Daily Archives: November 17, 2020

Seven years on, congressional oversight of NSA policies is still a slog – Reporters Committee for Freedom of the Press

Posted: November 17, 2020 at 6:12 am

When Edward Snowden leaked classified information about U.S. government mass surveillance seven years ago, the former National Security Agency contractor sparked intense debate about and reform of many surveillance policies. Those conversations around reforming government surveillance practices have been especially important for journalists. As the Reporters Committee haspreviously argued, national security surveillance can chill or compromise newsgathering.

Current discussions about proposed legislation that would prevent companies from using the strongest forms of encryption, such as theEARN IT Act, have resurfaced many concerns about government surveillance. But learning how NSA policies have changed is almost as hard as it was before Snowdens revelations, lawmakers are finding.

The NSA is resisting congressional efforts, led by Sen. Ron Wyden (D-Ore.), to improve transparency around its policies regarding the introduction of back doors into commercial products. In response to these inquiries, NSA official Anne Neubergertold Reuters, We dont share specific processes and procedures. But the broad strokes of post-Snowden policies on other issues have been released, including the White House-initiatedVulnerability Equities Process, which governs the process by which government agencies decide whether to reveal or keep for national security surveillance purposes vulnerabilities in information systems and technologies.

Reuters reports that three former senior intelligence agency officials have said that the new NSA backdoor process requires them to weigh the potential fallout and to arrange for some kind of warning to the company if the back door is discovered by adversarial actors.

Backdoor access to devices matters to journalists who rely on commercial products to communicate with sources domestically and overseas especially when these back doors are in commercial encryption products that journalists use to offer sources greater protection. Documents released by Snowden revealed that the NSA worked with the Commerce Department to get a certain encryption standard accepted as the global default in part becausethe agency knew how to break itand access encrypted data.

In a highly publicized incident, Juniper Networks, a network management company, discovered that an outside actor had changed the encryption key to the NSA-designed algorithm its products incorporated. In July, Sens. Wyden, Mike Lee (R-Utah) and Cory Booker (D-N.J.), along with 13 House members, sent aletterto Juniper Networks, asking the company to reveal the results of its internal investigation. The companys response has not yet been made public.

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The Technology and Press Freedom Project at the Reporters Committee for Freedom of the Press uses integrated advocacy combining the law, policy analysis, and public education to defend and promote press rights on issues at the intersection of technology and press freedom, such as reporter-source confidentiality protections, electronic surveillance law and policy, and content regulation online and in other media. TPFP is directed by Reporters Committee attorney Gabe Rottman. He works with Stanton Foundation National Security/Free Press Legal Fellow Grayson Clary and Technology and Press Freedom Project Legal Fellow Mailyn Fidler.

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Seven years on, congressional oversight of NSA policies is still a slog - Reporters Committee for Freedom of the Press

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NSA president Cecilia Molokwane unfazed by Solidaritys legal threat over race regulations – News24

Posted: at 6:12 am

Netball South Africa (NSA) president Cecilia Molokwane seemed unfazed on Monday about the legal threat sent to her federation by trade union Solidarity over the sports race regulations.

Molokwane said the governing netball federation would not respond to trade union Solidaritys legal letter until their council met to discuss the issue.

On 6 November, Solidaritys Hennie Bierman addressed a letter to Molokwane saying NSAs race regulations were "irrational".

This came after the Mpumalanga Sunbirds were disqualified for failing to adhere to the regulations during their clash with the Kingdom Queens, in the Telkom Netball Leagues Division 2 final last month.

READ | 'No quotas in netball,' says Molokwane

"[We are] of the view that the rules are irrational, damaging to the sport of Netball, and most importantly, to the players, coaching and management staff," Bierman wrote.

"The TNL tournament rules are on its own ambiguous in that no rational benchmark is set to determine the target system."

Molokwane, however, said they had procedures to follow before they could engage Solidarity on their threat.

"You can take us to court and do whatever but at the end of the day we will still have to go to the very same council and say, Solidarity is taking us to court, what do we do?" she said.

