Headlines In Tech

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

Russia/Ukraine conflict

Google stops short of ban in Russia

…However, Google has put an end to Russia state backed media from monetising ads, via apps and YouTube, and YouTube have stopped recommending videos coming from such media. Adtech is also no longer available to Russia.

Twitter, TikTok, Facebook are also making similar moves.  

Ukrainian prime minister seeks better internet coverage from Musk and is responded to

…[Space X’s] Starlink service is now active in Ukraine…more terminals en route came the Twitter reply (though when it would be, is not clear). It won the approval of proud mum Maye Musk.

Toyota shuts down all factories as major Japanese supplier is hit by cyberattack

…Japan is apparently a prominent supporter of Ukraine, which is speculated to be the reason why it has been targeted. 

All is fair in love and war?

… Ukrainian women are finding a whole host of Russian soldiers appear as matches on Tinder. Some have given their military locations away…but then Russian soldiers were told to turn off their phones. 

Supply chain disruptions expected to affect tech industry

…Who knew so much came from Russia and Ukraine?

Nickel – car batteries

Titanium – making aircrafts and aero-engines

Palladium – catalytic converters, electrodes, electronics such as semiconductors

Aluminium – electronics and devices

Platinum – catalytic converters

Iron 

Neon – semiconductor production (used in lasers to etch on the silicon)

Krypton – semiconductor production

Electrical cables for cars – in fact VW has halted its factory as it is finding it difficult to source them. 

Auto parts generally – because Auto parts manufacturers (eg. Bosch) have factories in Ukraine

PLUS the small issue of impact on oil and gas supply that is the blood supply of all industry.   

Apps

Peloton rejuvenated with new CEO at the helm – raises possibility of opening up platform 

…Ex-CTO of Spotify /Netflix and new CEO of Peloton Barry McCarthy considers shaking the business up by opening up an app store for others to plug into. This would help scaling up for sure and Peloton can take a page out of Apple’s book and start raking in some app-sales and increase subscription numbers by broadening out the offering. He is also thinking about changing the subscription model – rather than clients forking up a hefty upfront cost for the bikes, they may subscribe to the hardware+services for a set price per month that we see in many kinds of phone contracts. 

Data

EU Commission publishes its proposed Data Act

…It’s an act to ensure data in the EU is exploited in the EU; big industrial data flowing out of smart devices – which are mostly to be fed into AI as training data, will be available for use by users and will remain in the EU. See further below, In the Spotlight section. 

US DOJ puts in the spanner over UnitedHealth’s takeover bid of Change Healthcare

…What’s this about?

UnitedHealth: Major business in health, including Optum, a provider of health services and it also owns one of the largest health insurance business. The insurance business collaborates synergistically with Optum. 

Change Healthcare: Healthcare insurance technology group. It provides software and services which are widely used, meaning it has access to data (eg payment details between healthcare services provider and insurance services) of competitor insurance companies. 

DOJ has said that it will reduce competition in health insurance (which is huge in the US as they don’t have the national health service equivalent in the UK), and it will mean UnitedHealth with gain access to rivals’ data. The interesting point is that UnitedHealth is asserting that its acquisition would actually reduce costs for the consumers (meaning it can’t possibly be anti-competitive). However, Biden administration has proposed looking at competition law from a different lens – in terms of reduction of competition between the businesses – rather than short term financial harm to consumers. 

California Consumer Privacy Act is similar to the EU

This law is interesting also in view of a case that is being prepared (or filed?) in the UK against Facebook (a claim about Facebook taking users’ valuable data and not giving users commensurate compensation). According to this Act,

• Taking of customer data needs to be coupled to financial incentive. 
• Needs to justify the taking of data
• State what the financial incentive is to the customer
• Explanation as to how the price/financial incentive relates to the value of customer data, how it has been calculated, and this needs to be done in good faith

EU and US close to agreeing a data transfer mechanism

The mechanism will attempt to bridge EU Human Rights Law (protection of citizens’ data) VS US National Security Commitments. A couple of cases to bear in mind by way of background: 

• Google Analytics:  Held in breach of GDPR because it transfers European users’ personal data back to the US – US Cloud Act means US authorities can demand Google to turn over personal data – thus Austrian Data Protection Authority has held Google has not provided adequate protection to AT citizens’ data in breach of GDPR. 

• Facebook: says it might have to withdraw from providing services in Europe because of the requirement not to transfer European users’ data to the US 

Gaming

Enforcing sellers of cheat codes not as straightforward as you might think

…The US is seeing a lot of cheat code seller cases and UK has a couple too that I know of. However such cases can be tricky:

• If the cheat code seller is not a seller (eg. provided for free), can’t sue them for breach of contract
• Can’t identify them
• Can’t serve them with the court papers (located abroad)
• Can’t enforce judgment
• Can’t find assets to enforce against

There is also a shift in the objective of these suits – initially companies may have sued individuals to ward people off cheating. More recently, the game publishers have shifted to suing the software providers, to obtain damages. 

IoT

New interoperability for Smartphone products – the Matter Standard

…Have you got an Amazon Echo, Google Ring, and an Apple TV? The Matter Standard is coming our way – the goal is to try and connect up our connected devices that originate from different manufacturers seamless. Standardised technology allows all businesses to build on top of things. If Amazon Echo and Google Ring were interconnected by use of the standards, for example, Google Ring can be programmed so that the user can speak to the courier service at the door through Amazon Echo. What standardisation does is to discourage the closed ecosystem which some manufacturers, notably Apple, tries to promote. It prevents lock in to any particular ecosystem. 

Patents

Nokia branded phones banned in Germany

This follows loss by Nokia TM licensee HMD following audio codec Standard Essential Patent enforcement action by Fortress funded (ie: Masayoshi Son’s Softbank) VoiceAge EVS. HMD phones no longer deal with the EVS standard (ie: to minimise effects of injunction) but the phones will be reportedly worse in quality for streaming content rather than voice calls per se.

