure such as:
  • Cellular networks
  • Wifi 6
  • Blockchain
  • Cloud computing
  • Edge computing
  • AI + GPU
  • VR/AR
  • Wearables

Other metaverse related Chinese companies

• ReWorld: Easy to create games and share among users. A bit like Roblox. Backed by parent of TikTok, Bytedance.
• Soul: Matches people depending on likes and hobbies via avatars. Backed by Tencent. 
• Pico-technologies: makers of VR devices. Now acquired by Bytedance.
• Baidu: Makers of Chinese metaverse platform XiRang. It hosts virtual events and sightseeing capabilities.
• Tencent: other than backing other up and coming Chinese companies related to the metaverse space, it has a stake in Epic (makers of Fortnite).  

Points to Note: Metaverse and China:

• Over 16000 Trade Mark applications across the industry for metaverse relating products and services, including the auto and financial sectors. 
• Financial payments within metaverse though is tricky because crypto transactions are banned. Perhaps e-Yuan (Chinese Central Bank Digital Currency) is being used. 
• Privacy issues concerning behaviours of avatars. 

Delving Deeper

Next Semiconductor Technology: 3D stacking for performance and efficiency

Chip stacking is the next frontier of Semiconductor advancement. Why?

As this article explains, in order to stuff huge amounts of data into a small space, you need a high “degree of integration” in semiconductors. Degree of Integration means the extent of circuits that performs logical computations that can be fitted into a chip. This is why, you want to aim to make a chip which embodies as narrow circuit width as possible – leading to chips with higher capacity, performance and efficiency [note I do not profess to understand the exact physics underlying this – but this is a fact which is universally accepted]. The higher end semiconductors of today tend to be utilised for AI and EVs. 

However, there is a limit to how narrow you can make a circuit – so leading businesses are trialling the stacking idea. 

• AMD (US): company showcased in CES (one of the large expos for tech companies, in Vegas) two separate chips (one for temporary memory and the other for processing) stacked on top of each other. It led to an increase in capacity by three fold, and increased performance for gaming by 15% 

• Graphcore (UK): created semiconductors for servers, stacking Intelligence Processing Unit and Power Supply chip, leading to an increase in performance by 40% and efficiency by 15%. Graphcore chips are used for US Energy department’s cyber security projects. 

All are made by TSMC the leading semiconductor foundary. Stacking technologies require what is called Interposers which integrate the connections between multiple chips. 

Blockchain Name Use – Risks

There are things called blockchain domain name. For example, not www.ABC.com but ABC.eth via NFT issued by blockchain domain name service (eg. Unstoppable Domains, Ethereum name Service) – the blockchain domain name (e.g. ABC.eth) is linked to the address on blockchain, which is a unique crypto wallet for storing NFTs and crypto assets. You can design the blockchain domain name to refer to a web address. 

Uses of Blockchain Domain Names

• Transfer of crypto assets without having to use a long text string that make up the crypto wallet address [as anyone who dabbles in crypto would know].
• Use as a username for applications
• Use as an address for websites – for example to connect to the decentralised internet system.  

Issues

• Cybersquatting – you could apply for a blockchain domain name with a TM embedded into it. Though the blockchain domain name service providers have blocked out some well known TMs or celebrity names
• Blockchain domain name service has no ability to transfer the blockchain domain name to the rightful TM owner. 
• Difficult to enforce (cf ICANN) – anonymity, jurisdictions
• May be possible to ask for an order against the blockchain domain name service provider.
• Possible to use NFT marketplaces’ take down procedures to limit loss. 

Russia/Ukraine conflict

Clearview AI gives Ukraine’s Defence Ministry free facial recognition search engine

…What can it be used for?

• ID people at security checkpoints
• Identify the casualties
• Reunite families that have been separated 
• ID Russian operatives

Sounds good? But it can be abused. Indeed, Clearview AI has been sued in the US, UK and Australia for invasion of privacy. The charge is that they are doing things with the personal data beyond the expectations of those to which the personal data attaches. In the US, Clearview is currently in a privacy litigation for violation of Illinois privacy law. 

Macy’s is also being sued under Illinois privacy law for accessing Clearview AI’s database/facial recognition which is linked to its in-house security cameras in some way without obtaining the requisite consent. 

What Clearview AI does is, is to scrape pictures off the internet and match it with other images and information about the images and build a profile. Examples of abuse:

• It has sold the database to law enforcement. Law enforcement can marry scenes of crime captured by CCTV with images on social media. It’s not always accurate leading to wrong people getting arrested (typically those from ethic minority because the algorithm is less good at categorising them, owing to less training data used to develop the AI) – this actually happened in New Jersey.
• You can use the technology to stalk people eg. someone in the bar – take a photo of your target and you can find information about them. 

