Category Archives: Big Tech

When big technology companies start to expand into different industries, they are quick to be labelled as disruptive. In the financial services sector, the circulating rhetoric has been that Big Tech is coming into the industry as a unilateral force to compete with banks.

The industry tends to talk about this kind of big tech threat as one overarching problem, and I think thats really the wrong characterization, Kate Drew, director of research at CCG Catalyst told Tearsheet.

Big Tech is a nickname given to the five biggest technology companies in the world: Apple, Google, Facebook, Amazon and Microsoft. While Microsoft just recently announced its first consumer fintech move by adding BNPL into its browser, the other four are all more established players in the space.

The sheer size and capabilities of these companies can be intimidating, as is their advantage of having an existing user base of millions of people to offer banking products to. However, the oftentimes overlooked factor is the underlying strategy behind their expansion which, upon a closer look, suggests that direct competition with banks is not really on their main agenda.

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We have no intention of becoming a bank: Is Big Tech really a threat to banks? Tearsheet - Tearsheet

It's not immediately clear where Trump might have gotten the $1 billion pipeline to fund his venture, since Reuters points out that investors aren't too keen to associate with him, particularly after his supporters launched a deadly attack on the U.S. Capitol on January 6. Still and all, the money allows him to move ahead with plans to launch a social media platform in early 2022, followed by a video-on-demand subscription service that is meant to provide entertainment, as well as news and information.

But it's still not clear whether the company is in a position to make its target launch date, even if that's meant to happen next year. While Trump Media and Technology Group originally said they would send out an invitation-only beta version of its new social media site in November, CNBC points out that we've seen no official announcements that the platform is actually online except for an early test site that almost immediately fell victim to internet pranksters.

While tech companies are known to let deadlines come and go, the business network pointed out that the November Invitation-only launch was critical because investors needed to know that Trump's tech company was in a position to deliver. For now, all investors have is the promise of a conservative digital ecosystem that aims to entertain and inform a niche audience.

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Donald Trump Says This 'Important Message' Is Being Sent To Big Tech - The List

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About the author: Susan Ariel Aaronson is research professor of international affairs at George Washington University, where she directs the Digital Trade and Data Governance Hub.

At the behest of the U.S., representatives of 100 nations will gather online on Thursday and Friday to examine how they can sustain democracy. The Summit for Democracy has a packed agenda but ignores a major threat: Firms in the U.S. and elsewhere use large troves of personal data to manipulate our behavior, which is directly and indirectly endangering our autonomy, human rights, and democracy. This threat to democracy was and continues to be made in America, and Americas allies know it.

Americans developed, funded, and are perpetuating a new economic sector built on personal-data analysis. In return for free services, users grant firms such as Google, Amazon, and Facebook control of their shared personal data for use and reuse. These firms collect and monetize this data to create new products and services. They also sell their analyses and at times data sets to a wide range of governmental and corporate customers. Harvard scholar Shoshana Zuboff calls these practices surveillance capitalism, because these firms repackage personal data as prediction products for customers who want to learn how we think, what we will do in the future, and even how we vote. These practices undermine political and social stability. If individuals can be easily manipulated, whether through ads or with divisive content, they are less able to effectively participate in democracy and trust their fellow citizens.

The business model also poses an indirect threat to democracy. Firms and individuals can mix troves of personal data with other data sets to reveal information about a polity or society, from the level of trust to troop movements. This dependence on personal data poses a multilayered threat to democracies worldwide.

The public is concerned about these practices. In 2019, the Pew Research Center found that many people feared that their data is being used without their consent and are concerned that firms might use their clients personal data to discriminate against and manipulate them. But at the same time, users are unwilling to quit these firms, because they (and their networks of friends, relatives, and colleagues) depend on them.

Some firms appear to be reducing their dependence on these business practices. Apple, for instance, is using transparency to empower consumers to avoid apps that misuse their personal data. In November, Facebook said it will shut down its Face Recognition system. Users who opted in (accepted) facial recognition in will no longer be automatically recognized in photos and videos. The company, which now goes by Meta, will delete more than a billion peoples individual facial recognition templates until regulatory policies clarify how the company can use such data. Thats a start, but it doesnt change the bigger picture: Firms like this continue to undermine democracy through their exploitation of personal data. The U.S. government recognizes the threat. In its 2021 report, the U.S. National Intelligence Council warned that in the future, privacy and anonymity may effectively disappear by choice or government mandate Real-time, manufactured or synthetic media could further distort truth and reality, destabilizing societies at a scale and speed that dwarfs current disinformation challenges.

U.S. policymakers are divided as to how to address this problem and have focused their efforts on a personal data protection law and on reducing these firms monopoly power. But they have not tackled the business model head on for several reasons. First, the pandemic underscored global dependence on the biggest tech firms. Second, the U.S. government relies on these same firms for expertise, research, products, and services in areas from nanotechnology, artificial intelligence, extended reality, the internet of things, to quantum technologies, autonomous vehicles, and beyond. Not surprisingly, some officials are concerned that further regulation could weaken these firms ability to innovate, in turn reducing U.S. competitiveness and defensive readiness. (European officials have similar concerns.) Nonetheless, in October 2021, the Department of Justice, joined by 11 states, initiated a federal antitrust suit against Google alleging abuse of its online search monopoly. The Federal Trade Commission filed a lawsuit against Facebook for what its allegedly anticompetitive actions, joined by a suit from 48 attorneys general.

Given these different perspectives, the U.S. is sending mixed signals to its allies, including those it is gathering online this week. On one hand, the U.S. is trying to foster international cooperation to rein in these companies. It is working with the European Union on a Trade and Technology Council, and a broader coalition of allies on a shared approach to competition policies and data governance through entities such as the OECD and the G7. And Congress is trying to pass a national personal data protection law.

