The sustainability of Irish media is at a tipping point and radical action is needed by the new Government and the Communications Minister Catherine Martin.

ewspapers (in print and online), local radio and RT have been essential reading, listening and viewing respectively during the Covid crisis. Journalists and editors have been working overtime to ensure the public is up to date and informed.

However, many news organisations are on their knees financially and there is a real danger that some may not survive.

Despite occasional failings, we are well served in the main by the Irish media. You may not like all of them but they provide an essential public service in Irish democracy.

A report from the Reuters Institute for the Study of Journalism in July found that Irish media retain high levels of trust, bucking international trends.

Social media ranked among the least trusted sources, according to the report, with three out of five Irish adults concerned about 'fake news' online.

But the business model that supported journalism for 150 years has been battered for more than a decade by a perfect storm of changing consumer behaviour and a shift to online consumption; a collapse in advertising because of the increasing dominance of tech giants like Google and Facebook; and the failure by the news media to innovate and respond quickly to these threats.

Local journalism is in particular difficulty despite its enormous importance. Some provincial newspapers have already closed and job losses and furloughs are rife across the industry.

The national public service broadcaster, RT, is in dire straits. Staff costs have risen by 20m despite efforts to reduce headcount, and the firm has borrowings of 95m.

Paywalls have proven successful for INM, owner of the Sunday Independent, and for the Irish Times, but will not work for local newspapers or broadcasters.

We cannot blame the tech giants solely for the demise of Irish journalism but they do bear some responsibility. The near duopoly position Facebook and Google now hold in the advertising market has had a distorting impact on the ability of indigenous media to operate.

The two tech companies hoovered up an estimated 40pc of the total ad market (worth about 1.4bn) and a whopping 81pc of the digital advertising market in 2019.

It is not realistic to expect the Government could (or should) bail out the news media, given the perilous state of the public finances, but the news media do need support.

In that context, moves by the Australian government to introduce new laws to force Facebook, Google and other tech companies to pay royalties to the news media for content they produce may provide part of the answer.

The move follows a proposal by the Australian Competition and Consumer Commission (ACCC) which would force the Silicon Valley monoliths to negotiate a 'fair price' with news media for using their content on their platforms. If they do not, then they could be forced to accept a binding arbitration.

The Commission has also proposed new rules to force both companies to be more transparent with their algorithms, give notice of changes that might impact on news organisations' digital traffic, and be more transparent in their data collection methods.

In response both Google and Facebook have said they would remove news content from their news feeds and search results rather than pay the royalties.

Such bully-boy tactics by the two tech giants reinforce how dominant their position in the market now is, and why it's time to rein them in.

No media company can afford not to work with social media or Google. Media companies rely on these platforms to drive traffic, while the tech companies piggyback on the content created by the media companies to increase the amount of time audiences stay around, gathering terabytes of data about their behaviour and selling that to advertisers.

While the tech giants claim it's a symbiotic relationship, the reality is that it's closer to a parasitic one such is the power imbalance between them and the media.

France, Germany and Spain have also tried to force tech platforms to pay for republishing news media content but none has succeeded so far. Proposals for digital taxes have come to naught.

The new Programme for Government commits to a new Commission on the Future of Media, unifying regulation and support of media online and broadcasting, though no detail has been published yet explaining how it might operate or what powers it will have.

To be effective, this new Commission will need to have substantial teeth to bring the tech giants to heel and force them to take responsibility for the content on their platforms and the power to issue substantial fines.

Ireland may be too small to do so on its own; it may take the political muscle of EU action to bring Facebook and Google to the table, forcing them, for example, to contribute into a ring-fenced fund that could be used to support public service journalism jobs in local and national media.

The Commission will also need to look at wider issues such as protecting privacy, the role of these platforms in the promotion of 'fake news' and how we should set limits on harmful content.

One shudders to think what will be left if Google and Facebook strip their newsfeeds of quality, trusted journalism. Cat videos will thrive for sure, but on a much more sinister level, our social media timelines and search results will likely descend into a wasteland of fake news, half-truths and propaganda, where the tinfoil hat brigade, anti-vaxxers and anti-maskers will flourish.

We cannot leave our democracy to Mark Zuckerberg, it's much too important for that.

Radical and immediate action is needed by Communications Minister Catherine Martin.

So far, we have seen little to suggest she is preparing for the challenge.

Tom Felle is head of journalism and communication at NUI Galway and a former journalist and foreign correspondent

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Time to follow Australia's lead and force tech giants to play fair and pay for news - Independent.ie

The world's top 10 richest people lost a collective $44 billion due to equity devaluations amid the COVID-19 pandemic. The worlds richest man Jeff Bezos led the pack, alone shedding $9 billion in wealth as Amazon shares slumped, as per Bloomberg.

Bezos was closely followed by tech mogul Elon Musk, who lost $8.5 billion as company Tesla Inc. shares teased bear-territory over a three-day slide, the publication said.

Facebooks Mark Zuckerberg lost $4.2 billion, while Microsoft Founder Bill Gates wealth lowered by $2.9 billion. Other on the list include Steve Ballmer who lost $4.8 billion, Larry Page lost $3.6 billion, Sergey Brin lost $3.5 billion, MacKenzie Scott lost $3.2 billion, Larry Ellison lost $2.4 billion, and Jack Ma lost $1.6 billion.

The wealth reversal on September 4 was a surprise as markets had so far stayed afloat despite grim economic realities worldwide. Case in point: both Musk and Zuckerberg posted enormous $4 billion a day wealth gain; while Bezos became the worlds richest person and his ex-wife MacKenzie Scott the worlds richest woman.

First Published on Sep 6, 2020 10:42 am

Originally posted here:

Worlds 10 richest tech giants shed $44 billion wealth, Jeff Bezos tops list with $9 billion loss - Moneycontrol

Law360 (September 3, 2020, 8:23 PM EDT) -- Apple, Cisco, Google and Intel's lawsuit challenging a certain Patent Trial and Appeal Board precedent will test how far the U.S. Patent and Trademark Office's discretion stretches when it comes to instituting inter partes reviews.

The lawsuitfiled Mondayin California federal court pits the USPTO's wide discretionary power, supported by a series of recent U.S. Supreme Court decisions, against critics who say USPTO Director Andrei Iancu is fostering uncertainty and letting owners of weak patents, particularly nonpracticing entities, get away with exploiting the system.

"When some people believe the system is too patent-friendly, we get reactions like this lawsuit or the [America...

In the legal profession, information is the key to success. You have to know whats happening with clients, competitors, practice areas, and industries. Law360 provides the intelligence you need to remain an expert and beat the competition.

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Tech Giants Are Putting PTAB's Discretion To The Test - Law360

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Late summer squalls can churn up quickly and be quite violent, but they also tend to pass by swiftly.

The stock market appeared to experience something similar this past week. After the heat of the continued melt-up of the technology giants at the beginning of the week, a squall of selling on Thursday sent the entire market sliding. But, by weeks end, the winds seemed to have subsided.

The result was the erasure of $1.7 trillion of paper profits in the U.S. stock market in the final two days of the week, according to Wilshire Associates tally. But to put that in perspective, investors were still up $13.1 trillion, or 55.7%, from the lows of March 23 and $2.2 trillion, or 6.3%, since the end of 2019.

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Even with a recovery from their lows on Friday, the major averages had their worst week since late June, with the S&P 500 index off 2.3% and the Dow Jones Industrial Average off 1.8%. The technology-dominated Nasdaq Composite, at the center of the markets turbulence, slipped 3.3%, its worst week since late March.

As for what roiled the market, the suspects fingered most often were options players, both big and small. As reported by several media outlets, SoftBank Group (ticker: 9984.Japan), the big Japanese conglomerate, appeared to be a major buyer of options on megacap tech stocks, giving it the right to acquire $50 billion worth of the underlying shares.

