Headlines in Tech 24 May – 1 Jun

Artificial Intelligence

Microsoft open-sources tools to make Large Language Models (LLMs) more responsible

…Because LLMs are trained on huge swathes of data taken across the internet, they could can be trained to be toxic or prejudiced. Some of the datasets are so subtle and difficult to detect (eg. subtle jibes) by many content moderation filters. To combat this issue Microsoft have made available the following tools:

• ToxiGen Dataset: This is a large scale machine-generated Dataset for Adversarial and Implicit Hate Speech Detection. According to Microsoft, it collected initial examples of neutral statements with group mentions and examples of implicit hate speech across 13 minority identity groups and used a large-scale language model to scale up and guide the generation process. The Datasat can be used to train content filtering tools so that they can identify subtle forms of hate speech which do not necessarily contain expletives.

• AdaTest: The key here is that there is a human checking and steering the AI. According to Microsoft, a large language model is tasked with the burden of generating large quantity of tests targeted at finding bugs in the model being tested, while the person steers the language model by selecting valid tests and organizing them into semantically related topics.

Google releases AI which can create images from written descriptions

…seems that Google was just pipped to the post by OpenAI’s Dall-E2. Check out Imagen.

BigTech/ Data / Platforms

Microsoft hit with class action for using facial recognition on its Photos app without consent in violation of Illinois Biometric Information Privacy Act

…The app runs on Windows 10 and 11. The technology in question is Facial Grouping Technology, which groups same facial expressions, objects and people together. It means the user can search for specific photographs easily. The default setting is off. So what’s the problem?

• Biometric data is being collected without consent.
• No clear notice about how data will be collected, stored, used and deleted.

The issue was picked up when the Plaintiff noticed that her images were being updated by third parties onto Windows 10 and 11.

P&G, owners of Oral B sued for breach of violation of Illinois Biometric Information Privacy Act

…The Plaintiff alleges that the Oral B smart toothbrush which has embedded position detection technology unlawfully collects facial geometry information. The smart toothbrush can determine a person’s brushing habits through a software, combined with facial geometry information. The plaintiff says that he never gave consent allowing the smart toothbrush to take that information, in violation of the Illinois Biometric Information Privacy Act. Plaintiff, an Illinois resident, says he has never registered for an account so terms and conditions (which provided that any dispute is to be tried in Ohio) don’t apply. He says that the app can be used without agreeing to the terms and conditions. The Court did not decide whether the Plaintiff was correct, but allowed the case to proceed where it was started, in Illinois.

Zoom Standard Pro Monthly subscribers outside of US sue Zoom advancing privacy claims in Northern District of California

…the plaintiffs purport to represent all Zoom users in the UK, Canada, New Zealand and Australia (ie: the Five Eyes Intelligence Agreement members). They claim that, despite being told that Zoom calls were end-to-end encrypted, details such as location, amount of time on Zoom and other personally identifiable information were supplied to the likes for Google, Facebook for ad targeting. This follows a $85million settlement following a class action for US plaintiffs.

UK Competition Authority probes into Google’s potentially anticompetitive practices within the Ad Stack

…UK Competition Authority (CMA) is concerned that Google may be using its position in ad tech to favour its own services to the detriment of its rivals, of its customers and ultimately of consumers.

A bit about the Ad Tech Stack (based on UK government presentation)

DSP (buy side) is essentially a platform that serves Advertisers (in this example, BMW is seeking to advertise its cars).

SSP (sell side) is essentially a platform that serves Publishers (in this example, Forbes has some space for advertisers to use).

Simply put, Publishers who have space on their webpages for advertisement provide the information to the Supply Side Platforms, which aggregates the Publishers space inventory. The Advertisers who want to buy advertising space expresses their wish to buy web spaces for advertising purposes, and the Demand Side Platforms aggregates the various bids. A real time bidding process occurs between the Demand Side Platform and Supply Side Platform. Supply Side Platforms which manage the publisher’s inventory decide which ads to show, based on the bids received from different exchanges and/or direct deals between publishers and advertisers

Above I’ve skirted over the two types of advertising markets which are roughly as follows:

Ad Networks

• The Ad Network aggregates a range of advertising space from the Publishers and presents them to the DSP. There are many Ad Networks, and there are many DSPs. The Ad Networks purchase advertising spaces from Publishers, for onward sale with a mark up, to Advertisers.

