Restraining Strategic Tech Acquisitions in the EU
June 18, 2021
Anti-big-tech or anti-American? Is there a difference? The Macau News Agency reports, “Germany, France Want to Curb ‘Killer’ Big Tech Deals.” Left out of the headline is the Netherlands, which joins those larger powers in their desire to stop companies like Facebook, Google, and Amazon from making “killer acquisitions.” These are deals in which tech giants snap up budding startups before they can bloom into competitors. We learn:
“EU regulators believe that Facebook’s buyouts of Instagram or WhatsApp, or Google’s purchase of Fitbit, are potential examples of big companies buying out a high-potential startup before it developed into a rival. The EU ministers were discussing the Digital Markets Act, a law being hammered out at European Parliament and among the 27 member states that will take years to come into force. It would create a list of special rules for the handful of big technology companies on how they can operate, including stricter obligations on informing regulators of their buyouts and mergers. At the meeting, EU competition chief Margrethe Vestager insisted that existing rules already offered ways to intervene quickly against such buyouts when they are notified by national authorities. This was the case most recently with Facebook’s acquisition of software provider Kustomer even though that deal is below the EU’s thresholds for notification. The ministers also discussed the Digital Services Act that could force Big Tech into providing more transparency on algorithms and better policing of illegal content.”
The EU currently abides by the country-of-origin principle, wherein the country in which a company’s European operation is based handles enforcement. However, since it feels Ireland bungled the oversight of big tech firms, France suggests the EU re-evaluate that principle. The specific rules it will propose remain to be seen.
Cynthia Murrell, June 18, 2021
Great Moments in PR: Google and France June 2021
June 14, 2021
I am not sure what percentage of Alphabet Google’s annual revenue $268 million represents. My old handheld calculator balks at lots of numbers. I am more of a 00 or 000 kind of old timer. France believes that this figure is fair and appropriate for alleged missteps by the mom and pop online ad company.
I found the article “Google to Improve Ad Practices after Being Slapped with $268 Million Fine” interesting. In fact, I circled in True Blue this passage:
Following the results of this investigation, Google has decided to reach a settlement with the French antitrust authority. As a part of this settlement, the tech giant will have to improve its ad services to offer better interoperability with other platforms, and will also pay a $268 million fine.
Yep, the do better assurance. What was the alleged saying bandied about when Messrs. Brin and Page were roller blading around the Mountain View offices? I think it was this one:
It’s easier to ask forgiveness than it is to get permission.
A slight edit yields:
It’s easier to pay the find than make specific commitments.
Stephen E Arnold, June 14, 2021
AI Tech Forces Governments To Upgrade Laws
June 4, 2021
We are living in a time of science fiction due to advances in AI technology. While we are still far from holographic interfaces and competent digital assistants that do not spy on users, today’s technology was yesteryear’s imaginings. Due to advancements in AI, such as facial recognition, world governments are forced to update laws in order to maintain relevancy says Inc42 in, “How The World Is Updating Legislation In The Face Of Persistent AI Advances.”
Thirteen US stated banned facial recognition technology for police use. The ban is based on implicit biases hardwired into the technology from non-diverse datasets that favor light-skinned people. Meanwhile the European Union continues to protect its citizens’ privacy by restricting technology. The newest addition to the EU’s General Data Protection Regulation (GDPR), article 22, protects individuals’ rights from automated decision making, including profiling. EU citizens are guaranteed human intervention when automation harms their rights and freedoms. China continues to use facial recognition to monitor its people, including minority populations.
India remains in limbo when it comes to AI technology laws. While India has one of the world’s fastest growing economies and technology industries, the country also remains one of the poorest and under developed. Since the world lacks standardized AI legislation, India does not have a reference for its own laws. As an Asian country, India does not want to mirror China and it does not have the same development as Europe and the United States.
India’s government did create a Personal Data Protection Bill (PDPB), but it is stuck in parliament. The PDPB contains consumer protections:
“The Bill gives consumers the rights to access, correct and erase their data in its current form (Refer: Clause 19 of the PDPB “Right to data portability” under Chapter 5 “Rights of the data principal”). This is something that all organizations will have to comply within the timeline stipulated by the government. From a commercial perspective, data transference will be a major challenge, with its impact being harder on start-ups and SMEs. This does provide an avenue for new companies to provide services that help complying with the PDPB laws but will also impact start-ups and SMEs that rely on the consumer’s data and inferences of the data.”
There are also provisions for data localization and demands data is stored within India. Technology companies and startups will be the most affected other than Indian citizens. Restrictions on AI could limit technology business development within the Indian economy, but if the PDPB is passed it would benefit the citizens. There is a fine balance between morality and profit, but the people should come first.
Whitney Grace, June 4, 2021
TikTok: A Security Threat?
May 19, 2021
Some folks think the TikTok app is a security threat. On the other hand, there are some Silicon Valley poobahs who dismiss the idea that short videos viewed by millions is anything other than a harmless way to kill 30 seconds. These folks may perceive YouTube for Kids’s automatic playing of videos as harmless too. What’s the big deal? These are mostly kids.
