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TikTok sale deadline is Thursday, but a proposed deal hasn’t moved forward

Nov 12. 2020

By The Washington Post · Rachel Lerman, Jeanne Whalen · NATIONAL, TECHNOLOGY, COURTSLAW
TikTok has one final, major hurdle to overcome in its battle with the Trump administration over the video app’s future in the U.S. – and the deadline is looming with no clear solution.

TikTok’s Chinese parent company, ByteDance, is under a presidential order to divest from the app here by Nov. 12 – Thursday. But the deal it proposed, to take on investment from Oracle and Walmart and set up a new company, has yet to receive the green light from the government agency overseeing the negotiations.

And with no immediate threat of getting banned in the country after courts halted the administration’s shutdown order, TikTok is in a less precarious position and may be granted more time to figure out a path forward that avoids a wholesale sell-off in the U.S.

For months, the app was thrust into the spotlight of the administration’s China trade agenda. But it has seemingly fallen off the radar as Trump and his team focused on the election and coronavirus.

The video app on Tuesday asked a court to intervene and give it more time to reach a deal with the government, saying in a filing that it wants the divestment order to be vacated. TikTok said it asked a federal appeals court in D.C. for a “review of actions” of the government committee that demanded the divestiture, saying it has provided no “substantive feedback” on a deal the company has proposed.

After months of threatening to ban TikTok on national security grounds, President Trump issued an order in August requiring ByteDance to sell its U.S. operations by Nov 12. In September, the Trump administration announced it would essentially ban TikTok by that same date unless the company sold its U.S. assets.

But first a federal judge in D.C., and then a federal judge in Pennsylvania, halted the bans that would have essentially shutdown the app. The D.C. judge, Trump-appointee Carl Nichols, suggested in his ruling that the ban would “likely exceed” the bounds of the law.

That leaves, for the moment, one more avenue for the Trump administration to restrict the app – and it will be less dramatic, but likely harder for TikTok to avoid.

Trump issued his divestiture order after a review by the interagency Committee on Foreign Investment in the United States (CFIUS), which is chaired by the Treasury Department. TikTok said in its Tuesday court petition that its due process rights were violated when CFIUS “truncated” its review and referred the matter to Trump for his sign-off.

TikTok “had hoped it would not be necessary to seek judicial intervention,” but since the deadline is approaching, it asked the court to step in, it wrote in its filing.

The company said it asked the government for a 30-day extension, which was a possibility under the order, but it hadn’t been granted by Wednesday.

If TikTok doesn’t get the extension and the deal is still not finalized by Thursday, the government would be able to go to court to sue to force the sale, said Robert Chesney, an associate dean at the University of Texas School of Law.

“It’s not like a bunch of U.S. Marshals show up and make everyone at ByteDance leave,” Chesney said. “You cant unscramble the egg, at least not easily.”

It’s unclear if the government would go through with a lawsuit, especially since TikTok has proposed a deal it believes would satisfy the government’s security concerns. The Treasury Department did not comment.

TikTok has been scrambling to negotiate with investors and suitors to resolve the fight, and it struck a preliminary deal to spin off its U.S. operations with investments from Oracle and Walmart. The deal would create a new TikTok Global company headquartered in the United States, with Walmart and Oracle as investors, according to the companies.

It would also make Oracle a technology partner that secures TikTok’s U.S. data. And it wouldn’t completely cut out ByteDance – the company’s investors, which includes its founder and some employees, would still hold stakes in the new entity.

Trump gave his conditional blessing to that proposal in September, but a TikTok spokeswoman said the company hasn’t been able to finalize the deal because of the government’s process.

Even if ByteDance isn’t required to immediately divest the U.S. operations of TikTok, it still will likely need to address the privacy and data-sovereignty concerns raised by the Trump administration and others. India banned the app in June, citing a threat to national security and the privacy of Indian citizens. European data protection watchdogs launched a probe into TikTok’s privacy policies in July.

If the CFIUS-driven deal with Oracle and Walmart isn’t consummated, ByteDance would likely need to find another way to address those regulatory concerns if it ultimately hopes to sell shares in TikTok to the public at the highest possible valuation.

Casting more uncertainty on the situation is the impending end of the Trump presidency, which has been instrumental in moving the TikTok restrictions forward. President-elect Joe Biden might not be as willing to crack down on the app, though it is unclear if he would expend political capital to overturn the orders. A spokesman for the Biden campaign team said it didn’t have anything to share on its TikTok plans.

TikTok has vigorously resisted the Trump orders in court and in public statements, insisting it is not a security risk and that it keeps data private. The U.S. government said TikTok is a national security threat because the data it collects on U.S. customers could be turned over to the Chinese government.

Lawyers said the ban injunctions could make it hard for the government to enforce its order to sell the U.S. operations by mid-November. James Lewis of the Center for Strategic and International Studies, a think tank in Washington, D.C., said it seems likely TikTok would be issued the 30-day extension. He said ByteDance and the Chinese government, which must approve ByteDance’s spinoff plans, are unlikely to ignore the order.

“I expect this is the pressure on ByteDance that keeps the deal moving forward,” he said.

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Category 2 Typhoon Vamco to lash Philippine capital of Manila

Nov 12. 2020

By The Washington Post · Matthew Cappucci · WORLD, SCIENCE-ENVIRONMENT, ASIA-PACIFIC 

Amid what has already been a destructive typhoon season in the Philippines, yet another serious storm is targeting the archipelago nation.

Manila, the country’s capital, already reeling from the coronavirus pandemic, could be rocked by strong winds and a serious storm surge. The storm was given the name Vamco by the Japanese Meteorological Agency, but is referred to as Ulysses in the Philippines.

The typhoon was closing in on its second landfall on Wednesday afternoon Eastern time, the storm already having crossed parts of Patnanongan and Polillo Islands in Quezon. The system was moving ashore in the General Nakar region of Quezon, about 40 to 50 miles northeast of Manila.

At the time of landfall, it remained at “peak intensity,” with winds in the Category 2 range. The Philippine Atmospheric, Geophysical and Astronomical Services Administration (PAGASA), hoisted a Signal 3 warning, on a 1 through 5 scale, for much of Luzon, including the Manila metropolitan area. Winds gusting between 75 and 105 mph were expected.