• Suppose a user visits Forbes. The characteristics of the user (what other sites the user likes, what things have they bought from other websites) is then supplied to the SSP. The SSP then contacts the number of DSPs, and asks how much the advertisers would pay for that space for that user. The Advertisers will have programmatically specified how much they would pay for what kind of advert, and that information will have been forwarded on to the DSP via the Ad Networks. That information is sent back from the various DSPs to the SSP. The SSP receives this info and places the advert belonging to the advertiser with the highest bid in that space.  The exchange that goes on between the DSP and SSP is called RTB (or Real Time Bidding), which takes a fraction of a second.  It happens so quickly, users wouldn’t usually notice these transactions are happening behind the scenes when they visit various websites on the internet.
• Google Ads (formerly known as Google Adwords) can be regarded a form of DSP. Say Forbes has a space for advertisements. It can embed the AdSense technology on its webpage to indicate that it has space for advertising (Publishers which are using AdSense are collectively called Google Display Network). Advertisers that are using Google Ads can thereby reach out to those on the Google Display Network via the Google SSP (called Google Ad Manager – see below).

Ad Exchange

• This is an online marketplace, where you can buy advertising space from the whole of the internet. Publishers have much more control, with the ability to set the price for its ads (from which the Ad Exchange takes a commission upon concluded transaction), design its own ad campaign (eg. you can specify which advertisers you would not want to sell to). One of the largest marketplaces is called Google Ad Manager (an SSP, formerly known as Doubleclick), where you can directly buy advertising space from the various publishers (practically speaking, comprised of primarily websites that attract a lot of traffic). Ad exchanges provide the technology to automate the sale of publishers’ inventory using RTB, connecting to multiple DSPs (including non-Google ones).

This means that Google has control of every part of the Ad Tech Stack. The CMA is concerned that this weakens competition, because the connections between the Google entities in the Google Ad Tech stack is better (note third party SSPs can feed into Google Ad Tech stack)

Twitter to be penalised $150m for misleading users

…Twitter has agreed to pay $150 million in civil penalties and implement robust compliance measures to protect users’ data privacy. It had been alleged that Twitter had failed to protect users’ data, in violation the FTC Act and an administrative order issued by the FTC in March 2011. A further complaint has been filed by the government alleging that Twitter represented to users it would use non-public information such phone numbers for security purposes yet it transpired that it had used it for targeted advertising. The cause of action is violation of the FTC Act and the 2011 order. The complaint further alleges that Twitter falsely claimed to comply with the European Union-U.S. and Swiss-U.S. Privacy Shield Frameworks, which prohibit companies from processing user information in ways that are not compatible with the purposes authorized by the users. It may prompt the EU to raise a complaint. Could this give the material adverse effect Musk needs to extricate himself from the offer to buy the company for approx $40billion (now thought to be a massive overvaluation thanks to faltering Nasdaq)?

EV

Stellantis and Samsung to build a battery factory in Indiana

…The move undoubtedly has been spurred by US subsidies. GM is already committed to build a battery plant in Michigan, and Ford in Tennessee and Kentucky.

This joint investment is quite interesting because Stellantis is already in a JV with fellow South Korean rival, LG Energy Solutions. LG and Samsung have batteries of different characteristics. LG is known for light and power efficient batteries and Samsung batteries are known for high stability. Stellantis also has investments in Factorial Energy, which deal in solid state batteries as well. These have been claimed to be better than Lithium ion batteries, providing 50% more range and safer.

So perhaps Stellantis is betting on different types of horses.

Note: Stellantis owns Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall, and Mopar brands.

Sony ups its game by increasing its presence in the market for imaging sensors for EVs

…Sony says it will be supplying sensors to 75% of the top 20 global car manufacturers (accounting for 80 percent of the total market). I imagine that, other than the cars it is making under a JV with Honda, it will not be an exclusive supplier. However, if its sensors are better than other suppliers and the price is right, it will have plenty of opportunity to increase its market share.

Cars have a variety of types of sensors, but the ones that are in contemplation are those that capture the data about the environment of the car. That data is fed into the AI algorithm which promptly classifies what the car can sense, such as condition of the road, pedestrian in the way (avoid/slow down/emergency stop), plastic bag in the way (don’t stop), street signs, road markings (many may be already familiar with this technology) etc. Sony has strength in this area because of its camera technology, which is at present supplied to smartphones makers, for example Apple, Samsung and Google. All of these also have auto ventures so there may be scope for strengthening relationships, and the buyside obtaining volume discounts. Granted, there are chip supply problems but they are expected to be greatly helped by the recent tie up with the top chip maker TSMC and strength of Japanese chip related business (such as 3D stacking and packaging).  