Satellites

FCC raises concern over Starlink’s many satellites

…Too many space debris, increased likelihood of collision and difficulty detecting catastrophic asteroid strike on earth, it says. May be Elon’s giant chopsticks would do the trick of taking out satellites. 

Trade Secrets

US ex parte Rapid response measure included in the proposed SECRETS Act tries to deter theft of IP

…The aim is “to provide procedures for national security exclusion from the United States of articles or components of articles that contain, were produced using, benefit from, or use trade secrets misappropriated or acquired through improper means by a foreign agent or foreign instrumentality, and for other purposes”. This provision is not that different from Article 4(5) of the EU Trade Secrets Directive. 

However where the US and EU parts ways is the new ex parte rapid procedure. Any filed complaint will be reviewed by an Interagency Committee on Trade Secrets (Director of National Intelligence, Secretary of Treasury, Secretary of Homeland Security, Secretary of Commerce, Attorney General, IP Enforcement Coordinator, US Trade Representative) which can move to get the International Trade Commission to block imports of products including digital products. 

Requires Congress support – but there is reported to be no reason why there will be no such support. 

Taiwan approves the National Security Act making it crime to steal trade secrets and using critical national technologies (i.e. chip manufacturing) outside Taiwan

Special courts to be set up as cases are likely to involve top top secret information. 

In the Spotlight

The EU Commission’s PROPOSED Data Act – Data of Europe, by Europeans, for the Europeans

This is major. What are the headlines?

• It is no way near set in stone (only a proposal) – but still needs to be taken seriously
• It is not about personal data though most data is mixed. In such an instance GDPR will prevail.
• Its aim is to unlock the value in data, facilitate more sharing, in preparation for IoT – if your connected car were to collect valuable data, who should own it? Who should be able to decide who can access to the data of your connected devices for aftermarket services such as repair?
• Insight/data inferred from data itself / content are out of scope. 
• Governments are able to demand private companies to turn over data in exceptional circumstances like public emergencies

Why did the EU Commission feel the need to revise law in relation to data? 

Simply because data (especially machine generated data) is concentrated by a few, and was felt under-utilised for the following reasons:

• Siloed data
• Poor metadata management
• Lack of interoperability
• Lack of data sharing practices
• Power unbalance between data holder and licensee leading to abusive practices

To stimulate EU’s digital economy, the Commission felt that measures had to be provisioned to facilitate fairness, remove barriers and increase competition, and encourage more data sharing. 

Data Portability

• The proposed Act clarifies who can use IoT generated data – avoid lock-ins which may ensue if only OEMs could access that data  and so explicitly allows users to use the data generated by them – subject to payment on Fair Reasonable and Non-Discriminatory and transparent conditions by the third party seeking access to the data to the manufacturer (“access right”). The OEM’s ability to use data remains unaffected. Third party access to data cannot be prevented by assertion of Database Rights (because the conditions are not fulfilled under Database Rights law – not because there is an additional provision that apply to the Database Rights law). 

• Need to remove barriers to switching so that users of cloud services can switch between different providers. Data transfer should include user’s metadata. Standard contractual clauses to be developed. 

SMEs

• SMEs have no option but to accept data providers’ terms of data sharing. The Act aims to tackle unfair contract terms in relation to access and use where SME is involved – terms must pass an “unfairness test”.  Model contractual terms to be developed. Only unfair terms are liable to be invalidated.  

Flexible use of data

• Need to facilitate the ability to combine data from different sectors to ensure data is utilised fully thereby unlocking full value of data. 
• But the proposed Act sets obligations in relation to liability for accessing, processing, sharing and storing data. 

Protection of data from unlawful access by ex EEA governments

• Need to ensure data generated in Europe is not subject to unlawful access by non-EU/EEA governments (those without relevant international agreement) in the interests of human rights, national security, IP rights and trade secrets. [it seems to be at least as strict as the restrictions for personal data – if not more]
• But free flow of data within the internal market needs to be preserved. 

Public Interest 

• Where there is high public interest (emergency), private companies must provide relevant data (eg. adverse weather, floods, fires, cybersecurity incidents, pandemic). This provision is relatively wide. 

Examples to illustrate what the proposed Data Act purports to do

• Suppose you own a Volkswagen. Owners of the car has the right to use the data recorded by the car – for example, to give the data to an independent repairer (who may be cheaper than Volkswagen repairer), or a non Volkswagen partnered car insurer to calculate premiums depending on your driving patterns.

• Owners of factories should be allowed to use the data generated by their machines to optimise operational cycles, detect faults, manage supply chain, including using machine learning processes. That data should be usable by new machineries, which may be made by a different manufacturer.

Artificial Intelligence

Former Google chief executive Eric Schimidt sets up AI fund AI2050 to solve difficult problems

…What are the difficult problems in mind?

• Bias
• Harm & misuse – how to neutralise toxic consequences of AI
• Geopolitical conflict
• Scientific limitations in technology
• Harmful effect on jobs
• Social networking algorithms
• Deepfakes
• How can AI measure and mitigate socio-economic inequality? 

Sainsbury’s rebuilds data capability to enable automation and decision-making

… This newsbulletin is not at all remarkable.

What Sainsbury’s doing is a must if businesses want to survive. We are all creatures of habit – how many new things did you include this week in your shopping cart? That’s why Sainsbury’s – and its relatively recently acquired business Argos will be able to fairly well predict the demand, namely how many of each items it will have to stock. It may be different from day to day. For example, more tuna sandwiches on Friday, not so much on Monday. Or even, ham sandwiches to be increased if the day before is rainy. It will lead to much less waste in the case of perishables, it could work out the logistics better to calculate how best to get products supplied to it at the cheapest possible price, and make decisions such as discontinuance, better ad targeting etc. In short, it will be using AI, and human brains can’t beat AI. 