At the same time, relatively small punters also have been actively trading options, especially short-dated, out-of-the-money calls, which effectively give them a cheap lottery ticket to play the bull market in the giant tech stocks that have led the markets advance, observes Peter Tchir, the derivatives and credit maven at Academy Securities. While he concedes that the capital controlled by these speculators is small relative to the market, in a world where volumes are distorted by the frantic trading of [algorithmic-based accounts], any real order flow has a surprisingly large impact on prices, he adds in a client note.

After the long run in tech stocks, in which some have doubled or more, both individual and institutional investors have shifted to buying call options, where their loss exposure is limited to the premium they pay for the contract, explains Mark Haefele, chief investment officer for global wealth management for UBS.

Options dealers, who have sold calls to traders, are forced to hedge their exposure. That would mean buying underlying shares as their prices rise, and selling as the shares fall. All of which can exacerbate price swings, as happened on Thursday, Haefele writes in a client note. (Colleague Al Root explains the real nitty-gritty of the options trade, complete with Greek letters describing the math that makes derivatives vastly more intellectually challenging than betting on sports.)

Despite the drop in the big tech stocks, this doesnt seem like the bursting of the dot-com bubble in 2000. As Evercore ISI points out, a perfect storm had developed then: Oil prices had doubled, and the Federal Reserve raised its federal-funds rate target sharply, by 1.75 percentage points, which inverted the yield curve, a classic sign of tight money and a future downturn. Now, by contrast, the Fed has pushed the funds rate to near zero and expanded its balance sheet by nearly 50%, while oil prices remain depressed.

Capital Economics Jonas Goltermann points to another difference: Unlike in 2000, the largest tech firms today are highly profitable, and their valuations, while punchy, dont look so obviously unsustainable. So while this correction may well have further to run, and we continue to think that tech stocks will fare less well than most other sectors as the economic recovery continues, we dont expect that a collapse in tech stocks will drag down the entire market in the way that it did in 2000-02.

Corporate insiders apparently are not waiting to cash out, however. The Financial Times reports that U.S. executives took advantage of the markets rally to sell $6.7 billion of their own companies shares in August, the biggest dollar amount since November 2015. As my illustrious predecessor in this space, Alan Abelson, was wont to observe, there are many reasons to sell a stock; expecting it to rise isnt one of them.

Write to Randall W. Forsyth at randall.forsyth@barrons.com

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Tech Stocks Slide After a Summer-Long Rally. Is It the Dot-Com Bubble All Over Again? - Barron's

Microsoft has announced it will be ending support for Adobe Flash Player soon.

The much-maligned Flash will no longer be supported on Microsoft's web browsers after December 31 2020 as the technology firm looks to ensure customers are secured online.

Flash will be removed from Microsoft's browsers with the upcoming launch of Edge v88 in January 2021, with Internet Explorer 11 also waving goodbye alongside Microsoft Edge Legacy.

The announcement comes after tech giants including Microsoft, Apple, Google, Mozilla, Facebook and Adobe itself declared in July 2017 that Flash would gradually be phased out of the big internet players.

In a blog post, Microsoft program manager Suchithra Gopinath said the decision to remove Flash has been brought forward due to the dwindling numbers of users utilizing Flash Player, with many instead turning to more powerful and secure options such as HTML5, WebGL, and WebAssembly.

The company noted that Microsoft will continue providing security updates to Adobe Flash Player and maintain OS and browser compatibility through the end of 2020.

"As you transition away from Adobe Flash Player, we encourage you to continue to upgrade your systems with the latest security updates, while it is still in support," Gopinath added. "If you require additional assistance, please contact your Microsoft Account team."

She added that Adobe is offering some support options to companies that rely on Flash to power business applications, and that Microsoft Edge will allow Adobe Flash Player to load as a plug-in via the Internet Explorer mode feature.

However from January 2021, Flash Player will be disabled by default on Microsoft browsers, with all versions older than KB4561600, which was released in June 2020, will be blocked, and any downloadable resources related to Adobe Flash Player hosted on Microsoft websites will no longer be available.

Adobe confirmed that support for some Flash apps will continue thanks to a deal signed with Samsung's Harman group, which will offer to help customers transition from Flash to other technologies if desired.

Via The Register

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Flash is being removed from Windows soon - but there's a catch - TechRadar

Many people have found working from home has been one of the few silver linings stemming from the coronavirus pandemic but Netflix chief Reed Hastings isnt one of them.

Hastings, in an interview with The Wall Street Journal on Monday, was asked if hes seen any benefits from having employees working from home.

No. I dont see any positives, Hastings said. Not being able to get together in person, particularly internationally, is a pure negative. Ive been super impressed at peoples sacrifices.

Also Read: Netflix Shuts Out Amazon Prime Video in Nielsen's Inaugural Ranking of Weekly Top 10 Streaming Shows

Netflix in March closed its Hollywood office after an employee was believed to be positive for COVID-19. The Bay Area-based company joined a number of other tech giants, including Facebook and Twitter, in having employees work from home to combat the viruss spread.

Hastings said having most employees away from the office has been a challenge because its made debating ideas harder to do. He doesnt anticipate Netflix will lean into a full work-from-home setup if/when a vaccine is developed, either. Instead, he told the WSJ he anticipates many companies will have employees in the office four days a week and let them work from home once a week.

And how long after a vaccine does Hastings want to have employees return to the office on a regular basis?

Twelve hours after a vaccine is approved, he said.

Read original story Netflix CEO Reed Hastings on Working From Home: I Dont See Any Positives At TheWrap

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Netflix CEO Reed Hastings on Working From Home: I Dont See Any Positives - Yahoo Entertainment

Several state governments may soon send residents an alert asking them to turn on exposure notifications.

On Tuesday, Apple and Google said they would make it easier for states to use their new technology that detects phones that come close to one another and can notify people who may have been exposed to the coronavirus.

States that sign on will be able to send a notice directly to smartphones asking people to opt in to the technology. Previous versions of the technology had required people to seek out a state health agencys app.

The new approach could spur the popularity of such virus alert technology in the United States by significantly lowering the hurdles for its use. Maryland, Virginia, Nevada and Washington, D.C., already plan to use the new system, Apple and Google said, and about 25 other states were exploring using the earlier app version.

In a statement, Apple and Google called the changes a next step in our work with public health authorities. They said the shifts would help public health authorities to supplement their existing contact tracing operations with technology without compromising on the projects core tenets of user privacy and security.

In April, Apple and Google announced they were developing the technology, which uses Bluetooth signals to enable iPhones and Android devices to detect nearby phones. If someone using the technology tests positive for the virus, that person can enter the positive result into the system using a unique authentication code. An automatic notification would then go to other phones that had opted in and had been in close contact.

As the pandemic took hold this spring, countries around the world raced to deploy virus apps to help track and quarantine people. But some of the apps were mandatory and invasive, sending users locations and health details to their governments. Many apps were also rife with security flaws.

The Apple-Google technology, by contrast, does not collect personal health details or track users locations. That has made the system attractive in Europe and elsewhere. Germany, Denmark and Ireland have already released apps using the technology, and millions of people in Europe have downloaded them.

In the United States, public health agencies in Virginia, Arizona, Nevada, Alabama, North Dakota and Wyoming have also created such apps, although the uptake has been slower. The Alabama app, released in mid-August, has had about 44,000 downloads.

To make the virus alert apps from different U.S. states interoperable, the Association of Public Health Laboratories announced in July that it would host a national server for the data. That means users of Alabamas app may someday be able to detect nearby phones when they travel to Virginia and vice versa.

Now, to use Apple and Googles technology, state public-health authorities simply need to provide certain parameters to the companies, such as how close people need to be to trigger an exposure notification and recommendations for those with possible exposures. Google would then create an app for the state, while Apple would enable the technology on the iPhone software. The system would then use approximate location data to send an alert to residents phones in that state, asking if they would like to enroll. (On iPhones, enrolling requires tapping a button, while Android users are prompted to download the states app.)

