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Headline of the Week

Biden Administration seeks EU’s response on increasing efficiency and transparency of US and EU export regimes

…The step follows the inaugural Trade and Technology Council meeting in September. The US Department of Commerce’s Bureau of Industry and Security is particularly interested in export controls over emerging technologies such as AI and green energy. In particular, it called for concrete examples which could result in better security and protection of human rights.

According to the Department, cross-Atlantic trade in 2019 amounted to some $1.1 trillion. 

Big Tech / Platforms / Data

EU’s proposed Data Governance Act reaches provisional agreement

…Note however, that it is subject to approval by the Council.

What is this about? Enabling safe re-use of public-sector data that are subject to third party rights (eg. IP rights, personal data).  Aims to make the EU digital economy richer by making available more data, which are trustworthy.

What does the DGA provide?

• Setting up of searchable electronic register of public sector data.
• Registerable data intermediation services which will provide a secure environment for companies or individuals to share data – eg. use of tools such as personal information management tools, personal data spaces, data wallets [though not entirely sure how the rightsholder can be guaranteed that there is no misuse even so]

• Making registerable data altruism organisations which collect data in the interests of the common good.

• European Data Innovation Board – to enhance interoperability of data intermediation services, and advise on the creation of trustworthy data spaces

• Safeguards to ensure data is not transferred to jurisdiction outside of the EU without EU-level standards for the protection of data. For personal data, this is already provided for under the GDPR.

Jack Dorsey, founder of Twitter and holder of 2% stake resigns as CEO [again]

…He hands over the baton to CTO (Chief Technical Officer) Parag Agrawal, who has been at Twitter since 2017, and engineer at Twitter before that. Dorsey has been reported to have had difficulties with one particular stakeholder who considered that he was not engaged enough – for example, the fact that he is also chief of payments company Square, propensity to spend too much time in Africa ( to explore crypto currency opportunities) and leaving early for yoga sessions. Square is now renamed Block to reflect its blockchain/crypto lean. Furthermore, it is no secret that Twitter has been considered to be a bit of an underachiever; low market cap despite the massive market reach. It has though added advertisements and paid offerings, the Twitter Blue which is a premium service devoid of advertisements and has managed to do significantly better more recently.  Agrawal is said to be behind Twitter’s decentralised social networking protocol idea [thereby third parties can set up feeds on the protocol, possibly operating on independent algorithms]. Brett Taylor (formerly CTO at Facebook and before that at Google as co-creator of Google Maps) will become Chairman (and also incidentally, co-CEO of Salesforce).

Dorsey said there are limitations in founder-led companies, and felt that it could constitute a single point of failure. Some analysts say though that really he just want to pursue his passions (which is crypto) – similar has been said of Jeff Bezos, who some consider stepped down from Amazon to pursue his childhood dream, which is space exploration.

Founder authority is very important at the beginning of a start up [essentially a visionary founder can implement initiatives quickly in a unilateral way and so can be agile – think Tesla/Musk], but once the start up is on a steady trajectory, it can be taken over by other managers. Looking at other BigTechs:

Note the incredible diversity – over half of the top US (and incidentally the world) companies if you also include Twitter, are Indian in origin.

Furthermore BigTechs have come under regulatory pressure because of their enormous competitive advantage (the ability to analyse huge amounts of data and adjust business operations accordingly). Wouldn’t be surprising at all if other platform companies go the same way as regulatory pressure mounts. Most founders wouldn’t want to be testified by congress if they can help it…especially if you are like Jack Dorsey, you believe in free speech and democratisation of access to information.

Match group and Tile and others pile in to support Epic’s position in Epic v. Apple

…Game maker Epic’s complaint that Apple was acting anti-competitively by mandating the use of the Apple App Store to download Apps onto iPhones and (capturing 30% commission on sales therefrom) not allowing users to download Apps direct from Epic.

The district court held that Apple was not a monopolist but held that Apple’s anti-steering policy (ie: prohibition of downloading from sources other than the App Store where users can bypass Apple payments system) was contrary to Californian unfair competition law.

Developers said that the court ordered an injunction against Apple’s anti-steering provisions to “cure….extremely harmful and anticompetitive conduct”. Apple had applied to suspend the order until the appeal of the decision has been decided. Apple says that to do so will threaten the integrity of the iOS ecosystem from the perspective of anti-fraud, parental control and other security/privacy measures.

Google avoids liability in iPhone users’ data gathering claim (UK Supreme Court)

…The claimant was Lloyd, member of public, former director of consumer organisation Which? He claimed, on behalf of iPhone users [ie: Class Action] that Google had for a period, worked around the iPhone privacy measure and gathered data (to target users in its ad campaigns) without users’ consent, which was a breach of data protection laws.  The case failed because there was no evidence that the members of the class were materially damaged or distressed.

Meta ordered by UK Competition Markets Authority to reverse Giphy deal

…Giphy owns the largest library of looped animations (GIFs – no sound, just short looping videos). I’m sure you’ve come across it on Facebook, Whatsapp etc. Meta purchased Giphy, but the deal (concluded 2020) was ordered to be reversed because of concerns that it will limit access by rivals (eg. Snapchat, TikTok) to the Giphy library thereby driving more traffic to Facebook. Also were concerns that rivals’ data could be made available to Meta in return for access to Giphy.

According to the article:

• 73% of user time is spent on Meta business (Facebook, Instagram, Whatsapp)
• Facebook accounts for half the £7bn display advertising market in the UK

Note that Facebook is facing an FTC claim in the US that its acquisition of Instagram (2012) and WhatsApp (2014) was anticompetitive, done with the aim of eliminating nascent threats and monopolise social networking. Facebook says that FTC is merely claiming it has a dominant share, and speculating that consumers would have had a better choice had they stayed independent. People have more choice than ever in practice, it added.