“Heavy damage to high-risk structures” was forecast by PAGASA, indicating “increasing damage … to old, dilapidated residential structures, and houses of light materials” was likely. Rice, corn and banana plants were anticipated to be heavily damaged.

“Widespread disruption of electrical power and communication services” is also expected.

The southern flank of Vamco’s eyewall could scrape Manila, home to nearly 2 million people, with winds gusting upward of 80 to 90 mph.

The Polillo Islands and Catanduanes, where Goni made landfall earlier this month, were forecast to see a storm surge between seven and 10 feet from Vamco; in Manila, with northwesterly winds piling water up against Luzon’s west coast, a surge between four and six feet was expected.

On Nov. 1, passengers with flights out of Ninoy Aquino International Airport were stranded as Super Typhoon Goni stormed through to the north, while more than 1,300 others found themselves forced to ride out the storm in basketball courts, schools and churches. A new bill called on Philippine leaders to erect permanent evacuation shelters that could be used in emergencies like Vamco, since many storm shelters had been utilized to treat coronavirus patients.

Meanwhile, “rain-induced landslides” were forecast, with a broad five to 10 inches of rain likely near the center of Vamco’s path. A few 12-to-18-inch totals are possible along the windward (eastern) side of the Sierra Madre mountains in Luzon.

Vamco is expected to weaken some after its encounter with land before moving west through the South China Sea. It then may maintain strength through Friday local time as it nears central or northern Vietnam as a low-end typhoon or strong tropical storm.

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Drone taxis and bags of rice take flight in downtown Seoul

Nov 11. 2020An EHang Inc. 216 autonomous aerial vehicle prepares to land during an Urban Air Mobility Seoul Demo event in Seoul, South Korea, on Nov. 11, 2020. MUST CREDIT: Bloomberg photo by Seong Joon Cho. 

By Syndication Washington Post, Bloomberg · Youkyung Lee · WORLD, ASIA-PACIFIC 
A drone taxi and a drone delivery were tested in South Korea’s capital on Wednesday as the country moves closer to launching unmanned air vehicles by 2025.

The event, near Seoul’s Han River, offered a glimpse into the future and what flying vehicles might look like in a densely populated city. South Korea is investing around 24.5 billion won ($22 million) through 2022 to develop the so-called K-Drone System.

The demonstration in a quiet riverside park started with the flight of several small drones, which are designed to monitor traffic conditions and alert for any potential danger. A siren rang to signal the all clear before a larger, two-seater drone, made by Chinese company Ehang, began its takeoff.

No human passengers were on board the 5.6 meter-wide drone due to safety regulations. Instead, it carried 70 kilograms of rice bags in its seats. The vehicle glided above the river for around 10 minutes at a height of about 36 meters and reaching speeds of up to 50 kilometers (31 miles) an hour.

When the Ehang 216 passenger-grade auto aerial vehicle’s electric battery is fully charged, it can fly for as long as 30 minutes, according to Bill Choi, Ehang’s Asia business head. The company’s drones are already in use in China, for deliveries, firefighting and some tourism purposes, he said.

Flying taxis and other autonomous vehicles in the skies may sound like science fiction at the moment, but one day they’re predicted to be big business. McKinsey & Co. estimates the potential market size for drones could touch $46 billion in the U.S. alone by 2026. In Japan, it could reach around $20 billion by 2025, according to a forecast by drone startup Skyrobot Inc.

South Korea estimates its own local market for aerial vehicles will be about 13 trillion won by 2040.

Wednesday’s event was part of a series of ongoing tests of unmanned drone taxis and drone deliveries aimed at easing urban traffic congestion in South Korea.

Initially, flying cars will be controlled by a human on-board pilot and will look more like small helicopters, said Seo Jeong Seok, deputy director at the newly created department overseeing drones in South Korea’s transport ministry.

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New MacBooks get new brains with their first Apple-designed processors

Nov 11. 2020

By The Washington Post · Geoffrey A. Fowler, Heather Kelly · BUSINESS, TECHNOLOGY 
The Mac is getting a brain transplant.

Apple introduced a new MacBook Air, MacBook Pro and Mac Mini on Tuesday that feature an Apple-designed processor called the M1. The two laptops and small desktop computers are the first new Apple PCs in more than a decade that aren’t powered by chips from Intel.

Apple’s breakup with Intel marks a significant shift for Apple and the tech industry, but less of a big deal for consumers in the short run. The new computers hardly look different at all, though they promise improvements in battery life and speed, in certain circumstances.

Apple’s shift to its own processors, first announced in June, opens new possibilities for Apple’s computers, which otherwise haven’t changed much in recent years. Apple’s M1 processors use a custom design based on an architecture from a company called Arm, which Apple also uses for the processors in iPhones.

Controlling both hardware and software, Apple can better optimize for certain applications, power efficiency and potentially even evolve Macs into new forms and sizes. Macs are still a fraction of the PC market, but Apple has seen record sales of them – $9 billion in the quarter that ended in September – during the coronavirus pandemic.

Apple spent the first 24 minutes of its prerecorded video announcement on Tuesday touting the wonky capabilities of its chip designs. There was a lot of technical jargon, some charts without numbers, and videos of power users singing the new processors’ praises.

“Performance of the new M1 chip is nearly impossible to gauge as the company didn’t provide any detailed substantiation around any of the performance claims made,” said industry analyst Patrick Moorhead, of Moor Insights & Strategy. “I think these should be scrutinized extensively.” 

For most consumers, the devil will be in the details. Will the apps you use most work well on the new computers? And should you upgrade now or wait?

Here are three important factors that will matter for most consumers.

– – –

Faster apps – in some cases

Apple claims the M1 is faster than 98% of chips in PC laptops sold in the last year. It says exporting an iMovie project could be up to three times faster on the new Air compared to the old one.

But that’s for apps – like Safari, iMovie and all of the ones made by Apple – that have been rewritten to run on Apple’s new M1 chip. Existing apps will have to run using a translator built into MacOS Big Sur called Rosetta 2. How do they hold up? Apple didn’t offer any direct, specific speed comparisons using older apps and games. It said performance for these apps is generally similar, and some graphically demanding apps perform better under Rosetta.

