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Tag: trade and development

  • Putin’s ruthless power play may not preclude a revival of Ukraine grain deal | CNN Politics

    Putin’s ruthless power play may not preclude a revival of Ukraine grain deal | CNN Politics

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    CNN
     — 

    Russian President Vladimir Putin just reminded the world that he has the capacity to apply pain far beyond the excruciating torment he’s inflicting on Ukraine.

    Russia’s suspension of a deal allowing the export of Ukrainian grain from a region fabled as the world’s bread basket threatens to cause severe food shortages in Africa and send prices spiraling in supermarkets in the developed world. In the United States, it represents a political risk for President Joe Biden, who is embarking on a reelection campaign and can hardly afford a rebound of the high inflation that hounded US consumers at its peak last year.

    Russia’s decision looked at first sight like a face-saving reprisal for an attack claimed by Ukraine on a bridge linking the annexed Crimean peninsula to the Russian mainland. The bridge was a vanity project for Putin and the apparent assault represented another humiliation for the Russian leader in a war that has gone badly wrong.

    The Black Sea grain deal, agreed last year and brokered by Turkey and the United Nations, was a rare diplomatic ray of light during a war that has shattered Russia’s relations with the US and its allies and has had global reverberations.

    By refusing to renew it, Putin appears again to be seeking to impose a cost on the West, in return for the sanctions strangling the Russian economy. He may reason that a food inflation crisis might help splinter political support in NATO nations for the prolonged and expensive effort to save Ukraine. And grain shortages afflicting innocent people in the developing world could exacerbate international pressure for a negotiated end to a war that has turned into a disaster for Russia.

    The United States and other Western powers reacted to Russia’s announcement that the deal had been “terminated” with outrage, mirroring Ukrainian President Volodymyr Zelensky’s warning that Putin was trying to “weaponize hunger.”

    Secretary of State Antony Blinken warned that Russia was trying to use food as a tool in its war on Ukraine, adding that the tactic would make “food harder to come by in places that desperately need it and have prices rise … The bottom line is, it’s unconscionable. It should not happen.”

    Singling Russia out as a moral transgressor might be understandable given the horror it has visited on Ukraine and may rally fury over Putin’s move in the West and the developing world. But humanitarian arguments won’t sway a Russian president who launched an unprovoked onslaught on a sovereign neighbor and is accused of presiding over brutal war crimes.

    Still, Russia’s rhetoric after canceling the deal and the reactions from key players elsewhere in Eurasia suggest that the agreement may not be quite as terminated as the Kremlin claims. There’s a chance Putin sees a grain showdown as a way to improve his dire position.

    In a clear sign of diplomatic maneuvering, Russia justified its cancellation of the agreement by saying that it was not getting its share of the benefits. noting that it had faced obstacles with its own food exports. Kremlin spokesman Dmitry Peskov hinted, however, that Moscow might allow the return of exports from Ukraine’s Black Sea ports once its objectives were achieved.

    But UN Secretary General António Guterres underscored how difficult it might be to return to the deal with a categorical repudiation of Russia’s points in a letter to Putin, arguing that under the agreement, the Russian grain trade had reached high export volumes and fertilizer markets were nearing full recovery with the return of Russian produce. Guterres said that he’d sent Russia proposals to keep the grain deal alive but that he was “deeply disappointed” that his efforts went unheeded.

    The UN chief’s comments reinforced a view that, for now, Russia sees a point of leverage in refusing to renew the Black Sea grain deal. The decision comes against a complicated geopolitical backdrop following last week’s NATO summit at which G7, nations pledged to offer Ukraine the means of its self-defense for years to come.

    It may also represent the latest chess move in a shady double game of great power geopolitics being waged by a pair of Machiavellian autocrats — Putin and Turkish President Recep Tayyip Erdogan, who are due to meet in August.

    Erdogan won prestige and the gratitude of his fellow NATO leaders and developing nations for brokering the original grain deal. But he has angered Russia in recent days, despite keeping open channels with Putin during the war. It’s conceivable the Russian leader could be sending a shot across the bows of his Turkish partner by canceling out his achievement.

    Russia was infuriated last week when Turkey sent a group of captured Ukrainian military commanders back to Zelensky despite a previous agreement they would not go home until after the war. Erdogan also risked his relationship with Putin by dropping opposition to Sweden’s entry into NATO, a move that significantly weakened Russia’s strategic position in Europe.