Apple and Google have said they designed their technology to protect peoples privacy. The system does not share peoples identities with Apple, Google or other users, the companies said, and it does not share location data with health authorities or the companies.

Google initially required Android users of the virus alert apps to turn on location services, which could have allowed Google to collect their location data. After health officials in Europe complained, Google said it would stop requiring location services to be on to enable the apps.

Still, security researchers have warned that the technology could also be misused to send false alerts, spreading unnecessary alarm. While they acknowledged the companies desire to help stem the pandemic, a few said they were troubled by Apples and Googles power to set global standards for public health agencies.

Ashkan Soltani, an independent security researcher, also warned that the companies could at some point turn on virus notifications by default. I continue to worry about rapidly deploying a new technology to nearly everyones device, he said, especially when the decision to do so isnt done by policymakers but unilaterally by these platforms.

Continued here:

Apple and Google to Make It Easier to Opt In to Virus Tracing - The New York Times

The value of the Japanese technology investor SoftBank slumped by about 7bn on Monday after shareholders were spooked by reports that the company has been making huge bets on US technology firms listed on a US stock exchange.

Over the weekend, SoftBank, which is best known for investing in young technology businesses, was reported to be the so-called Nasdaq Whale whose massive punts were behind US technology stocks moving to record highs before slipping back at the end of last week.

By the middle of last week, the US equity market had rallied by about 55% since March. In particular, tech giants such as Amazon, Apple, Facebook and Google have seen their share prices soar.

SoftBanks moves in the market appear to have succeeded in the short term, with the company said to be sitting on trading gains of about $4bn (3bn) after a series of colossal bets on equity derivatives by the groups founder, Masayoshi Son.

However, the change in strategy is viewed as high risk and appears to have scared investors, who fear that markets could switch and leave the company nursing painful losses.

About 30% of SoftBank shareholders are retail investors who are still recovering from some of the investment companys high-profile failures over the past year, having invested heavily in the likes of the office space provider WeWork, which it ended up rescuing last year, and the payments group Wirecard, which filed for insolvency in the summer amidst a 1.7bn alleged accounting fraud.

Softbank is believed to have bet $4bn on call options focused on individual US technology stocks. A call option is a financial derivative that gives the owner the right to buy a share at a pre-agreed price but the trade can help drive up the value of the real stock market as the sellers of the options buy the underlying shares.

Shares in SoftBank closed down 7.2% on the Tokyo exchange. US stock markets were closed on Monday because of the Labor Day holiday. Before Mondays drop, SoftBanks shares had climbed by about a third this year.

Softbank declined to comment.

Read more here:

SoftBank value slumps as investors fear it may be the 'Nasdaq Whale' - The Guardian

Small toy figures are seen in front of diplayed Amazon logo in this illustration taken March 19, 2020. REUTERS/Dado Ruvic/Illustration

WASHINGTON (Reuters) - Top U.S. tech firms including Amazon.com Inc (AMZN.O) and Facebook Inc (FB.O) filed a legal brief on Monday backing a challenge to U.S. President Donald Trumps temporary ban on the entry of certain foreign workers to preserve jobs for Americans during the coronavirus pandemic.

In the brief, filed in a lawsuit brought in California by major U.S. business associations, the companies argued that the visa restrictions will hurt American businesses, lead employers to hire workers outside the United States, and further damage the already struggling U.S. economy.

Trump issued a presidential proclamation in June that suspended the entry of a range of foreign workers until the end of the year, a move his administration said would free up jobs for unemployed Americans amid the economic fallout of the pandemic.

Among those affected by the temporary ban are skilled foreign workers entering on H-1B visas and managers and specialized workers being transferred within a company on L visas - both visa types used by tech companies. Trumps ban also blocks seasonal workers entering on H-2B visas, with an exception for workers in food supply chain jobs.

In the brief filed on Monday, the companies argue Trumps proclamation could do irreparable damage to U.S. businesses, workers and the economy, and was based on a false assumption that it would protect U.S. workers.

Global competitors in Canada, China, and India, among others, are pouncing at the opportunity to attract well-trained, innovative individuals, the brief reads. And American businesses are scrambling to adjust, hiring needed talent to work in locations outside our nations borders.

Apple (AAPL.O), Microsoft (MSFT.O), Netflix (NFLX.O) and Twitter (TWTR.N) were among 52 companies that signed the brief, which was filed in a lawsuit brought by the National Association of Manufacturers, which represents 14,000 member companies, as well as in a similar lawsuit brought in Washington, D.C.

Reporting by Ted Hesson in Washington, Editing by Rosalba O'Brien and Nick Zieminski

Originally posted here:

Tech giants back legal challenge to Trump's foreign worker restrictions - Reuters

The pandemic has businesses everywhere on the ropes, with many firms filing for bankruptcy since lockdowns began. Despite the uncertainty, tech giants and major digital retail brands are still thrivingand some are running circles around those that are less pandemic-proof.

Using data from Kantar and Bloomberg, a recent brand report released by BrandZ shows which tech companies are proving their worth to consumers during COVID-19 chaos. With data covering almost 4 million consumers, BrandZ also reveals that the tech sector leads the worlds 100 most valued brands in terms of financial power and consumer sentiment.

Heres how the top 20 tech brands from the report stack up:

Out of the top five tech brands, Microsoft made the biggest moves with 30% brand value growth. Other big movers in the top 20 were Instagram (owned by Facebook), Adobe, and LinkedIn (owned by Microsoft), rising 47%, 29%, and 31%, respectively.

Broken down by nation, U.S. brands are dominating techs heavy hitters, claiming 14 of the worlds top 20 tech brands. Chinese brands round out much of the remaining top 20, including tech entertainment and social media giant Tencent, which rose 15% in brand value since 2019.

Techs top brands are raking in billions of dollars, capturing consumer mindshare, captivating people, and comforting them during volatile months. Apple, Microsoft, Google, Tencent, and Facebooktechs leading contingenthave made those moves look easy during what are rough times for many world brands.

While most tech brands in the upper half of the top 20 saw significant increases in brand value, only Facebook and IBM were in decline from 2019, at -7% and -3% respectively. The biggest loss in techs top 20 came from Chinas Baidu, which fell by -29% in 2020.

Waning consumer trust, thanks in part to the perceived misuse of personal data, is a gap that techs popularity alone wont fill forever. (Following the Cambridge Analytica scandal, nearly 25% of Facebook account holders reported being extremely or very concerned about their personal data.)

Coming in at eighth place, Facebook-owned Instagram gained 47% in brand valuea huge percentage, but less than the whopping 95% growth it had in 2019.

On the whole, digital apps have been faring well during the pandemic, especially those built for entertainment, shopping, social connection, and delivery.

These brands had anticipated, even invented, the online-offline dynamics of modern life that became indispensable for survival during the lockdown homebound weeks of avoiding the contagion.

BrandZ 2020 Global Top 100 Report

While the brand value growth rates of tech giants arent entirely immune to the effects of COVID-19, the likes of Apple, Microsoft, and Google are growing steadily, surpassed only by e-commerce leader Amazon.

With data collected into April 2020, BrandZs report on the worlds top 100 brands reflects multiple shifting needs and consumer concerns at a categorical scale.

While consumer affinity for e-commerce and social media brands has increased, fast food and beer brands took a hit, despite reports of increased alcohol consumption and food delivery during lockdown. It would seem then, that consumers have been valuing their tools and means of consumption.

Of the reports 14 brand categories, only six increased in value, mostly by less than 5%. Of the top risers, six were tech brands and six were mainly e-commerce.

Other upwardly mobile brands were those in the apparel and personal care categories. Much like retail, those categories had an increasing reliance on technology to deliver their products.

The above chart shows overall categorical changes for 2020 led by retail, tech, and insurance. In the opposite corner, energy, and bank brands took the biggest hits.