By way of note, there are other non-camera based sensors that EVs might typically have in addition to the imaging sensors:

• Radar: detects objects made of metal – does not recognise what the object is
• LiDAR: this hits the environment with light to ascertain the distance between the car and various objects by observing the bounce back. Additional data processing is used to create a 3D image of the environment. It is especially well used today in autonomous cruise control.
• Wireless Communication: cars can communicate with other cars and infrastructure (eg. traffic light) to understand the physical relationships and carry out forward planning

Gaming/Metaverse

Gucci Town launches on Roblox

…if you work in brands, this is a must-check-out. Gucci Town has been established on Roblox on a permanent basis. It has an in-game currency (obviously) called GG Gems. What can you do?

• Get involved in Gucci inspired games
• Create art and experiment with various colours and patterns
• Interact with other Gucci Town goers in a café
• Visit Vault, which displays Gucci’s latest products and collaborations
• Gucci store to buy digital Gucci items (last time it launched a campaign in Roblox, it sold its digital only bag for a higher price tag than the average Gucci (physical) bag) – it fits any avatar body type (unlike in real life then).
• Access to perks can depend on your activity in Gucci Town – so you don’t necessarily have to have the cash

Why is this clever? Gucci can grow its future fans from the grass roots; (young – though not necessarily) gamers can aspire to one day own a real Gucci item in real life. They might form a strong Gucci supporting community further strengthening allegiance to the brand. Gucci can understand the tastes of upcoming creative fashionistas and devise cutting edge products that might appeal to them.

Meta’s VR headset (Oculus) and Horizon World (Meta’s social VR platform) infringing says Immersion’s US patent complaint

…Immersion, a predominantly IP licensing company has sued Meta for infringing its patent around haptics, which are the vibrations and forces you can feel on headsets and controllers for a more immersive digital experience. Immersion has sued Samsung before and managed to settle it, concluding I imagine, a licence agreement. Sony has already licensed. Immersion is no doubt wishing to strike another licensing agreement with Meta, the most successful VR seller (Oculus was the most downloaded app in the US last Christmas). The fact that litigation has ensued despite Immersion’s successful licensing deals in the past (no doubt hard negotiators too) indicates that Meta has an aggressive licensing stance.

Apple files RealityOS as a Trademark

…Everyone is speculating whether Apple will be displaying its VR/MR/AR headset at the Apple WWDC (World Wide Developers Conference) next week.

NFT

Actor Seth Green’s Bored Ape kidnapped – can he continue with his show?

…Actor Seth Green has not only lost his Bored Ape NFT, but possibly also the right to continue a show featuring the kidnapped Bored Ape that he had been developing for months. The kidnap happened when he fell for a phishing scam whilst minting (creating) another NFT. It is understood that the Bored Ape Yacht Club’s conditions state that all rights, that include the right to commercialise and make derivate works of the Bored Ape, are tethered to the ownership of NFT. In the world of copyright, the creator owns its copyright even though the artwork is sold on. If I purchased a copy of Harry Potter, I do not own any copyright in the Harry Potter work – it’s the same principle. But the Bored Ape conditions adjusts that rule.

Green instantly tweeted the incident, trying to stop further transactions, but to no avail. DarkWing84 purchased it from the scammer for $200k pretty soon after the theft. Assuming Darkwing84 did not know about the theft (there is every possibility that Darkwing84 is the scammer itself), depending on interpretation of the Bored Ape terms and the application of applicable copyright law, Darkwing84 may restrain Green from continuing with the show by enforcing its newly acquired copyright.

Semiconductors

Qualcomm expresses interest in investing in ARM upon flotation on the NYSE

…Qualcomm had strongly opposed Nvidia purchasing ARM fearing that its confidential information on its chip designs would end up in Nvidia’s hands if Qualcomm were to continue using ARM’s chip architecture. Unsurprisingly, that deal was not cleared by the antitrust authorities. ARM has therefore decided to IPO. As well as being interested in buying into ARM, Qualcomm also said that it would be amenable to buy ARM outright together with other chipmakers to keep the asset neutral. ARM’s designs are incorporated in most chips sold worldwide.  