Google executive in Moscow finds Russian agent on his doorstep and told to remove an app from Google Play or else

…Similar has happened to an Apple representative.  

I wonder whether this plays in the hands of Apple who advocates that all apps on iOS should, for security and privacy reasons, be channelled via their App Store? 

Instagram down-grading posts from Russian state controlled media

…Instagram posts of Russian state controlled media will be placed below posts from other sources with a pop up cautioning against spreading information from Russian state controlled media. 

Chinese tech firms are doing the opposite, promoting Russian propaganda, which causes compliance issues for foreign investors, it has been reported. 

Ukrainian cyber army of volunteer hackers

…Ukranian government backed calls for volunteers to join the cyber army on the Telegram channel has been effective [Telegram is like Whatsapp, but you can broadcast your messages publicly by creating your channel – users can subscribe to a channel of interest on the Telegram platform. Subscribers can’t see each other. It is a bit like subscribing to your favourite channel on YouTube – I don’t know who else has subscribed to that channel and nobody else knows which channel I’m subscribing to. Judging by eavesdropping on the chats between 20 somethings in my local gym, Telegram is very popular – there is also Private Telegram channels too where subscribers have to be invited in]. Clearly vetting the volunteers that want to join is key, as there must be would-be moles that try to get in. One of the key requirements to join is that you must already know members of the Ukranian cyber army. 

The Ukranian volunteer cyber army have carried out DDOS attacks (bombarding of traffic on target websites) on Russian banks, Russian energy giant Gazprom, Kremlin, Ministry of defence, and more recently also websites of Russian ally Belarus, as well as asking volunteers to report to YouTube about channels that disseminate misinformation about Ukraine. 

Interestingly the trend has signalled to the Ukraine population at large, the level of resistance and solidarity that has been mustered across the country. 

New York Times has recently announced that it is starting a channel on Telegram. 

Belarussian anti-Russia cyber group Cyber Partisan advances second attack on Belarussian railways

…There are anti-Russian cyber groups in Russian ally Belarus declaring cyber war against “a common enemy [with the Ukranians]: Putin, Kremlin, the imperial regime”. They have been around for some months, with the main objective to oppose the Belarussian president and Putin ally Lukashenko. The attack on Belarussian railway was carried out to delay Belarussian invasion into Ukraine.

Russian hacking groups advance attacks on the West

…There are of course cyber groups on behalf of Russia. These include criminal organisations such as Conti which is well-known for their ransomware. A whopping 75% of ransomware in the world is thought to derive from Russia. There are many other similar organisations. But not all is plain-sailing as there have been revolts by Ukrainians within these groups causing chaos. 

Ukraine raises funds through NFTs of digital images of Russians attacking Ukraine

…This initiative is led by Ukrainian vice Prime Minister and Minister for digital transformation Mykhailo Fedorov. 

Civilians from across the world are also participating, including Russian arts groups. 

The largest NFT open marketplace OpenSea is expected to restrict Russian users participating in NFT trading. 

Exclusion of Russians spills over to the borderless virtual world – pro-Ukraine demonstrations in Final Fantasy 14 (FFXIV)

…Gatherings in social hubs within FFXIV are full of avatars donning yellow and blue outfits voicing support for the people of Ukraine.

Over in the virtual world Sandbox, Russian user accounts have been suspended, EA Games (Electronic Arts) have stopped selling games in Belarus and Russia, which includes the popular Apex Legends. 

Epic, the publisher of blockbuster Fortnite, has also stopped the sale of games in Russia but communication functionalities are sustained. 

Russian vice prime minster Fedorov had earlier asked gaming companies to prohibit sales in Russia, and suspend Russian user accounts.  

Facebook faces criminal charges in Russia after changing hate speech rules to allow users to call for “death to the Russian invaders”

…Facebook has drawn a line at hate speech aimed at civilians. Nick Clegg (former deputy prime minister of UK and current head of global affairs of Meta) said the rules only apply in Ukraine to allow the population to express themselves. 

Google and Twitter had for some time had to deal with contents deemed by Russia as being illegal. This is kind of predictable. Putin’s popularity in the 2000’s owed itself to tightly controlled state media. When the Russian population started owning smartphones in the decade that followed, that control slipped and Putin’s popularity eroded. The withdrawal of BigTechs in Russia could help the Russian government regain control over messaging across Russia. 

Head of European Commission Margaret Vestager, “EU’s top tech cop” as monikered by CNBC, who is staunchly against hate speech including against state heads, seemed to be supportive because it’s the sort of speech you hear protestors shout outside city halls. 

Apps

Peloton and iFIT battle it out at the US International Trade Commission (ITC) requesting the blockade of each other’s product into the US on the grounds of patent infringement

…iFIT patent concerns bike with pedals and cradle for free weights. Peloton is said to be infringing. ITC now investigating.