Sainsbury’s success, I think will depend on how they use humans in the decision making process. Do it too much, it will be too inefficient, not enough could lead to mistakes and damage to reputation. 

Auto

Stellantis unit Fiat Chrysler sued for using Internet Media Interactive Corp’s patented link-shortening software to promote its services on social media

…The defendant allegedly used Sprinklr’s service to generate links which led to Fiat Chrysler’s vehicle service Mopar’s website. The patent owner is seeking damages or royalties. Shortened URL links are particularly useful for use in Twitter feeds which have a size limit. 

BigTech

Facebook settles $90m claim agreeing to delete “wrongfully collected” browsing data while users had logged out

…The original 10 year old claim was for breach of US WireTap Act and California Invasion of Privacy Act

Google sued by District of Columbia for using dark patterns to obtain consumer data

This is relevant to EU law as well in the form of Digital Services Act. It is implemented with the objective of protecting people’s fundamental freedom of expression and information, preserve the ability of users to make free, autonomous and informed choices (Art 13a). Dark patterns includes the following types of conduct:

• Unsubscribe button so small it’s difficult to spot
• Making sure option to select Yes is the same in prominence and ease as the option to select No (for subscription services)
• Asking for consent when it has been refused previously
• Urging users to change settings after the user has already made a choice
• Making services difficult to cancel, threatening users that they may be missing out on something if they cancel

Back to the Google case. The charge is against Google making it hard for people to choose more robust privacy settings. 

Tracking Apple’s strategy, Google too to limit tracking across apps

… It has been reported that a staggering 80% of Apple users have opted out of ad tracking. 

Google is however planning to give the option for users to prevent apps tracking them, in 2 years’ time. Move comes in response to calls for users’ right to control own data and privacy. Google will be alright though as it has plenty of first party data with access to billions of users’ data as a result of their popular search engines in which users directly type and thereby disclose to Google the sort of things that is of concern or interest. 

Nick Clegg promoted to head of global affairs at Meta

…the former deputy UK prime minister is certainly experienced in negotiating frameworks with politicians across the globe. His main task is to negotiate regulatory, antitrust, data privacy, child safety policies. He will be the guy that will be in the firing line when regulators start increasing the heat. He did get himself a promotion to Zuckerburg (in charge of products) and Sandberg (in charge of operations) level in return now that Thiel has left. So the idea is Nick Clegg does all the firefighting whilst Zuckerburg and Sandberg get on with the biz. 

By the by, Meta is now calling their employees Metamates. That’s a bit like Disney which labels their staff Cast members. 

UK’s Online Safety Bill gets Cabinet backing

…The government wants the UK to have one of the strictest internet rules. The rules would

• Limit intermediary liability
• Give Ofcom powers to require tech companies to proactively seek and remove illegal and legal harmful content (for children) using technology

There are fears that these rules would make UK unattractive to tech and start up businesses. Tech industry is critical. Nicely segues onto…

US FTC considers the Social Media NUDGE Act

…the proposed approach does not target harmful content per se, but more how that harmful content spreads. Twitter asks users to re-consider mean tweets and Facebook gives moderator tools to prevent conversations from overheating. 

Connectivity

EU has filed a case against China concerning low SEP licence rates and anti-suit injunctions

…The EU complains of:

• Licence rates which are too low, so much so that it does not compensate Licensor’s investment in R&D
• Chinese Courts issuing fines pressurising licensors to settle at a low rate
• Decision of Chinese Courts to prohibit patent holders from going to a non-Chinese court to enforce patents is unfair.  

The result is that EU’s vibrant high tech industry is being taken for a ride. US and Japan have also expressed concerns and are expected to join in on the action. 

Crypto

Colorado accepts tax payment in Crypto

…Crypto is volatile, so the coins will be converted promptly on receipt. The governor was one of the first to accept donations in crypto. 

Mainstream Venture Capitalist fund Sequoia to create funds to invest in cryptocurrency

…The main point is taken together, crypto is likely to become more mainstream rather than fade into obscurity. 

EV

Start up Redwood partners up with Ford and Volvo in its EV battery recycling venture

…Redwood is a business which purports to recycle end of life battery packs in EVs and hybrids. It also deals in the recycling of other electrical goods such as laptops, batteries, power tools, e-bikes etc. As battery metals are a limited resource, these schemes are likely critical for sustainability. 

Gaming

Patent case against Activision Blizzard to be held next week

…The patent concerns a computer protocol “that allows multiple networked users to simultaneously upload and download segments or pieces of the same file to and from each other”, owned by AC Technologies and Via Vadis. 

The same patent is asserted against Amazon. 

Metaverse/NFT

JP Morgan becomes the first lender on the “metaverse” Decentraland

…It has issued a whitepaper on how businesses can operate in the new medium. Interested people should take a look.  

Melania Trump buys her own NFT – allegedly on behalf of another party

…Why did she do this? It has been suspected to save face despite what has been said by the spokesperson. As the crypto heist of last week has shown, it is possible to trace wallets. In the case of Mrs Trump, it wasn’t such a hard thing to do because the wallet which created the NFT actually bought the NFT. A practice called “wash trading”, crypto dealers have been known to do buy and sell repeatedly to artificially inflate prices. Reuters reported that wash trading accounted for much of the high value NFT sales in January. 

Her husband has launched new social media app Truth social, which is set to rival Twitter and Facebook.

Metaverse and Employment 

Employment lawyers are grappling with new issues before the metaverse user-base expands. These include questions such as the following:

• Can you get harassed in the metaverse?
• Is there discrimination laws? [and what if your avatar is not a human, but a thing – such as a metronome, for example? – is discrimination prohibited on the understanding that a person is behind that avatar]
• Is it OK if your avatar doesn’t resemble you?
• Which national employment laws apply? 
• How should workers’ data be protected?