But the U.S. government is also actively trying to weaken regulation of these firms and their practices in other countries. For example, Reuters reported in November that U.S. government officials have argued against the EUs draft rules, which are designed to create more competition and facilitate data portability. The U.S. allegedly argued that requiring U.S. tech giants to share information with rivals could risk companies intellectual property and trade secrets. The U.S. also tried to water down the U.K.s approach to personal data protection. Finally, while Congress holds hearings on these firms monopoly power, on data brokers and anticompetitive practices, it has done little to incentivize these firms to rethink their use of personal data or to examine how these practices may indirectly or directly affect human agency and democracy as a whole.

There seems to be little chance that this weeks summit will resolve any of these concerns. The White House had planned to roll out a new coalition in support of a free and open internet on the sidelines of the summit. But that plan was apparently pulled at the last moment, following substantialpushback from leading digital rights groups, Protocol reported.

Americas muddied approach should end now if we want these firmsand democracyto flourish. Congress must pass laws that require personal data to be protected from misuse and hold firms to account for inadequate cybersecurity. We must incentivize the data giants to find new ways to fund their services. Finally, we need to build on the long history of global cooperation to solve cross-border threats. The Biden administration should begin that brainstorming this week with its allies.

Guest commentaries like this one are written by authors outside the Barrons and MarketWatch newsroom. They reflect the perspective and opinions of the authors. Submit commentary proposals and other feedback toideas@barrons.com.

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Biden's Summit for Democracy Won't Address Big Tech's Threat to Personal Freedom - Barron's

A group of New Zealand news publishers has applied to the island countrys competition regulator for the power to engage in collective bargaining with Google and Facebook.

The Kiwi journalism industry is one of several around the world that is seeking to follow the example of Australia, where regulatory changes have enabled news companies to strike lucrative cash-for-content deals with the tech giants.

In New Zealand, according to one publisher spoken to by Press Gazette, the need for such deals is made particularly urgent because of the situation in Australia. Duncan Greive, founder and publisher of the Spinoff, explained that his outlet and others compete directly with Australian news companies that are benefiting from big tech payments now.

As in Australia, the tech giants are likely to lobby against any regulatory intervention in this area.

Facebook or Meta, as it is now known at a corporate level has already come out fighting in response to the application. In a submission to the Commerce Commission, Meta claimed that news is highly substitutable on its platforms. The company made the same claim in Australia during Canberras news media bargaining code consultation.

The New Zealand publishing groups application to the Commerce Commission makes dozens of references to the Australian Competition and Consumer Commission (ACCC), which was the architect of new legislation in Australia.

New Zealands government, led by Jacinda Ardern, does not appear to have immediate plans to introduce a version of Australias news media bargaining code.

But media minister Kris Faafoi recently called on Google and Facebook to engage with New Zealand media entities to reach meaningful, fair and equitable arrangements for content usage.

Publishers believe that collective bargaining power would help them secure such deals. Currently, New Zealand competition laws prevent publishers from banding together.

The application for collective bargaining was made to the Commerce Commission by the News Publishers Association of New Zealand (NPA), a membership organisation that includes New Zealand Herald publisher NZME, Stuff and Allied Press.

As well as negotiating for its members, the NPA said that it would welcome participation from other Kiwi news publishers. The Spinoff, run by Duncan Greive, was listed as a non-member outlet that has already shown interest in collaborating with the NPA.

Since the application was filed on 25 November, New Zealand broadcasters have written to the Commerce Commission suggesting that they too should be allowed to be part of the collective negotiation. They would be excluded under the original wording of the NPAs application.

The NPA-led group is specifically seeking ten-year authorisation to collectively negotiate with Google and Facebook to secure fair compensation to individual publishers for the content the participants produce that appears on [the] digital platforms.

The NPA believes it needs these powers because there is a symbiotic (albeit significantly unbalanced) relationship between Google and Facebook known collectively as the duopoly because of their dominance of the online advertising market and the countrys news media.

Approximately only ten cents in every dollar spent on digital advertising in New Zealand goes to New Zealand news producers that invest in producing journalism and news content, the NPA said.

This lack of fair and appropriate remuneration to [news publishers], in particular in light of the significant reductions in advertising revenue as a result of successive Covid-19 lockdowns, is one of the factors imperilling the viability and sustainability of the [news media] sector.

The NPA further noted that publishers are now having to use editorial resources tocombat disinformation/malinformation circulating on platforms associated with Google (which owns YouTube) and Meta (Facebook, Instagram, Whatsapp).

The group believes that collective negotiation power will help publishers achieve more efficient and effective negotiations with the tech giants, and may enable members to become more informed and improve their input into contracts due to members benefiting from greater levels of resourcing and expertise available.

The application also stated that joint negotiations would help benefit smaller regional and community titles that might otherwise not have the resources to strike deals.

Collective bargaining reform was a key component of Australias code. It is also being sought by publishers in other countries including the US (through the Journalism Competition and Preservation Act) and Canada (which is expected to pass its own Australia-style legislation in the near future).

The Australian rules have enabled different organisations including Country Press Australia and the Public Interest Publishers Alliance to negotiate with Google and Facebook on behalf of small publishing members.

To better understand the dynamics at play in New Zealand, Press Gazette spoke to Duncan Greive, the founder and publisher of the Spinoff, which is not an NPA member but is part of the application.

Greive says the Spinoff has benefited from significant financial support from Facebook through the Accelerator programme. But he does not believe these relationships should stop the New Zealand media from pursuing cash-for-content deals with the tech giants.

Greive also explains that the situation in Australia where many publishers have already signed licensing deals with Google and Facebook has created a competitive issue for the Kiwi media.

Why were doing this now is because of what happened in Australia earlier this year, he said. There is a close economic relationship between New Zealand and Australia we share a huge amount both culturally as well as legally. Fundamentally, there are half a million New Zealanders equivalent to 10% of our population who live in Australia.