Peloton patent – stationary bikes which allow subscribers to remotely participate in streamed classes, control system which collects and synchronises user’s live performance and metrics and a display table which compares users’ class performance. 

Peloton to overhaul pricing strategy

…Peloton exercise equipment (mainly bikes and treadmills) are superior, and so is the price. This means that its captive audience is limited as only a small proportion can afford it. Now that we move back to normal life, people have also decided to move back to the gyms, and the company has suffered majorly, leading to shuttering of its factories, slashing of employees and the resignation of the visionary founder CEO. In comes, as a replacement, a high profile CFO (formerly of Spotify and Netflix) Barry McCarthy who has come in to do what he does best – look at subscription models and pricing and take a firm grip on the balance sheets. 

Peloton is thinking now to offer monthly subscriptions (which does not involve an initial significant outlay ($2500) for the equipment) priced around $100/ month for both the hardware and the services. This means many more people – say, 50% of the population instead of say, 5% of the population (my own wild guesses) can afford to on-board. A success of an enterprise is all in the business model. 

From a position of strength, a similar sort of business play can be seen from Apple which has launched the iPhone SE, a mid-range price point device which has installed the latest Apple M1 chips. Why? Apple’s devices do have handsome profits built in, but how does it compare with profits that can be derived from services? By launching a much cheaper mobile, it now aims to eat into the Android portion of the mobile market (and most importantly, apps) pie.  

Artificial Intelligence

UK National Health Services (NHS) launches algorithmic impact assessment (AIA)

…A typical use of AI in healthcare, might be training the artificial intelligence software with volumes of x-rays of lungs, teaching the machines those images have been shown to be cancerous and others which have not. The AI works out a pattern and using those images, learns to identify whether they are likely to be cancerous or not. 

What is the issue with this?

• Too much reliance on what the AI says – remember episodes of people who believed in their sat navs so much they drove into a river? You need to also exercise human judgement. 

• Effectiveness of AI depends on the quality of images – so if an image is taken in suboptimal conditions, the AI could give you the the wrong output. 

• Quality of the data on which the AI has been trained – sometimes the data is not diverse enough such that differences depending on ethnicity/gender/ age might not be sufficiently taken account of (the Clearview AI example described above, is a case in point). This is especially acute when it comes to skin diseases where the tone of skin could impact on outcome, could with the use of AI based on genetic databases which comprises of predominantly the white population, which has been known to lead to misdiagnoses. 

NHS AI Lab’s National Medical Imaging Platform (NMIP) has collected data from the NHS, and that data is made available to companies wishing to develop AI. However, those wishing to access must conduct an algorithmic impact assessment first, and show that they ought to be given access to the database. 

The AIA process will require applicants to:

• Engagement of stakeholders – including clinicians and patients
• Considerations of benefits and harms to society
• Ensure transparency – Document the AIA process and publish results

Autos

Japanese Vehicle infotainment systems maker overcome Broadcom’s application to block importation of allegedly patent infringing goods before the US ITC (International Trade Commission)

…The relevant law is Section 337 of the Tariff Act of 1930. Broadcom was found to have provided insufficient evidence that the patents covered Broadcom’s own products. Before the ITC, a complainant must fulfil two prongs:

• Technical prong – that the defendant infringes the complainant’s patent
• Economic prong – complainant or its licensee has significant or substantial US economic activities with respect to the patented articles beyond those of a mere importer (US manufacturing, R&D, technical support, and other US based activities – so the definition is quite wide). 

BigTech

EU Commission and UK CMA launches parallel attacks against possible collusion between Google and Meta on digital ad price fixing

…This concerns the agreement called Jedi Blue in which:

• Google gives Facebook preferential rate and priority on ad placements
• Facebook promises not to build competing ad technologies or use the competing header bidding system (online display advertising services). 

Google apparently accounts for 90% of the search advertising market (it’s the advert on the side when you search for particular word on Google eg. rucksack – and you see ads for different rucksacks on the side of a Google search result) 

Meta is said to control more than 50% of the display advertising market. 

Parallel complaint in Texas is in situ.

Other Google antitrust EU complaints:

• Online display advertising case, EU Commission probe, 2021: Whether Google favoured online display advertising technology of their own over others by restricting third parties use of user data for advertising purposes on websites and apps, whilst using them for itself. 

• Adsense, EU Commission fine (€ 1.5billion), 2019: Google sells advertising space on third party websites. It is by far the biggest broker, boasting over 70% of the market since 2006. The commission found restrictive, anticompetitive clauses in its agreements with major sites, such as exclusivity and prohibiting the sourcing of search ads from Google’s rivals, requirement to put Google search ads in the most prominent place.  

• Android, EU fine, 2018 ($5billion): Google required manufacturers to pre-install Google Search app and Google Chrome as a condition for licensing Google’s app store / paid manufacturers and mobile network operators to pre-install chrome (at one point, it paid for exclusive pre-installation) / as a condition for installing Google apps, manufacturers were prohibited from installing unapproved versions of Android. 

