5G
Roll out of C-band 5G clashes with Airline safety in the US
…Airlines are fearing that “C-band” 5G signal (which is separate from normal 5G) have the potential of disrupting some airplanes’ navigation systems. The Federal Communication Commission had sold this spectrum to carriers notably AT&T and Verizon (for colossal sums following an auction – despite being asked not to, to avert this situation – the sum no doubt reflects the scale of potential digital services markets that 5G can realise) and had not managed to agree a solution with Federal Aviation Administration before the roll out date. Airlines have demanded 5G signals be excluded from 2 mile radius of runways.
C-band roll out has already been carried out in 40 countries without any reports of planes falling out of the sky.
C-band frequency is high powered with wide coverage but limited in bandwidth, and so highly sought after by the carriers. It has been commented that rarely do C-band 5G is required for currently offered services; we are only readying ourselves for the future filled with AR glasses (as for which, see In the Spotlight section below)
Apps
Amazon Style launched as its first clothing store poised to open in Los Angeles this year
…You guessed it, it’s not your usual shopping experience. The clothing store only displays one item of each clothing, and you input your size, and budget. I’m not sure whether you can also set the colour, but I wouldn’t be surprised if you can. Check out done by biometrics.
It will obviously be powered by its clever algorithm – which probably means very dangerous Amazon recommendations will also be included in your personalised wardrobe. If Amazon algorithms get it right, it might be very difficult not to yield to temptation. Thank goodness we are far away from LA! (for now).
Se the one minute demo video: https://www.independent.co.uk/tech/amazon-clothing-store-algorithms-b1997655.html
Netflix shares plummets as it fails to attract further subscribers
…Netflix is well known for its good value. Low subscription prices + high quality and wide ranging content. However it faces increasing competition with HBO max and Disney + both of which have far higher subscription fees and doing well on subscriber numbers. How will Netflix jack its prices up substantially to a level that equals their rivals so suddenly, without losing subscribers?.
Autos
Broadcom asks Federal Circuit to overturn ITC Commission not to block imports of Toyota’s infotainment (navigation) systems into the US
…The claim had prior failed because Broadcom did not succeed in showing that Broadcom practices a key claim in the patent asserted.
John Deere forecloses competition by giving no access to software that controls farming machinery preventing independent dealers and farmers from repairing says US Law suit
…Compare in the EU (which includes the UK because the rule was in force before Brexit) where certain information has to be made available to car dealers in the EU, designed to enable independent dealers to service cars. Seeing news pieces like this, I realise how ahead the EU had been on policy shaping and implementing laws with the future in mind.
US electric battery company Factorial Energy announces further investment from Mercedes and Stellantis
…following on from joint development and investment agreements struck last year. The company says its solid state batteries are better than Lithium ion batteries, providing 50% more range and safer. Factorial already has joint development agreements with Hyundai and Kia.
BigTech
EU Parliament adopts the draft of Digital Services Act
…Negotiations with Member States can now start. What does the draft DSA contain?
- Online platforms responsible for countering illegal products, services and content online, including clearly defined take-down procedures
- Stronger obligation to ensure products can be traced on online marketplaces
- More options for tracking-free advertising
- Ban on using a minor’s data for targeted ads, as well as other vulnerable groups (based on sexual orientation, religions beliefs etc)
- Prohibition from influencing behaviour through dark patterns (eg. if you unsubscribe, you could miss out because of X, do you really want to unsubscribe?)
- Very large Platforms subject to mandatory risk assessments risk mitigation measures, independent audits and the transparency of so-called “recommender systems”, which should include at least one system not based on profiling
- Clarity on how data will be monetised
- Should be easy to decline consent as it is to give consent
- Recipients of services would have the right to seek compensation for damages
Small enterprises are exempted
American Innovation and Choice Online Act may become law meaning platforms can’t treat its goods and services better than those of third parties
…Unsurpsingly it will hit Google and Amazon the hardest…though supermarkets have been carrying out preferential product placements for years (the issue with platformers though is the scale). As I understand it, it all sort of started with Amazon clocking the most popular products sold on its website, manufacturing own versions of it, and displaying it more prominently (eg. top of the search results) to any other similar products on the platform. The Act also plans to ban merchants from purchasing more prominent placements on platforms. The concept is similar to EU’s Digital Markets Act.
- Apple is against it because it would mean it would have to allow users to download an App from its iOS App store which Apple says will compromise safety and security standards. Also, Apple’s App Tracking Transparency Policy will not apply to those Apps which is a feature enabling users to choose what sorts of data if any they will allow the App to track [followers of the epic Epic v. Apple litigation will be well aware of this]
- Google is also against it because it won’t be able to offer its users the best service [Google also faces similar suit advanced by Epic], such as having to give equal prominence to spammy services, and harming small businesses if Gmail and Calendars can’t work seamlessly.