Satellites

EU decides to advance €6bn to vie with Space X and Amazon to create satellite internet

…The offering will be encrypted and will span Europe and Africa  – to provide them with an alternative to Chinese services. To be approved by EU Parliament and member states. It is reported to be spurred by the gaining of UK Government’s stake in OneWeb jointly with India’s Bharti Enterprises, which operates a low earth orbit satellite broadband network. 

Semiconductor

Intel buys Tower Semiconductor (Israel) to boost the creation of its foundary business

…Usual regulatory scrutiny permitting.

Magnetar funded Arigna targets Qualcomm chipped devices (Alphabet, Apple, Lenovo, Microsoft, Oneplus, Samsung and TCL) in patent infringement litigation

…The feature targeted is IoT modules related to tracking. Qualcomm is likely to have an indemnity obligation – it is reported, and if so (or even if not) likely be dragged in, the first step being patent validity challenges in the US. 

Arigna has previously targeted wireless charging Qi systems and devices that include NFC communications (tap and go technology).

Smart City

Disney to launch a masterplan residential community

…You have to have at least $1.6million though. I did have a quite look at the demo of the city and what really did strike me was that the people featuring in the video were so diverse. 

Anyway, for tech peeps, what I really wanted to say is that this kind of themed community could expand. It will be like a smart city, comprised of like-minded people. I would not be surprised if Google did something similar, or Apple. Or Tesla owner’s community. I would not be surprised if celebrities were to do the same – I covered off a newspiece that Snoop Dogg is constructing one in the metaverse. Why stop in the virtual world?

15 February 2022

US

US Companies need $4billion more than budgeted by the government to rip and replace Chinese network devices (mainly Huawei and ZTE) says the Federal Communications Commission

…Because it is much cheaper to replace network devices with Open RAN architecture  which is a modular system, compared to what the network uses at present in which you have an integrated hardware and software structure (out of the non-Chinese companies, this is really the preserve of Nokia, Ericsson and Samsung), Open RAN adoption may see acceleration – though it probably will not be the only answer given that that too takes time to implement.  Open RAN will open up competition in the network architectural infrastructure providers allowing especially BigTech companies to become involved. 

Meanwhile, network operators (eg Deutsche Telecom, Orange, VodaFone) in the EU have written an open letter asking EU lawmakers to make BigTechs pay for having to stamp up heaps of cash to upgrade their infrastructure to be able to support the increase in traffic caused by their successful streaming services, despite the tight squeeze on margins [SK Telecom of South Korea even sued Netflix because they were compelled to upgrade the network owing to the very popular Squid Games viewing traffic]. 

The letter comes on the heels of the Commission’s statement “all market actors benefiting from the digital transformation . . . make a fair and proportionate contribution to the costs of public goods, services and infrastructures” in the declaration on digital rights last month. An FT commentator says it’ll be interesting to see what the BigTech sceptic French presidency of the EU Council might do. 

As an aside FCC’s bleat will surely help Ericsson defend Apple’s claim before the ITC (International Trade Commission) asking for an import ban against Ericsson’s network devices which is said to be infringing Apple’s patents. The pair is fiercely battling out a licence dispute around the world. Indeed in Ericsson’s Public Interest Statement for the ITC case it explained that replacement of infrastructure is not a plug and play exercise, with the network operators needing to redesign networks, test and deploy, which would also lead to significant delay rolling out 5G network. 

By the by, Ericsson is also trying to get Apple iPhones banned from importation into the US (iPhones are made in China). Apple is protesting, saying there is no alternative to an iPhone because only Apple sells iOS based goods. This statement could come back to haunt Apple in disputes concerning Apple’s allegedly monopolistic conduct. 

US FTC threatens to sue companies which fail to sort out known software vulnerabilities

…The particular threat was in relation to a well known bug known as Log4j, but the principle would apply across all bugs. This is fair enough, as cyberhacks have been carried out by exploiting known flaws in the programming.

Apps

Peloton seeks buyer – Amazon, Nike and Apple rumoured to be interested but new CEO denies its up for sale

…Peloton failed to foresee the drop in demand as our lives go back to a more pre-pandemic pattern. It has a huge inventory of heavy, expensive products that they are finding it hard to sell off. Last month, it was reported that the firm planned to temporarily halt the production of its machines. 2800 jobs, or 20% of the workforce, will be lost. Ohio plant will be shuttered. They have a new CEO, Barry McCarthy who has an impressive CV: a CFO at Netflix and then Spotify, help managed to boost the companies to the successful companies they are today. Here’s a man good at taking charge of inventory. Sounds like a perfect fit. 

Some of the following companies supposedly interested – here are some possible business cases:

Amazon – Peloton could be a portal to expand into healthcare. Many see that Amazon has an opportunity to bundle the Peloton offering with its Prime service, to keep Prime subscribers signed up and to grow. Possibly gives an opportunity to offer different levels of Prime services too.  

Nike – it sells complementary products, can utilise Peloton’s fitness community. As I understand it, Peloton’s fitness community is rather hardcore (exercise wise). 

Apple – experienced at hardware business. However, Apple hardly ever buys businesses, preferring to organically grow. The purchase of Beats headphones (which was really quite small in comparison to some of the buy outs we are seeing) has been the exception. 

However McCarthy has denied that Peloton is up for sale. 

Artificial Intelligence

Bill Gates-backed start up Kobold Metals uses AI to mine EV battery metals Lithium and Nickel

…Mining these metals are becoming more and more expensive because the low hanging fruits have already been mined. Clues for where it may be worth prospecting for these metals may be determined by analysing some 20 million pages of documents in the public domain, including “two centuries worth of mining rights’ agreements in countless jurisdictions”, collecting rock data and using a large metal detector with a helicopter. Kobold digitises them and uses AI to analyse. I’m sure this type of disruption will spill over to other industry areas.