• Google Shopping case, EU Commission fine, 2017 ($2.7billion): Whether Google favoured its own comparison shopping service by displaying it prominently in its search results. Google’s service was not subject to Google’s search algorithms. Rival comparison shopping services are demoted, or in some cases, not indexed so it isn’t displayed in search results. 

Antitrust breaches in the EU is serious because firms can face a penalty up to 10% of global revenue (not profits). 

Amazon should be criminally investigated for lying in the course of Congress Investigation says House Judiciary Committee

…It is said that Amazon lied about two things:

• It had given its own products preferential treatment over better rated third party products on the e-Commerce website in the customer search results

• It had used confidential third party seller data (rather than usable aggregated data) on its platform, to sell its private label items [Amazon has been accused previously of looking at what sells well, and make their own version of those products] 

Cloud computing

Google to purchase Mandiant, a well-known US cyber security company to strengthen its cloud offering

…Being able to identify attacks and fend itself is key to cloud services offerings. Google will also acquire security consultants, which is valuable in the face of unprecedented security threats. 

Crypto

Biden signs executive order on cryptocurrencies – what does this mean?

…The executive order means the US government will examine the benefits and risks of crypto. This is worth looking at further, anodyne though it sounds.

Areas of Benefits & Risks

• Consumer & investor protection
  • Safeguards against scams and cyberattacks. 

• Financial stability
  • Crypto is volatile. It can be pegged to a stablecoin, but these are not necessarily backed by dollars held in reserve  

• Illicit activity
  • This goes back to the scam point – vulnerable to hacking.
  • You can also launder money. There is a process called crypto mixers which is a software that combines crypto from different sources, mixes them and then re-distributes, which makes it harder to trace its provenance. Others have said it facilitates privacy, as crypto/blockchains are fundamentally transparent [though it is true that one usually is not able to identify who owns what wallet]. 
  • Getting around sanctions using crypto [sanctioned oligarchs are being supported by securing funds through crypto – but on the other hand it has helping Ukraine. It has managed to amass $106million in crypto donations that is flooding into the Ukranian central bank following the government’s announcement that it will accept global donations in crypto currencies] 

• Climate 
  • High levels of computer power required to carry out crypto transactions. Biden called for innovation to make it more responsible/sustainable. 

• US competitiveness on global stage
  • China has launched the digital currency (e-Renminbi or e-Yuan, which is 100% government backed) earlier this year – this threatens the dollar as a main reserve currency, as the global population (for example those excluded from the financial ecosystem – in poorer countries) can embrace the Chinese digital currency. 
  • Urgent development required for the digital dollar (or Fed coins) where it is actually backed by Fed Reserve Dollars
    • Benefit: harder to commit fraud, evade tax 
    • Risk: impact on privacy; it will mean governments will know what you are spending your money on, potential control of citizens’ assets by the government (easier to freeze accounts, confiscate proceeds for example in response to speaking against the government – depending on the nature of the government), government losing control of fiscal policy.

[It ought to have looked at the role in the future metaverse – it is key to building economies in the virtual world]

Data

Pfizer case study: Real World Data (RWD) key for developing new drugs

…Competition to access data is escalating as Real World Data (RWD) proves key to getting drugs approved. RWD is not clinical trial data, but data of patients following a doctor’s visit and use of medical devices. 

Pfizer looked at data of Electronic Health Records of in-patients suffering from Covid-19, and accelerated new vaccines effective against the Omicron variant based on such data.  

Pfizer has previously been successful in using RWD to establish breast cancer treatments for males. This is because breast cancers in males are rare (less than 1% of the patient population) and so there is difficulty collecting sufficient data. Pfizer looked at the data of patients who used its own breast cancer treatment ibrance, and compared to those that were not so treated. 

There is likely to be stiff competition to gain access to RWD, held by companies like IQVIA (formerly Quintiles and IMS Health) and Flatiron (now purchased by Roche). 

RWD includes data such as:

• Electronic Health Records – data relating to patient treatment and outcomes
• Recept – price of treatment and details of medicaments prescribed
• Wearable devices

Kids’ smartwatch maker TickTalk Tech breached privacy rule – US Children’s Online Privacy Protection Act (COPPA)

…The interesting aspect is what TickTalk have to do to comply:

• Revise website and app to make clear what personal information can be collected from children, both passively and actively (these include location tracking, information in videos, text and voice messages), 
• Make clear how the data can be used and disclosed
• Clear and prominent link to privacy policy, including policies for deleting and retaining information
• Enable parents to consent prior to completion of the registration process

Oracle, one time bidder to buy TikTok now close to a deal to become data holders of US TikTokkers’ user data

…It will apparently be later replicated in Europe. This means that TikTok parent ByteDance will be prevented from access.