Note that the Act is considered to apply to free services (like Google’s) not subscription based ones (like Microsoft’s software services), which Google says will harm consumers [but see the proposed UK Class action against Facebook– where the main complaint is that “free services” aren’t really free because Facebook extracts valuable user data].
No doubt heavy lobbying would follow, and amendments will be made to the bill.
Unsealed law suit in the US complains of alleged anti-competitive agreement between Google and Facebook
…The agreement allegedly provided:
- Facebook to agree not to be involved in header bidding (which is a type of advertising exchange routing)
- Google to give Facebook information, speed and other advantages in auctions for mobile phone app advertising
Contains evidence on Google’s dominance in the online ad industry, and how Google is said to have manipulated the price of ad bids.
Apple settles iCloud storage class action in the US
…Plaintiffs had complained that contrary to what was advertised Apple did not store data in its own infrastructure.
Amazon reverses on Visa credit card ban, at least for now
…I am delighted to hear. Amazon had said before it will drop Visa credit cards in the UK because its transaction rate is too high (not sure why the prohibition was UK only – was it a test case?). The parties have decided to re-negotiate. Both parties were due to lose out (with Amazon’s estimated losses amounting to over a billion). I guess Visa made Amazon blink first.
Patent infringement and antitrust suit in Florida against Apple on behalf of innovative software platform developers
…The complainant The Coring Co complains that Apple has stifled competition in the App marketplace. The complainant is associated with a suit against Apple in Northern District of California about Covid-19 trackers but the case failed because it did not plead market-wide competitive harm. The complainant claims its own App marketplace enables source code screening, which in turn enables one to check for corrupt algorithms and bypass Apple’s censorship.
Apple says Coring is attempting to re-litigate.
Google Analytics unlawfully transfers data in contravention of GDPR says Austrian Data Protection Authority
…Use of Google Analytics on an Austrian website involved data transfer from Google LLC in the US, and there were insufficient measures to ensure this was lawful, meaning Google provided inadequate level of protection. When a EU user accesses a website using Google Analytics whilst logged in his Google account, personal data is transferred to Google LLC. In accordance with US CLOUD Act, US authorities can demand personal data from Google, even when they are operating outside the US. Google therefore cannot satisfy the protection level for protecting the personal data of EU citizens under GDPR according to the Austrian Data Protection Authoritiy.
Royalty Society study says don’t ban fake news
…Royal Society says banning fake news will only make them harder to access, leading to distrust in authorities. It called for a more nuanced, sustainable and focussed approach. What is required is collective resilience, it was said. Instead, we need information literacy programmes and mechanism for data-sharing to ensure that high quality information can compete (- I assume, against sensationalist or divisive posts).
Crypto
Federal Reserve publishes whitepaper and seeks public comment on the Digital Dollar
…although many commentators say it will happen no matter what, there are a number of options on implementation, which the Fed can consider following consideration of responses to its call for public comments.
Main advantages are
- Faster financial payments
- Stimulation packages can reach to public more quickly
- Greater financial inclusion
- Enables quicker actions, can avoid crashes
- Safer (cf: cash robbery)
But also drawbacks
- Privacy (dealing in cash enables consumers to work “off-line” so spending cannot be tracked)
- Stability
- Fraudulent use
Russia follows China in banning crypto
…Russia is the third biggest territory which mine digital tokens (after US and which country? – the answer is surprising). It’s too speculative, used for illegal activities, not green and it undermines national fiscal policy says Russia’s central bank.
Gaming
Microsoft agrees to buy gaming major Activation Blizzard for $69bn
…This is Microsoft’s biggest shopping in its history. To put it in context for the broader entertainment industry, Disney’s acquisition of Star Wars was for $4.05bn, and its acquisition of Marvel was $4bn. This deal is approx. 20 times larger.
Metaverse
Meta plans to create marketplace for NFTs and allow users to use NFTs as their profiles
…Also, Meta plants to enable creators can create – or “mint” – tokens it has been said. Facebook’s digital wallet Novi will be key to facilitating the transactions.
Semiconductors
Intel plans to build a semiconductor factory in Ohio
…There are generally two processes in semiconductor manufacturing that tend to draw focus:
- Designing the chip: most dominantly by ARM for mobile phones, Nvidia (for AI type processing chips and graphics) and recently by other companies which have entered the fray (Apple, GM, Ford).
- Fabrication/Manufacturing (so-called foundaries): TSMC and Samsung are the main ones. These require major investment.