He suggests that the tech companies would like what happened in Australia to be unique to Australia. But you cant do that. You cant do that to a much bigger economy that is so closely linked to ours pour hundreds of millions of dollars into it and not expect that to have an impact here.

Some of the people who got those settlements most notably, the Guardian Australia are literally on the ground here. They have small but growing teams and are actively selling memberships and audiences here. So the idea that this is a microcosm off to the side, and has no relationship to New Zealand, just doesnt stand up.

A Press Gazette investigation into Google News Showcase recently reported that Guardian Australia had signed a Showcase-related deal with Google worth an estimated AU$5m ($3.6m/2.7m) per year. Australias largest news companies News Corp, Nine, Seven West and ABC are each thought to have signed deals worth tens of millions of dollars a year.

Australia and New Zealand are basically one big economy, says Greive. You cant just do it for those six states and then just not do it for New Zealand.

Our journalisms suffering enough without having the Murdochs and the Nines and Seven Wests with big war chests, saying, You know what? We need these kind of journalists [in New Zealand], take them over.

Thats just not sustainable. Once you do it in Australia, you have to do it in New Zealand. You can say we dont want to do it anywhere else in the world and good luck to you but you cant do it in Australia and not New Zealand.

Beyond the Commerce Commissions judgment on his groups application for collective bargaining, Greive is confident that his country and others will in time pass legislation similar to Australias news media bargaining code.

I think its inevitable its coming everywhere, he says.

We have a long history of looking at Australian legislation and saying something much like that could be created here.

It is not clear how long the Commerce Commission will take to decide on the NPA groups application. After the filing was made on 25 November, a consultation period was launched.

Within days, broadcasters Television New Zealand, Radio New Zealand and Discovery each filed suggested amendments to the application that would allow them to become part of negotiations with Google and Facebook.

On Wednesday 8 December, Meta also filed a response to the application, challenging several claims made by the NPA.

Metas arguments mirror many of those it made in the run-up to Australia introducing its news media bargaining code. The tech giant claims news represents a very small proportion of content that people see when they use Facebook. It told the Commerce Commission that news is highly substitutable for Facebook.

Meta went on to say that, because the company recognises that news is a public good, it has launched several financial initiatives including the Accelerator programme for the benefit of publishers.

Meta specifically referenced the success of the Spinoff, which has been the beneficiary of Accelerator funding, in its submission to the Commerce Commission. (Greives response to this: They seem to think theres a contradiction in our participation in and enthusiasm for the Accelerator programme, which I think fundamentally misunderstands what were talking about. I.e. training and intermittent and contingent grants, while very helpful, have only a limited impact on our ability to meet the boring realities of paying the humans to create journalism.)

The tech company suggested it was inappropriate for the NPA to reference the findings of Australias ACCC. Wholesale comparisons to Australia, without detailed consideration, are not appropriate, it said.

Meta also challenged the NPAs reference to the cost that publishers rack up by fighting falsehoods that spread on social media.

We note that the application refers to costs that are borne by New Zealand publishers to counter misinformation on our services, Meta said. To assist the NZCC in its consideration of the application, we have outlined the considerable work we do to combat misinformation online.

This includes policies and proactive detection technology to prohibit and remove fake accounts and harmful health misinformation, increasingly before people are exposed to it. It also includes our investment in third-party fact-checking and systems to reduce the distribution of content rated as false by our fact-checkers, and products to inform New Zealanders about misinformation and provide more context around the content they see on Facebook.

The New Zealand media is likely to take issue with this characterisation.

In his interview with Press Gazette, conducted before Metas document was filed, Greive said: We had a massacre our worst act of modern terrorism livestreamed on Facebook.

We, two weeks ago, had a huge, thousand-strong march on Parliament of anti-vaxxers who have been radicalised on social media saying that they want to kill politicians and kill journalists.

I feel like thats material to this case.

Photo credit: REUTERS/Mike Hutchings

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New Zealand publishers want collective bargaining rights for big tech talks - Press Gazette

Nvidia has been trying to buy Arm for $40 billion for over a year now but this week, the acquisition was hit with its biggest roadblock yet. On Monday, the Federal Trade Commission laid out the case to stop the merger from going through, arguing that the deal would stifle competing next-generation technologies.

Its the most significant attempt to reign in Big Tech yet under Lina Khans term as FTC chair, so theres a lot at stake, both for the FTC and the electronics industry at large. Arm is a hugely important company; the companys chip designs touch hundreds of billions of devices, including CPUs and ISPs for modern cars, embedded chipsets for wearable and medical devices, smart home gadgets like thermostats and routers, and of course, smartphone and laptop processors. The question of who controls it will have massive implications for all of them and the FTCs case now seems like itll be the biggest barrier to the acquisition going through.

Nvidia already competes in at least some of the same fields as Arm licensees. The FTC and other regulators in the EU and UK are concerned that, because of that involvement, Nvidia could influence Arms future product development. Its particularly worried that Nvidia would use its control over Arm to advance its own interests in emerging markets like data centers and autonomous vehicles, instead of working to ensure that all the companies that use Arm designs to compete with Nvidia in those fields can continue to do so on an equal playing field.

Crucially, Arm doesnt actually make its own chips: rather, it sells both licenses for companies to design their own chips that use Arms architecture (like Apples M-series chips for Macs), in addition to selling entire CPU and GPU designs (like the Cortex-X1 CPU and Mali GPUs found in the Google Tensor and Samsung Exynos 2100). But Arms architectures which offer better power efficiency and customization options for device manufacturers have steadily become a critical part of the computing landscape. Its Arms technology, not the traditional x86 designs used by Intel and AMD, that has fueled the massive growth of smartphones, tablets, and other mobile devices over the past two decades.