The economic impacts of COVID-19 are undeniable. Even still, BrandZs top 100 brands marked a steady increase of 6% in value in 2020, compared to 7% the previous year.

This pandemic has offered up era-defining change, with tech and e-commerce seizing the day. But in a climate where nothing can be taken for granted, brands large and small are still taking their knocks.

For now, the brands that are embraced by consumers will be those that can apply a salve to the blows that 2020 keeps delivering.

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Ranked: The World's 20 Biggest Tech Giants, by Brand Value - Visual Capitalist

In what seems to be a common occurrence, Chinese video-sharing app TikTok is once again in the headlines.

After months of speculation about national security risks and users data being harvested by the Chinese Communist Party, US President Donald Trump has announced plans to ban TikTok in the United States any day now.

In response, a deal is being negotiated between TikToks parent company ByteDance and US software giant Microsoft. If successful, Microsoft will take over the apps operations in the US and potentially also in Canada, Australia, and New Zealand.

A US ban would not be unprecedented. India barred TikTok last month, alongside dozens of other Chinese-owned apps and websites.

[Read: Facebook launches Instagram Reels globally amidst TikTok drama]

According to reports, ByteDance has agreed to sell some of its TikTok operations to Microsoft. The deal, which is unlikely to progress before mid-September, would appease US regulators and could be seen as a way forward for TikTok in Australia.

Microsoft has indicated any takeover would include a complete security review and an offer of:

continuing dialogue with the United States government, including with the president.

Moving ownership to a US company could help address concerns surrounding the perceived influence of the Chinese government over TikTok. But there will need to be strong oversight to ensure existing user data is transferred entirely to Microsofts control.

While Microsoft has pledged to ensure TikTok data are deleted from servers outside the country after it is transferred it would be difficult to prove copies had not been made before control was handed over.

Whats more, a Microsoft-owned TikTok may not appeal to everyone. Some may think Microsoft is too closely tied to the US government or may consider it a monopoly holder in the personal computing market.

Also, it would be naive to think foreign governments will not be able to covertly access US-stored user data, if they are so inclined.

Should the deal go ahead, it may open an opportunity for the Australian and New Zealand governments to align with a US-supported initiative.

Australia is still deciding how to proceed, with the Senate Select Committee on Foreign Interference through Social Media due to hear from TikTok representatives on August 21. The committee has been tasked to look at the influence of social media on elections and the use of such platforms to distribute misinformation.

TikTok wont be alone though Facebook and Twitter are both due to attend. It is, however, unlikely the Microsoft acquisition will have much influence on the proceedings as the deal is still in the early days of discussion.

Microsofts acquisition may introduce fresh concerns about the US governments influence over TikTok. Although, this is perhaps more politically palatable than potential Chinese government influence over the app given the Chinese Communist Partys unsavoury record of privacy abuses.

Perhaps the only winner from the deal would be ByteDance itself. A product that is increasingly disliked by foreign governments will only become harder to sell with time. It would make sense for ByteDance to cash out its asset sooner rather than later.

The deal would also likely earn it a significant payout, given TikToks millions of users.

Despite ongoing allegations, there is no solid evidence of a threat to either national security or personal data from using TikTok. Many of the concerns hinge on data sovereignty specifically, where data are stored and who can use and access them.

TikTok has responded to allegations by stating its user data are not stored in China and are not subject to Chinese government influence or access.

That said, while TikTok user data may well be stored outside China, it is unclear whether the Chinese government has already secured access, or will seek to do so later through legal channels.

There are, however, other potential issues that may be driving the USs concerns.

For instance, in 2018 an unexpected consequence of sharing fitness tracker data through the Strava website inadvertently revealed the locations of secret US military bases.

Thus, services such as TikTok which are meant to be relatively benign (if used ethically) can, under certain circumstances, present unexpected threats to national security. This may explain why Australias defence forces have banned the app.

Threats from the US against TikTok are not new.

The countrys Secretary of State Mike Pompeo indicated TikTok was being examined by US authorities in early July. And suggestions of a national security review go as far back as November last year.

However, in regards to Trumps most recent threat, one contributing factor may be the personal feelings of the president himself.

There are theories much of the new hype over TikTok could be a reaction from Trump to an ill-fated political rally in Tulsa.

A number of TikTok users reserved tickets to the Trump rally and didnt show up, as a protest against the president. The rally saw only a few thousand supporters attend, out of hundreds of thousands of allocated tickets.

This article is republished from The Conversation by Paul Haskell-Dowland, Associate Dean (Computing and Security), Edith Cowan University and Brianna OShea, Lecturer, Ethical Hacking and Defense, Edith Cowan University under a Creative Commons license. Read the original article.

Read next: Why Elon Musk is wrong about Level 5 self-driving cars

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Moving Tiktok's ownership to Microsoft will benefit tech giants not users - The Next Web

These are quixotic times in India. On the economic front, the Narendra Modi government appears to have embarked on yet another grand project. It wants to offer the Indian market on a platter to the much-criticised data behemoths and other tech giants from the United States.

Today, there is global optimism towards India. This is because India offers a perfect combination of openness, opportunities, and options. Let me elaborate, India celebrates openness in people and governance, Prime Minister Narendra Modi boasted in his interaction with the US India Business Council on July 22.

India has attracted more than $20 billion foreign investment between April and July, he claimed. However, he did not provide the breakup of these investments or which companies had actually invested.

That these imploring calls of Prime Minister Modi to the US business behemoths contradict his grand pronouncements on the Atmanirbhar campaign of self-reliance is well known.

Otherwise, it is difficult to explain that, at a time when the American tech companies are being pilloried in their own Congress for their anti-competition policies, India is ready to embrace them. One popular strategy seems to enable key tie-ups with Indian monopoly giants to monetize the data of more than 400 million Indian users of GAFA Google, Amazon, Facebook, Apple.

Consider for a moment the proceedings against the GAFA companies in the US Congress on July 29. These proceedings appeared like the infamous 1994 congressional hearing of the tobacco executives who raised their right hands to claim that cigarettes were not additive. CEOs Mark Zukerberg of Facebook, Sundar Pichai of Google, Tim Cook of Appeal and Jeff Bezos of Amazon also raised their right hands to say that everything they are doing is for the public good. If that is the case, how is it that they are able to rake up profits to the tune of hundreds of billions of dollars.

Of course, the Congress just simply dismissed the claims of the CEOs of four tech companies. Indeed, they were lampooned for stifling competition and bringing monopoly into the data industry.

Congresswoman Pramila Jayapal tore into what she described as Facebooks strategy to prevent competitors from getting footholds by copying competitors. Facebook is a case study, in my opinion, in monopoly power because your company harvests and monetizes our data, and then your company uses that data to spy on competitors and to copy, acquire and kill rivals, said Jayapal, raising several questions to Mark Zukerberg.

Our founders would not bow before a king, nor should we bow before the emperors of the online economy, warned Congressman David Cicilline, the chair of the committee looking into the dangerous practices adopted by the GAFA companies. He suggested the time has come to break up these companies.

Microsofts Satya Nadella could not attend the proceedings as he was busy negotiating with TikTok, which could soon become the new jewel in the Microsoft crown. It remains to be seen whether the deal will go through, as President Trump is placing near-extortionist demands on Microsoft to comply with.

Consider the investments made by big Silicon Valley tech companies in India. Facebooks $8.8 billion, amount to a bet that Jio Platforms Ltd, and Mukesh Ambani, the chairman and shareholder of its parent company, Reliance Industries Ltd are the players best positioned to bring legions of Indian consumers fully into online and e-commerce, according to a Wall Street Journal report of 20 May.

Already, Facebook has a huge presence in India and generates more than $100 million in the Indian market. How hard will it be for Facebook and WhatsApp to manipulate public opinion and influence elections for the party of its liking? And what are the chances it will be the ruling party, whose chief has already embraced Zuckerberg?