Telecoms

BT and Ericsson to offer Private 5G networks to UK enterprise

…This is said to be more lucrative than offering the same to the retail sector. Private 5G networks promises glitch-free private infrastructure within which businesses can operate. FT reports that Belfast Harbour in Northern Ireland uses the 5G network to operate drones and carry out remote maintenance. It also reports that consumers would be willing to pay 20-30 percent more for a 5G (low latency, high transmission rate) service but feel that there are not many use cases (3D hologram calling and VR shopping) that really need that sort of service.

Late last year, Amazon had launched a similar service promising that clients can just simply plug and play the private 5G network.

In the Spotlight

Meta complains of Apple’s business practices to the US National Telecommunications and Information Administration

…NTIA is an agency of the United States Department of Commerce that serves as the President’s principal adviser on telecommunications policies. NTIA had recently asked for input on competition in the mobile ecosystem. Meta advanced a number of detailed comments against Apple’s practices in the US (where it has apparently 60% market share of smartphones – it would be dominant from competition purposes if correct) and this is what they had to say:

• Cross-platform, high-engagement apps pose a threat to Apple by lowering switching costs for consumers from iOS to Android / other devices:
  • Apps offer device-agnostic ways to perform core functions of a mobile device [think WhatsApp]
  • Apps allow users to save their data in the cloud and easily access it from any device
    • Cloud-gaming services stream games from the cloud to a consumer’s device. Cloud games diminish the importance of the consumer’s device and operating system because they rely on the processing power and storage of the cloud (ie: no need for high spec phones such as an iphone). As a result, a consumer who switches from a high-end to a low-end device can continue to enjoy the same, high-quality, cloud-gaming experience.
  • any user (operating systems (or OS) -agnostic) can interact with one another, reducing the barrier-raising impact of network effects [because it’s OS neutral, Apple doesn’t get more dominant because more users use for example, WhatsApp]

• Apple imposes restrictions on such apps to lock in consumers to iOS:
  • App Store restrictions on cloud games. This restriction forces developers to create two versions of the same game. In some cases, it may even be technologically infeasible to program a native-app version of a cloud game, as the very purpose of cloud gaming is to allow users to play games that their local devices may not have the processing power to run or local storage to download. A web app (which bypasses the App Store) cannot provide users of iOS devices the experience that a native app could offer.
    • users’ stored game data is not transferred upon switching creating a barrier to switch to Android.
  • Prevents app developers (eg. Meta) from introducing features that would enable developers to distribute and monetize
  • Prevents independent web browsers from creating web apps which operate system-agnostic alternatives to native apps (i.e., apps developed for a specific operating system). Apple requires all web browsers on iOS to use WebKit, a degraded version of Apple’s Safari browser, to render web pages – meaning there is a limit to what web apps can do.
    • …which means developers focus on creating native apps, rather than robust web apps (which would be OS neutral).
  • Imposes App Tracking Transparency (ATT) framework – meaning users can opt out from being tracked by third party apps.
    • Third party apps (who wishes to advertise their products/services) are then limited from carrying out effective ad targeting, or providing a personalised service to its subscribers
    • Third party apps, which are often publishers of adverts (such as Facebook – it has many ad spaces) cannot measure ads’ effectiveness, to attract further advertisers
    • App developers have shifted from ad-based (eg. like Facebook – it is free to use, but has lots of adverts) to fee-based monetization (on which Apple collects a 15–30% commission), because without the data it is less well able to target users more effectively
    • Unlike free, ad-supported apps, which allow consumers seamlessly to switch from Apple to non-Apple devices, fee-based apps often require switching consumers to repurchase apps, forfeit in-app purchases or subscriptions, or expend time and effort canceling current subscriptions and establishing new ones
    • There is a limit to the number of standalone app subscriptions for a typical user, so app developers might opt to distribute their apps through one of Apple’s proprietary aggregation services (such as Apple Arcade or Apple News+). This pressure further raises the costs to consumers of switching from Apple to non-Apple mobile devices, as Apple’s proprietary services are generally accessible only on Apple devices.
    • The ATT framework prohibits developers from offering users incentives to opt in to allow third party to track users, which would have enabled third party apps to share some of the value with users, as observed by the UK competition authority.

• Apple favours its own services:
  • ATT framework did not apply to Apple initially, and in a later version of the OS, asked users whether Apple can track their activity, but the prompt emphasised the benefits for users if they were to allow to track their activity

The comments are much more detailed and interested readers should read the comments. It gives you a good picture of how platforms work.