    But it was noticeable that Erdogan, who has a reputation for cannily playing his cards to enhance his own and Turkey’s influence, referred to Putin as his “friend” on Monday and suggested that the Russian leader might want to keep the “humanitarian bridge” of grain exports open.

    If he could somehow engineer a return to the deal, Erdogan could again bolster his place at the hinge of Eurasian great power politics. He’d also boost his goal of emerging as a leader among developing world nations and do a favor for Western leaders fearing an inflationary spike.

    Michael Kimmage, who served on the policy planning staff at the State Department between 2014 and 2016 and is now a professor at Catholic University of America in Washington, argues that Turkey is in a unique position, since it possesses considerable leverage inside NATO but also has robust relationships with both Ukraine and Russia.

    “I think it’s very possible that even before the Putin-Erdogan meeting there could be a resumption of the grain deal because that keeps Russia to a degree in the good graces of the international community,” Kimmage said.

    Reviving the grain deal would show that Russia, in its isolation, retains some Turkish support, Kimmage added, but the episode also demonstrates to the rest of the world that “when Russia wants, it can turn off the grain deal and be an enormous pain in the neck in the Black Sea.”

    First video of damage to Crimean bridge surfaces after reported strike

    While the war in Ukraine has consumed Russia’s foreign policy, Moscow has also made intense efforts to carve out its own influence in Africa and elsewhere in opposition to the United States. So it may risk damaging its own priorities by triggering widespread food shortages, especially since much of Ukraine’s grain is used in World Food Programs to alleviate famine in Africa.

    While the White House is fueling a sense of moral outrage over Russia’s move, it quickly dismissed another potential response – an attempt to bust a Russian blockade in the Black Sea.

    “That’s not an option that’s being actively pursued,” John Kirby, the coordinator for strategic communications at the National Security Council, said Monday in a comment that was in line with Biden’s goal of avoiding any direct NATO clash with Russia, a nuclear superpower.

    While the end of the grain deal would cause significant global hardship, its worst effects may be weeks away – so there could be time for diplomacy to work.

    Nicolay Gorbachov, the President of the Ukrainian Grain Association, told Isa Soares on CNN International on Monday that exports by road, rail and river could mitigate the most damaging effects of the collapse of the deal for two or three weeks, even if such transportation methods lacked the volume of shipborne cargoes.

    But he also warned that ultimately, if Ukraine could not export its grain – “all of us, in developed countries, in developing countries, will face food inflation.”

    “In my opinion, the international community, the developed countries have to find the leverage to move grain from Ukraine to the world market,” he said.

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  • Federal appeals court tosses state antitrust suit seeking to break up Meta | CNN Business

    Federal appeals court tosses state antitrust suit seeking to break up Meta | CNN Business

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    CNN
     — 

    A group of states that sued to break up Facebook-parent Meta in 2020 were years too late to file their challenge and failed to make a persuasive case that the company’s data policies harmed competition, a federal appeals court ruled Thursday in a sweeping victory for the tech giant.

    In siding with Meta, the decision by a three-judge panel of the US Court of Appeals for the DC Circuit upheld a lower-court decision tossing out the suit initially filed by New York and dozens of other states.

    The decision is a blow to regulators who have cited Meta as a prime example of the way tech giants have allegedly abused their dominance. And it casts a shadow over a parallel antitrust case against Meta that was brought by the Federal Trade Commission at around the same time.

    The states’ original complaint had sought to unwind Meta’s past acquisitions of Instagram and WhatsApp, accusing the company of a “buy-or-bury” approach that violated antitrust laws.

    In 2021, a federal judge dismissed the complaint, saying that the lawsuit came long after the acquisitions had been completed in 2012 and 2014. Thursday’s appellate decision agreed.

    “An injunction breaking up Facebook, ordering it to divest itself of Instagram and WhatsApp under court supervision, would have severe consequences, consequences that would not have existed if the States had timely brought their suit and prevailed,” wrote Senior Circuit Judge Raymond Randolph.

    In addition, Randolph wrote, state allegations claiming that Meta’s — then Facebook’s — policies placing restrictions on app developers were anticompetitive didn’t hold up.

    The policies in question, Randolph wrote, simply told app developers they could not use Facebook’s platform “to duplicate Facebook’s core products,” and did not rise to the level of an antitrust violation under federal law.

    Although the states argued that Facebook’s policies at the time — which have since been removed — discouraged innovation by the company’s rivals, the complaint failed to establish how widely the policies affected Facebook’s third-party developers.