Google has also invested more than $4.5 billion in Indias Jio Platforms Ltd. Google is exploring an investment in a move that could pit the US internet group in a battle against Facebook for the worlds fastest growing mobile market, says Financial Times of 28 May.

Amazon has reportedly tied up with Bharti Airtel to fend off Mukesh Ambanis Reliance Jio and Microsoft in the battle for Indias cloud computing market, according to a report in the Financial Times. Ironically, these very companies are now going to be the largest beneficiaries of the Modi governments munificence. They can use the data of hundreds of millions of Indian users for creating demand for future products through their machine intelligence involving use of complex algorithms and artificial intelligence (AI).

While Siraj-ud-Daulah valiantly fought against the East Indias companys armies to stop the plunder of India, the Modi government seems to revel in joy for turning the Bharat into the playground for American tech behemoths.

Ravi Kanth Devarakonda is a senior journalist.

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When will India Start Adopting the World's Tough Scrutiny of Global Tech Giants? - The Wire

New York state is introducing a bill that would make it easier to sue big tech companies for alleged abuses of their monopoly powers.

New York is Americas financial center and one of its most important tech hubs. If successfully passed, the law could serve as a model for future legislation across the country. It also comes as a federal committee is conducting an anti-trust investigation into tech giants amid concerns that their unmatched market power is suppressing competition.

Bill S8700A, now being discussed by New Yorks senate consumer protection committee, would update New Yorks antiquated antitrust laws for the 21st century, said the bills sponsor, Senator Mike Gianaris.

Their power has grown to dangerous levels and we need to start reining them in, he said.

New Yorks antitrust laws currently require two players to collaborate in a conspiracy to conduct anticompetitive behavior such as price setting. In other cases companies may underprice products to the point where they are even incurring a loss just to drive others out of the market anticompetitive behavior that New Yorks laws would currently struggle to prosecute.

Our laws on antitrust in New York are a century old and they were built for a completely different economy, said Gianaris. Much of the problem today in the 21st century is unilateral action by some of these behemoth tech companies and this bill would allow, for the first time, New York to engage in antitrust enforcement for unilateral action.

The bill will probably be discussed when New Yorks senate returns to work in August but is unlikely to pass before next year. It has the support of New Yorks attorney general, Letitia James.

For more than 100 years, our antitrust laws have served as critical protection for consumers and small businesses from unchecked corporate power to choke off competition and limit consumer choice. While our states antitrust laws remain essential to these protections, we support legislation to strengthen them further to meet the challenges of todays economy, said James. State Senator Gianaris legislation is an important tool to do just that.

Gianariss bill comes a week after a heated exchange between the leaders of the USs largest tech companies and the House committee investigating them. At the hearing Apple, Amazon, Facebook and Googles leaders were told they had too much power, are censoring political speech, spreading fake news and killing the engines of the American economy.

I was struck by the brazen tone of the witnesses, said Gianaris. Some of the things they were admitting to appeared to me to be violations of existing laws.

Gianaris said states needed to take a lead while the federal government decides what, if any, action it will take.

Whether its the existing laws not being strong enough or the existing laws not being enforced, they clearly feel invulnerable. That is a microcosm of the entire problem. They have become too powerful economically which leads to them becoming too powerful politically and they feel like they can get away with things nobody else can, he said.

Everyone recognizes the problem. The federal hearing really shines a light on that, he said. So far Gianaris said the bill had received a very positive response. I am anticipating movement on the bill in the next session.

One thing we know, and we have learnt this the hard way in the last four years, is that the states need to be prepared to step in when the federal government is not being aggressive enough. This is clearly an example of that.

Gianaris said it wasnt too late to act, but its later than it should be. These problems should have been addressed years ago.

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New York unveils landmark antitrust bill that makes it easier to sue tech giants - The Guardian

Ken Buck, a Republican representative who is a member of the conservative Freedom Caucus, continued the theme, grilling Bezos about evidence that Amazon had deliberately allowed counterfeits to proliferate on its site in order to extract protection money from suppliers. He cited the experience of PopSockets, a start-up in his home state of Colorado that makes popular phone accessories. The companys founder told the subcommittee that Amazon declined to rid its website of fake versions of his products until he agreed to spend $2 million to advertise on the site.

The subcommittee also has evidence that Bezos had leveraged his exceptional backing from Wall Street to block upstart competitors from gaining a foothold; that Amazon lost $200 million in a single month selling diapers below cost in a bid to force the parent company of a popular rival, Diapers.com, to agree to be acquired; that Amazon sold Echo speakers below cost and bought up potential rivals such as Ring so that its Alexa voice assistant could dominate the smart home market. Lawmakers have also documented the consequences of these practicesthe small businesses, the software developers, and the product inventors who live in fear of being crushed at Amazons whim.

Amazon, of course, is just one of the tech giants under the antitrust subcommittees scrutiny. The panel is building a case that these companies have created a form of private governmentautocratic regimes that are tightening their control over our main arteries of commerce and information. As such, they threaten Americans liberties. Our founders would not bow before a king, Cicilline said at the hearing. Nor should we bow before the emperors of the online economy.

Congress has not conducted so detailed an investigation of monopoly power in the lifetimes of most Americans, so its hard to conceptualize where it might lead. But if the past is any guide, it could precipitate both new laws and antitrust prosecutions. In 1938, for example, Congress set up a commission to examine concentration across multiple industries. Its findings led the federal government to file a major antitrust case, change the patent laws, and, in 1950, pass sweeping legislation to restrict mergers. Congress conducted other investigations of monopoly in the 1950s and 1960s, and the results shaped antitrust enforcement. But then, beginning in the 1970s, monopoly was sidelined as a concern by both political parties.

The Houses antitrust subcommittee is resurrecting this tradition, and there are signs its work is already having an effect. State attorneys general in New York and California have reportedly opened antitrust investigations into Amazon.

But a multiyear court fight is not the only way to restructure Amazon and the other tech giants. The subcommittee may recommend a more straightforward approach. Congress could approach digital platforms the same way it did the railroads, another pivotal technology that governed market access. In the late 19th century, a handful of railroad barons used their control of the rails to monopolize other industries. They captured the market for coal, for example, by blocking rival producers from using the rail lines to get their coal to market. They also charged farmers exorbitant rates to ship their crops. Congress responded by setting up a commission to oversee rates and ensure that the railroad companies did not discriminate against some customers by imposing higher prices or different terms of access. Then, in 1906, Congress enacted a law barring the railroads from maintaining an ownership stake in firms that produced goods requiring rail transportation, thereby dissolving their ability to self-deal.

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Amazon Is a Private Government. Congress Needs to Step Up. - The Atlantic

India's proposed data protection regulations have received pushback from US tech giants.  |  Photo Credit: Twitter

India's plan to regulate 'non-personal' data has received significant pushback from US-based tech behemoths Facebook, Google and Amazon who, via the US-India Business Council (USIBC), has labelled the data sharing principals outlined by the Indian government as anathema to the promotion of competition, alleging that it will deter foreign investment made by technology companies into the Indian digital eco-system, and hurt economic growth.

In late July 2018, the Narendra Modi-led government introduced a far-reaching piece of data privacy legislation called the Personal Data Protection Bill, for Parliamentary review, reportedly, based on the European Union's Global Data Protection Regulation (GDPR) that came into effect in May that year.

However, privacy analysts have noted that there are elements of the proposed legislation that differ markedly from the EU's GDPR, that have, over the last two years, caused consternation among foreign tech players eager to gain access to India's lucrative digital markets.

The first of these relate to the cross-border flow of information and India's data localisation requirements. As per the current draft of India's data protection Bill, foreign entities are permitted to transfer personal data of users to servers outside India, as long as a copy of this data is stored in a local facility. Notably, it also bars any cross-border processing of what India deems 'critical personal data.' The treatment and use of another category, 'sensitive personal data' also requires companies to meet heightened consent, notice and compliance obligations.