The FTC makes its case by looking at three specific areas where Nvidia already licenses Arms technology: Nvidias advanced driver assistance chips and two types of data center chips. One of those data center chips is particularly important: the DPU-based (data processing unit) SmartNIC, a core component of data center networking infrastructure, which provides both processing (thanks to Arm cores) and network interfacing for secure cloud infrastructure. Nvidia thinks theyre going to be a big deal, setting up that DPUs are set to be the third pillar of computing infrastructure, alongside traditional CPUs and GPUs. And virtually everyone that makes DPU SmartNICs even Intel, the biggest x86 chip company around uses Arm technology.

Its a similar case for automotive vehicle assistance. Arms technology is used in virtually all the chips for enabling Level 2 and Level 3 assistive features in cars (which covers basic automated tasks like acceleration or lane changing while still having a human operator on standby). With the exception of Intel-owned Mobileye, every major chip in this field uses Arm including Nvidia.

There are a couple of things to note here. The FTC is being very strategic in its examples, choosing areas that have a clear impact on the broader tech industry. But these three licensing deals also represent a very small part of Arms business. As a SoftBank presentation from 2020 shows, its bread and butter is focused in mobile phones (where it dominates more than 90 percent of the market) and IoT application processors. On the automotive side, Arm claims to have 75 percent market share but doesnt distinguish how much of that is for infotainment systems versus the kinds of driver assistance applications that the FTC is concerned about. And its presence in data centers is virtually nonexistent: Arms technology has just a 5 percent market share there.

The FTC is making a broad case here that a combined Nvidia / Arm would be willing to make moves that would hurt its competitors that rely on Arms architecture or designs, because the profits it could generate from better succeeding in these markets would outweigh the losses from licensees. But its relying on very specific parts of the business, which seems to open the door for some kind of compromise that would spin off the conflicting parts of the business while allowing the bulk of the acquisition to go through.

In practice, that kind of compromise has been hard to achieve. According to The Information, Nvidia offered to spin out an independent licensing company for licensing out designs in an attempt to mollify regulators, but the plan failed due to concerns that Nvidia would still control Arms development of new products. So while Nvidia could try to divest itself of, say, Arms data center technology, thanks to the common architecture shared by Arms products, it would still be in charge of what kinds of features Arm would focus on to include in those chip designs.

The FTC also highlights the fact that Nvidia would gain access to Arms customer list and be privy to sensitive information that companies share with Arm. Nvidias ownership of Arm would fundamentally upend Arms status as a neutral partner and, at the same time, enable Nvidia to obtain access to its rivals competitively sensitive information. The regulatory group also notes that Arm licensees that compete with Nvidia might be less willing to work with the company to help further improve Arm, in addition to skewing future development of Arms products in directions that benefit Nvidia specifically, rather than the broader Arm ecosystem.

Of all the FTCs arguments, Nvidia seems most prepared for this one: back when the deal was first announced, Nvidia CEO Jensen Huang told the Financial Times he could unequivocally state that Nvidia will maintain Arms open licensing model. We have no intention to throttle or deny Arms supply to any customer. The company has since reiterated that the merger would boost competition, [and] create more opportunities for all Arm licensees and expand the Arm ecosystem.

This puts the FTC in a delicate position as it heads to court. But the specific examples that regulators are using to prove it are very specific and less integral to Arms overall business strategy than, say, concerns about competition for its major CPU and GPU products. After decades of relatively lax oversight, its hard to say how any antitrust case will fare in court so even the slightest weakness in the case could be fatal.

On the other hand, the FTC also doesnt necessarily have to win to block the deal. It just has to hold out long enough that Nvidia decides that the deal isnt worth the trouble, especially since Nvidias deal with current Arm owner SoftBank only gives the US chip company until the end of 2022 to clear regulatory approval.

Behind all of it is a very nervous electronics industry. Google, Microsoft, Qualcomm, and Tesla have all objected to the deal, and the concerns that Nvidia ownership could influence Arms development and stifle innovation are very real. The only question now is whether the FTC can make the case work in court.

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Nvidia's big ambitions could be its Achilles' heel in the Arm deal - The Verge

Big Tech platforms Meta Platforms Inc, formerly known as Facebook, and Google have been hit with a series of antitrust lawsuits by the U.S. federal government and states on charges they are operating monopolies and abusing their power.

Below is the status of the cases, as well as government probes of Apple Inc. and Amazon.com Inc.

Meta:

The U.S. Federal Trade Commission filed a new complaint against Facebook in mid-August 2021, adding more detail on the accusation the social media company crushed or bought rivals and once again asking a judge to force the social media giant to sell Instagram and WhatsApp. The agency did so at the invitation of Judge James Boasberg, who had said that its previous effort fell short. Facebook has asked for the lawsuit to be dismissed with prejudice.

Boasberg, however, threw out a related state lawsuit, saying the attorneys general had waited too long.

Four lawsuits against Google:

The U.S. Justice Department sued Alphabet Incs Google in October 2000, accusing the $1 trillion company of illegally using its market muscle to hobble rivals. A trial date was set for Sept. 12, 2023.

The government is preparing to file a second lawsuit focused on the companys digital advertising business.

A lawsuit by 38 U.S. states and territories accuses Google of abusing its market power to try to make its search engine as dominant inside cars, TVs and speakers as it is in cellphones. This was consolidated with the federal lawsuit for purposes of discovery.

Texas, backed by other states, filed a separate lawsuit against Google in December 2020, accusing it of breaking antitrust law in how it runs its online advertising business.

Dozens of state attorneys general sued Google on July 7, alleging it bought off competitors and used restrictive contracts to unlawfully maintain a monopoly for its app store on Android phones.