Greentech

Huawei shows off solar power generating technology at the Mobile World Congress

…I looked at Qualcomm’s displays at the MWC just last week, Qualcomm being a thought leader in tech. So is Huawei. It is focussing on solar power generating green tech. With the drive to carbon-zero, use of fossil fuel and oil being restricted as a result of the war in Ukraine, and with nuclear energy lacking public support and the long lead-time to implementation, I think focus on solar is highly likely to intensify. 

At the MWC, Huawei announced a new data center in UAE (February) and the world’s largest energy storage in Saudi Arabia. They will be powered by 100% renewable energy supply, with the help of Huawei’s technology. 

Huawei is the leading business in inverters, which is one of the main components of solar power generation. Huawei’s “Digital Power” division is likely to be key (alongside its EV projects) to compensate for losses in smartphones and semiconductors as a result of US trade restrictions. 

NFT

NFT market plunges – was it a fad?

…Personally, I don’t think so because of its potential, especially when it comes to creators selling their digital works, but there may have been a lot of over-hype and hence some correction going on:

Average selling price of NFT – down 48% compared to November peak

Daily trading volume on OpenSea – the biggest marketplace for NFTs – down 80% compared to peak in February

Number of active accounts – down about 50% compared to November peak

NFTs fetch keen prices because of their scarcity. One thought leader said, yeah, but it’s like snowflakes. Each one of them is unique, but there are billions of them. It doesn’t mean each snowflake is valuable. Plus, it doesn’t help that there is a lot of grifting going on – you can buying your own NFTs and selling them at higher and higher prices, to generate an illusion of value. This process is called wash trading. Melania Trump was called out for doing that. Prevalence of wash trading may have led to the erosion of confidence in NFT marketplace. 

Delving deeper – for those who want to dig deeper into tech

Where are metaverse invested companies heading? 

…Here I provide a summary of the main patents covering AR/VR headsets by the main players in this space – needless to say, these reflect visions of various companies that are invested in the metaverse:

• Microsoft 
  • Ensuring low latency when melding real and virtual worlds
  • Accurate virtual visualisation of positioning and movements of physical products in the real world.

• Meta
  • Movement of virtual objects based on brain activity
  • Management and control of data used for conversations between users in the virtual world. 

• Magic Leap (has partnership with Google cloud)
  • Engineering concerning displays on the headsets
  • Efficient energy solutions for the headsets
  • Management and displays of virtual content

• Sony Group
  • Meta data and displays of positioning of real life objects
  • Technology relating to spectating virtual sports and other events

• Apple
  • Provision of virtual displays relating to real life environments
  • Display of virtual objects on the interface between virtual and real worlds on electronic devices such as smartphones.  

Qualcomm, together with Vodafone and Thales develop iSIM – the integrated SIM

…The traditional SIM cards (which users have to insert into a smartphone, as most of you have done before) have personal information about the user of the network. With the iSIM, the SIM, including the personal information is designed to be stored inside the semiconductor chip. If iSIM takes off, users can more freely contract with cheaper network operators, or a number of them in parallel (so that users can use different network operators depending on the app). 

The iSIM will be available on Qualcomm’s Snapdragon semiconductors. Now that Qualcomm, which have approximately 30% share of mobile phone chips, have developed this technology, other mobile makers such as Apple and Samsung may follow suit. 

The use of iSIM will free up more space for other functionalities which may be very advantageous especially phones limited in internal capacity (ie: less space). 

GSMA is looking to standardise iSIM. 

What is so good about 6G?

…We haven’t really gotten round to enjoying the real benefits of 5G yet. And here we are, having to consider the next generation of cellular technology. 6G is expected to be released in 2030.

In short, 6G should provide services at a faster and higher data rate, by using bandwidths at a higher frequency. 

6G – Operates at the yet to be cultivated “teraherz” frequency band. Confusingly, teraherz band covers 100giga – 10 teraherz, but 6G is expected to use 100 – 450 gigaherz (ie: not teraherz) [giga = billion, tera = trillion – why they don’t just use the more familiar prefixes I don’t know]. 

5G – max 28 gigaherz

4G – max 3.5 gigaherz

The benefit of using higher frequency bands is that each network operator can use a wider bandwidth (around x10 5G), which increases the data rate. However, higher frequency waves are more easily affected by buildings and obstacles, which means that the signals have lower range. This means in turn that the signal masts have to transmit the waves in a narrower beam. Antenna technology is expected to advance in preparation for the 6G era.   