“TikTok Banned from US Government Devices Due to Bill Deeming it ‘an Immediate Security Threat’” seems to suggest that some in Washington, DC, are concerned about the Chinese TikTok thing. The write up states:
the Senate Homeland Security and Governmental Affairs Committee has just unanimously passed a bill that would officially ban US federal workers from being able to download the now very popular app onto certain US government devices.
The intent of the bill is to keep the app off US government mobile devices. The reason? TikTok is a data harvester aligned with the Chinese government. lf TikTok does capture data and generate metadata about its users, new services introduced by ByteDance could be used to alter opinions and behavior of the services users? If TikTok does not, better safe than sorry maybe?
The new bill may not have the desired effect. The users of the service can access videos on another mobile, and the majority of the TikTok user base do not work in the US government. Meaningful regulation? On the surface, no.
Stephen E Arnold, May 19, 2021
Google and Apple App Stores Rebuked in Australia
May 18, 2021
In a conclusion that should surprise no one, the Australian Competition & Consumer Commission has found, “Dominance of Apple and Google’s App Stores Impacting Competition and Consumers.” The commission is in the midst of a five-year inquiry into the state of Australia’s digital-platform services market. Its second interim report suggests ways to reduce the outsized market power of both Google’s Play Store and Apple’s App Store. The media release states:
“The ACCC has put forward a series of potential measures in response to its findings, including that consumers be able to rate and review all apps, that consumers have the ability to change any pre-installed default app on their device, that app developers be allowed to provide consumers with information about alternative payment options and that information collected by Apple and Google in their capacity as app marketplace operators be ring-fenced from their other operations. ‘We have identified a number of areas where action is required and have put forward potential measures to address areas of particular concern. There is a window of opportunity for Apple and Google themselves to take steps to improve outcomes for app developers and consumers by adopting the potential measures we have identified,’ [ACCC Chair Rod] Sims said. The ACCC will revisit the issues raised in this report during the course of the five-year Digital Platform Services Inquiry and will take into account steps by Apple and Google to address the concerns identified.”
It is nice of the commission to give the tech firms a chance to comply with these suggestions, but will they? Sims and his team are not holding their breath—the commission is examining laws and proposals in other countries as it prepares to impose regulation should it be needed. Its third interim report is due on September 30.
Will Google hire the chaos monkey and ship him down under now that the Apple orchard acted with extreme prejudice?
Cynthia Murrell, May 18, 2021
Disinforming the FCC: Who Pays the Price of Misinformation?
May 11, 2021
Yep, Friday. Who needs to be reminded that “18 million of the over 22 million public comments that the FCC received both for and against net neutrality were fake.” I sure did not. “Net Neutrality: US Broadband Industry Accused in ‘Fake’ Comments on Rules” reports what may or may not be “trusted” and “accurate” information via the House of Mirrors channel:
The New York investigation showed that broadband industry players spent $4.2 million … to generate and submit more than 8.5 million fake comments to the FCC “to create the appearance of widespread grassroots opposition to existing net neutrality rules.”
The article answers the question “Who pays the price of misinformation?” by naming:
- Fluent
- Opt-Intelligence
- React2Media
Who paid?
The campaign was run through a nonprofit organization funded by the broadband industry called Broadband for America made up of senior broadband company and trade group officials, it said. Documents cited in the investigation said the public comments would give the FCC’s Republican chairman at the time, Ajit Pai, “volume and intellectual cover” for the repeal.
These are paragons of virtue I assume. The questions I have are:
- What entity or entities “look out” for the consumer?
- What universities trained these individuals responsible for the alleged actions?
- Was a US Federal agency aware of the “campaign”?
Interesting but possibly part of a larger pattern of information manipulation.
Stephen E Arnold, May 11, 2021
AI: Committees Are Smarter Than Developers?
April 27, 2021
I read “EU Outlines Ambitious AI Regulations Focused on Risky Uses.” The main idea seems to be that European Union regulators are smart enough to write rules for risky uses of numerical recipes. First, what’s risk, or, more accurately, what’s acceptable risk? Second, are regulators able to understand specific implementations of smart software designed for “uses”?
In my opinion, the answer to the first question is that “acceptable risk” is an interesting idea. It’s like ethical behavior, beauty, and evil. The answer to the second question is, “Not a chance.”
The write up reports:
Under the AI proposals, unacceptable uses would also include manipulating behavior, exploiting children’s vulnerabilities or using subliminal techniques.
How pray tell will lawyers, bureaucrats, and successful clothing sales professionals recognize a subliminal technique? Whom will these professional deciders believe when data are gathered from academics, allegedly suppressed businesses, and activists?
AI is now, and the write up makes clear that progress will be slow and painful:
To be sure, the draft rules have a long way to go before they take effect. They need to be reviewed by the European Parliament and the European Council and could be amended in a process that could take several years, though officials declined to give a specific timeframe.
To sum up, hubris is wonderful when enshrined in bureaucracy. How fast does AI change? A little quicker than an EU deliberation for sure.