"We cannot spend money on legal matters. We will only answer that letter only when weve gone to council.

"We are not going to jump because of them. We have procedures to follow. We have a constitution to follow and it should be a council resolution like many other legal things we have to deal with.

"We are not going to do anything and we havent even responded. We will take the letter to council and go through our procedures, as we did with the AfriForum issue."

Molokwane said she was concerned that people outside netball were trying to influence the sport in a negative way and that it was up to their own council to decide whether their system was fit or not for the sport.

"My concern is that there are people outside of netball thinking they can come into netball and threaten us, giving us legal letters and whatever," said Molokwane.

"The council of Netball South Africa will decide whether the rules suit them or not. At the end of the day, they are the people that play netball.

"They are the people with the players and they will decide what is best for the players in the country."

READ | Proteas air Black Lives Matter grievances

Molokwane added that NSA, which was under a barrage of criticism during the height of the Black Lives Matter conversation in South African sport, her federation was working hard to ensure redress.

However, she suspected foul elements were trying to destabilise the organisation ahead of the 2023 Netball World Cup in Cape Town.

"We are still trying to fix the wrongs and injustices of the past and we cant do that in a day," Molokwane said.

"People are expecting so many miracles from us, the executive, and I dont know why. Theres only seven of us but we are working and we do netball because of the passion and love we have for it.

"People are trying to destabilise us. Is it not a plan to make sure we dont host the World Cup?"

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Steeplechase of Charleston will decide jockey of the year title – Charleston Post Courier

Posted: at 6:12 am

Last year, Michael Mitchell and Jack Doyle staged a season-long battle for top jockey honors on the National Steeplechase Association circuit. They were due to settle the matter at the season-ending event at the Steeplechase of Charleston.

But at the final fence of the final race before Charleston, Doyle suffered a season-ending injury during a fall, a fractured jaw that required his mouth to be wired shut.

Mitchell, an Englishman who has ridden all over the world, faced a decision. He could come to the Steeplechase of Charleston and attempt to break a tie with Doyle atop the NSA jockey standings. Or he could stay away and share the title with Irish rider Doyle.

He chose the sporting gesture.

Going down to Charleston, I was putting myself into a position where I was taking away from someone else," Mitchell told This is Racing. "Ive won. Jacks won. The only other outcome would be winning a race and taking that title away from Jack. Thats what hit me."

It was the opportunity to take it away from someone else. I know how hard Ive worked to try to get that title. The amount you stress over rides, the amount you stress over your weight, you put everything in for that season. For it to come to the last meeting and have someone take it away from you, when you have it, thats tough. Thats what clinched the decision for me.

This year, the NSA jockey title again comes down to the Steeplechase of Charleston, set for Sunday at Stono Ferry Racetrack in Hollywood.

Mitchell has 11 wins in a season cut short by the COVID-19 pandemic, one victory ahead of Gerard Galligan, another Irish rider. Both are entered on mounts in Sunday's five races at Steeplechase of Charleston.

Like many jockeys, Mitchell is all too familiar with the dangers of his sport. He fell at the Queen's Cup in Charlotte in 2016, taking a kick to the head that resulted in a severe concussion, a broken cheekbone and fractured jaw. The jump-racing industry rallied to his aide through the American Steeplechase Injured Jockeys Fund.

Its part and parcel of a career, Mitchell told The Hunt Magazine. You just carry on.

The NSA's trainer of the year title already has been clinched by Hall of Famer Jonathan Sheppard, who has 16 wins this year.

The Steeplechase of Charleston is the final event on the NSA 2020 calendar, but is just the second of the year to allow spectators due to the pandemic. All of the NSA's spring events were canceled, including races in Aiken and Camden. Racing resumed with some spectator-less events in Virginia, and spectators were allowed last week in Pine Mountain, Ga.

The Charleston event, produced by The Post and Courier's parent company, applied to the S.C. Department of Commerce for an event exception, which was granted. Ticket sales have been limited to 50 percent of the 60-acre facilitys total capacity.