If you rely on older apps, don’t buy one of these new Macs expecting a speed boost – at least not yet. Adobe has said it will be porting over its popular Lightroom next month and Photoshop next year. But before buying, we’d like to see how the new Macs perform with Microsoft’s Office Suite and Google’s popular Chrome browser, which has a reputation for being a processor hog.

And one more thing: The new Macs work with the newest, fastest form of wireless Internet, called WiFi 6, but you’ll need to be a on a compatible network to benefit.

– – –

Better battery life

This is the biggest news from the new lineup. The MacBook Air battery has made a leap from 11 hours to 15 hours, measured though surfing the Web over WiFi. The 13-inch MacBook Pro went from 10 hours to 17 hours.

While this is clearly good news, there’s one tiny disclaimer. These measures are based on surfing the Web with Apple’s Safari browser, which is one of the apps that’s been updated for the M1 processor. Apple didn’t offer battery test comparisons for any other apps.

– – –

The things that didn’t change

On the outside, the new computers look almost identical to the previous generations, down to the dimensions. The Air and the Pro have all the exact same measurements and weight. The Mac Mini is the same size but has lost 0.3 lbs.

Apple also isn’t changing the paltry amount of RAM – 8 GB – that comes in its base-model laptops. You can buy more, but only up to 16 GB, and only if you order it with the computer – you can’t decide to upgrade later. Another longtime feature improvement Apple didn’t address is the number of ports. Both the Air and 13-inch Pro just come with two USB 4 ports – and no return to Apple’s popular old MagSafe chargers.

Also mostly the same: prices. The MacBook Air and MacBook Pro keep the same starting prices, $1,000 and $1,300 respectively, while the Mac Mini will cost $100 less than before, starting at $700.

One of the few design differences will be what you hear. The latest MacBook Air won’t have a fan, which Apple says means the computer will be quieter, even when it’s running the most demanding apps. The real test will be if its new fan-free design can keep it from heating up.

The remaining non-changes were expected, but still might disappoint anyone hoping for a flashy reason to upgrade. In our Zoom-times, the cameras on the MacBook Air and MacBook Pro are still the same 720p resolution, though Apple claimed its new processing power would improve the image quality.

And if you want a touch screen or FaceID on your computer, your only choice remains an iPad Pro.

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Europe fined Google nearly $10 billion for antitrust violations, but little has changed

Nov 11. 2020

By The Washington Post · Jeanne Whalen · BUSINESS, WORLD, TECHNOLOGY, COURTSLAW, US-GLOBAL-MARKETS, EUROPE
The European Union spent a decade pursuing Google on antitrust charges, ultimately fining the company nearly $10 billion for using illegal tactics to abuse its dominant position on the market.

But two years after the bloc’s biggest rulings, very little competition has emerged, in part because the E.U. largely left it to Google to fix the problems, antitrust lawyers and Google competitors say.

Google’s fixes included charging a fee to rival search engines that wanted to appear on a selection menu for Android phones, a step that drew howls of protest from competitors – why should they have to pay Google to help it fix its anticompetitive behavior, they asked?

“The bad actor gets to decide what their medicine is going to be. And that’s just crazy, right?” Megan Gray, general counsel of rival search engine DuckDuckGo, said in an interview.

With the Justice Department filing its own antitrust case against Google last month, U.S. government lawyers are scrutinizing the European results. Google continues to dominate more than 90% of Europe’s search-engine market, just as it did before the E.U. probes began in 2010, data from the analytics firm StatCounter show. Google competitors in the online shopping business, meanwhile, complain the playing field is still tilted in the tech giant’s favor.

Some veterans of the E.U. battle say the outcome shows the difficulty of restoring competition to a market that has already tipped under the control of one giant. They also say the European Commission was held back by a belief that Europe didn’t have the political standing to impose tougher measures, such as a breakup, on an American company.

“As a matter of politics, the European Commission is not going to break up an American icon. That just ain’t going to happen,” said Thomas Vinje, an antitrust lawyer at Clifford Chance who advises an industry group that helped spark the Commission’s investigation by filing a complaint against Google. The group, FairSearch, is funded by Oracle, TripAdvisor and others.

The Justice Department lawsuit hinted at possibly tougher measures, should the government win its case, asking the court to consider “structural relief,” which theoretically could include a requirement that the company sell a portion of its business.

“It’s more difficult to win a case in the U.S. than in Europe. However, the U.S. in the past has applied more far-reaching remedies, mandating divestitures and breakups,” said Gene Kimmelman, former chief counsel for the Justice Department’s antitrust division, who now serves as senior adviser to the nonprofit tech-policy group Public Knowledge.

In a blog post after the U.S. filed its lawsuit, Kent Walker, Google’s senior vice president of global affairs, said consumers “use Google because they choose to, not because they’re forced to, or because they can’t find alternatives.” He called the Justice Department case “deeply flawed’ and said it “would do nothing to help consumers.”

Google spokesman Jose Castaneda disputed the idea that the European Commission investigations have changed nothing, saying the bloc’s probe of Google’s role in the online shopping market led the tech giant to make changes that are “subject to intensive monitoring” and “generating billions of clicks for more than 600 comparison shopping services.”

He declined to comment on Google’s continued dominance of general search queries. Google is appealing the E.U. rulings.

A spokeswoman for the European Commission, which also announced antitrust charges against Amazon on Tuesday, said the bloc “continues monitoring the market with a view to assessing the effectiveness of the remedies” applied in the Google case.

She added that the commission plans to propose new legislation to the European Parliament to help “address more effectively” competition problems in the tech sector.

Margrethe Vestager, who oversees competition policy at the commission, has said the bloc is considering proposing powers that would give it more flexibility to address “structural competition problems.”

The E.U.’s former chief competition economist, who was involved in the Google cases, summed up the lackluster result with a rueful joke on Twitter last month. 

“How it started, how it’s going,” Tommaso Valletti tweeted, atop two slides: the E.U.’s 2010 announcement opening an antitrust investigation into Google and a chart showing the tech giant continuing to monopolize the search-engine market ever since.