Justice Department investigates Apple:

This probe, revealed in June 2019, appears to focus on Apple Incs app store. Some app developers have accused Apple of introducing new products very similar to existing apps created by other developers and sold in the Apple Store, and then trying to banish the older apps from the store because they compete with Apples new product. Apple says it seeks to have only the highest-quality apps in the app store.

Federal Trade Commission on Amazon:

In its investigation of, the FTC is likely looking at the inherent conflict of interest of Amazon competing with small sellers on its marketplace platform, including allegations that it used information from sellers on its platform to decide what products it would introduce.

(Reporting by Diane Bartz in Washington; Editing by Lisa Shumaker, Matthew Lewis and Dan Grebler)

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How Big Tech Is Faring in U.S. Lawsuits and Probes - Insurance Journal

European ministers on Thursday green-lit their versions of two new, massive EU rulebooks to tame Big Tech and tackle illegal content online.

Economy ministers from across the bloc rubber-stamped common positions on the digital competition and content moderation laws known as the Digital Markets Act (DMA) and Digital Services Act (DSA), at a Competitiveness Council meeting in Brussels. The ministers' approval paves the way for the EU Council and Parliament to hammer out final texts next year.

The regulatory crackdown comes after years of revelations of excesses and harmful practices on Big Tech's online platforms, ranging from terrorist footage gone viral to massive sharing of child sexual abuse material and anti-competitive practices of some the most popular global platforms.

The new rules are also a key priority for policymakers in Paris. The French government takes over the presidency of the EU Council in January and is keen to clinch a final deal on the new laws ahead of the country's presidential election in April.

"Today is a very important, almost historical day," France's Digital Minister Cdric O said ahead of Thursday's discussion, calling the two draft laws "potentially the most important in the history of digital regulation, both when it comes to the economic side and content side."

Presented by the Commission in December 2020, the legal texts lay out rules to force tech companies to better police content on their platforms and to boost digital competition by limiting the sprawling power of tech giants such as Google, Apple, Amazon, Facebook and Microsoft.

Companies that would violate the new laws could face fines of up to 10 percent of their global revenues.

The final version of the two texts could be adopted as early as the first half of 2022.

We need these regulations and we have needed them for years now, Denmark's Minister of Industry Simon Kollerup told POLITICO ahead of the meeting. It is an important milestone in democracy to be able to take back power for the future of the societies we live in.

POLITICO breaks down what ministers will agree on at Thursday's meeting.

The Digital Services Act is a revamped version of e-commerce rules drafted over twenty years ago. It will lay out rules for how internet players manage content affecting everyone from small registrars managing websites' names to massive social media firms like Facebook and online marketplaces like Amazon.

The aim is to crack down on child sexual abuse images, terrorist content and dangerous products but also to force online platforms to open up the black boxes of how their technology functions.

What's new for Big Tech?

EU countries supported much of the Commissions initial proposal but clarified some rules, including specifically mandating internet giants to disclose publicly how many staff are moderating content and the languages they speak. Recent revelations by Facebook whistleblower Frances Haugen highlighted the lack of resources the social media firm devotes to tackling harmful content in languages other than English.

Officials in Council also added some new ideas. One is to force Big Tech to take measures to protect children through age verification and parental controls; another to ban the use of misleading or manipulative design tricks known as dark patterns to nudge users to give their consent to be tracked on platforms to get personalized recommendation of content.

Capitals also bolstered a rule for tech companies to notify law enforcement of their suspicions of a criminal offense, expanding the rule to cloud companies, which host troves of images.

What's in it for users?

Users of online platforms would also be given new rights, including that a platform should tell them if it restricted the visibility of certain posts or suspended monetary payments a boon to influencers and online "creators" that make a living from social media posts on sites like TikTok and YouTube.

Online marketplaces such as Amazon, AliExpress and eBay would also be forced to invest more efforts to check who is selling goods on their platforms a way to combat the spread of illegal and dangerous products online. Online buyers would get better access to redress.

Who will enforce the rules?

Countries' most drastic change to the text has been to empower the European Commission to hold Big Tech accountable, rather than authorities in Ireland, the EU country where most of the Big Tech firms have their European headquarters. Many countries including France and Germany have been frustrated with Dublin over its enforcement of the bloc's privacy law, known as the GDPR, against companies like Facebook.

When will this come into effect?

EU governments want to give tech companies a year and a half before the content moderation rulebook applies, instead of three months as initially proposed, meaning the DSA would be first applied in 2024 at the earliest.

The second part of ministers' agreement is on the EUs bid to rebalance the digital economy and temper the market power of platform giants under a new Digital Markets Act.

The bill would impose a series of prohibitions and obligations on so-called "gatekeeper" platforms firms that hold a lot of market power in the digital economy like Google, Amazon, Facebook, Apple and Microsoft.

How will they be 'reined in'?

These tech behemoths would be prohibited from combining personal data from different sources and bundle digital services. Users would also be granted the right to remove pre-installed apps on their devices.

What qualifies as a 'gatekeeper'?

A major sticking point in upcoming negotiations with EU Parliament lawmakers will be how many other, smaller firms get caught up in the scope based on where the EU puts the threshold to call a company a "gatekeeper."

The Commission wants the rules to cover firms with an annual turnover of at least 6.5 billion in the last three years in Europe and a market capitalization of at least 65 billion in the last financial year. A firm would also need to have more than 45 million monthly EU end-users and more than 10,000 yearly active business users in the EU to be considered a gatekeeper.

The French government, which will shepherd negotiations with the European Parliament on the plans in 2022, has favored that the rules target the largest players first and foremost.

The German government this week also called for the Digital Markets Act to focus on the "largest" gatekeepers, asking for the draft law's definition to be further narrowed down, in a diplomatic note seen by POLITICO.

The Commission meanwhile has a dozen firms in mind that would fall under the new rules.