Among the safety guidelines in place for the event:

Each dedicated tailgate space will accommodate a group of up to five guests. Each party is encouraged to stay with their own party.

Ticketholders planning to join a tailgate group (but arriving separately) must use a ride-share service to the Stono Ferry track, as no guest parking will be available on site. All ticketholders will be part of a tailgate arrangement; the 2020 Steeplechase cannot accommodate single-ticket holders unattached to a tailgate party.

Guests will pack their own food and beverages to be enjoyed on race day; special catering services are available for hire for individuals or groups purchasing hospitality tents.

A wide-open vendor village will offer shopping and entertainment in a 100-percent touchless environment.

The event will feature double the number of sanitation stations and restroom facilities available last year, each of which will be cleaned regularly.

Masks will be required of all individuals any time they leave their dedicated space.

Reach Jeff Hartsell at 843-937-5596. Follow on Twitter @Jeff_fromthePC

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An odd divergence between India and its constituents – Mint

Posted: at 6:12 am

Currently, a divergence is observed between the aggregate of gross state domestic products (GSDPs) and the gross domestic product (GDP) of India. Though a thorough exercise is required to find out the reason, this difference has public policy implications for the country.

The divergence between the recorded output of Indias constituent states put together and the national output, which is taken to signify the size of the economy, gives rise to doubt if the GDP numbers put out by the Central Statistics Office (CSO) accurately capture the countrys economic growth. This divergence, if found true, could complicate assessments of the outcomes of various policy measures.

In 2019-20, as per available official data, Indias 20 states and Union territories (UTs) combined recorded growth of 6.9%, compared to national-level GDP growth of 4.2%. There have been reasonable differences between the two numbers in the past, and after the introduction the 2012 series of the National Accounts Statistics (NAS), this difference averaged 0.3 percentage points over fiscal years 2012-13 through 2018-19. The added-up GSDP growth of states/UTs has been consistently higher than that of national GDP during the last five years. But the growth difference of 2.7 percentage points in 2019-20 is not only abnormally high, it also suggests that the deceleration of growth at the sub-national level was not as sharp as the national number may suggest.

In India, states release only annual data of their GSDP and not quarterly data. Also, they do not provide GSDP figures with a break-down of consumption and investment. However, in their annual GSDP sectoral estimates, not only do they follow the same methodology of data compilation used by the National Statistical Agency (NSA), but the data is also discussed and vetted by the NSA. The comparable estimates of GSDP for 2015-16 to 2017-18 that the NSA prepared for the Finance Commission indicate that states estimates were quite consistent with these; specifically for 21 states, the ratio of one to the other varied between 0.99 and 1.01. Even the average annual growth at current prices of the NSAs comparable GSDP for 2015-16 to 2017-18 at 12% was a just a shade lower than 12.4% for the aggregated GSDP as compiled by the states themselves. This suggests that state estimates did not suffer from any methodological or estimation flaws. Further, the aggregated GSDP of states/UTs was also aligned with national GDP in 2011-12, the first year of the new NAS series, with the ratio of aggregated GSDP of sub-national constituents being 1.012. Aggregated GSDP growth after that was expected to show a similar growth trajectory. The gap of 2019-20, however, raises a question: Is there an emerging disconnect?

Before we look at the implications and ways of resolving it, it is important to look at two issues. The ministry of company affairs MCA-21 data for corporate output across all sectors and the data on railways, financial institutions, public administration and defence is allocated by the NSA to various states. Their respective directorates of economics and statistics incorporate that data in their overall compilation of GSDP. Each states share differs, and tends to exceed 60% of total GSDP for most. Hence, differences in GSDP growth can be inferred to arise from only that part of GSDP which is solely in the states domain. Often, discrepancies in GDP estimates (including sharp revisions) get attributed to the informal sector. The overall share in GDP of households and non-profit institutions serving households, which is the informal sector, has been around 45%, and this is almost equally distributed across agriculture, industry and services. Though there are differences in growth across those three broad sectors, industrial growth is significantly more robust from a data perspective.