Rivals Bing, Yahoo, Yandex and DuckDuckGo have held steady with a small sliver of the market, according to StatCounter data.

U.S. federal and state prosecutors have closely studied Europe’s pursuit of Google to try to draw lessons. Last year, a group of state attorneys general investigating the tech giant hired an adviser with long-running ties to one of the E.U. probes: Cristina Caffarra, a U.K.-based economist and consultant who previously advised Yandex, a Russian tech company whose complaints about Google helped kick off one E.U. investigation.

Caffarra in the past also advised Google critic News Corp. 

“When I started advising the AGs last year, I had my first meeting with them in Austin,” Caffarra said in an interview. One of their big questions about the E.U. campaign was, “Why hasn’t it worked?” she said.

Caffarra said she explained some of the “limitations” of the European response, including that it gave Google the power to design its own remedies. “The state AGs were all looking at me, saying, ‘We are the government. We can break them up.'”

Many of the allegations in the Justice Department’s 60-page lawsuit mirror the findings of the E.U.’s biggest probe: that Google used illegal tactics to ensure its search engine and apps were widely adopted by phone manufacturers and mobile-network operators, which often determine the specs of phones used in their networks.

The commission’s probe, which ended in 2018, found that Google required Android phone manufacturers to pre-install Google’s search engine and the Chrome browser app as a condition for licensing the Google Play app store, a feature no Android phone can do without. It also found that Google paid some phone manufacturers and mobile network operators in exchange for exclusively pre-installing Google Search.

“These practices have denied rivals the chance to innovate and compete on the merits. They have denied European consumers the benefits of effective competition in the important mobile sphere,” the Commission concluded.

The E.U. fined Google $5.1 billion and ordered the company to cease its anti-competitive conduct within 90 days, but the commission essentially left it to Google to propose and adopt changes to remedy the infractions, lawyers say.

The commission did informally push back on one of Google’s proposed remedies, when the tech giant suggested it tweak its contracts with phone manufacturers in a way the Commission viewed as insufficient, Vinje said.

But generally, the commission felt “that it’s appropriate to leave it to companies to find their own means to deliver the end result,” said Alec Burnside, an antitrust lawyer at Dechert LLP in Brussels, who has represented several Google opponents in antitrust cases.

The fixes Google did adopt changed little, said Gray, DuckDuckGo’s general counsel.

“First, Google sent out an alert to all Android phones [in Europe], in the spring of 2019,” Gray said. “It sent an alert saying, ‘Hey, would you like another search engine? Click one of these other options.'”

“With no context or background, it was a really weird alert. If you stopped in your tracks and paid attention . . . and picked DuckDuckGo, it downloaded from the Play store the DuckDuckGo app,” she said. But that download didn’t change any of the phone’s default search-engine settings, so the effect was minimal, she said.

Google also offered rivals the chance to bid for a spot in the search-engine choice menu for new phones running on Google’s Android software. Gray said rivals bristled at the idea of paying Google to help it “correct its anti-competitive behavior.”

Google said its offer was a “fair and objective method to determine which search providers are included in the choice screen. It allows search providers to decide what value they place on appearing in the choice screen and to bid accordingly.”

Google also said that if no rival search engines bid for the slots, it would randomly choose competitors to display free.

After a separate probe, the E.U. in 2017 fined Google $2.8 billion, concluding it had “abused its market dominance” to give an “illegal advantage” in its search results to Google Shopping, the horizontal bar of product ads Google features at the top of the search results screen.

The commission concluded that Google had demoted rival shopping sites that compare prices for various products, such as Foundem, a U.K. company that helped spark the investigation by complaining to the commission that Google was unfairly suppressing its site in the search results.

After the commission ordered Google to cease its anticompetitive behavior, Google offered companies such as Foundem the chance to bid for ad space in the Google Shopping bar.

Foundem chief executive Shivaun Raff said the company has refused to bid for the ads, because that would harm consumers by featuring products that “will pay Google the most money for a click.”

Inside the commission, the Google cases are “seen as failures,” said Damien Geradin, a lawyer in Brussels who regularly represents companies opposing Google in antitrust matters.

“These are great decisions with great principles. I think the Department of Justice can find great information there,” Geradin said. “But at the end of the day the remedies were not there.”

“In a way the best thing that could happen in the E.U. would be for the U.S. action to succeed,” he said.

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China clampdown on Big Tech puts more billionaires on notice

Nov 10. 2020President Xi Jinping 

By Syndication Washington Post, Bloomberg · Zheping Huang, Coco Liu · BUSINESS, WORLD, TECHNOLOGY, US-GLOBAL-MARKETS, ASIA-PACIFIC 

Xi Jinping’s Communist Party is stepping up efforts to rein in some of China’s most powerful companies, jolting investors and dealing a blow to the country’s richest entrepreneurs.

 Beijing on Tuesday unveiled regulations to root out monopolistic practices in the internet industry, seeking to curtail the growing influence of corporations like Alibaba Group Holding and Tencent Holdings. The rules, which sent both stocks tumbling and sparked a wider selloff in Chinese equities, landed about a week after new restrictions on the finance sector that triggered the shock suspension of Ant Group Co.’s $35 billion initial public offering.

While Xi’s government has been steadily tightening its grip on the world’s second-largest economy, it has until recently taken a relatively hands off approach toward businesses that dominate China’s burgeoning internet, e-commerce and digital finance industries. Authorities are concerned the companies have become too powerful, according to Ma Chen, a Beijing-based partner at Han Kun Law Offices.

“This is a watershed moment,” said Ma, who specializes in antitrust.

Alibaba, Ant and Tencent alone commanded a combined market capitalization of nearly $2 trillion before last week, easily surpassing state-owned behemoths like Bank of China as the country’s most valuable companies. Tuesday’s selloff sent Alibaba shares down 5.1% to the lowest since Sept. 29 in Hong Kong, while analysts have estimated that Ant’s $280 billion valuation could be cut in half due to stricter regulations. Both companies were co-founded by billionaire Jack Ma, China’s most celebrated businessman.