Member states each have their own idea of how many firms will come under the scope, one EU diplomat involved in the talks said. We believe that there will be 11 companies that, as things stand, qualify as gatekeeper platforms.

How does Washington feel?

Not very happy. Such a narrow definition could anger the U.S. government, however, because the rules may disproportionately impact U.S. companies when compared to other regions.

How does France feel?

The French government is confident about finding common ground between EU nations.

"There still work to do in terms of refining the names of the platforms," France's Digital Secretary Cedric O told POLITICO on the sidelines of Thursday's Competitiveness Council.

"However there is a form of consensus for identifying the real gatekeepers," he added.

This article is part of POLITICOs premium Tech policy coverage: Pro Technology. Our expert journalism and suite of policy intelligence tools allow you to seamlessly search, track and understand the developments and stakeholders shaping EU Tech policy and driving decisions impacting your industry. Email [emailprotected] with the code TECH for a complimentary trial.

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Europe reins in Big Tech: What you need to know - POLITICO.eu

In a groundbreaking 2017 Yale Law Journal study, Amazons Antitrust Paradox, the legal scholar Lina Khan sized up the online giant.

Amazon is the titan of twenty-first century commerce, she wrote. In addition to being a retailer, it is now a marketing platform, a delivery and logistics network, a payment service, a credit lender, an auction house, a major book publisher, a producer of television and films, a fashion designer, a hardware manufacturer, and a leading host of cloud server space.

Let me be very clear: capitalism without competition isnt capitalism. Its exploitation.

The company, she continued, has positioned itself at the center of e-commerce and now serves as essential infrastructure for a host of other businesses that depend upon it, adding, Elements of the firms structure and conduct pose anti-competitive concernsyet it has escaped antitrust scrutiny.

That was then, this is now: In March, President Joe Biden nominated Khan to the Federal Trade Commission, or FTC. Opposition to her appointment was fast and furious. The Wall Street Journal published a half-dozen pieces opposing her nomination, including a July 5 editorial that dismissed her as a thirty-two-year-old academic who has no experience running anything.

On June 30, after Khan became chair, Amazon filed a petition asking that she recuse herself from any antitrust investigation, adjudication, litigation or other proceedings in which Amazon is a subject, target, or defendant. It said this was necessary because Khans prior statements create the appearance for her having prejudged facts and/or legal issues relevant to the proceedings. No action was taken on the petition; she has not recused herself.

Congress, the media, and the U.S. public are concerned about the ever-growing power of the Big Five tech companiesAmazon, Apple, Meta (Facebook), Google, and Microsoft. The recent revelations about Facebook made by whistleblowerFrances Haugen, a former data scientist for the company, give insight into just how insidious Big Tech companies can be in their efforts to manipulate market power in order to maximize profit. Her testimony before Congress fueled calls for the breakup of Big Tech companies.

In 2019, Senator Amy Klobuchar, Democrat of Minnesota, introduced the Monopolization Deterrence Actthat would give the U.S. Department of Justice and the FTC the authority to seek civil penalties for companies that engage in anti-competitive practices. Although it had strong Democratic support, the bill was never brought to the floor for a vote and died.

In October 2020, following a sixteen-month investigation, the House Judiciary Committee released a 400-page report on the challenges posed by Big Tech companies. And in June 2021, five bills were introduced in the House to reign in the tech behemoths.

From Amazon and Facebookto Google and Appleit is clear that these unregulated tech giants have become too big to care, said one of the bills sponsors, Representative Pramila Jayapal, Democrat of Washington State. On the other side of the political aisle, Representative Lance Gooden, Republican of Texas, said, Big Tech companies are stifling American innovation with their monopolistic behavior. Unfortunately, the Houses efforts seem destined to suffer the same fate as the Senate bill.

For more than a century, the United States has witnessed repeated efforts to break upif not outlawmonopolies, cartels, and trusts. The 1890 Sherman Antitrust Act and 1914 Clayton Antitrust Act led to the breakup of Standard Oil and other monopolies. While those promoting the current anti-monopoly efforts share much in common with earlier advocates, todays efforts face a very different economic situation.

One difference is that Lina Khan is now the FTC chair, and shes undertaking the monumental task of bureaucratic reform to meet the challenges posed by twenty-first century corporate capitalism.

Khan, thirty-two, was born in London to Pakistani parents and migrated with them to the United States when she was eleven years old. She is a former Columbia law professor who also served as legal director for the Open Markets Institute, a political advocacy group. She is the youngest person to be appointed FTC chair.

The FTC was established by President Woodrow Wilson in 1914. But since the 1980s, under the presidency of Ronald Reagan, it hasin the words of Matt Stoller from the American Economic Liberties Project, an anti-monopoly groupbeen defanged, to the point where economists [are] in charge and made it an agent of monopolists.

I agree with Matt, Sascha Meinrath of Penn State University told The Progressive.Reagan is an inflection point promoting the deregulatory era. The FTC adopted a policy to not unduly burden legitimate business and everything elsefostering competition, consumer protectionbecame subservient to it.

For decades, the FTC operated under a consumer welfare standard, focusing on anti-competitive practices that harmed consumers (i.e., pricing practices). The Big Tech giants are all creations of those shifts, Stoller told Politico. What Lina is doing is going back to the pre-1980s model.

On assuming office, Khan noted her priorities in a memo to her employees: American consumers, workers, and honest businesses depend on the Commission to champion a fair and thriving economy for all, and I am confident that we can deliver. One top priority, she added, is taking on a massive wave of proposed mergers and other forms of rampant consolidation.

Khan repealed an Obama-era policy that limited the commissions ability to challenge anti-competitive behavior. And she rescinded Trump-era guidelines favorable to vertical mergers that enable companies in the same industry that arent direct competitors to merge (e.g., AT&Ts acquisition of Time Warner or Amazons proposed acquisition of MGM Studios.)