Some questions arise in this regard. Has the issue of a sharp, persistent and secular deceleration of GDP growth been overplayed? The average annual growth of GSDP of Indias 20 major states/UTs during 2012-13 to 2018-19 was 7.15%. This measure of growth in 2019-20 at 6.89% was only a shade lower than 6.97% achieved in 2018-19, and showed a marginal deceleration from the trend medium-term growth. Seven of these states (six of them major), namely Tamil Nadu, Haryana, West Bengal, Sikkim, Bihar, Madhya Pradesh and Andhra Pradesh recorded higher growth in 2019-20 than the previous year. Could it be that Indian states are making a more accurate assessment of the growth situation on the ground? After all, considerable changes have taken place in the composition of the economy over the last five years, especially in the informal sector.

The methodology of the survey used by states to gather data has the approval of the National Sample Survey Organization (NSSO). The NSSO, however, lacks the expert capacity to supervise these surveys, and this makes data robustness hard to ensure. Should this bottleneck not be eased for us to obtain clarity?

If the states GSDP reflects the situation correctly, has Indias unorganized sector bounced back faster after demonetization (in 2016) and introduction of the goods and services tax (in 2017) than anecdotal data suggests? And if this is so, will it not be prudent to ensure that the sector gets access to capital as part of the countrys stimulus strategy? And finally, will the 15th Finance Commission use GSDP or CSO data in deciding on its devolution of resources to states?

R. Gopalan and Manak C. Singhi are respectively, former secretary in the department of economic affairs, ministry of finance, and former senior adviser at ministry of finance, Government of India.

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An odd divergence between India and its constituents - Mint

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Terrorism: Nigeria and USA committed to defeating ISIS, Boko Haram and others – NSA – Nairametrics

Posted: at 6:12 am

The Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) have been empowered to set up a Banking Sector Resolution Fund to ensure the safety of depositors funds and operate as a bridge bank to strengthen struggling banks back to health.

The CBN is expected to inject the sum of N10 billion ($26 million) or any amount that will be determined by its board into the fund every year.

According to a report from Thisday, this disclosure is contained in the Banks and Other Financial Institutions Act (BOFIA) 2020 which was just signed by President Muhammadu Buhari.

Section 74 of the BOFIA states that without prejudice to the provisions of the Asset Management Corporation of Nigeria (AMCON) Act, the Resolution Fund shall be domiciled with the central bank, and into which shall be paid all contributions and agreed levies.

According to the Act, the CBN Governor, Mr. Godwin Emefiele, with the approval of the board of the bank, is to determine the date of commencement of the fund.

This new arrangement is, however, separate to that of AMCON which was established to buy bad debts following the banking crisis that happened in 2009.

In the new act, each bank is expected to make annual contributions that are equivalent to 10 basis points of their total assets or a percentage that the CBN will still have to finalize.

The new regulation states, This will be based on the financial institutions total assets as at the date of their audited financial statements for the immediately preceding financial year published pursuant to this Act, and which shall be payable on the commencement date, and on or before the 30th day of April in each subsequent calendar year following the commencement date.

The funds are expected to be used to offset operating costs of a bridge bank, to pay the costs of transferring the whole or any part of the business of a bank, specialized bank, or other financial institution pursuant to a resolution measure.

The new act also states, The Resolution Fund shall not be subject to tax and accordingly, all monies accruing to, payments made from, and instruments and transactions relating to the Resolution Fund shall be exempt from all forms of taxes, levies, duties, charges, or imposition howsoever described.

Any annual levy paid by a bank, specialized bank or other financial institution in pursuance of this Act, shall be deductible for the purposes of the companies income tax of the paying bank, specialized bank or other financial institution under the Companies Income Tax Act.

A bank, specialized bank or other financial institution that is in default of payment of the levy imposed under this Act or any part thereof, shall be prohibited from paying dividends or other purpose of the Resolution Fund, it added.