Big Tech

 UK Publishes Online Safety Bill to protect children from being exposed to harmful content

…The main feature seems to be that sites which contain adult content need to provide robust measures to stop underage persons from accessing them. What will follow is a valuable database of people that access pornography, ripe for hacking & blackmailing. 

However, the UK Parliamentary Joint Select Committee has identified a number of issues (such as the need to focus on the design of the platforms not just the content), which makes it difficult to assess whether the bill could be passed within the year. 

European Publishers Council lodges complaint with the EU Commission over Adtech

…The complaint is that Google has end-to-end control of the Adtech value chain, accounting for 90-100% in the chain, the complainant says. Google is both a buyer, seller and the intermediary of Adtech business. 

Comparison site Price Runner (soon to be acquired by Klarna) sues Google for preferencing Google services over theirs in breach of competition law

…The suit appears to be a follow on damages claim filed in Sweden. Last November, Google failed to successfully appeal the 2017 decision of the EU Commission finding that it was in breach of competition law, as Google’s preferential treatment of its own price comparison shopping service gave Google an unfair advantage. This appeal decision itself is being appealed. 

The suit follows Axel Springer’s suit in 2019, based on its comparison shopping service, Idealo. 

Peter Thiel quits Meta Board

…This is a name worth bearing in mind. Thiel is a co-founder of Paypal with Elon Musk, and member of Facebook board since 2005. He had supervoting powers on Facebook together with Zuckerberg and Sandberg. One of the most prominent Trump allies, he has decided to step down to help back Republican candidates for the mid-term elections. You may see him appear in the Cabinet in the future.  

Facebook is cleared to buy Kustomer, a customer service management provider, but on two conditions

…Germany and EU Commission gave the blessing on two conditions which were (i) that Facebook give non-discriminatory access, without charge to its publicly available APIs for its messaging channels to rival providers and (ii) any changes to the messaging services used by Kustomer customers must also be made available to Kustomer rivals on the same terms – for 10 years. 

UK Competition Markets Authority OK’d without any conditions. 

Is there a difference between the stringency of assessing impact on market competition between the UK and Europe? If so, is there a difference in the authorities’ attitudes? Alternatively, could the differences depend on the different market landscape?  

Crypto

Coinbase Commercial proves a hit at Super Bowl

…Super Bowl is some sports event that swathes of Americans watch every year, attracting around 90 million viewers. Click on the link here  and check out the low tech ad Crypto exchange company Coinbase released – an ad comprised of moving QR Codes which has scored a huge hit leading to (some say aptly) a crash. Coinbase now holds the number two position in the App Store rankings after Peacock, which was the App that streamed Super Bowl itself. At the same time it effectively educated and familiarised the nation about the use of QR Codes.

The take away points are:

• Crypto isn’t going away despite the low valuation at present. In fact a whole host of crypto companies (eToro, crypto.com, FTX) advertised on Super Bowl. Some say it smells a bit bubbly.

• QR Code is a powerful tool to enable companies behind it to get first party data.

$3.6bn crypto heist by a colourful married couple – now arrested

…$3.6 BILLION. It was said to have been stolen from the 2016 hack of HK based Bitfinex exchange. 

It’s a colourful story, in particular, the wife is a part time Forbes contributor (which included the article  “Expert Tips to Protect Your Business from Cybercriminals” – sadly no longer available) and rapper going under the name Razzlekhan (which included raps about ditching toxic friends like vacuum cleaners – sadly (?) no longer available too). 

Search warrants were issued for the couple’s crypto wallets, and the US authorities somehow managed to trace the money to seize. They tried to launder the crypto by in part, chain-hopping, which means to jump between different cryptocurrencies (ie: different blockchains) very rapidly and using tokens that have higher cryptography built into them (who knew that different blockchain had different security standards)? 

It appears that the couple did not do the actual hacking, but the hacker placed the stolen coins into their wallet. 

Interesting point is that it appears you can track the people behind a crypto-wallet. And it has left the US authorities with a conundrum – the coins which were hacked in 2016 were only worth $70m or so. The Bitfinex exchange has settled claims with the victims already. So what will they do with it? In the US usually seized items (eg. art – but presumably not drugs or other illicit items such as weapons which I hope gets de-commissioned) get auctioned off – and presumably the authority gets to keep the proceeds?. How do you then auction off a $1 crypto currency? Do they just get to keep this? In the UK, in accordance with the Proceeds of Crime Act, Police force and the Home Office can keep proceeds of seizure half and half….which nicely segues to the next news item….

UK HMRC seizes NFT worth £1.4million

…Not the same level of magnitude as the US case mentioned above, but HMRC was successful in tracking down stolen NFTs and cryptocurrency as a part of a probe into tax fraud involving 250 or so companies. Quite how they got so many companies to agree to defraud is an interesting question in itself.

Again, it goes to show that you can track individuals down for perpetrating hacks, though it is undoubtedly is complicated. This case apparently involved pre-paid phone numbers, false addresses, stolen addresses and use of VPNs. It certainly highlights the drawbacks of NFTs. It only records the “ownership” of a particular file, by pointing to where that file can be found. It doesn’t protect the file itself, which could be compromised if the server it’s stored on is damaged, or the original uploader of the file deletes it.

In a U-turn, Russia decides to allow cryptocurrencies, but they will be regulated

…The government has had a re-think and decided it ought to keep its toe in the crypto water. 

This is a huge reversal from the Russian central bank which had earlier considered crypto to be a threat. However, the banking system (SWIFT) is controlled by the west and sanctions have been issued to hurt Russia. One way to get round this is by using cryptocurrency, the most efficient monetary system. Therefore, rather than ban crypto trading, they have decided to recognise crypto as a form of currency. 