Khan faces another, often overlooked challenge: an FTC culture fueled by the revolving door between regulators and the companies they regulate.

In a 2020 article, the tech news website Protocol noted that dozens of former commission lawyers now work for big and small companies across the tech industry. The publication found that of the nearly 700 lawyers and other employees who left the FTC between 2015 and 2018, at least forty now work for tech companies. At least seventy-two work for private law firms, and at least eighty-two hold other government jobs. Apple, for example, has at least three former FTC attorneys on its high-powered legal team.

Today, we are witnessing the reemergence of the old Robber Baron cartels. Standard Oil and Ma Bell have been replaced by Amazon, Apple, Facebook, Google, and Microsoft. Rockefeller, Carnegie, and J. P. Morgan have been superseded by Elon Musk, Mark Zuckerberg, Bill Gates, Larry Page, Jeff Bezos, and Warren Buffet. It is a transformation where nothing fundamental really seems to have changed; instead, its gotten worse.

In 2020, Applebecamethe first American company to be valued at $2 trillion; with the other big dogs (Google, Amazon, and Microsoft) topping $1 trillion valuations.

But Khans FTC has only a limited number of tools that can be deployed against Big Tech. She could pursue the August 2021 refilling in the U.S. District Court of the December 2020 antitrust suit against Meta, originally initiated by President Donald Trumps FTCtogether with a coalition of attorneys general from forty-eight states and territoriesto break-off two of its major acquisitions, Instagram (2012) and WhatsApp (2014).

Khan could also pursue some low-hanging fruitcases similar to its recent victory against Amazon over $60 million in tips that the company failed to pay Flex drivers. Or she could follow the advice of Stacy Mitchellco-director of the Institute for Local Self-Relianceand try to break up Amazon, Google, or Meta along business lines.

Khans options depend on whether the Democrats hold onto Congress in 2022 and Biden or another Democrat is re-elected in 2024. Otherwise, corporate interests and an increasingly conservative federal court system will constrain her efforts. For now, she has support from Biden, who argued, Let me be very clear: capitalism without competition isnt capitalism. Its exploitation.

The big question in my mind is whether the FTC is going to wield the power that it was granted in 1914, says Meinrath.I would argue that Lina Khan is much more likely to wield the powers the agency has than has been done in recent history.

Original post:

How the Federal Trade Commission Can Break Up Big Tech - Progressive.org

In todays ExchangeWire news digest: The Irish DPC are slapped with a corruption complaint filed by noyb; Apple and Google could face fines of 2% under new Korea laws; and Niantic receive a hefty USD$300m (224.5m) investment from Coatue.

The Irish Data Protection Commission (DPC) has come under fire, having been accused of corruption and even bribery in a complaint filed by the non-profit organisation noyb. The organisation are alleging that the Irish commission have presented them with an ultimatum in the form of a letter: sign an illegal NDA within one working day or be removed from the Facebook procedure. noyb have declared this quid pro quo as procedural blackmail.

Vienna-based noyb filed the complaint to the Austrian Office for the Prosecution of Corruption. Subsequent to the filing, noyb published the letters they received, describing the request as unlawful: only if we shut up, the DPC would 'grant' us our legal right to be heard. The writing also shows the DPC demanding the not-for-profit to take down existing documents relating to the draft decision, once again without a legal basis.

It has been reported that Facebook (now Meta) would significantly benefit from a signed NDA, as new documents could compel EU regulators to find their GDPR bypass illegal. This would result in major implications for the tech giant if regulators were to declare their use of personal data since 2018 unlawful.

Max Schrems, chairperson of noyb.eu, comments, "the DPC acknowledges that it has a legal duty to hear us, but it now engaged in a form of 'procedural coercion'. The right to be heard was made conditional on us signing an agreement to the benefit of the DPC and Facebook. It is nothing but an authority demanding to give up the freedom of speech in exchange for procedural rights."

App store operators, such as Apple and Google, could face fines of up 2% of sales for forcing their own in-app payment methods, under the amended Telecommunications Business Act. The Korean Communications Commission (KCC) drafted the amendments on Wednesday (17 November), in order to protect app developers and provide further clarity when determining illegality of new prohibited acts. App store owners could also see an additional fine of 1% of their revenue for delays in reviewing apps.

Within the document, the KCC describe the forcing of certain payment methods as a serious illegal act which will result in penalty surcharges. The move has come to allow a fairer mobile ecosystem for developers, in an attempt to limit app store operators power within the industry. Obstructions against in-app billing policies were first introduced in August when South Korea made amendments to the Telecommunications Business Act. The challenge caught media attention when Epic filed a lawsuit against them for monopolistic behaviours back in 2020. South Korea were the first country to introduce restrictions on payment policies.

KCC Chairman Han Sang-hyuk commented, considering that this issue is receiving attention both at home and abroad, we will proceed swiftly with follow-up measures so that the law is enacted smoothly in order to create a fair and sound app market ecosystem.

Augmented reality (AR) platform, Niantic, have received a hefty investment of USD$300m (224.5m) from Coatue, valuing the company at USD$9bn (6.7bn). The software development company have announced that they will use the fund to build their vision for the real-world metaverse.

John Hanke, Niantics Founder and CEO, commented in a blog post announcing the news, were building a future where the real world is overlaid with digital creations, entertainment and information, making it more magical, fun and informative. He adds, this will take a significant investment of talent, technology and imagination, and were thrilled that Coatue is on this journey with us.

Niantic recently launched a platform enabling developers to understand and enhance their ideas for AR and the metaverse. The Lightship Platform is the core for the San Francisco-based companys own products, such as Pokmon GO.