This new regulation is expected to act as a relief to some smaller or medium-sized banks who sometimes struggle during the global financial crisis like the one that happened in 2016 or the one that hit that Nigerian financial system in 2009, which led to the collapse of some financial institutions.

Nairametrics had reported that President Muhammadu Buhari, some days ago assented to the Banks and Other Financial Institutions Act (BOFIA) 2020, with several new provisions to enhance the effectiveness of the countrys financial system.

It also strengthens the regulatory and supervisory framework for the financial industry and provides additional tools for managing failing financial institutions and systemic distress to preserve financial stability.

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Innovative retail concept Egg to launch in SA this November – Bizcommunity.com

Posted: at 6:11 am

A joint venture between Old Mutual Property and retail mavens Paul Simon (founder of Young Designers Emporium) and Arie Fabian (who built up the Fabiani brand) will see the introduction of a new multi-brand omnichannel retail concept in South Africa, called Egg.

Credit: Egg

Within 3 years, there will be three more Egg precincts at The Zone @ Rosebank and Bedford Centre in Johannesburg, as well as Gateway Mall in Durban.

Its approach is described as 'digital first, celebrated in the physical', and promises to combine a world-class in-store shopping experience with an innovative e-commerce platform and an interactive consumer app.

Of the 250 brands forming part of Egg's offering, many such as Swiitch Beauty, Tshepo Jeans, Selfi, Honest Chocolate and Unframed Ice Cream are small businesses led by talented local creators.

The new concept will provide SMMEs access to a full omnichannel platform including e-commerce that is managed by Egg on behalf of each vendor partner.

Below is a glimpse of some of the brands that will be showcasing their work with Egg:

Accessories Pina Jewels, Missibaba, Sealand, Rowdy, Pichulik, Black Betty, Dr Pachanga, FamkeBeauty Swiitch, Skoon, Glow TheoryFood Potluck Club, Sheckter's Raw, Unframed Ice CreamFashion Orphan Street Clothing, AKJP, Maison Mara, Skhanda World, Artclub and Friends, Ogun, Float, Shelflife, Stiebeuel, Iconic Black, New Balance, Puma, Converse, Lily Label, Selfi, Unknown UnionLiving Haus by Hertex, The Chairman Home, The Tshirt Bed Co Wellness Wazoogles, Honest Chocolate, KURO-B, Nanuki

The first Egg store in Cape Town will occupy the space previously held by Edgars on the first and mezzanine levels of Cavendish Square.


Innovative retail concept Egg to launch in SA this November - Bizcommunity.com

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JPG on board as Airfields progresses – Place North West

Posted: at 6:11 am

The Airfields project occupies part of the former RAF Sealand base

12 Nov 2020, 14:30

Structural and civil engineering firm JPG Group has been appointed to deliver phase two enabling works at the mixed-use Airfields project in Deeside.

JPG has been involved with the wider Northern Gateway project for six years, advising on infrastructure and masterplanning during phase one. The Northern Gateway, which sits within the Deeside Enterprise Zone, comprises three elements: the former RAF Sealand South Camp, RAF Sealand East Camp, and the former Corus steelworks. .

The Airfields, which is being advanced by Praxis, is within the South Camp plot, and is billed as having 140 acres available for immediate development. B8RE is instructed as sole agent on commercial space at the site.

Initially, JPG advised on 1,500m of flood defences from the River Dee with the creation of new watercourses through the site, and provision for first part of the Welsh Government-funded spinal road to unlock the Airfields site for development including a residential area and roadside retail.

Countryside Properties in now on site delivering 283 homes as a first residential phase, billed as Dutton Fields of these, 99 homes are built in partnership with Sigma as private rented, and 28 homes are classed as affordable. .

Chris Harding, managing director at JPG Group said: The site is the former RAF Sealand South Camp which when we first became involved had immediate flood threats and very minimal access to existing key infrastructure such as power and drainage.

As the projects lead consultant our role has been critical in advising the client on viability and economic development potential. We are serving the project with experts from our teams in Strategic Land, Infrastructure and Geo-Environmental Engineering. We are both designing the infrastructure and simultaneously identifying best development potential for interested parties.