8 March 2022

Russia/Ukraine conflict

Ukraine requests ICANN (non-profit, situated in the US) and crypto exchanges to block out Russia (eg. .ru domains), Domain Registrar Namecheap says Russians need to find other registrars for their domain

…Ukraine has requested that ICANN revoke top level domains and shut down DNS route servers in Moscow, St Petersburg etc – ie: obliterate Russian domains. One might be able to bypass any blocks possibly by using IP addresses, or possibly VPN, however, so many technologists say there is very little benefit.  ICANN and crypto exchanges have declined to comply, though crypto accounts of particular people may be frozen. 

TikTok struggles to control scams and fake news

…This includes TikTok posts of men bidding an emotional farewell to their wives in Kyiv – but sceptic users would twig that something wasn’t right – the background is sunny, when in reality Kyiv was overcast and snowy. These fake footages are being taken down, but after thousands have already watched, and virtual gifts already sent (eg digital roses sent which can be converted to Diamonds – TikTok’s currency – which can then me converted into fiat). TikTok takes 50% commission on money spent buying virtual gifts. The article says that it’s harder to moderate on TikTok compared to other platforms because the system is more opaque. 

Putin signs legislation which makes fake news criminal offence carrying up to 15 years in prison – independent media outlets (BBC, CNN, Bloomberg, etc) stop broadcasting in Russia in response

…This would include describing the Russian/Ukranian conflict as invasion or war – instead of special military operations. Russians now effectively cut off from non state-run media. 

Musk’s Starlink successfully delivers satellites to Ukraine

…But, he cautions that use should be circumscribed because the uplink transmissions could reveal presence and so end up becoming targets for strikes. Thank goodness for private satellite companies and foresight of Musk. He’d warned years ago that it was dangerous to rely on Russian rocket engines to launch satellites.  All of SpaceX (which provides Starlink) hardware is made in the US. Which segues onto….

…Meanwhile, UK backed satellite company OneWeb taken hostage by the Russians (predictably)

…Russian state corporation Roscosmos said it will only launch OneWeb’s satellites (launch of 36 satellites had been planned on 5 March, using the Russian Soyouz rocket) if 

1. it can promise that it will not be used for military purposes and 
2. UK government, which is the primary shareholder in OneWeb, divests its stake. 

Russia’s asks were rejected.  The UK government have already injected $500million to pull OneWeb out of Chapter 11 (US Bankruptcy Code). 

Seventy percent of OneWeb is already in orbit, but further launches are unlikely in the short term. OneWeb had been using Soyouz exclusively – it will be difficult to re-design so it can be launched by an alternative system, and also, most launchers are booked well in advance. 

US space companies are also heavily reliant on Russia and alternative sourcing from home-grown companies are expedited

…as Russia says it will not sell rocket engines to the US any longer. Roscosmos head though helpfully recommended the use broomsticks. The Russians’ rocket technology has always been good albeit they lost to the US on the race to sending a man on the moon. Rocket technology and missile technology as you might expect, share common aspects. 

2 American companies are worth mentioning, both rely on Russian rocket engines made by NPO Energomash:

United Launch Alliance (JV between Lockheed Martin & Boeing):

Launch provider to NASA and US Defense. It says it’s got sufficient stock of Russian engines (Called RD-180) to power its Atlas V rockets. Now developing a new rocket called the Vulcan, using engines called BE-4 made by Jeff Bezos’ Blue Origin. 

Northrop Grumman: It uses its own rocket Antares to launch Cygnus spacecraft, which carries cargo to the International Space Station.  Uses Russian engine RD-181, but doesn’t have sufficient supply like ULA. It is possible to rely on Space X’s Falcon 9 rocket in the alternative. 

Conclusion: Diversification of supplies/self-reliance are key. 

The International Space Station collaboration with Russia to continue

…But there have been threats that the Russians will pull out suddenly. It is currently staffed by 4 Americans, 2 Russians and 1 German. More are set to join. Thank goodness for Space X which is capable of bringing back the non-Russian astronauts – otherwise they could have been taken hostage. 

Russia had said it will pull out of the ISS by 2025, last year. Both Russia and NASA input is necessary to keep ISS in the right path. ISS is significant in mass and uncontrolled fall out from the orbit would be catastrophic (and for reasons I don’t really know, it will apparently not affect Russia). 

A sensible international space agreement is not likely on the horizon. 

Tech companies restrict operations in Russia

…Note that they have carried out the restrictions voluntarily, not because they were legally required to do so. Such move, across the whole of the business industry, is unprecedented:

Microsoft, Apple (although App Store still functioning), Samsung, SAP, Oracle, Paypal, Spotify, Visa, Mastercard halt sale/operations. Airbnb has extended suspensions to Belarus. Google and Meta aren’t advertising in Russia. Russia has banned Twitter, Facebook and Youtube. 

Many gaming companies have suspended sales in Russia. Content companies such as Netflix, Disney, Warner Bros have suspended service. 

Chip makers such as Intel, Nvidia, AMD have stopped supplying chips. 

Other types of companies, such as Levi’s, Nike and Ford too have suspended operations in Russia. 