It’s not a legal tender though (therefore stores will not have to accept it as form of payment cf for example. El Salvador where it is a legal tender) – but transactions of crypto in Russia will be regulated. Cryptocurrency purchases will be allowed only through locally registered and licensed companies so users can be verified and information about transactions can be made available to government authorities. All crypto transactions over a certain amount have to be reported to federal taxation services and failure to do so will be considered a felony. Banks can act as intermediaries between users and crypto exchanges even though that defeats the point of crypto currencies. 

Fintech

Apple introduces Tap to Pay on iPhone

…US merchants will be able to use the features requiring users to tap iPhones together for one payment to transfer over to the other. 

NFT

Nike Sues StockX, a marketplace for selling unauthorised Nike trainers’ NFTs

…StockX is a online marketplace, which resells garments including trainers, and verifies authenticity (ie: is this Gucci bag really Gucci?). It also offers NFTs linked to physical goods (Vault NFTs) which can be redeemed for physical items but can also be traded as digital goods. Vault NFTs are comprised of images of the product (eg trainers) with the TM on it. Nike complains that it looks like it has endorsed StockX, or that there is some economic connection. Nike considers that the offering is comprised of “inflated prices and murky terms of purchase and ownership” and thereby damages Nike’s reputation. 

Patents

Google’s Nest thermostat feature infringes valid patent of EcoFactor says the jury of Western District of Texas

…Jury awarded EcoFactor $20m, shy by $9m of EcoFactor’s asks. EcoFactor failed to show infringement of the other patent. Both concerned thermostats. 

Google has had to fight a few patent infringement cases of late:

• November 2021: Google/YouTube held to infringe a VideoShare’s Video Sharing patent

• October 2021: Google successfully defended an infringement case claiming that Nest was infringing Profectus’ picture frame patent. 

US patent litigation fun fact: Judge Albright who oversaw this case decides 20% of US patent litigation. He also promises to get to trial faster than any other US court. The EcoFactor case took 2 years. Western District of Texas is also well known for juries giving huge damages awards since VSLI v Intel. 

US Federal Court says patent licences should remain sealed

…In relation to the case Uniloc v. Apple, a third party, Electronic Frontier Foundation argued that relevant licences should be disclosed to the public because:

• The public has an interest in inspecting the valuation of the patent rights
• disclosure of patent licensing terms would facilitate ‘up-front cost evaluations of potentially infringing conduct
• inform reasonable royalties in other courts

Federal Court, overturning the District Court’s decision to unseal said:

• District Court failed to assess whether any of the third-party information was protectable as a trade secret or otherwise entitled to protection under the law
• It was an error of law in making a blanket ruling that the public has a broad right to licensing information relating to patents. The public’s interest in patents was to ensure that they are not procured by fraud or improper means. 
• No rule of law or binding precedent says that the public is generally entitled to know what consideration a patentee receives for licensing its patent
• The parties agreed that licences should be sealed

Certainly, the UK Courts would agree with the Federal Court. 

Semiconductors

EU decides to put up €43bn to set up semiconductor manufacturing in the region

…The pandemic has exposed a major fragility in today’s economy causing serious supply chain issues leading to shut down of factories  for companies which have failed to manage its supply chains. This was especially prominent in the disruption of chip supply. Most of today’s the cutting edge chip manufacturing facilities are in Asia (specifically, TSMC and Samsung). To protect the EU economy from future chip supply chain issues, the Commission has decided to put up a €43bn fund. The US has done the same, advancing some $52bn, and China $33bn. 

Ukraine/Russian tension spells tension in the semiconductor industry

…Key materials for semiconductor manufacturing, such as Neon and EU decides to put up €43bn to set up semiconductor manufacturing in the region

Palladium which come from Russia/Ukraine, could be blocked. Russia may prioritise other states, notably China, over other countries especially if they impose sanctions on them. 

In the Spotlight

In a Power Move, Microsoft publishes Open App Store Principles

…Microsoft publishes “Open App Store Principles” on its Microsoft Store on Windows – to be incorporated into their gaming store it plans to build, ahead of Activision Blizzard deal. Essentially it’s promising it won’t do what Google and Apple have been accused of doing in the Epic trial (ie: allegedly acting exorbitantly by not allowing third party App Stores on their mobile phone operating systems (there are only two, iOS and Android), not allowing apps to use different payment systems, not allowing app developers to download app without going via the App Store run by the operating systems, charging 30% commission on all in-app purchases etc). They are:

Quality, Safety, Security & Privacy

Developers can access app store provided they have reasonable and transparent standards for quality and safety. [but this does mean effectively, that Microsoft has control]. Consumers can control how their data will be used. 

Accountability [Echoes EU Commission’s proposed Digital Markets Act]]

Own apps will have the same standards, and non-public information or data from the app store won’t be used to compete with developers’ apps.

Fairness and Transparency [Echoes EU Commission’s proposed Digital Markets Act]]

Treat all apps equally, no preferencing or ranking of own apps or business partners’ apps over others. Being transparent about rules for promotion and marketing.

Developer Choice

• Developers don’t have to use Microsoft payment system to process in-app purchases. [So if this principle were to be applied across the board, you’d be able to use for example, Paypal, in a game downloaded from the Apple App Store]
• Developers aren’t required to provide more favourable terms in Microsoft app store than in other app stores.

• Not to disadvantage developers if they choose to use non Microsoft payment processing system 
• Microsoft will not prevent developers from communicating directly with their customers through their apps for legitimate business purposes, such as pricing terms and product or service offerings.