The wider Northern Gateway site benefits from outline planning consent for up to 4m sq ft of industrial and commercial accommodation, including 290,000 sq ft of roadside, retail, leisure, hotel, business and supporting uses plus 1,325 new homes.

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Big Tech Execs and Bitcoin: Skype Cofounder Keeps Personal Wealth in Crypto, Intercom Chairman ‘Firmly Jumps on the Bitcoin Wagon’ | News – Bitcoin…

Posted: at 6:10 am

This week two well known tech executives revealed they have been dabbling in bitcoin and other cryptocurrencies. In a recent interview, Skype cofounder Jaan Tallinn detailed that he held bitcoin and ethereum in his personal finances, while the Intercom cofounder Eoghan McCabe tweeted on Sunday that hes jumped firmly onto the bitcoin wagon.

In 2020 a number of popular tech executives and CEOs from giant firms have revealed they hold a fascination for cryptocurrencies like bitcoin and ethereum. On Friday, the cofounder of the telecommunications application Skype discussed a couple of donations he made in the past leveraging ethereum and bitcoin. Skypes cofounder Jaan Tallinn sent 350 ETH ($158k) to the London-based organization Faculty AI and in March 2020, Tallinn donated 50 BTC ($850k) to the group.

Faculty AI won $800k from the U.K. Home Office in order to develop an artificial intelligence (AI) system that detects terrorism through social media. During his interview, Tallinn explained that the reason why he donated cryptocurrency to the organization is because he keeps a majority of his wealth in crypto assets.

He opted to donate the crypto directly because if he cashed out the digital assets he would be liable for capital gains. According to the recent interview, Faculty AIs annual accounts note that the company sold roughly $144k from the stash of ethereum in 2019.

Following the interview with Tallinn, another well known executive told his Twitter followers on Sunday that hes jumped into the bitcoin space. On November 15, 2020, the chairman and cofounder of Intercom, a well known American software firm, tweeted about the decentralized crypto asset bitcoin. Intercoms Eoghan McCabe disclosed he is holding bitcoin after messing around with the digital currency for years.

I would like to announce that after years of dabbling, Ive jumped firmly onto the Bitcoin wagon, McCabe tweeted. In a tweet that followed, McCabe noted that hes been listening to the Pomp Podcast and one in particular that features the Bitcoin evangelist Robert Breedlove. Mad love for all the Bitcoin freaks, McCabe added in another tweet. A great number of bitcoiners welcomed McCabe into the space, and a few individuals told him that he was still in the early adoption phase of bitcoin.

The Tallinn and McCabe news follows a number of prominent executives getting into the cryptocurrency space and discussing the benefits of bitcoin in 2020. Executives like billionaire Stanley Druckenmiller, the Bond King Jeffrey Gundlach, the well known fund manager Bill Miller, billionaire investor Paul Tudor Jones, and even the actor Kevin Hart jumped on the bitcoin wagon this year. Alongside this, the U.S. Senator, Cynthia Lummis, sees a lot of promise when it comes to the innovation provided by the crypto economy.

Even the traditional crypto naysayers are starting to discuss bitcoin in a more positive way. Former bitcoin doubter JPMorgans recent analysis shows institutional interest has been moving from gold exchange-traded funds (ETFs) to bitcoin. The infamous BTC hater, Nouriel Roubini (Dr. Doom), admitted that BTC might be a store of value in a recent interview with Yahoo Finance. With the way things are going, its likely a whole lot more popular tech and investor luminaries will be joining the cryptocurrency revolution. And maybe some former haters as well.

What do you think about Skype cofounder Jaan Tallinn holding most of his personal wealth in crypto and the Intercoms chairmans recent plunge into bitcoin? Let us know what you think about this subject in the comments section below.

Image Credits: Shutterstock, Pixabay, Wiki Commons

Disclaimer: This article is for informational purposes only. It is not a direct offer or solicitation of an offer to buy or sell, or a recommendation or endorsement of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.