Tencent, the gaming to payments giant whose rise turned co-founder Pony Ma into China’s richest man, sank 4.4% on Tuesday. It was the second-largest contributor to the 0.4% drop in the Hang Seng China Enterprises Index. Meituan, the food-delivery startup that has since expanded into hotel bookings and movie tickets, was the biggest drag, tumbling 10.5%. The company declined to comment while representatives from Alibaba and Tencent didn’t immediately respond to queries.

China’s antitrust watchdog is seeking feedback on a raft of regulations that establish a framework for curbing anti-competitive behavior such as colluding on sharing sensitive consumer data, alliances that squeeze out smaller rivals and subsidizing services at below cost to eliminate competitors. They may also require companies that operate a so-called Variable Interest Entity — a vehicle through which virtually every major Chinese internet company attracts foreign investment and lists overseas — to apply for specific operating approval.

The latest proposal follows heightened scrutiny of technology companies worldwide, as regulators investigate the extent to which internet giants from Facebook Inc. to Alphabet Inc.’s Google can leverage their dominance. Consumers in China — home to some of the world’s largest corporations from e-commerce giant Alibaba to WeChat-operator Tencent — have in recent years protested against the gradual erosion of their privacy via technology from facial recognition to big data analysis.

Beijing is increasingly seeking to diminish the influence that a handful of its tech corporations wield over vast swathes of the economy. It investigated Tencent’s music arm’s exclusive agreements with publishers last year and, most recently, modified regulations to rein in risk at fast-growing micro-lending entities such as Ant Group. The latter step derailed Ant’s planned IPO last week, before it was to complete what would have been the world’s largest such offering on record.

“There seems to be a broader China government sentiment that internet platforms are becoming too powerful,” said Hoi Tak Leung, a Hong Kong-based lawyer specializing in Chinese internet companies at Ashurst. “This would be consistent with worldwide developments as well.”

The new rules were proposed in accordance with and build on China’s Anti-Monopoly Law, which in January included broad language governing internet companies for the first time. They restrict targeting specific customers through their online behavior, a common practice adopted by players both at home and abroad. Under the regulations unveiled by the State Administration of Market Regulation, violators may be forced to divest assets, intellectual property or technologies, open up their infrastructure and adjust their algorithms. The watchdog will seek public feedback on the regulations till Nov. 30.

Representatives from Alibaba, Tencent, TikTok-owner ByteDance and 24 other tech giants attended a meeting with regulators from the antitrust and cyberspace authorities earlier this month to discuss issues ranging from unfair competition to counterfeiting. “Internet platforms are not outside the reach of antitrust laws, nor are they the breeding ground for unfair competition,” the regulators said in a subsequent statement.

Further measures to tighten oversight of the tech companies may be in the offing. Regulators plan to release new rules governing internet transactions by June 2021, according to a State Council statement released Tuesday.

The government is now trying to update its laws for the internet era, to adapt to an industry where market dominance isn’t always easily quantifiable. In the past, China used revenue or market share to determine whether a company held a monopoly. But those precepts may not apply to internet firms, which sometimes control valuable information that haven’t yet been monetized.

JD.com, for instance, has accused bigger rival Alibaba of unfairly locking in exclusive agreements with merchants, which Alibaba has denied. Regulators have investigated the legality of Cheng Wei’s Didi Chuxing acquiring Uber Technologies’s Chinese business. And Tencent’s WeChat dominates many aspects of daily Chinese life from payments to gaming, though ByteDance, co-founded by Zhang Yiming, has in recent years begun to eat into its advertising business through video service Douyin and news platform Toutiao.

Alibaba and Tencent now dominate e-commerce and gaming, but are also key backers of leaders in adjacent businesses such as Wang Xing’s Meituan and car-hailing leader Didi. They’ve together invested billions of dollars in hundreds of up-and-coming mobile and internet companies, gaining kingmaker status in the world’s largest smartphone and internet arena by users. Companies like ByteDance and Tencent-rival NetEase, controlled by William Ding, that have risen to prominence without backing from either of the pair are viewed as rare exceptions. In other areas, Robin Li’s Baidu dominates online search.

“The Party is faced with the conflicting desires to empower domestic tech companies to be internationally competitive, while keeping their market activities firmly under control at home,” said Kendra Schaefer, head of digital research at the Trivium China consultancy in Beijing. “The horizontal spread of Chinese big tech makes anti-monopoly regulation that much more urgent for Chinese regulators.”

Han Kun Law’s Ma said the specific regulation pertaining to VIEs requiring approval should be of concern to much of the industry as well. The model has never been formally endorsed by Beijing but has been used by tech titans such as Alibaba to list their shares overseas. Under the structure, Chinese corporations transfer profits to an offshore entity with shares that foreign investors can then own. Pioneered by Sina Corp. and its investment bankers during a 2000 initial public offering, the VIE framework rests on shaky legal ground and foreign investors have been nervous about their bets unwinding overnight.

“It will not only have a huge impact on Alibaba but also all the companies that use a platform business model and a VIE structure,” Ma said.

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Amazon hit by EU complaint, faces new probe over sales

Nov 10. 2020

By Syndication Washington Post, Bloomberg · Aoife White, Stephanie Bodoni · BUSINESS, WORLD, EUROPE
Amazon.com became the European Union’s latest Big Tech target as regulators escalated a case into how it uses rivals’ sales data on its platform and added a new probe into whether it unfairly favors its own products.

The European Commission said it suspects Amazon violated antitrust rules over its use of non-public business data from independent sellers on its marketplace that could benefit the company’s own retail arm. The EU regulator will also probe how Amazon chooses products for a prominent “buy box” and whether Amazon pushes retailers to use its own logistics and delivery services.

“We do not take issue with the success of Amazon or its size,” Margrethe Vestager, the EU’s antitrust commissioner, told reporters at a press conference in Brussels on Tuesday. She said the EU’s concerns focus on “very specific business conduct” linked to Amazon’s dual role as a retailer and a platform for smaller merchants.

An EU statement of objections for Amazon raises the risk of potential fines or a possible order for it to change business practices. Vestager has been ramping up scrutiny of many other big tech firms, adding probes into Apple Inc. and Facebook Inc. as well as some $9 billion in fines for Google. Regulators are also weighing new rules for online giants that critics say run a rigged game when they set the rules for platforms that also host their competitors.