Latest out of the professional firms include Linklaters, KPMG and PwC.

This is an incomplete list obviously. 

There are mounting calls for other western businesses to stop selling in Russia, such as McDonald’s, Coca Cola, KFC, Starbucks…

Amazon is to use its logistics prowess to get supplies to Ukraine and cybersecurity acumen to those that need it. 

Ukraine to issue NFT to raise funds for its army

…What they will consist of (eg. art) is unknown. Well known Russian activist group Pussy Riot backed Decentralised Autonomous Organisation (DAO – ie: company on a blockchain) has raised $6.6million selling Ukranian Flag NFTs. 

Auto

Sony and Honda tie up with the view to catching up with Tesla

…Sony – to make the mobility platform. It also has strength in sensor technology (which enables the car to understand its environment). Platforms may be used by other EV makers, and not exclusive to Honda. 

Honda – will make the car itself. Separate from the mass market model it is making, it will share some parts/ platforms with General Motors. 

Ford to split into two – into EVs and Legacy (ie: Internal Combustion Engine) units

…The proposal is to make two businesses, EVs (Ford Model E) and Legacy (Ford Blue), but they will remain in the same company. This could cause issues as the profits of Ford Blue will be ploughed into R&D (especially around battery technology development) to support Ford Model E. However, to some extent, Ford Blue can benefit too by the use of technology developed in Ford Model E, such as driver-assist systems.

Rivian jacks up its electric trucks price by a whopping 20% owing to chip shortage & inflation, but then reverses gear in response to customer outrage

…All pre-orders before 1 March will be honoured at the price agreed, but reservation holders (which I assume are cancellable) did not originally benefit. Rivian did say that prices could change, but a price hike of this magnitude was not expected, and customer outrage followed. Rivian revised its plan, honouring the promises it made to all pre-orders before 1 March.  

BMW and Daimler to keep competing options available on their own Apps to allow more market entrants

…Back in 2018, BMW and Daimler sought the EU Commission’s approval to combine their free-floating car-share services in Germany, BMW’s DriveNow and Daimler’s car2go, in addition to ride-hailing, parking, charging and other mobility as a service offerings. The EU Commission said that their commitments to make room for rivals for two years need to be extended in respect of certain cities which still doesn’t have the requisite level of other competing services. 

BigTech

Meta’s market cap drops from nearly $900billion to about $500billion – Rejoice?

…Some commentators have said that there’s a silver lining because by being under the $600billion market cap threshold, M might duck US antitrust law which provides for increased scrutiny to covered platforms, defined as those platforms with a market cap of $600billion or more among other conditions…Some bills which are being considered in the US are the following: 

Platform Competition and Opportunity Act  – makes it hard for dominant platforms to acquire smaller firms

The American Choice and Innovation Online Act – prohibits platforms to preferentially treat own products over others 

Act concerning Data Portability (not sure what the nickname for the act is) – enables users to switch service providers

Act concerning the prohibition of dominant platforms to own online platform and other business where it causes conflict of interest (not sure what the nickname for this act is either)

But more likely, it is reported that there will likely be some buffer built in in the market cap limitation – to account for fluctuation in the stock markets. Other conditions that need to be met are: 50 million active users or 100k business users, must be critical trading partner for a particular product/service. 

Similar rules are being considered in the EU at least for the first three concepts – I am not aware of the fourth. 

CRISPR

Harvard-backed Broad Institute, MIT invented CRISPR, says PTAB

…leaving the Nobel-prize winning group at University of California and University of Vienna (“CVC”) thoroughly disappointed. The decision may be appealed to the Court of Appeals of the Federal Circuit. The question was who first invented CRISPR Cas9 method in eukaryotic cells. CRISPR (pronounced Crisper Cas Nine) is a groundbreaking gene editing technology with huge potential to remedy a number of serious genetic illnesses. 

PTAB ruled that CVC failed to “provide sufficient, persuasive evidence of an earlier reduction to practice or conception, as they are legally defined, of each and every element of [the disputed claims] before Broad’s evidence of reduction to practice”. In contrast, Broad successfully showed that it had reduced the concept of this gene editing technology to practice in eurkaryotic cells. PTAB also rejected the claim that the wrong inventors were cited. 

That doesn’t mean everything is now settled, for CVC does have other CRISPR patents in the US, including notably the use of CRISPR in all cell types (not just eukaryotic cells), and also in Europe (where CVC has been more successful in their patenting than Broad). 

Data

Reddit can’t hide behind s.230 to fend off liability for hosting child pornography, says claimants in class suit

…Section 230 of the Communications Decency Act of the United States generally protects websites from liability over content uploaded by users or third parties. 