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Disrupting the disrupters: China is slamming the brakes on Big Tech – Sydney Morning Herald

Posted: at 6:10 am

The unease regulators and politicians have about the big tech companies range from their market power, to the vast amounts of sensitive consumer data they hold, to their impacts on democracies and societies to their destabilising of pre-existing orders.

In the US both Republicans and Democrats, albeit for different reasons, have been increasingly hostile to the mega-techs, threatening not just more regulation but anti-trust actions to break them up.


In China, the response has been to impose regulations on its tech companies that treat them more like traditional companies and institutions.

The dilemma for regulators and legislators is that the tech-based disrupters are driving innovation and consumer benefit in a tide of creative destruction of the established order that is forcing the incumbents to become more innovative and dynamic themselves. Its a productive process.

The flip side of that, however, is that it is destabilising and destructive and is occurring on a landscape tilted heavily against the incumbents.

Nowhere is that more evident, or the stakes higher, than in fintech, where the traditional and heavily-regulated banking system is being progressively unbundled by new unregulated or, at best, very lightly regulated non-bank players. Thats been increasingly the case since the global financial crisis and the dramatic increase in the burden of regulation on traditional financial institutions.

In an economy as tightly controlled as Chinas, of course, the antipathy to disruption and the ability to act decisively is somewhat greater than it is in most Western economies.

There has been explosive growth in the non-bank, or shadow-banking, sector since the GFC as new players without the capital and liquidity requirements of the regulated institutions and, with regulated access to their data, are eroding their traditional dominance.

The growth of the mega-techs is also raising a long-term question mark over the ability of the regulators to maintain the stability of financial systems and governments ability to protect consumers, protect their data, implement their own monetary policies and police money-laundering, cybercrime and tax evasion. Theres also the small matter of the tax they pay, or dont pay.

So far the authorities have tended to have a laissez-faire stance, seeing more benefit in the innovation and disruption than downside. That now, however, appears to be changing in line with the sheer scale and global market power the biggest of the tech groups have achieved.

Perhaps it isnt surprising that China, given the authoritarian nature of its governance, has been among the first to react.


While the external focus of the suite of new regulations has been on its impact on Jack Mas Ant Group and its now-aborted IPO, they apply far more broadly and, rather than simply responding to the imminence of Ants IPO (or, as some have suggested, inflammatory comments by Ma in the lead-up to its launch) have been years in the making.

China has special concerns about fintechs and shadow banking more broadly. For at least the last four or five years it has been showing increasing angst about the growth in its non-bank financial sector, the rise, and rise, of the levels of leverage in its household and small business sector and the relationship between its banks and non-banks.

Chinas banks have used off-balance sheet lending to shadow banking institutions to circumvent their own regulation.

Last month Ma, inadvertently perhaps, put the issue into stark relief when he described Chinas banks as "pawn shops" because they required collateral and guarantees instead of using "big data" and were risk-averse.

China has proven to be less accommodating to disruptors than some of its Western peers. Credit:Bloomberg

Ant Group, spun out of Mas Alibaba in 2014, has the biggest mobile payments app in China, offering credit and unsecured micro loans through Alipay. Between Ant and Tencents WeChat Pay, the two companies control about 80 per cent of Chinas online payments. Ant has more than a billion users.

China, like regulators elsewhere, sees tech companies offering banking services and, unlike most other jurisdictions to date, has decided to regulate them like banks.

Ants model means that it originates loans but keeps only tiny fractions of them about two per cent on its own balance sheet. Its co-funders are banks and other institutions and securitised debt investors.

China now proposes that all online micro-lenders like Ant and there are hundreds of them in China should provide at least 30 per cent of the funding themselves. It plans to cap the rise of individual loans and impose loan-to-income ratios. Lenders will need special permission to operate outside their provinces.

For Ant, and others with similar models, that probably means at least trebling the amount of capital it has to hold against each loan and therefore a dramatically lower return on its capital.

Thats a significant change to what had been a very capital-light model but one that echoes, to a lesser degree, the capital requirements and leverage restrictions that banks have to meet.