It cleverly contains provisions similar to the proposed US Open App Markets Act, which is currently being considered for incorporation. That Act mainly targets Apple/Google duopoly over their app stores that are offered within the mobile ecosystem. Microsoft has also said the following:

• Its top games (especially ones purchased from Activision Blizzard) will remain available to SonyPlaystation, and support Nintendo as well [note that the promise isn’t forever]

• But, the Developer’s Choice principles do not apply to app stores on Xbox because the consoles are sold at a loss, and Microsoft requires additional revenues to make up for that loss. [Note that Open App Markets Act do not apply to gaming consoles]

Fun fact: Last December, Apple was fined € 5million / week by the Dutch Competition Authority for breaching its competition laws by preventing the Match App from allowing in-app purchases using third party payment system. Weirdly, the finding of breach only applies vis-a-vis the dating apps (Match was the complainant), not all App developers. It is reported that changes made by Apple was minimal because it is not simple to use an alternative payment method, and Apple still charges 27% commission (instead of 30%) on purchases made by alternative payment methods – supposedly a reduced rate that excludes value related to payment processing and related activities – with developers responsible for collection and remittance of taxes & VAT. Apple is appealing the decision, but meanwhile decided that it would be more beneficial for the bottomline to make minimum changes to the system and cope with the Authority’s decision that it is non-compliant and pay the €5 million/week! South Korea has also passed laws forcing platform owners (namely Apple and Google) to open up payment systems that could be used on their operating systems. Apple says there is operational costs for running the platform to ensure that it is safe from fraud, and to provide privacy protection (including features like parental control).

Auto

Tesla to fix software bug over the air

…Not entirely sure whether it was a bug, actually. The car was designed to slow down (5.6miles/hour) at stop signs if the junctions are clear (called roll stop) when they are supposed to come to a full stop regardless per the highway code of the US. Tesla’s cars had been programmed to do a roll stop – because it is much more energy efficient that way.  Tesla now have to “recall” their vehicles to disable that feature which breaks the law – which can be sorted by updates on the software.

Over the air software updates enable auto manufacturers to come up with all sorts of add-on features to the cars

…The article lists the following add-on features:

• Heated seats 
• Advanced cruise control 
• Lock or start their cars remotely
• Automatic high beam which dims when it sees an oncoming traffic

…but a survey said people will not be willing to pay for it. Or potentially, customers will decide on the brand of car depending on what features can be accessed without having to make any regular payment.

BigTech/Platforms

Facebook ordered by German Constitutional Court to disclose personal data of users who insulted a politician

…The insults posted are horrific. The Courts picked out those comments which can be regarded as criminal, balancing the right to free speech and privacy rights, as stipulated by the constitution. The disclosure of user information will then enable the politician to sue. New laws in Germany obliges platforms to pass on the data of suspected criminals to the German police. This is to enable the government to control far-right extremist posts in particular.

In parallel, the UK is preparing to pass an online safety bill, aimed at holding tech companies liable for illegal content (including the metaverse), for example hate speech, posts that incite violence, revenge porn, promotion of suicide, human trafficking, etc much resisted by tech platforms and strong supporters for free speech. If the law comes into force, platforms will be expected to take proactive measures, not merely to take down once notified of illegality. Breach can lead to penalty up to 10% of global turnover. 

All sounds reasonable – but it’s a difficult issue. Should there be a line, between free speech and censorship, and if so what standards should be used to draw that line? 

• BigTech/Platforms Camp: These (Facebook, Google, Twitter, and recently Spotify, etc) were started with an ideal to democratise information (be it search results, media, content). They believe that platforms should function to passively provide information (“a mere conduit”), they don’t edit and consider that consumers should be treated like adults – let them choose and research and decide what to consume, what to believe. 

• BigTechs aren’t a Platform but a Publisher Camp: By allowing harmful information to be made available, platforms are permitting harmful content to be accessible, and even amplifying it; this means they should be considered as de facto publishers with responsibility to remove harmful content. Too much responsibility could lead to the removal of users’ ability to upload content for free because it would just become too costly for the platforms (note that 25% of content on the internet is user generated). 

The Spotify saga (Joe Rogan v Neil Young) of last week, is a good example.  This debate – often called “section 230” in the US (which essentially states that Platforms are immune from liability for user created content, but if they are complicit in the creation of illegal content, then they will be liable) – is being continued in Washington. The hurdle for showing complicity may be quite low. Transparency on how content editing is done could help strike the right balance. Business personality Jason Calacanis suggested it ought to depend on whether you are doing any of the following P activities: Pay, Promote, Publish or Produce. In the case of Spotify, it is doing all those things vis-à-vis Joe Rogan. 

Interestingly, Spotify’s strategy is not only to get more subscribers, but also to secure deals with car makers (eg. Tesla) to get on their platform.

Facebook faces the biggest single day drop in market capitalisation in history – here’s why

…Zuckerberg has blamed competitor TikTok’s formidable growth stealing attention time away from users who would have used that time browsing Facebook [to Decode: we aren’t market dominant, guv]:

• Facebook sits within platforms (ie: Apple/Google), which means it is at the behest of such platforms.

• Apple’s policy for limiting ad targeting impacted Facebook massively. At the same time advertisers (eg. retailers) are now deciding to allocate spending on Google (which does have that deal with Apple to keep Google its default search engine. Furthermore, Google benefits from having granular and direct data about users’ interests (when they use the Google search engine, by directly typing in the terms of interest e.g. “where can I buy Victorian door handles?”– so called first party data) over Facebook – because Google is more effective at providing advertisers with targeting ad services. 

• Privacy scandals – whistleblower employee disclosed Facebook’s business decision-making which revealed that it was interested in growth even where it knew its services could be damaging to mental health of users; pushing users to content which elicited emotion, often negative ones (which tend to have more hold over users’ attention). 

• This has led to huge regulatory scrutiny of Facebook, and Facebook is now not in a position to acquire businesses with promising technology. Antitrust complaints on foot by the US Federal Trade Commission over Facebook’s past acquisitions of Instagram and WhatsApp which completed several years ago. The allegation is that Facebook bought them because it saw them as a future competitor and so had made the acquisition to kill the competition at an early stage.