    “The States thus have not adequately alleged that this policy substantially foreclosed Facebook’s competitors, giving us an additional reason to reject their exclusive dealing theory,” the court held.

    A spokesperson for New York Attorney General Letitia James didn’t immediately respond to a request for comment.

    In a statement, Meta said the state’s case reflected a mischaracterization of “the vibrant competitive ecosystem in which we operate.”

    “In affirming the dismissal of this case, the court noted that this enforcement action was ‘odd’ because we compete in an industry that is experiencing ‘rapid growth and innovation with no end in sight,’ Meta said. “Moving forward, Meta will defend itself vigorously against the FTC’s distortion of antitrust laws and attacks on an American success story that are contrary to the interests of people and businesses who value our services.”

    In spite of Thursday’s decision, Meta must still face a similar lawsuit by the FTC, which also seeks to break up the company in connection with its Instagram and WhatsApp acquisitions.

    Last year, the same federal judge who dismissed the state suit, James Boasberg, allowed the federal suit to proceed. Boasberg had tossed out the FTC suit as well in 2021, saying the agency had failed to make an initial showing that Meta holds a monopoly in personal social networking. But he permitted the FTC to re-file its complaint with changes.

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  • Apple got rich in China. Other Asian markets offer the next ‘golden opportunity’ | CNN Business

    Apple got rich in China. Other Asian markets offer the next ‘golden opportunity’ | CNN Business

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    Hong Kong
    CNN
     — 

    Apple launched an online store in Vietnam this week, in another nod to the growing importance of emerging markets for the iPhone maker.

    The opening on Thursday, which followed the high-profile launch of its first physical shops in India, means consumers in the fast-growing Southeast Asian economy will be able to buy any Apple product directly for the first time.

    Markets like Vietnam, India and Indonesia are becoming more important for Apple as its growth in developed markets, including China, slows down, prompting the company to focus on places where it’s traditionally been less active.

    For decades, China was central to Apple’s extraordinary ascent to become the most valuable company on Earth, serving as a backbone for both its production and consumption. While the country remains key to Apple’s operations, the tech giant is now hedging its bets.

    Apple

    (AAPL)
    CEO Tim Cook has pointed to the company’s prospects in emerging economies, calling them bright spots in the company’s financial results. On an earnings call this month, Cook said he was “particularly pleased” with the performance in these markets during the first three months of the year.

    Apple “achieved all-time records in Mexico, Indonesia, the Philippines, Saudi Arabia, Turkey and the UAE, as well as a number of March quarter records, including in Brazil, Malaysia and India,” he told analysts.

    That came as the California-based giant also reported its second straight drop in overall quarterly revenue, prompting concerns about a broader slowdown in demand amid economic uncertainty.

    “Clearly, growth has slowed globally and thus put more pressure [on Apple] to aggressively go after emerging markets,” said Daniel Ives, managing director of Wedbush Securities.

    Ives predicts that “over the coming years, Indonesia, Malaysia and India will comprise a bigger piece of the pie for Apple, given its efforts in these countries.”

    The start of online sales in a country usually precedes the launch of brick-and-mortar stores for Apple, he told CNN. This was true of India, for instance, which got its first physical outlets last month and a pledge from Cook to further invest in the country.

    Thursday’s launch showed how Apple was “further cementing” its presence in emerging markets, according to Chiew Le Xuan, a research analyst who covers smartphones in Southeast Asia for Canalys.

    He said the tech giant had been “actively increasing” its presence in the region in recent months, ramping up its distribution and network of authorized resellers, especially in Malaysia.

    Apple has ample room to run in these markets.

    Currently, the company only operates its own stores in more developed regional economies, such as Thailand and Singapore, according to Canalys.

    Even Indonesia, a vast archipelago that is the world’s sixth-biggest smartphone market, doesn’t have a physical Apple store yet, said Chiew. Apple’s market share there is tiny, at just 1% in 2022, according to Canalys data.

    “We’re putting efforts in a number of these markets and really see, particularly given our low share and the dynamics of the demographics … a great opportunity for us,” Cook said during Apple’s results call.

    Apple joins a growing list of global businesses that have become bullish on Southeast Asia, where more investment is being poured into manufacturing.

    The region’s consumer base also holds promise, with the number of middle-income and affluent households in economies such as Vietnam, Indonesia, and the Philippines projected to grow by around 5% annually through 2030, according to the Boston Consulting Group.