In further metaverse-related news, Vietnamese startup VerseHub closes a silent fundraise of USD$1m (748,383) from an angel investor. The metaverse platform will use the funds, raised without going through the formal process, to enhance their ongoing projects. Co-founder and CTO of VerseHub, Canh Ho, explains, the team incubated the project 6 months ago and rejected many investment invitations, for cooperating with other Vietnamese partners in the industry, with the desire to contribute to the development of blockchain technology in our home country.

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The Irish DPC Slapped With Corruption Allegations; South Korea Place Big Tech Under the Microscope - ExchangeWire

Danielle RoseContributor

It may have taken congressional hearings, but America is starting to wake up to the negative effects the unexamined use of technology has on our society particularly our young people.

From the Facebook Papers to the ongoing Elizabeth Holmes trial, were facing a clear reminder that in the tech industry, there is a pervasive preference for slick marketing over real results. But then why, when it comes to solving big issues, from healthcare to education, are we still so willing to trust Big Tech?

Having moved from corporate America to the tech industry to my current role leading advocacy efforts supporting racial justice in the education space, Ive seen firsthand the harm in prioritizing flashy promises over real, measured impact and neglecting to engage existing expertise.

I also know all too well that we need to reimagine our education system particularly in the STEM fields to effectively prepare our next generation for the world they will inherit. But Im not sold on the seemingly given fact that the tech industry should be the ones leading this effort. Supporting it? Yes.

With the seemingly exponential demand for individuals who can fill skilled tech jobs, major tech companies have a natural talent-building agenda to increase tech education. This has resulted in high-profile efforts to get coding and computer science education to K-12 students from Tim Cook pressuring the White House to make coding mandatory for school curricula to early investors in Facebook and Dropbox founding Code.org to get computer science into public schools. In the past 10 years, over 100 million students around the world have participated in the Hour of Codeand about 70% of parents now say its important for their children to study computer science.

But we need to be careful not to treat a powerful vision as an accomplishment in itself, such as rewarding Elizabeth Holmes with significant investment dollars as she donned a Steve Jobs turtleneck and accepted accolades for promises yet to be kept.

Right now we have some of the worlds most brilliant tech minds backing innovative efforts to boost access to tech education. And yet the populations that stand the most to benefit from new pathways to opportunity are still being left behind. Since 2009, the percentage of women computer science (CS) undergraduates in the U.S. declined from 20.7% to 18.7% and African-American CS undergraduates dropped by 3%.

Short-term educational interventions the orgs creating free online coding modules, mentorship event series or global hackathons have been very successful in accumulating private-sector attention and donor investments with eye-catching branding.

But when I was a young student passionate about STEM, while Im sure I would have enjoyed these engagements immensely, momentary resources did not sustain my journey from initial interest to a masters degree in mechanical engineering at one of the top institutions in the country.

To accomplish that feat, I needed relatable and accessible educators and professionals who radiated a belief in my potential. It was having a community of peers who could reassure me during challenging periods and validate my frustration when facing constant othering in predominantly white spaces. And then, at minimum, I needed access to a continued and rigorous STEM education and the technical resources to complete assignments.

For communities of color, breaks in the tech pipeline arent restricted to access to laptops or the availability of AP computer science courses. With gaps appearing from secondary education to college admissions to hiring practices in techs top companies, disjointed interventions are just Band-Aids, even when applied at scale.

If the current scrutiny facing social media giants tells us anything, its that tech doesnt erase cultural differences or societal problems: It amplifies them. For the tech industry to make a meaningful investment in improving our education system, it needs to heed this lesson and seek to understand not just whats missing, but how to meaningfully support the existing work underway.

At SMASH, a STEM justice education nonprofit founded in Oakland to close the opportunity gap in tech, 79% of our scholars graduate the program to complete a bachelors degree in STEM. Our national average for the same demographic is 39%.

Scholars start with SMASH Academy as they begin their high school academic career. This is our flagship program that provides a multiyear, immersive and culturally relevant STEM education year-round and hires predominantly instructors of color who are trained to offer both technical and career mentorship with a focused lens on student voice and choice. These scholars move in cohorts through the pipeline of programs. High school seniors are paired with a college admissions coach and attend essay and financial aid workshops. Once their college admission is locked, students are then placed into paid internships and start building workplace experience with company partners like Raytheon.

Long-term educational interventions like this are more costly, time-consuming, complex to implement and, ultimately, most effective at actually changing student outcomes.

The good news is that countless community-based organizations across the country have already laid the groundwork to complement the long-term investment and holistic approach that our organization takes.

As long-standing racial and socioeconomic divides in STEM education widen, donors now have a critical role to play. The necessary knowledge and talent are in place to effectuate the change we all know our nations future depends on, but we need to redirect available resources to ensure theyre able to deliver the full weight of the results theyre capable of. When determining investments, define and stress test the impact metrics of potential recipients.

What does success look like? How will this programs benefits be relevant in the next six months versus the next four years? Does this initiative substantively address obstacles inhibiting students of color?

The Tim Cooks and Mark Zuckerbergs of the world have a role to play in all this but their biggest impact might actually happen outside of a high school computer lab. If these companies are serious about closing achievement gaps in public education, we need to prioritize tech equity policies and educational programming that offer tangible results and do more than simply create a good narrative.

This not only means sectorwide advocacy but funding education policies and partnering with existing community-based interventions that ensure the over 20 million Black and Latinx students in K-12 public schools are taught culturally relevant computing education and are prepared to materially contribute to a strong, diverse and socially conscious tech workforce.

The future of STEM education wont become more equitable by placing the newest technologies in every students hand or creating a free coding course but by seeing the solutions already before us and acting accordingly. Tech companies driven to help in the education space shouldnt fall back on bad Silicon Valley habits.

For our youth, we cant afford to spend time on solutions that sound good on paper but dont drive real impact. Big Tech leaders, this is not a call out, but a calling in. Lets talk.

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The US has an education problem, but is Big Tech really the answer? - TechCrunch