Intel has recently announced it will start the foundary business because it is simply too unstable to rely on semiconductor manufacturing carried out mainly in SE Asia (especially the cutting edge sort). They will benefit from the US government subsidy. Note that Samsung and TMSC are coming to the US to build a foundary business (also taking the opportunity to receive the subsidy).
Intel has announced it will split these two processes into two business units – it had until recently carried out both the designing and manufacturing, but because the manufacturing capability fell behind, it was thought that their designs also suffered. They announced the decision to have the two businesses less integrated to avoid similar mistakes.
In order to compete effectively, TSMC has announced a record high $44bn budget this year alone to strengthen chip manufacturing capability this month.
Semiconductor business will likely be hot for some time.
In the Spotlight
What does head of US FTC (that’s the competition authority in the US), and longtime critic of BigTech, Lina Khan say about deals involving large tech companies generally?
…It so happens that Lina Khan was slated to talk about her vision of future US competition on the same day as Microsoft’s announcement. You may recall they are trying to unwind Facebook’s purchase of Instagram and WhatsApp (after several years following the acquisition) because their view is that Facebook is now clearly dominant (although last week I noted that there are strong arguments against it), and considers that the Facebook’s game plan was to buy nascent companies with promising technology specifically to kill off future competition. It is true that those deals have enabled Facebook to reach out effectively to the entire mobile community and effectively gain dominance using their infrastructure and data they have managed to amass. The question is whether their conduct was anti-competitive. Should FTC have scrutinised those deals more carefully? Was the deal which enabled Facebook to become too dominant (in their view) foreseeable? Similarly, will Microsoft ‘s Activision Blizzard also enable it – with its predominantly enterprise clientbase to iterate over to the mobile users’ market?
FTC is looking at assessing deals which might reduce competition in the future – what is the problem with this?
What FTC wants to do is to catch and prevent deals which might lead to significant erosion of competition early, not 3, 4 deals later. This is a new concept because it looks at competition not from a consumer harm standpoint where one looks at whether a certain M&A would lead to higher prices for the consumer…
Case Study: Microsoft acquisition of Activision Blizzard
The proposed acquisition can be good for consumers. Consumers can buy Microsoft’s subscription services and they can get Call of Duty without any hikes in the subscription price (ie: get more for the same price). It’s a bit like being offered say, Peaky Blinders (iPlayer) on Netflix without any hike in Netflix prices. If the offering is increased, then consumers can potentially just buy one streaming service, not a number of offerings such as Netflix and Disney Plus and Amazon Fire and etc etc.
But it could reduce competition in the future – for example, if Sony is denied access to Call of Duty (currently available on Sony PlayStation) and other popular titles, it will not be able to compete as effectively against Xbox. It’s the nature of deals involving BigTech, because a few players are the gatekeepers over any particular sector. Indeed, the whole assessment of competitive harm from a pricing standpoint may no longer cut the mustard where consumers are being given ad based services free of charge. How could that possibly constitute consumer harm in one sense?
However, looking at competition in this way could lead to uncertainty in businesses – deals are often done to decrease competition – for businesses to get stronger so per se, so should not be struck down out of hand. But, how do you know if the FTC will view your deal as the sort sufficiently likely to reduce competition “substantially” (Lina Khan’s words) in the future such that it ought to be prevented? It has been pointed out that the assessment requires a more objective criteria, as otherwise, whether a deal can be done or not could be highly politicised. This could chill the M&A market, with future M&A accompanying higher break-up fees (which is the $ you pay to your counterparty if the deal can’t go through).
US FTC also wants to look at competition from a labour viewpoint
FTC are looking to see if any deal might impact the labour market. In the US FTC’s view, labour markets are significantly concentrated, and so they are looking at the anticompetitive nature of no-poach agreements, employers’ collusion to supress wages. Mergers may lead to significant redundancy and needs to be looked at, she added.
This has been one of US labour unions’ asks, but commentators have said this does not make sense:
- BigTech aren’t dominant in the labour market as they compete with other tech companies for a pool of skilled engineers.
- Some large technology companies aren’t known for treating their engineers all that well because they consider that the opportunity to work for them is a privilege in itself.
- The acquisition by BigTech of smaller companies do not necessarily lead to redundancy
- Example: when Google purchased YouTube which had a very limited number of employees, Google amplified the workforce for YouTube, to accelerate YouTube’s limited footprint to scale up massively using Google’s wide reach. The acquisition led to more employment and consumers benefited from YouTube’s services. Which was free. However, that deal may have been classified as potentially anti-competitive to the extent that it was foreseeable that YouTube will become so successful that no company would ever be able to compete with it.
Aside from the competition viewpoint, and the uncertainties new ways of looking at competition may prove to be, will M&A be a trend?