Claimants say that Reddit knew or should have known that they are hosting harmful content. Reddit refuses to prevent, detect and remove illegal content or ban repeat offenders who traffic child pornography, it is claimed. Claimants rely on s. 1595 of the Trafficking Victims Protection Reauthorization Act to advance a case that Reddit have knowingly benefitted from illegal trafficking. Ninth Circuit to decide in due course. 

Employee surveillance a huge issue says UK Workers’ Union

…Pandemic / remote working has increased monitoring which includes:

• Tracking emails
• Webcams
• Recording typing patterns
• Checking out calls made

Some employers are possibly breaching privacy, abuse of personal data, and possibly carrying out harassment. They could be liable if employees’ mental fitness were to deteriorate as a result. In the EU, provisions within the AI regulation may apply. GDPR includes the requirement of humans in the loop for decisions made by computer algorithms (Art 22 GDPR) which the UK is currently consulting on as it considers reforming GDPR following Brexit. This will be a delicate exercise because UK would need to have adequate protection for personal data (adequacy status) to maintain free flow of information between the UK and the EU.

US data analytics group Palentir to help reduce NHS backlog

…I suspect contracts of this nature will increase. What Palentir will do, is to look at disparate data such as number of patients waiting per clinician, operating theatre schedules, staff rosters and pre-surgical tests and compile into a single system usable by all hospital staff. Clinicians can then better prioritise urgent cases. 

The mandate is a little controversial because Palentir has links to national security agencies of the US

US State Attorney Generals said that they are investigating how TikTok engages young users

…The cause of action is state consumer laws. The probe will look to see whether TikTok induces youths to use the service which put them at risk of mental or physical harm. TikTok has an under 13 service as well, which has built in additional safety and privacy protection. In the US, kids under 13 are subject to COPPA, which is Children’s Online Privacy Protection Act, which requires sites for children to seek consent from parents to collect, use and disclose personal data. 

Similar probes are ongoing against Instagram – which focuses on techniques used by Meta to increase the engagement (duration and frequency) of younger users. 

Software company Zywave agrees to pay $11million to settle data breach

…Zywave was claimed to have failed to act promptly and notify customers who were affected. The leaked data includes very sensitive information such as social security numbers, birthdays, driving licence details. These users were nwo exposed to identity theft and fraud, and faces “years of constant surveillance of their financial and personal records, monitoring and loss of rights” the plaintiffs had said. 

Fintech

Wepay Global Payments sue Apple, Amazon, Tesla, Walmart, McDonald’s for infringing a design patent for a user interface screen in Texas and Illinois

…It concerns a design of layouts which includes animated graphic user interface, and the text $0.00 and parts of a QR Code, when carrying out financial transactions.  

Incredibly there are parallel suits against PNC bank, Paypal, Samsung Electronics, JPMorgan, Bank of America

Gaming

Lobbyists raise concern about Microsoft’s Activision Blizzard purchase

…The proposed acquisition represents both horizontal tie ups (Microsoft is also games publisher as is Activision Blizzard) but also a vertical one (Microsoft sells the Xbox Consoles). In particular the lobbyists are worried about the following issues:

• Self-preferencing own games on its platform
• Data privacy and survelliance (especially as Microsoft also purports to purchase Xandr, survelliance data company)

Streaming

Disney plus channel to release ad-supported cheaper streaming service

…So what? You may think. But it presents pressure on Netflix which doesn’t have the infrastructure to offer similar service. As the competition in streaming intensifies with consumers demanding better quality for cheaper, Netflix is bound to feel the heat. Goes to show important it is to think about different business models out the outset and keeping your options open. Having said that Netflix did pioneer streaming services – the consideration of different types of services may well be all hindsight; it may have been a victim of being the pioneer. It did well expanding its client-base whilst it was the only service provider. Now it has well resourced competitors who are able to plow in the profits generated from other revenue streams such as merchandise, licensing and parks in the case of Disney. Netflix are devoid of alternative revenue streams. 

Telecoms

Qualcomm update on various fingers in pies at the Mobile World Congress

…Qualcomm is quite a visionary company, so it is worth noting what it’s investing in [plus check out the sheer number of partners it has, often on similar projects]:

• With Rakuten Symphony: Next generation 5G radio unit as part of pushing cloud-native, open and software-based mobile networks with a number of open interface products [ie: to set it up for Open RAN – a more flexible way of building networks]
• RAN (Radio Access Network) automation platform with Microsoft on end to end private networks, Mavenir on radio units and deals with Fujitsu on Open RAN. 
• Qualcomm chips used in Huawei spinout Honor’s phone which have features such as high res camera with optical zoom, 100W fast charging
• Wi-Fi 7 plus Bluetooth connectivity system with superfast connection speeds and ultra low latency (eg for gaming), stereosounds, recording through earbuds
• Fruitful partnership with Meta on XR (mixed reality) platforms
• Also partnership with TikTok parent Bytedance on VR hardware and software
• Laptops with super fast connectivity