Amazon disagrees with the EU’s assertions and “will continue to make every effort to ensure it has an accurate understanding of the facts,” it said in an emailed statement.

Amazon shares slid more than 2% in premarket trading.

“Amazon represents less than 1% of the global retail market, and there are larger retailers in every country in which we operate,” the company said. “There are more than 150,000 European businesses selling through our stores that generate tens of billions of euros in revenues annually and have created hundreds of thousands of jobs.”

While Amazon’s global sales last year were $280.5 billion, any fine is likely to be far less than the 10% of annual revenues the EU could levy — and would be based on sales in European markets. Amazon made $22.2 billion in Germany and $17.5 billion in the U.K. in 2019, the only European sales it breaks out.

Amazon has around 3 million active merchants selling products on its site, with around a third of those in Europe, according to a 2019 report by e-commerce analysis firm Marketplace Pulse.

The EU warned last year it was probing suspicions that Amazon could spot best-selling products and start stocking the same thing itself — essentially cherry-picking the most profitable or high-volume goods.

Regulators say the use of non-public marketplace seller data allows Amazon to avoid the normal risks of retail competition and allows it to abuse a dominant position as an online host for merchants in France and Germany. Amazon’s retail arm can access “very large quantities of non-public seller data” which flow into automated systems that can calibrate Amazon’s own retail offers. That can help Amazon make “strategic business decisions” that might harm other sellers.

The new investigation focuses on the “buy box” where Amazon highlights sellers of a particular product. Some 80% of sales go to the winner of the buy box, Vestager said. The EU will check how Amazon selects the winners of that box and how sellers can offer products to the Prime loyalty program. Officials will also check if that effectively favors Amazon’s own products and sellers that use Amazon’s logisitics and delivery service.

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Facebook takes down a large network of pages tied to former Trump chief strategist Stephen Bannon for misinformation

Nov 10. 2020

By The Washington Post · Elizabeth Dwoskin · NATIONAL, TECHNOLOGY, POLITICS 
Facebook took down a widespread network of pages tied to President Donald Trump’s former chief strategist Stephen Bannon for pushing misinformation about voter fraud and delegitimizing election results.

Bannon’s page also incurred penalties, including not being allowed to post content, but was not removed from Facebook.

The seven pages, which had a total of more than 2.45 million followers and had pushed the “Stop the Steal” messaging that alleges election fraud, were flagged for Facebook by the liberal group Avaaz on Friday night.

The move comes just days after Bannon was permanently banned from Twitter after saying that Trump should execute Anthony Fauci, the nation’s leading infectious-disease expert. Facebook had also removed two videos from his page for inciting violence.

“We’ve removed several clusters of activity for using inauthentic behavior tactics to artificially boost how many people saw their content,” said Facebook spokesman Andy Stone. “That includes a Group that was originally named ‘Stop the Steal’ which later became ‘Gay Communists for Socialism’ and misled people about its purpose using deceptive tactics.”

Bannon did not immediately respond to requests for comment.

Social platforms have taken unprecedented steps to police misinformation in the chaotic aftermath of the election, but numerous problematic groups have still gained large followings. Last week, “Stop the Steal” groups rapidly gained hundreds of thousands of members and pushed related events protesting election outcomes, before Facebook banned one large group for inciting violence.

The pages taken down include those of Brian Kolfage, Conservative Values, We Build the Wall Inc., Citizens of the American Republic, American Joe and Trump at War.

Kolfage is a longtime Bannon ally. He was indicted with Bannon and two others in August for allegedly defrauding donors to a crowdfunded effort to build a private U.S.-Mexico border wall.

In an interview, Avaaz analysts said they noticed the pages were interconnected in a way that raised red flags. They tended to post content at exactly the same time, for example. Some of the pages shared an administrator – often Bannon and Kolfage. Some of the pages included links to a Bannon-affiliated website called Populist Press, which included stories that have been debunked by fact-checkers.

“In 2016, Steve Bannon was buoyed by the Facebook algorithm and helped define the political narrative for millions of Americans,” Fadi Quran, campaign director at Avaaz, said in a statement. “Over the last few months, pages and groups connected to him pushed ‘voter fraud’ and other misinformation content to millions. Now, he is seeking to further divide America and spread chaos in this post-Election Day landscape, again using Facebook. Facebook has finally acted after Avaaz’s pressure, but the question is: Why did the company not act earlier?”

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No social media is safe: How election misinformation spread on LinkedIn, Pinterest and Nextdoor

Nov 10. 2020Biden supporters celebrate President-elect Biden./ file photo 

By The Washington Post · Cat Zakrzewski, Rachel Lerman · NATIONAL, TECHNOLOGY, POLITICS, MEDIA 

Pinterest, LinkedIn and other smaller social media sites have again been forced into the war against misinformation this election cycle, showing the challenges of policing the spread of lies online.

On image bookmarking-site Pinterest, researchers found a search for the phrase “stolen ballots” uncovered posts promoting baseless claims about the vote-counting process. On LinkedIn, the business-focused social network, users shared articles and videos that pushed false claims about the election results. And on neighborhood-focused social media site Nextdoor, users reported false claims of voter fraud in Wisconsin and Pennsylvania.

Those social networks have long struggled with the misinformation runoff from bigger rivals, like Facebook and Twitter, who have worked to stifle the spread of election disinformation on their sites. Those tech giants have spent months preparing for this period, marshaling tens of thousands of content moderators to slap labels on posts, hide tweets and even shutting off political ads.

The more misinformation circulates on the large social networks, the more it trickles down to the smaller sites better known for posting wedding photos, connecting with potential employers and complaining about a neighbor’s dog.

“Of course, the Internet is a space without borders, and that means the conspiracy theories and propaganda and misinformation does not remain static across platforms,” said Samuel Woolley, program director of propaganda research at the University of Texas’s Center for Media Engagement.

It’s not the first time. In the lead-up to the 2016 election, Pinterest became a repository for thousands of political posts created by Russian operatives. Pinterest was one of the first social media companies to decisively crack down on anti-vaccine disinformation in 2019, and it expanded policies to prohibit voting misinformation this year. LinkedIn last year started releasing reports of its content moderation practices, where it detailed that it was removing fake accounts, spam job postings, harassment and even child exploitation.