    The consultancy has called this group of consumers “the next mega-market.”

    The allure of Southeast Asia’s rising middle class “has changed the dynamic in these countries, which previously Apple stayed away from,” according to Ives.

    “This is a golden opportunity for Apple,” he said.

    For years, premium brands like Apple have have struggled to compete in emerging markets because of the price of their products, choosing instead to rely on local resellers.

    iPhones, which cost between $470 and $1,100, are expensive for consumers in less developed Southeast Asian economies, where the bulk of smartphone shipments are priced under $200, according to Chiew.

    He said Apple’s absence from places like Cambodia or Vietnam was typically more apparent around the launch of a new iPhone, as buyers from those countries often flew to Singapore or Malaysia to purchase devices and take them back for resale.

    A view of an Apple store at Marina Bay Sands in Singapore in 2020. Buyers from other Southeast Asian countries without their own Apple stores typically line up outside such outlets to buy devices for resale, according to an analyst.

    This could change in the coming years, particularly as Apple continues to increase its firepower in the region.

    Ives predicted that Apple could “further expand its ecosystem and tentacles to emerging markets using its China playbook,” meaning it could try to hook customers through “various pricing strategies and building out from there.”

    Once those users have converted to Apple’s operating system, iOS, they tend to stick around and become loyal customers, he added.

    This has “been the core part of its success in China that now can be replicated in India, Indonesia, and Vietnam, among others,” said Ives.

    But Apple may face hurdles in Southeast Asia, where several countries have placed stringent requirements on foreign businesses, according to Chiew.

    For example, at least 35% of the components of electronic goods sold in Indonesia must made locally, a threshold Apple has had to meet by working with partners, he added. Similar rules prevented Apple from setting up shop in India for years until the relaxation of regulations in 2019.

    And while consumers are becoming more affluent, the company’s price points are still considered high in many emerging markets, noted Ives. “Growth will be choppy we believe.”

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  • EU officials accuse Google of antitrust violations in its ad tech business | CNN Business

    EU officials accuse Google of antitrust violations in its ad tech business | CNN Business

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    Washington
    CNN
     — 

    Google’s advertising business should be broken up, European Union officials said Wednesday, alleging that the tech giant’s involvement in multiple parts of the digital advertising supply chain creates “inherent conflicts of interest” that risk harming competition.

    The formal accusations mark the latest antitrust challenge to Google over its sprawling ad tech business, following a lawsuit by the US Justice Department in January that also called for a breakup of the company.

    The EU Commission has submitted its allegations to Google in writing, officials said, kicking off a legal process that could potentially end in billions of dollars in fines in addition to a possible breakup that could impact part of its core advertising business.

    The commission alleges that since 2014, Google has unfairly boosted its own proprietary ad exchange — the online auction house known as AdX that matches advertisers and publishers — through its simultaneous ownership of some of the most popular ad tools for publishers and advertisers.

    For example, the commission claims, advertisers who used Google’s ad buying tools frequently had their purchases routed to AdX instead of to rival ad exchanges.

    Meanwhile, Google’s publisher-facing tools unfairly gave AdX a leg up over rival ad exchanges, the commission alleged, because Google’s publisher tools gave AdX competitive bidding information that the exchange could use to help advertisers win an auction.

    One proposed solution by the commission would spin off Google’s ad exchange and publisher tools from the ad-buying tools it provides to advertisers.

    “@Google controls both sides of the #adtech market: sell & buy,” tweeted Margrethe Vestager, the commission’s top competition official. “We are concerned that it may have abused its dominance to favour its own #AdX platform. If confirmed, this is illegal.”

    In a statement, Dan Taylor, Google’s vice president of global ads, said the EU’s probe “focuses on a narrow aspect of our advertising business,” that the company opposes the commission’s preliminary conclusions and that Google plans to “respond accordingly.”

    “Our advertising technology tools help websites and apps fund their content, and enable businesses of all sizes to effectively reach new customers. Google remains committed to creating value for our publisher and advertiser partners in this highly competitive sector,” Taylor said.

    A Google spokesperson told CNN Wednesday that the company has only just received the commission’s complaint and that it will take time to review the commission’s claims. Google also added that it will oppose calls for a breakup.

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  • First on CNN: New bipartisan bill in Senate could address TikTok security concerns without a ban | CNN Business

    First on CNN: New bipartisan bill in Senate could address TikTok security concerns without a ban | CNN Business

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    CNN
     — 

    Five US senators are set to reintroduce legislation Wednesday that would block companies including TikTok from transferring Americans’ personal data to countries such as China, as part of a proposed broadening of US export controls.