Microsoft is relatively well known for having a diverse portfolio (and actually whilst it may have been viewed as a software company traditionally, it is probably better to view it as a cloud company nowadays):
- [Intelligent] Cloud services (Azure – top two with Amazon’s AWS) – by the way critical for fancy gaming visuals
- Software (Microsoft office including Outlook for a start)
- Teams (video-conferencing and virtual workplaces)
- Internet search (Bing)
- Mixed reality (HoloLens)
- Gaming (Xbox, Game Pass)
- Digital Services Market (MSN)
- Surface (PC)
- Social Platform (Linked-In – and via Game Pass)
- Healthcare (Nuance)
This is in contrast to other BigTechs which do not have such a diverse and relatively even portfolio; the majority of Facebook & Google revenues come from Ads, Apple – hardware (though increasingly services through the revenues from in app purchases of apps downloaded from the App Store) and Amazon – cloud services.
It is thought that there is a trend for businesses to diversify its business portfolio. We see here Microsoft strengthening its gaming business vertically (Activision’s content and Microsoft’s software distribution/platform), but others might expand out into different areas, different jurisdictions, yet some others might explore emerging technology (web3, blockchain, IoT, metaverse, cryptocurrency etc) to help them get a foothold into yet unknown future markets.
Google is also throwing the hat into the ring as leaks suggest it is making an AR headset
…Ostensibly not such an interesting piece of news, but I need to highlight why Google is joining the race.
The most important point about this is that the technology industry is viewing augmented (AR) as the potential next platform device, following on from laptops and mobile. Of course, Google has got to get in on the race. I didn’t twig this point until this week…
Google’s main competitors
Understood to be progressed under the name project Iris. So who are its contenders?
- Meta are investing tremendous amounts following acquisition of Oculus (technically VR) and is seen to be currently leading in terms of progress
- Apple are also behind it, but in a more low profile way because’ well that’s Apple, they like to make a big splash on launch
- Microsoft also has its HoloLens and has a venture with Qualcomm to make specialised AR chips – all in preparation for when Metaverse takes off, and the current gaming market (which is likely to be the first portal into the Metaverse). Note also that Microsoft’s HoloLens is actually being tested by the US Military, so it has huge scope for picking up on faults and improving quickly.
There are other names like Snap and Magic Leap which are good names to be aware of.
What about VR (Virtual Reality)?
AR is much more difficult than VR in terms of technology, which is why VR is being launched first. For AR you are actually looking at the real world and you have an overlay of information. So you can see the world (like wearing normal spectacles), and an AR device will augment your physical space, such as pointing out which shops are around you, or which shops are in the building in front of you. It may include opening hours. Both Apple and Google will be trying to make MR (mixed reality VR and AR) devices for now – where there is an out-ward facing video camera so the real world can be blended with the virtual (apparently called “pass through” – so it’s not really AR) – you do not see the real world direct, but the processed videoed images.
What businesses are trying to do – particularly Apple who don’t really believe VR will take off, because it will be too isolating and assumes most users would not really want to be cut off from the real world – is to make VR now, get people developing Apps to run on their VR devices, find use cases, pick up on issues and develop these, build an ecosystem and then step into the AR world. It’s really a stepping stone to AR.
The gaming world is the most obvious starting point for VR, because it is played out in fantasy worlds, plus it is probably true to say it is populated with more techy people than average, who are willing to try new technology. Another use case may be is to watch films in VR. The other one is a better version of video conferencing experience (see the videos of Facebook and Microsoft as they advertised their vision of the metaverse).
What are Google’s chances?
Google’s Google Glass project has sort of failed. Will the story be different this time? Maybe so:
- Google Glass didn’t really take off because it was a bit ahead of its time. It was also quite expensive but people have gotten used to paying handsomely for devices (prices of iPhone devices have kept increasing), especially those with advanced technology.
- From the Google Glass experience, they will have some assets and know how in this area. This does include the feature of identifying faces in your vicinity – though this may have also been the reason Google Glass did not take off, because it was deemed to be too intrusive. People didn’t want to be around Google Glass bespectacled people. There were reports of persons being abused for it and shops banning people with them on.
- Less controversially, Google already has Google Lens capability where you point a mobile at something (eg. plant) and it can identify what it is.
- Incredible AI capability.
- Amazing volumes of data, which are highly indexed – users of Iris glasses (?) may be presented with better and more relevant information (though see Google’s issue with American Innovation and Online Choice Act, above)
- Great cloud expertise – it can render complex information and deliver to users.
Just by the by, other of Google’s projects include Starline – enables one to talk remotely with your colleagues as if you are having an in-person meeting. It was shown that colleagues focused more compared with traditional video calls using Starline. Check it out by clicking on to the link.