Tech outfits like Facebook and Google have claimed that the India's data localisation demands are based on faulty logic, raising concerns that 'sensitive data' of Indian users may very well be entangled with that of non-Indian users, amounting to a privacy threat to non-Indians, if their data is stored locally. Separating Indian user data from non-Indian data, as Facebook has previously asserted, can prove to be extremely challenging.

The second bone of contention that US-based tech outfits have over the India's proposed data protection legislation has to do with non-personal data. In July, a goverment-appointed panel recommended the set up of a regulator to oversee the use and treatment of anonymised data, or data stripped of any personal identifiers.

The panel proposed that firms operating within India's digital eco-system be made to share data with other entities including their competitors, presumably, to prevent monopolistic or anti-trust practices.

Non-personal data is any dataset that does not contain information that can be used to identify individual persons. For instance, data collected by a taxi service will, naturally, contain details like a person's name and address. This data can only be classified as non-personal if such details are removed. However, there remain key concerns about whether data can truly be made anonymised with several studies showing that perfect anonymisation may not be possible, flagging risks to personal privacy.

Facebook, Google and other tech outfits have alleged that mandating sharing of this data goes against the principles of competition.

The non-personal data a company providing digital services collects can allow it to gain a critical advantage over its competitors, especially in highly competitive markets. The counter-argument here is that non-personal data, by itself, is of little use, and it is the way that this data is analysed, via artifical intelligent algorithms and other data mining tools that is, in truth, how companies gain leverage in the market.

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'Anathema' to competition: What are the sticking points between US tech giants and India over data protection? - Times Now

(Above, l-r): Pedro Noguera, Dean, USC Rossier School of Education; Shaun R. Harper, Executive Director of the USC Race and Equity Center; Daniel (Dan) Domenech, Executive Director of the School Superintendents Association; Eddie Valero, Supervisor for District 4, Tulare County Board of Supervisors; and Mary Helen Immordino-Yang, Associate Professor of Education, Psychology and Neuroscience at the Brain and Creativity Institute and USCs Rossier School of Education. (Siliconeer/Zoom screen grab)

By Sunita Sohrabji/EMS Contributing Editor

As school districts around the nation grapple with how to educate students this fall, education experts called on tech giants which earned billions from the pandemic to chip in to bridge the digital divide.

No district or community can wait for leadership or funding from federal or state agencies to fill the growing equity gap, a panel of experts on school equity issues agreed at a July 31 Ethnic Media Services news conference. Communities have to turn inward and find the resources kids need to thrive.

With over 11 million students around the nation lacking lap tops, and many regions still reliant on antiquated DSL technology, panelists singled out the role of tech giants.

Jeff Bezos (founder and chief of Amazon) is raking in incredible profits for his business during the pandemic, as is Facebook, Google and Apple, noted Pedro Noguera, Dean of the Rossier School of Education at the University of Southern California (USC).

They have a moral responsibility to bridge the digital divide but they dont act. They should be held accountable by Congress to invest in access to the Internet. It is a basic right at this point in our history, Noguera said.

Amazon announced its Q2 revenues on July 30. Despite the pandemic, the company doubled its net revenue from $2.6 billion for Q2 in 2019 to $5.2 billion in net revenue for the months of April, May, and June. Sales increased 40 percent to $88.9 billion in the second quarter, compared with $63.4 billion in second quarter 2019, said the company in a public statement.

Apple announced gross revenues of almost $58 billion, with $11 million in revenue.

In June, following the killings by law enforcement officers of George Floyd and Breonna Taylor, corporations pledged to spend billions of dollars on addressing structural racism and inequities, noted Shaun Harper, Executive Director of USCs Race and Equity Center.

Many of those tech companies made those announcements about the money that they were putting up without fully even knowing how they were going to spend those dollars, Harper said.

That is a lever that could be easily pulled. Just say to them, Amazon, heres how you could direct some of those resources that will help address some of the racial equity issues pertaining to schooling, particularly schools that primarily enroll mostly black and brown students.

Harper noted that people of color, who are going to be impacted more heavily by decisions on how to safely open schools, have largely been left out of the discussion. So less attention has been paid to making sure schools have grief and trauma centers for students who have lost a family member, or personal protective equipment, testing, contact tracing and cleaning supplies for food service workers, janitors, and groundskeepers, roles held primarily by people of color.

He also noted that none of the plans addressed the bullying being suffered by Asian American students for their supposed association with the coronavirus.

It doesnt help when the president of the United States repeatedly refers to it as Kong flu and the Chinese virus. It further puts Asian Americans at risk, he said.

Dan Domenech, Executive Director of the School Superintendents Association which represents all school superintendents across the nation, said his organization has asked Congress to spend $200 billion to bridge the digital divide, ensuring that students have laptops and quality access to the Internet. Increased costs for getting students back to learning work out to $490 per child, he said.

Senate Republicans have proposed a $70 billion package to aid school districts. Senate Democrats have proposed $175 billion. Domenech noted that similar to a federal provision which mandates all households have telephone access a separate provision could mandate that all households must have access to high speed internet.

The communications companies are unwilling to do this, said Domenech. The solution here is to get the federal government to put up the money, he said, noting that this was unlikely to happen before schools reopen, because the Senate July 31 recessed for summer vacation. The House has canceled its August recess until a relief bill is passed.

Eddie Valero, who serves on the Tulare County Board of Supervisors, spoke of two measures in the California state Legislature which would require communications companies to provide high-capacity broadband to all residents. Large portions of the state still have only DSL networks, which transfers data at much slower speeds, therefore making it incompatible for technologies like Zoom, the top choice for distance learning.

These bills are game-changers for education, said Valero, adding that the measures would focus on developing the infrastructure to deliver fiber broadband in currently under-served areas.

We have reached a pivotal moment in real time where we need to re-envision what school looks like for the future. We can no longer look back or stay stagnant, stated Valero.

Mary Helen Immordino-Yang, Professor of Education, Psychology and Neuroscience at the Brain and Creativity Institute and Rossier School of Education at USC, said the pandemics isolation has over-stressed childrens brain systems. Kids watching their parents struggle over the loss of a job or possible eviction become anxious themselves, but without the ability to interact with other people to help them through their crises.

Immordino-Yang advocated for a system which utilizes college-ready recent high school graduates who are not able to attend college this fall. We could tap into those young people and help them to become tutors, teachers helpers, and education activists for the kids in their vicinity.

Junior and senior high school kids could also be tapped to tutor younger students, said Immordino-Yang. They need to feel not like Im waiting here isolated for the world to reopen, but instead that they have agency to actually build their community during this terrible time period.

Video clips from the briefing:

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Tech Giants Earned Billions from Pandemic Now They Need to Bridge Digital Divide for Kids - Siliconeer World's First South Asian Digital Daily

U.S. government debt priceswere lower Monday morning as investors monitored the state of U.S. stimulus talks and the latest fraying of relations between Washington and Beijing.

At around 2:50 a.m. ET, the yield on the benchmark10-year Treasury notewas higher at 0.5673% andthe yield on the30-year Treasury bondedged up to 1.2431%. Yields move inversely to prices.

President Donald Trump on Saturday signed a series of executive orders on coronavirus relief, circumventing Congress after lawmakers failed to agree on a fresh round of fiscal stimulus to temper the impact of the coronavirus pandemic.

However, the executive orders have been widely criticized as ineffective and unconstitutional, and House Speaker Nancy Pelosi and Treasury Secretary Steven Mnuchin on Sunday signaled a willingness to restart negotiations.

Chicago Federal Reserve President Charles Evans said in an interview with CBS News on Sunday that a fresh round of financial aid would be vital to enabling workers to stay home and curtail the spread of the pandemic. The U.S. has now reported more than 5 million confirmed cases of Covid-19, with more than 162,000 deaths, according to data compiled by Johns Hopkins University.

Investors also have an eye on relations between the U.S. and China in the aftermath of Trump's executive order banning Chinese tech giants TikTok and WeChat. U.S. Health Secretary Alex Azar voiced strong support for Taiwan on Monday, a move likely to further irk Beijing.