    The bipartisan bill led by Oregon Democratic Sen. Ron Wyden and Wyoming Republican Sen. Cynthia Lummis would, for the first time, subject exports of US data to the same type of licensing requirements that govern the sale of military and advanced technologies. It would apply to thousands of companies that rely on routinely transferring data from the United States to other jurisdictions, including data brokers and social media companies.

    The legislation comes amid a flurry of proposals to regulate how TikTok and other companies may handle the sensitive and valuable data of Americans — not just their names, email addresses and phone numbers but also potentially their behavioral data such as location information, search and browsing histories and personal interests.

    “Massive pools of Americans’ sensitive information — everything from where we go, to what we buy and what kind of health care services we receive — are for sale to buyers in China, Russia and nearly anyone with a credit card,” Wyden said in a statement. “Our bipartisan bill would turn off the tap of data to unfriendly nations, stop TikTok from sending Americans’ personal information to China, and allow nations with strong privacy protections to strengthen their relationships.”

    Lawmakers have scrutinized TikTok, in particular, for its ties to China through its parent company, ByteDance. Much of the existing legislation addressing TikTok at the federal and state level has focused on bans of the app. But Wyden’s bill subjecting US data to export licensing could address the issue without wading into the thorny legal issues surrounding a potential ban, an aide said, and simultaneously avoid giving broad new powers to the executive branch.

    Wednesday’s legislation, known as the Protecting Americans’ Data From Foreign Surveillance Act, does not identify TikTok by name. Instead, it directs the Commerce Department to maintain lists of countries that are considered trustworthy and untrustworthy for the purposes of receiving US data.

    There would be no restrictions applied to personal information transferred to trustworthy states, and no restrictions on individual internet users’ own transfers of their personal data, but companies seeking to transfer Americans’ personal information to countries outside of the trustworthy list would be required to apply for a license. Transfers to countries on the untrustworthy list would be automatically prohibited unless companies could prove they have a valid reason for a transfer, according to a copy of the bill text reviewed by CNN.

    Factors the Commerce Department would need to consider when building its lists include whether a country has enough of its own privacy safeguards — reflected in laws, regulations and norms — to prevent sensitive US data from being transferred further to one of the untrustworthy countries. Another factor includes whether a country has engaged in “hostile foreign intelligence operations, including information operations, against the United States,” language that appears to refer to China, Russia and other foreign adversaries.

    The Commerce Department would also be authorized to identify the specific types of information that would be subject to licensing requirements, based on their sensitivity, as well as how much information a company could transfer to a non-approved country before needing a license.

    A previous version of the bill was introduced last summer. The newest version, the Wyden aide said, includes fresh language that targets TikTok indirectly by prohibiting data transfers from one company to a parent company that may receive data requests by a hostile foreign government, when the company holds data on more than one million users.

    TikTok has faced criticism from US officials who say the company’s links to China pose a national security risk. TikTok has said it has never received a request for US user data from the Chinese government and would never comply with such a request.

    TikTok has also said it is working on securing US user data by storing it on servers controlled by Oracle and by establishing special US access protocols to prevent unauthorized use of the information.

    Should TikTok abide by its plan, known as Project Texas, Wednesday’s legislation would not affect the company, according to the Wyden aide, but if TikTok or ByteDance did seek to move US user data to China, then those transfers would potentially be subject to the proposed Commerce Department restrictions.

    Congress has made several attempts in recent months to address data transfers to foreign adversaries. In February, House lawmakers advanced a bill that would all but require the Biden administration to ban TikTok over national security concerns about the app. The next month, Senate lawmakers introduced a bill that would give the Commerce Department wide latitude to assess all foreign-linked technologies and to take virtually any measures, up to and including imposing a nationwide ban, to restrict their domestic use.

    Those bills have provoked a backlash from industry and civil liberties groups, as well as among some fellow lawmakers. Among the concerns are their potential impact on Americans’ First Amendment rights and a potential conflict with laws facilitating the free flow of media to and from foreign rivals. Other concerns include whether the breadth of the legislation could give the US government too much power and whether it could end up harming industries that are not the target of the legislation.

    The new bill includes language requiring more input from privacy, civil rights and civil liberties experts, said Justin Sherman, founder and CEO of the research firm Global Cyber Strategies and a senior fellow at Duke University’s Sanford School of Public Policy who has seen the bill.