EU’s competition and digital policy chief, Margaret Vesteger had just called upon the European Parliament to get on with approving the proposed Digital Services Act and Digital Markets Act which are designed to control the power of Big Tech.

Coalition of Tech companies led by Nextcloud complains to EU Commission that Microsoft’s practice of bundling OneDrive, Teams and other services with Windows, is anticompetitive, pushing users to handover data

…Nextcloud says such practice makes it impossible to compete with Microsoft’s software as a service offerings. A German competition complaint has also been filed.

Google offers tighter conditions as it moves away from tracking cookies

…The impact of Privacy Sandbox Initiative has been looked at closely by UK’s Competition Markets Authority (CMA). The concern was that, if third party cookies were abolished, then other competitors will be deprived of tracking data that enable them to target would be customers, while Google gets to continue using that data. Google has offered tighter conditions which aims to maintain competition, and agreed for CMA to have deeper oversight. These will be considered by the CMA by mid December. 

The Movement for an Open Web, a U.K.-based group has filed a complaint to the EU fearing that the phasing out of third party cookies will limit independent analytics, advertising and other web features.

Clearview AI faces fine from UK’s Data Protection Authority (ICO)

…The ICO is considering a £17million fine against Clearview AI for scraping facial images of a substantial number of Britons off the internet and processing them in ways which the individuals would not have expected, in breach of UK Data protection law.

Clearview AI said what it does is to scrape publically available information to law enforcement agencies in order to solve crimes. However, Clearview AI also provides an app which enables users to upload a photo and match with other photos available in the database.

Parallel cases in the US and Australia are in situ.

Shopify sued by educational publishers for allowing copyright infringing textbooks shops to sell, in the US

…The claims are contributory and vicarious copyright infringement and contributory trade mark infringement. Shopify is a paid subscription service, which provides a platform on which online stores can be set up to sell products – but the complaint says that it does not prevent the sale of pirated products.

Nvidia – ARM deal challenged by US FTC

…The FTC is unanimously against the merger for fear of restricting access by Nvidia rivals to ARM intellectual property, thereby stifling competition. The interesting point is that the deal is a vertical integration which is usually less contentious. However Nvidia has been described by the FTC as the “dominant supplier of standalone graphics processing units … for personal computers and datacenters”, and microprocessor and designs architecture firm ARM as the “Switzerland of the semiconductor industry”. New FTC chief Lina Khan has revoked recently enacted merger guidelines on vertical transactions. Nvidia is facing challenges in the EU, UK and it is speculated that China will as well.

Connectivity

Amazon launches private 5G network service

…Amazon Web Services say they have an affordable and workable solution for Industrial IoT (an example would be smart manufacturing). Setting up private networks is traditionally a costly and complex process requiring months of planning, procuring and integration but AWS claims to have made this process simpler – for 5G. The new AWS service will provide enterprises with pre-integrated hardware and software components, so customers can deploy, operate and scale up easily, without requiring any planning or integration –in a matter of days! That is pretty impressive.

5G has significant advantages over pre-existing wireless communication protocols such as LTE and WiFi. It has 3 major capabilities:

• It is reliable: ULL, or ultra low latency – think: Autonomous Vehicles and navigating cars in moving traffic on a microsecond level
• High throughput: eMBB enhanced Mobile Broadband – think: downloading a feature movie in an instant
• Provides resources to a number of devices instantaneously: mMTC massive Machine Type Communications – think: mass of football supporters using mobiles in a stadium at once

Private Networks have significant advantages over public ones, in terms of security, adjusting Quality of Service (specified machine operations can be prioritised over others – you can prioritise which set of devices have better service), and you are able to view utilization at a more granular level.

The new AWS offering states that it facilitates enterprises to upgrade to 5G quickly, and provides predictable network service with the above 5G features, which is especially critical to some (for example, in smart manufacturing). The pricing is promised to be keen, you pay for what you use in terms of network coverage and capacity, rather than per device (which will have to have AWS Sim inserted in them).

Remote Surgery

Surgical robot company Intuitive Surgical faces antitrust claims in the US for shutting out Surgical Instrument Service Company from repairing surgical instruments

…The surgical instrument used by Intuitive’s surgical robots need replacing every 10 times. Intuitive can enjoy further revenues from the replacements, but Platintiff Surgical Instrument Service sought to replace them more cheaply. Plaintiff complained that only Intuitive can re-set the counters which count the number of surgeries and contracted with hospitals on terms which prevents third companies from servicing the hospitals at a cheaper rate. This practice, it is alleged, breaches antitrust laws. Intuitive says that will void the robot’s (costing some $2million) warranty. 

Metaverse

Luxury brands continue to play with Metaverse idea

…FT reports:

• Balenciaga – new collection exhibited in a simulator game, and has partnered with Fortnite (a game) for designs of character outfits.

• Louis Vuitton – created clothes for League of Legends and its ad campaigns featured Final Fantasy (a game) characters.

• A new category was created in The Fashion Awards: Metaverse design – nominees were all player-creators of the online gaming platform Roblox.  The Award presented by Gucci’s creative director.

• Gucci branded digital items were also available.

• Other luxury brands are designing for games:

• Animal Crossing: Marc Jacobs & Valentino
  • The Sims: Moschino
  • Burberry, Dior, Guerlain and Hermes all have own interactive mobile games