On the data front, JOLTs job openings for June are expected at 10 a.m. ET ahead of consumer inflation expectations at 11 a.m. ET.

Auctions will be held for $54 billion of 13-week Treasury bills and $51 billion of 26-week bills.

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Treasury yields fall slightly as investors monitor stimulus bill and U.S.-China tensions - CNBC

Microsoft is part of a group of tech industry heavyweights who have formed a new foundation focused on open source. Specifically, the Open Source Security Foundation wants to increase security around open source services.

Joining Microsoft in the Open Source Security Foundation (OSSF) are Red Hat, Google, JPMC, IBM, NCC Group, and OWASP Foundation. Microsofts own GitHub is also a part of the group. Announced Monday, the collective of tech companies are also joined by the JPMorgan Chase banking firm.

All of the foundation is hosted at the Linux Foundation. In the announcement, the group said the intention is connect and secure software by leveraging the Linux Foundation. For example, the Core Infrastructure Initiative (CII) and the GitHub-initiated Open Source Security Coalition (OSSC), are part of the initiative.

In a confirmation post, Microsofts chief technology officer Mark Russinovich says the foundation will improve the security of open source software by building a broader community, targeted initiatives and best practices.

Given the complexity and communal nature of open source software, building better security must also be a community-driven process.

For a list of current project being looked at by the Open Source Security Foundation, head to the official GitHub page.

Russinovich explains securing open source software can benefit every company in the foundation, as well as users:

Open source software is core to nearly every companys technology strategy and securing it is an essential part of securing the supply chain for every company, including our own. With the ubiquity of open source software, attackers are currently exploiting vulnerabilities across a wide range of critical services and infrastructure, including utilities, medical equipment, transportation, government systems, traditional software, cloud services, hardware and IoT.

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Microsoft Joins Tech Giants in Forming the Open Source Security Foundation - WinBuzzer

On July 29, in a congressional antitrust hearing, the CEOs of four of the worlds biggest tech companies endured a five-plus-hour cross-examination filled with combative and accusatory questioning. The livestreamed bipartisan grilling was aimed at making the case that the rich corporate quartet Facebook, Amazon, Apple and Alphabet have repeatedly abused their outsize economic clout.

The next day, the four companies collectively reported $28.6 billion in second-quarter net profits. Indeed, Big Tech has demonstrated its resilience amid the coronavirus-induced economic crisis that has trashed whole sectors of the U.S. economy, leading to a record 9.5% drop in the countrys GDP for the quarter.

The House antitrust subcommittee hearing last week was long on posturing and gotcha moments and short on remedies for reining in the tech giants behavior. The question, with the pivotal U.S. election looming in November, is when or whether anything will actually change in how the Big Four companies are policed.

The upshot, according to industry and legal experts: The tech backlash has definitely picked up steam, although what form that takes remains uncertain.

Momentum to regulate the tech stalwarts is starting to increase on both sides of the aisle, says Wedbush Securities analyst Dan Ives. The strong second-quarter results of the Silicon Valley titans feed into that call for action, he adds, noting: In the COVID environment, the strong have only gotten stronger.

In the quarter, Facebook punched up revenue by 11% and said that 2.7 billion people per month now use its flagship service, with the company netting about 200 million new users in the first half of 2020. Apple also posted an 11% top-line increase, with net profit up 12% to $11.25 billion. Alphabets total revenue actually declined for the first time ever, dropping 2% on weaker Google search ad sales, but still topped Wall Street forecasts.

And Amazon thundered to record quarterly sales of $88.9 billion, up 40% on pandemic buying, and turned in an all-time-high profit of $5.2 billion, as cooped-up consumers leaned harder on the e-commerce and web services giant for delivery of goods, groceries and entertainment. The results were simply jaw-dropping given the company is still not operating at full efficiency with the surge in demand, Pivotal Research Groups Michael Levine wrote in an analysis.

Until now, investors have seen political saber rattling about Big Tech and even huge fines like the Federal Trade Commissions $5 billion slap on Facebook over data privacy violations last year as so much background noise. But with a possible Joe Biden presidency and a Democrat-controlled Senate, theres the real prospect of the U.S. government enacting laws to restrict the operations of Google, Facebook, Amazon and Apple, or taking aggressive enforcement actions. If you get blue across the board in D.C., this goes from a negligible risk to something that becomes potentially a game changer, Ives says.

More than anything, the House hearing established the competitive harms of the industry very publicly and in detail, says Vanderbilt University professor Rebecca Allensworth, who specializes in antitrust law. For foes of Big Tech, it was successful in the sense that it built political will to take action, says Allensworth. Her takeaway: Courts and regulators will be emboldened to apply the Sherman Antitrust Act to the 21st centurys technology tycoons.

Sundar Pichai, CEO of Alphabet and Google,acknowledged that reality in comments on thecompanys July 30 earning call. I think thescrutiny is going to be here for a while, and so we are committed to working through it, he told analysts. Obviously, we will operate basedon the rules. And so to the extent there are any areas where we need to adapt, we will.

The House subcommittees most damning evidence of anticompetitive behavior by the four companies was contained in selection of documents it released in connection with the hearing (out of the more than 1 million documents it obtained during its investigation). Among those were communications from Facebooks Mark Zuckerberg in which he expressed a desire to neutralize rival startups. The company has done that by copying features of competitors or buying them outright, as Facebook did with its 2012 acquisition of Instagram for $1 billion, the documents revealed. In one email, Zuckerberg wrote, Instagram can hurt us meaningfully without becoming a huge business.

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House Judiciary Committee chairman Jerry Nadler, D-N.Y., told the Facebook CEO: This is exactly the type of anticompetitive acquisition that the antitrust laws were designed to prevent.

Zuckerberg, who appeared via teleconference as did the other CEOs socially distanced thousands of miles away, couldnt contradict the record. His defense: Ive always been clear that we viewed Instagram as both a competitor and as a complement to our services. Zuckerberg also argued that the Instagram acquisition represents an American success story, in that Facebook invested in Instagrams growth. And, he noted, the FTC had access to the same documents and approved the deal eight years ago which pundits say is more of an indictment of the agencys inaction.

I would emphasize that theres often a fine line between a very competitive, hard-nosed business practice and a legal violation, says USC law professor and antitrust expert Jonathan Barnett. And so, absent an intellectual property issue, imitating a competitors product or service is not in and of itself something that could be the basis of an antitrust violation. But he added that the July 29 hearing built on the increasing reports of practices of imitating or copying products, and I think that would be of concern.

Another set of documents exposed a 2016 exchange between Amazons Jeff Bezos and Apple senior VP Eddy Cue about a deal to get Prime Videos app on Apple TV in which Cue agreed that Apple would take only 15% of app revenue (versus the standard 30% commission) with the understanding that Amazon would, in return, start reselling Apple products. That contradicted Apple chief Tim Cooks testimony during the hearing in which he claimed that we treat every developer the same.

During the hearing, Bezos was challenged to explain whether Amazon was using its status as a gatekeeper to demand WarnerMedia supply content in return for agreeing to offer HBO Max on Fire TV (which still does not carry HBO Max more than two months after launch). Bezos professed ignorance of the negotiations but said he thought the companies eventually would reach a deal. Asked if he thought it was OK in general for Amazon to employ such a bargaining tactic, Bezos was noncommittal: There could be scenarios where it could be inappropriate and scenarios where it would be very normal business and very appropriate.

Given the state of Big Techs entrenched power, what are the fixes?

The odds are now higher that U.S. regulators will explore post-merger tech breakups, says Vanderbilts Allensworth, with Facebook the most vulnerable to the possibility perhaps being forced to divest Instagram and WhatsApp. The FTC, the Department of Justice and several states attorneys are conducting their own antitrust inquiries into the large tech companies, and those may result in new rules designed to stop anticompetitive conduct.