In the past week, misinformation and conspiracy theories have surged across the board online – something largely expected by the research community and the tech companies. President Trump took to Twitter to falsely claim victory, and he and his team claimed the Democrats were trying to “steal” the election. Fake posts about voter fraud in Arizona and Georgia also took off. Major media networks declared Joe Biden had won the election on Saturday despite Trump’s repeated denials.

Twitter labeled several of Trump’s posts, and Facebook banned a “Stop the Steal” group that was trying to mobilize supporters to protest.

The smaller platforms have fewer people to respond to the fake claims, but in some instances they are taking much more expansive steps to stop falsehoods about the election from gaining traction on their platforms.

In Pinterest’s case, the company removed posts about stolen ballots that violated its policies. It is now preventing searches of controversial topics that are more likely to turn up election misinformation, like “stolen ballots.” The company also cracked down on phrases that are gaining traction about conspiracy theories, such as “Sharpiegate,” a false claim that votes were eliminated in Arizona because people used Sharpie pens to mark them.

“One of the ways they’re cutting the corner on the fact that they have less resources for doing the moderation is they’re just straight up blocking some of these terms and hashtags, which works better,” said Alex Stamos, the former chief security officer of Facebook and the director of the Stanford Internet Observatory. He’s part of the election integrity project, which flagged the problems to Pinterest. “It’s much easier to just block Sharpiegate than to try to wade through misinformation and what isn’t. You can still enjoy your handmade tea cozy pictures without having your Sharpiegate content.”

Pinterest says its teams are working to proactively review and remove content that apparently intends to legitimize election results on the basis of false and misleading claims.

“Our goal is to inspire Pinterest users with useful and relevant ideas, and we believe misinformation takes away from this experience,” company spokeswoman Charlotte Fuller said.

Pinterest’s fight is indicative of the “long tail” of misinformation that spreads from major sites such as Facebook and Twitter to smaller social media sites and blogs, Woolley said. Even though the smaller sites have fewer users, they often have even more tightly knit communities that trust what each other share.

“Just because they don’t have the same ability to go viral, that doesn’t mean they can’t have some kind of impact,” Woolley said.

Microsoft-owned LinkedIn had been preparing for the election and is employing many of the same content moderation tactics it used to respond to misinformation about the coronavirus. The company also created an election news module where people can find news from authoritative media sources about the election results, which is being updated by a team of 75 editors.

“We’re closely monitoring for and taking action on content that violates our policies, including unfounded claims of election fraud,” LinkedIn spokesman Greg Snapper said. “We also continue monitoring for and taking action on any premature claims of victory, unless the content includes context that the claim is being disputed or is premature.”

Still, one post asserted that there was systematic voter fraud in Pennsylvania, despite a lack of evidence. In another post, a user linked to a video from One America News that falsely claimed Trump won the election and Democrats were trying to steal it. LinkedIn has removed these posts.

One tactic that may be working for Nextdoor: vigilant volunteer moderators who police their own groups.

Some users reported seeing claims of voter fraud or other election gripes pop up but quickly get taken down.

“It’s crazy that they’re able to remove these conversations about the election so quickly,” said Jenn Takahashi, who manages the Twitter account Best of Nextdoor. The account collects Nextdoor screenshots from users across the nation.

Takahashi asked followers about election misinformation and found that many people had seen a post but checked back later to find it gone. But others shared screenshots of posts alleging voter fraud that remained online, including one promoting a false claim that Wisconsin had more votes than registered voters.

Nextdoor did not respond to a request for comment.

Debunked claims of voter fraud, including the one about Sharpies, continued to spread on meme site iFunny, according to disinformation researchers. One meme showing a fake story about Canadian military intervention racked up 1,600 likes. iFunny removed that post and several others after The Washington Post inquired about them.

iFunny’s policies allow political satire and opinion, and prohibit calls for others to support a particular candidate. “We are product-focused on humor, not on breaking news or politics,” Denis Litvinov, chief information officer of parent company FunCorp said in a statement. It increased moderating resources, but hasn’t seen anything “extremely unusual” for such a big event, he said.

These companies also have more flexibility because they do not see political speech and news as core to their product offering in the same way as websites like Facebook and Twitter, misinformation experts said. And in some ways, the smaller social media sites have an easier time enforcing policies because they are not thrust into the political spotlight as often.

“People don’t direct as much ire at a company like Pinterest when they make very firm decisions to block, say, anti-vaccine content as they would at Facebook,” Woolley said.

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Trump’s power on Twitter, Facebook will outlive his presidency

Nov 10. 2020Trump’s tweets, more than 32,000 and counting since formally entering politics, continue to shape the news cycle.MUST CREDIT: Washington Post photo by Jabin Botsford 

By The Washington Post · Craig Timberg, Elizabeth Dwoskin · NATIONAL, TECHNOLOGY, POLITICS, WHITEHOUSE, MEDIA 
President Donald Trump will leave the White House, whether it be in January or four years later, with a massive social media following that he could use to shape the nation’s politics throughout his successor’s administration and beyond.

When Trump started his first campaign in 2015, he had just 3 million Twitter followers and 10 million on Facebook. But should Democrat Joe Biden’s narrow electoral edge Friday morning hold and withstand certain legal challenge, Trump would leave office with a singularly powerful online megaphone – at least 88 million followers on Twitter, 33 million on Facebook and 24 million on Instagram – that will give him a unique ability to communicate his thoughts to legions of supporters accustomed to hearing from him more than three dozen times a day.

It’s a pace he could easily keep up as a private citizen looking to influence debates, mock opponents or help revive his flagging business interests, say social media researchers.

This power, honed and enhanced through two national campaigns and nearly four years as president, gives Trump the opportunity to do something rarely attempted by the 44 men who previously held the nation’s highest office – keep the national gaze fixed on himself as a new chief executive tries to command the national stage. It’s something that could complicate Biden’s stated goal of reunifying a nation fractured across regional, racial and partisan lines.