Stephen E Arnold, April 27, 2021
Huawei: Dutch Treat for 5G Security
April 27, 2021
A secret report from 2010 has surfaced in the Netherlands and has been reviewed by editors at news site de Volkskrant. The document reveals that “Huawei Was Able to Eavesdrop on Dutch Mobile Network KPN,” reports the NL Times. We learn that, in 2009, KPN used Huawei tech and that six employees of the Chinese tech giant worked at its head office. Warned by security firm AIVD that this was a dicey situation, KPN hired researchers at Capgemini analyze any risks involved. We learn:
“The conclusions turned out to be so alarming that the internal report was kept secret. ‘The continued existence of KPN Mobile is in serious danger because permits may be revoked or the government and businesses may give up their confidence in KPN if it becomes known that the Chinese government can eavesdrop on KPN mobile numbers and shut down the network’, de Volkskrant quotes the report. At the time, KPN’s mobile network had 6.5 million subscribers.”
These subscribers included then Prime Minister Jan Peter Balkenende and other ministers as well as, importantly, Chinese dissidents. The write-up continues:
“The Capgemini report stated that Huawei staff, both from within KPN buildings and from China, could eavesdrop on unauthorized, uncontrolled, and unlimited KPN mobile numbers. The company gained unauthorized access to the heart of the mobile network from China. How often that happened is not clear because it was not recorded anywhere.”
Huawei assures everyone it never took advantage of this access and there is no evidence (yet) that it did so. The revelation explains why KPN has since maintained its own mobile core network and relied upon Western suppliers. Lesson learned.
Cynthia Murrell, April 27, 2021
Apple and Facebook: Maybe Regular Governmental Regulations Do Not Work for These Outfits?
April 26, 2021
I read “How Mark Zuckerberg and Tim Cook Became Foes.” The dust up is about user tracking. It is not explicitly about making money, acting in a manner which helps customers, or conforms to the expectations of some people. The NYT article is interesting, but it ignored a point I think is important. I will get to what is in my opinion an important omission in a moment.
First, the write up states:
At the center of the fight are the two C.E.O.s. Their differences have long been evident. Mr. Cook, 60, is a polished executive who rose through Apple’s ranks by constructing efficient supply chains. Mr. Zuckerberg, 36, is a Harvard dropout who built a social-media empire with an anything-goes stance toward free speech.
Then some history:
Mr. Cook decided to distance Apple from Facebook, the people said. While Mr. Cook had raised privacy as an issue as early as 2015, he ramped that up in 2018. Apple also unveiled a new corporate motto: “Privacy is a fundamental human right.”
And allegedly Mr. Zuckerberg’s current position:
But Mr. Zuckerberg has also been blunt about Facebook’s feelings on Apple. “We increasingly see Apple as one of our biggest competitors,” he said in an earnings call this year.
No problem but the omission is that the antics of two monopolies are no longer amusing. The US government as well as organizations like the EU have been unable to constrain either firm. This is a failure for three reasons:
- These are monopolies and the jousting is simply an effort to allow one company to win.
- Neither company cares about customers. Facebook sucks data and enables a Cambridge Analytica thought process and Apple makes it impossible for “customers” to have confidence that their purchases are theirs or that their devices can be fixed. Both approaches are anti-consumer.
- Both companies manipulate to thrive. Both use Orwellian type lingo to further the illusion that these firms are more than money generating constructs operating with personal antipathies, biases, and as supra-governments.
Quite an omission if my hypotheses are on the money.
Stephen E Arnold, April 26, 2021
US Fights Digital Taxes With Import Taxes
April 23, 2021
The United Kingdom, Spain, Italy, Turkey, Austria, and India are six countries levying a digital service tax own social media companies, search engines, and online retailers. Most of these companies are American. The Office of the US Trade Representative (USTR) conducted a six-month investigation and decided the new digital tax “unreasonable, or discriminatory and burdens or restricts US commerce.” Roll Call explains how the Biden Administration plans to handle the digital tax: “US Confronts ‘Digital Dagger’ From Overseas Aimed At Top Tech Companies.”
The Biden administration plans to leverage a 25% tariff on imported goods from the six countries. The European Union, Indonesia, Brazil, and the Czech Republic might adopt similar taxes. Trump’s administration had the USTR investigate France’s digital taxes and came to the same conclusion, but did not respond following an ongoing investigation with Organization of Economic Cooperation (OECD) and Development and the G-20 group.
The USTR wants to develop a solution with the OECD, but it comes with tons of baggage:
“The friction between the United States and its top tech companies and the rest of the world stems from how the global economy has shifted toward a model in which companies based in one country earn profits from delivering services to citizens of another country without establishing a physical presence, said Clete Willems, a partner in the law firm of Akin, Gump, Strauss, Hauer & Feld LLP who served in the White House as a top trade adviser during the Trump administration. The OECD has been discussing how to determine taxing rights when companies have no physical presence in a country and which companies should be considered digital entities…”
American companies feel targeted because they are reaping the profits of their handwork, but the foreign countries are not getting needed tax revenue to fund their own economies. It is not a digital dagger, but a double edge sword.
Whitney Grace, April 23, 2021
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