• Facebook is hamstrung from growing organically. It was failing to gain sign ups by the younger generation anyway, and users, investors and developers are distancing themselves from Facebook following the whistleblower’s disclosure. 

• TikTok really is a formidable competitor, and it is eating into their lunch. 

• Facebook has now attempted to break into the content market by launching Reels, but this is getting little traction. Reels is basically like TikTok – but users use Facebook to connect with friends, not to see content made outside the friendship circle. In the users’ minds, TikTok is the platform for that. 

• It has bet the farm on the metaverse – a grand project which is not expected to see any returns for another decade or so. 

• VR division is losing $10-12bn / year. 
• VR market is crowded with other BigTechs (Apple, Microsoft, Google). 

• Its global digital currency project Diem was crushed under regulatory pressure. 

Meta threatens to pull Facebook and Instagram out of Europe amid tightening regulatory shackles

…Meta says it needs to be able to send European user’s data to the US, and cannot agree to storing all its data in Europe.  However, Schrems II ruling of the Court of Justice of the European Union (CJEU for short – Europe’s top court) means it is unlawful to send EU citizens’ personal data to the US, which impacts on the firm’s critical operations. Query whether they really can’t separate data storage between the EU and the US. Note that Apple already does this for their Chinese users – Apple has no control over data on iPhone in China, as I understand it, so Apple itself holds no data on Chinese subjects. 

Belgium’s Data Protection Authority finds Interactive Advertising Bureau of Europe’s Transparency and Consent Framework as being non-compliant

…This Framework was created to help advertisers to comply with GDPR. However, it has been found to be non-compliant, in particular, pop-ups asking users for certain permissions to collect data is inadequate – users don’t know that their profiles will be sold widely so more relevant ads can be shown to them. You simply cannot ask someone to consent to a data breach, said one member of the Irish Council for Civil Liberties. 

Crypto/Digital Currency /NFTs

Diem caves due to Regulatory Pressure

…Meta has sold off Diem assets to Silvergate Capital Corp, which is a crypto-focussed bank. 

Meta will take a seat on the board of Crypto Open Patent Alliance spearheaded by Jack Dorsey, which promises not to enforce patents unless it is for defensive purposes. Dorsey earlier criticised Meta for not embracing Bitcoin in the first place. Dorsey believes Bitcoin is key to financial inclusion. 

India to launch digital currency in 2022-2023

…It closely follows China, which is ahead. 

HitPiece, a website without regard for Intellectual Property gets slammed by artists

…A website which claims to “let fans collect NFTs of your favourite songs” is getting slammed (predictably) by artists. It appears that the website is providing the service without the artist’s consent.

Gaming

Sony – number two largest gaming company, to buy Bungie which is the developer of Halo and Destiny franchises  – for $3.6bn

…Bungie has in its history an acquisition by Microsoft back in 2000, only for it to be later spun out. Sony will get Destiny but not Halo, however. The deal follows a number of studio acquisitions by Sony last year as well as Microsoft, EA, Tencent. 

What’s Sony’s aim? 

Sony has produced one of the best consoles (PlayStation) on the market, and its popular exclusive titles are strong on role playing games with compelling story lines. Bungie is particularly well known for FPS (First Person Shooter) games. By purchasing Bungie it hopes to gain knowhow on “live games” in which gamers battle it out online, and build gaming communities – which come with in-community transactions and experience sharing (such as live music within a game). Naturally Sony has one eye on using the tie up to gain some vantage in the metaverse. 

Sony’s aim has been to get users buying its cutting edge consoles by offering up exclusive titles developed in-house – though Bungie has managed to get an agreement from Sony to remain independent. This could be similar to Microsoft’s proposed plans for Activision Blizzard, which is to profit from making available some of its popular titles to ostensibly, all.  

Metaverse

Mortgage over metaverse land successfully issued in Decentraland

…The mortgagor TerraZero Technologies provided most of the financing. Each mortgage is collaterised with the virtual real estate, represented as an NFT, it is reported. 

Where you might be located could be a key to how effectively you can promote your products on the metaverse. Consumer brands have already purchased virtual real estates in key areas (Decentraland has a Fashion Street Estate studded with apparel brands). Early adopters can hope to profit, because each of these platforms have their own tokens which will increase in value as more people decide to jump in. 

In another metaverse, one fan of Snoop Dogg (a rapper, if you didn’t know him) spent $450k on a piece of virtual land in Snoopverse, a virtual space Snoop is creating in the Sandbox. Snoop is re-creating aspects of his real life, including his Californian mansion in the Sandbox. Residents will be invited to his exclusive members-only parties. 

Semiconductor

EU Chips Act which funds chip manufacturing in the EU struggle in Brussels

…Chips are the building blocks of technology, which is the foundation of economy of the modern era. Governments and other organisations are busy trying to shore up chip manufacturing by the provision of generous subsidies and there is reported some struggle over whether relaxation of state aid rules is required. Note the amounts that are being contemplated is around a mere €40bn (including member states’ contribution – unclear over how many years)– compare with TSMC (just to labour on the point – this is just one company!) that announced a budget of $44bn for this year to boost its manufacturing facility.

GlobalWafer (Taiwan)’s €4.35bn acquisition of chip supplier Siltronic (Germany) falls over

…National security concerns on the German side has prevented the merger, it has been reported. 

Nvidia’s proposed purchase of Softbank’s ARM collapses amid competition concerns

…Softbank will receive a break up fee of $1.25bn [wow], and semiconductor design company ARM will be floating. Strongest voices against the acquisition includes Microsoft and Qualcomm, who fear access to ARM will become restricted, and nervousness over disclosure of key technological innovations to ARM which may be shared with Nvidia.