“There’s no way that Donald Trump sits on his hands while Biden undermines his legacy,” said Timothy Naftali, a New York University historian. “He is likely to be a fundamentally disruptive presence in American political life as an ex-president. And that is, once again, norm busting.”

Trump also could remain a potent force for misinformation by continuing to undermine the election’s legitimacy and sow doubt about the results in the minds of millions of people, researchers said. He has repeatedly railed against mail ballots and other elements of the national vote, making unfounded claims he has pressed with ever greater intensity as Biden mounted an apparent comeback in recent days.

His allies have turned to Facebook, Twitter, YouTube and other social media platforms to echo and amplify these claims, often peddling misleading videos and other supposed evidence that independent fact-checkers have deemed false, prompting numerous actions by technology companies to label or remove the misleading claims.

Despite frequent complaints by Trump and his allies that technology companies are biased against him, the day after the election he had five of the 10 Facebook posts with the most English-language interactions – a category that includes retweets, likes and other user actions – according to data from CrowdTangle, an analytics tool.

His tweets, more than 32,000 and counting since formally entering politics, continue to shape the news cycle, even as they increasingly get slapped with warning labels for violating Twitter policies against misinformation. Trump’s misleading election night tweet claiming he had a “big win,” well before the election was decided, for example, got 125,000 retweets before Twitter restricted it.

Trump may prove easier to ignore as a former president, at least by those who dislike his politics or his bombastic, truth-bending style. But judging by ballots cast in this election, the president’s base of support is roughly 70 million Americans – a group so large that, if taken by themselves, would exceed the population of the United Kingdom, the world’s 21st largest country.

“Whenever Trump leaves, he will leave with the biggest direct-to-supporter communications infrastructure in modern politics,” said Philip N. Howard, director of the Oxford Internet Institute. “He’ll be able to keep his supporters in an information bubble for an extended period well beyond the end of his public office. And he’ll have a loyal and adoring audience for his political heckling and product placement – the ultimate distribution network for conspiracy, sensationalism, extremism and polarization.”

The nation’s first president, George Washington, set a standard of non-intervention by stepping down after two terms and retiring to his Northern Virginia plantation, Mount Vernon, despite growing rancor among his fellow Founding Fathers.

Many presidents have since taken more visible and vocal roles after leaving office, Naftali said. Theodore Roosevelt, for example, soured on his hand-picked successor, William Howard Taft, and started his own political party. Roosevelt then ran unsuccessfully again for the presidency, in 1912, four years after initially stepping down.

But recent decades – in an era in which the power of television has made presidents akin to celebrities capable of reaching most of the nation with an immediacy once impossible – have seen former presidents of both parties largely step away from the political spotlight after leaving the White House.

Trump’s predecessor, Barack Obama, didn’t even open his own Twitter account until his second term but eventually built an even larger Twitter following than Trump’s, accumulating 125 million followers. But Obama largely held his tongue on partisan politics until recent months, as this year’s presidential campaign quickened. And Obama has never tweeted with anything close to the frequency or impact of Trump.

Trump’s ability to command attention goes far beyond the mere numbers of followers he has on various platforms. Even his detractors agree the president has rare skill at using Twitter to drive conversation with posts that are often harsh – even inflammatory – but hard to ignore. His rapid-fire style, complete with frequent capitalizations and the occasional spelling error, makes his voice hard to tune out.

Trump also benefits from the unrivaled enthusiasm of his followers, many of whom share his messages instantaneously by using software to automatically retweet him, researchers have found. Some use his Twitter feed as a primary source of their news, akin to having the television always on in the background, said Claire Wardle, U.S. Director of First Draft, a nonprofit organization focused on addressing misinformation and disinformation.

“The networked infrastructure that the Internet allows, he has capitalized on that in an extraordinary way,” Wardle said. “He has his megaphone, but he also has this network that takes his messages and distributes it in their own communities.”

She pointed out that prior to the 2016 election, Trump had conversations with television networks about having his own show. “But today he doesn’t need Trump TV when he has the most powerful communication network at his fingertips,” Wardle said.

Whenever he leaves the White House, Trump will lose the extra leeway that Twitter affords world leaders, and Facebook may stop bending it policies to soothe criticisms from the president and his political allies. But even when that deference disappears, Trump will retain the ability to turn up the volume on his claims, even if he may have to become more cautious about how he makes them.

He has used his time in office effectively to grow his follower base tremendously. Trump’s median number of retweets, which was 66 the month before announcing his candidacy in June 2015, has soared by nearly 30,000%, to 19,600 last month, said Darren Linvill, a social media researcher at Clemson University.

Trump and his campaign also built a formidable email list, with tens of millions of valuable names and email addresses, during his time as a politician. The Trump campaign has sent out more than 460 million emails seeking donations to support its legal fight related to the election since Tuesday, according to data compiled by Trevor Davis, chief executive of CounterAction, a Washington-based digital intelligence firm. He said other politicians have used such lists to raise money for other candidates and exert influence after leaving office.

“An email list is a source of political power,” Davis said.

Trump also has developed an echo chamber of supporters throughout the social media universe, including influential conservatives and countless ordinary supporters who respond to his messages and contend that hostility from mainstream news sources and tech companies could prevent his voice from being heard. An elaborate, well-development network of far-right groups, such as the violent all-male Proud Boys and supporters of conspiracy theories such as QAnon, revere Trump and work to amplify what he says, online and off.

One critical test of whether Trump’s megaphone will be as potent after he leaves office will be whether he can forge the same close alliance with Fox News that he enjoyed during his presidency, said Yochai Benkler, co-director of the Berkman Klein Center for Internet & Society at Harvard University and an expert on the news media and misinformation. Fox pundits have consistently repeated White House talking points, as has the news side of Fox, Benkler said, giving significant credence to and amplification for Trump’s messages.

Another issue will be whether Trump tries to capitalize financially on his audience in the months ahead, Benkler said. He suggested Trump could go into competition with Fox if he doesn’t regain the same level of support following a bruising election in which the president and his allies criticized the network for its polling and its election-week declarations about which states had been won by Biden.

So far, he said, the news network has shown “restraint,” in its coverage of the Trump campaign’s allegations of voter fraud and attempts by Democrats to steal the election. “But I’m not sure it will hold,” he said.