Chinas crackdown doesnt just impact online lenders. It is also considering rules that would address anti-competitive and monopolistic behaviour, the use of consumer data, big tech alliances and predatory behaviours involving subsidised below-cost services.


Alibaba has a cloud services business that is generating massive losses as it tries to establish market dominance. As the mega-tech companies diversify their offerings that kind of cross-subsidy from exceptionally profitable activities to loss-making businesses to drive out competitors and create new dominant positions isnt uncommon.

Some of the proposed new rules would apply to Alibaba and Ant and the other big Chinese tech companies but they would be economy-wide and are not out of step with the discussions and debates occurring within market economies in the West.

In an economy as tightly controlled as Chinas, of course, the antipathy to disruption and the ability to act decisively is somewhat greater than it is in most Western economies.

There will, however, be a tipping point in other major economies where the discussions shift more heavily from emphasising competition and innovation to the of disruption and dominance if unregulated mega-techs are allowed to grow unchecked. That moment is looming.

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Stephen is one of Australias most respected business journalists. He was most recently co-founder and associate editor of the Business Spectator website and an associate editor and senior columnist at The Australian.

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Disrupting the disrupters: China is slamming the brakes on Big Tech - Sydney Morning Herald

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Obama wishes he had been tougher on China, labels Big Tech liability protections ‘untenable’ – Fox Business

Posted: at 6:10 am

Rep. Devin Nunes, R-Calif., on Adam Schiff, the presidential race and censorship by media and social media companies.

Barack Obama has called tech company liability protections untenable and lamented not taking a tougher stance against China during his administration.

In an interview with the Atlantic, Obama reflected on his tenure and the aftermath of his time in the White House. He spoke about how he allowed the circumstances surrounding his election to influence his decision making more than he liked particularly regarding the economy and China.

One of the things I was reminded of in writing the book was just how many of my earliest choices were premised on the very specific circumstances of being a global financial meltdown, Obama said, noting that he wasnt a knee-jerk anti-trade guy, but that he allowed China to get away with more than he would have had he not needed help during a global recession.

And if we hadnt been going through a financial crisis, my posture toward China would have been more explicitly contentious around trade issues, Obama added. But I couldnt have a trade war in 2009 or 2010.

A trade war with China has been the centerpiece of President Donald Trumps foreign policy over the past two years a policy that succeeded in reducing short term trade deficits, but then led to greater overall trade imbalance, according to the Wall Street Journal.

While Obama could wax philosophical about what he might have done, he also turned his attention towards what needs to be done: namely, he spoke of the liability protections around tech companies, calling them untenable.


Those protections have come under sharp scrutiny in recent months as information control became a central issue in the U.S. presidential election. Companies such as Twitter started to flag comments that they deemed misinformation or unproven claims, drawing outrage from some circles over what many deemed outright censorship.

Tech companies have testified multiple times before Congress now, with executives from Apple, Google, Facebook and Amazon weighing in on the federal law known as Section 230, which protects social media platforms from liability for the content users post.

Former President Barack Obama speaks at a rally as he campaigns for Democratic presidential candidate former Vice President Joe Biden, Monday, Nov. 2, 2020, at Turner Field in Atlanta. (AP Photo/Brynn Anderson)

Many see the rule as outdated, particularly as the companies gather increasing influence due to their reach, but some tech executives, such as Mark Zuckerberg, believe that it is necessary to update the law, according to the Washington Post.

Obama specifically took issue with the way that social media has helped to spread disinformation at a turbocharged pace, though he doesnt hold them ultimately responsible.

This predates social media. It was already there, Obama said. The degree to which these companies are insisting that they are more like a phone company than they are like the Atlantic,I do not think is tenable.


They are making editorial choices, whether theyve buried them in algorithms or not, the former president said. The First Amendment doesnt require private companies to provide a platform for every view that is out there.

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Obama wishes he had been tougher on China, labels Big Tech liability protections 'untenable' - Fox Business

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