But a breakup of the major tech companies is unlikely, says USCs Barnett. Less dramatic options are available, ranging from behavioral remedies, which leave the corporate structures in place but offer limitations, to deeper structural remedies.

The question with respect to Amazon and each of these companies is not whether theyre too big because big in and of itself cannot be the basis for an antitrust claim but whether Amazon and others are doing something now to perpetuate themselves in a way thats not whats called competition on the merits, says Barnett.

Congress, particularly under a Democratic regime, could move forward on the legislative front. One idea circulating in antitrust circles is a law that would require separation between platforms and commerce, as outlined in a 2019 article by Columbia Law School scholar Lina Khan. That would prohibit dominant tech corporations from operating businesses that compete directly with those of companies that depend on their platforms. The thorny issue here is how to define the boundaries: Would Amazon be barred from offering both Prime Video and third-party video apps? The devils in the details, Allensworth says. Regardless, any such law would probably face a legal challenge.

Spotify CEO Daniel Ek says the industry has long needed a legal framework governing app stores akin to the concept of network neutrality (forbidding internet service providers from discriminating against content providers). Spotifys 2019 complaint with the European Union about Apples App Store policies, including the 30% tax on app sales, led the EU to launch an antitrust probe into the tech company in June.

Our view is that we need some real platform principles that enable these platforms to be open, Ek tells Variety. Government intervention is necessary, he says, so that we can have a thriving marketplace.

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Tech Giants Face Growing Calls for Tougher Regulatory Treatment - Yahoo Finance

Via Americas Lawyer: Big tech leaders from Apple, Amazon, Facebook, and Google appear at the center of congressional hearings focused on whether these companies are stifling competition and free speech. Mike Papantonio & Farron Cousins discuss.

Transcript:

*This transcript was generated by a third-party transcription software company, so please excuse any typos.

Mike Papantonio: Last week CEOs from Amazon, Facebook and several other tech giants appeared before a House panel to defend their business practices and answer some really tough questions. Joining me to talk about that is Farron Cousins from trial lawyer magazine. Farron, you know, as I watched this, I was surprised at one thing. It was almost, it was almost a bilateral kind of attack on these folks, wasnt it?

Farron Cousins: It was and, you know, occasionally, it is nice to see them actually working together, especially against this particular industry. This is one that Congress, you know, the federal government at every level has allowed to run rampant for, for 20 years almost when a lot of these companies were first getting started. And now theyre trying to play catch up. And I think thats part of the reason we see Congress kind of uniting together against this because they let these, these giants now, grow and grow and grow and absorb every piece of competition along the way, or crush every piece of competition along the way. And now suddenly theyre staring down these behemoths because they didnt address it at the time.

Mike Papantonio: Okay. So weve got a $5 trillion business. Thats what, this is $5 trillion. Youve got whats been described as a digital railroad problem. What that means is weve always handled antitrust cases against the railroad, against the steel industry. Were not afraid to go, in the past, we have not been afraid to go after antitrust cases. This department of justice has failed to do it and the reason is these folks are spending so much. Theyre, theyre just spreading so much money around. You know, the easiest thing to me is to go after them on, just absolutely say, look, your 230 right, your chapter 230 right is gone. Take it from there.

Farron Cousins: Yeah, absolutely. And for anybody whos not familiar with the 230 protection, says that any of these giants specifically, really though the social media ones, Facebooks, Twitter, LinkedIns, theyre not responsible for anything that gets posted on their website. So if you go on there and you say something horrible, you issue threats, the platform itself faces no liability over allowing you to say that. And this is actually, this goes back to Bill Clintons telecommunications act. They included that as part of the telecommunications act that Bill Clinton signed into law. And a lot of what were seeing right now.

Mike Papantonio: It was a gift.

Farron Cousins: Right.

Mike Papantonio: It was take care of me, Im Bill Clinton and Im going to give this to you, which is crazy.

Farron Cousins: Well, and thats a lot of the problems we see with these giants does stem from the Clinton administration. When he deregulated further the media industry, it included these soon to be giants.

Mike Papantonio: Okay, lets talk about that just a second. Clinton comes in, I swear to you, it was about Clinton and the Democrats, and were going to get all this favorable press if we do these things. So what did they do? And go back to 19, what was it, 1980. I think there were almost sixty different independent news medias that, that covered the entire country. Now its down to three. Okay. Thats where it led us. So this is, theyre looking at the same thing here. Youre looking at this, this, at this machine that appears to be above the law. I mean, we can, they can just do whatever they, they create this nanny, you know, we now have this new nanny momentum. Were going to decide what you can read and what you cant read. If we find it offensive, you cant read it. Were going to censor it. This is out of control. And I was shocked not to see warm and fuzzy Jack from Twitter, not on that, werent you?

Farron Cousins: Well, I think Twitter, since theyre not necessarily gobbling up as many of their competitors as some of these other folks and they are, I believe for the most part, kind of strictly in the Twitter business, they have issues that have to be addressed. But I think thats why they were probably excluded from this. Because with Amazon, Google, Facebook and Apple, of course, they also do other pieces of industry. And this was, I think the primary focus on the antitrust, which is, which is huge. Amazon, Amazon owns everything. You know, Amazon has security cameras for your home. Amazon has cloud computing. Amazon makes their own products and sells them, giving those priority over competition who also sells on their website. This, this shouldnt be allowed and technically legally, its not.

Mike Papantonio: Okay.

Farron Cousins: But we didnt stop it.

Mike Papantonio: Think about this. Okay. Bezos comes in, puts mom and pop operations out of business all over the country. Now thats not enough for Bezos. Bezos now says, well, Im going to see whats selling really well. Were going to look at our, at our metrics, what sells real well, then were going to build the same thing and make it cheaper. You understand? So hes put, hes put thousands and thousands of businesses out of business. Now its not, thats not enough for him. Now even the people that ship directly that make these products, he says, Im going to copy what you do and Im going to sell it cheaper on Amazon. This guy is a machine that has got to be stopped and the DOJ needs to man up and say, look, weve done it on railroads. Weve done it on steel. Weve done time after time, banking, weve done it a lot of different ways. We got to stop this.

Farron Cousins: Well, and its funny too, because these companies all tried to use the same defense during the hearing and say, listen, but were American. Were American companies. Dont we want to make stuff in America? Dont we want to prevent the Chinese, they said from, from taking over? I mean, they really dug their heels in on trying to claim to be the most American of Americans. But, but really a lot of the stuff they make, a lot of the stuff they sell, it is in fact not coming from America at all.

Mike Papantonio: Let me run this by you. I, it was almost a laughable moment. They, the, you know, CEO, CEO of Google, sir, look, let, let me talk to you about your censorship. Let me talk to you about what youve done to the left and to the right. Let me talk about how ridiculous your censorship is. The guy comes back and he says, oh no, its a coincidence. These are just algorithm mishaps. Did you hear that? Its algorithm mishaps. Oh, theres nobody over at, look, its happened to us, hasnt it?

Farron Cousins: Yes.

Mike Papantonio: Talk about Saudi, Saudi Arabia, right? We did a story on Saudi Arabia. You did it. I did it. Talk about that.

Farron Cousins: Right. We, we had a good segment. We were talking about arms deals to Saudi Arabia. Google would not let it show up. YouTube pulled it, which YouTube is owned by Google.

Mike Papantonio: Right.

Farron Cousins: Because they said it was hate speech.

Mike Papantonio: Yeah.

Farron Cousins: It was hate speech. News of the day they said was hate speech.

Mike Papantonio: Well, thats not the only theyve done it to us.

Farron Cousins: Oh right.

Mike Papantonio: Weve had, of course, Sam Seder is a dear friend of ours. We know who theyre doing this to and theyre doing it, it is, it is the new nanny culture. And this guy with, with, with Google, hes the nanny and hes decides whats acceptable and whats not. Its got to end. I hope theyll keep pressure on here.

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