    “You don’t load up Excel sheets in a shipping crate and send them to a foreign port,” Sherman said, but data transfers are a “hugely and often ignored problem in national security.”

    “We need to get beyond just looking at a couple mobile apps and platforms, and start looking at all parts of this ecosystem, including how data gets sold and transferred,” Sherman added, “and this bill takes an important look at that issue.”

    Other senators co-sponsoring Wednesday’s legislation include Rhode Island Democratic Sen. Sheldon Whitehouse, Tennessee Republican Sen. Bill Hagerty, New Mexico Democratic Sen. Martin Heinrich and Florida Republican Sen. Marco Rubio. A companion bill in the House will also be unveiled Wednesday, sponsored by Ohio Republican Rep. Warren Davidson and California Democratic Rep. Anna Eshoo.

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  • Italy ties China’s hands at Pirelli over fears about chip technology | CNN Business

    Italy ties China’s hands at Pirelli over fears about chip technology | CNN Business

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    London
    CNN
     — 

    Italy has imposed several curbs on Pirelli’s biggest shareholder, Sinochem, in a move aimed at blocking the Chinese government’s access to sensitive chip technology.

    The Italian government decided last week to make use of its so-called “Golden Power” regulations, designed to protect assets of strategic importance to the country, Pirelli said in a statement Sunday.

    The government order risks inflaming tensions between Europe and Beijing, and follows similar intervention by Germany and the United Kingdom to protect their semiconductor technology.

    Earlier this year, Europe joined a US-led effort to restrict China’s access to the most advanced chipmaking technology when the Netherlands — home to ASML Holding, a key supplier to the global semiconductor industry — said it would introduce export controls.

    Italy’s move comes as US Secretary of State Antony Blinken wraps up a high-stakes visit to China aimed at repairing strained relations between the world’s two biggest economies.

    Sinochem, owned by the Chinese government, is Pirelli’s biggest single shareholder, with a 37% stake, and has 60% of seats on the board of the Italian tire maker. CNN has contacted Sinochem for comment.

    In a statement Friday, the Italian government said Pirelli’s Cyber Tyre, which uses chip technology to collect vehicle data, is “configured as a critical technology of national strategic importance.”

    “Improper use of this technology can pose significant risks not only to the confidentiality of user data, but also to the possible transfer of information relevant to security,” the statement added.

    The order sets a host of limitations on Sinochem’s involvement in Pirelli, including a bar on it devising the company’s strategy and financial plans, or appointing a CEO.

    The government said these curbs would protect the “autonomy” of Pirelli and its management, as well as “information of strategic importance.”

    Europe is heavily reliant on China for trade and investment, but relations have come under strain from ideological differences, including over Russia’s war in Ukraine, and recent moves by European Union regulators and governments to limit China’s access to sensitive technology.

    The order takes a page out of this playbook. It requires that Pirelli refuse any requests from Sinochem’s owner — China’s State-owned Assets Supervision and Administration Commission of the State Council — for information sharing, including any information connected to the “know-how” of proprietary technologies.

    The government said “some” strategic decisions would require approval from at least 80% of board directors, a further limitation on Sinochem’s influence.

    Separately, Rome is also assessing whether to renew its partnership with Beijing on the Belt and Road Initiative — China’s global infrastructure and investment megaproject. Italy is the only Group of Seven nation to have joined the initiative.

    In a further sign of the steps multinational companies are beginning to consider to protect their operations from growing geopolitical friction, drugmaker AstraZeneca

    (AZN)
    has drawn up plans to spin off its China business and list it separately in Hong Kong, according to the Financial Times. AstraZeneca

    (AZN)
    declined to comment.

    Earlier this month, Sequoia Capital, the Silicon Valley venture capital group, said it would separate its China investments into an independent unit.

    On Tuesday, the European Commission will unveil measures — possibly including screening of outbound investments and export controls — to keep prized EU technology from countries such as China, Reuters reported.

    — Laura He in Hong Kong contributed to this article.

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  • The largest newspaper publisher in the US sues Google, alleging online ad monopoly | CNN Business

    The largest newspaper publisher in the US sues Google, alleging online ad monopoly | CNN Business

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    CNN
     — 

    Gannett, the largest newspaper publisher in the United States, is suing Google, alleging the tech giant holds a monopoly over the digital ad market.

    The publisher of USA Today and more than 200 local publications filed the lawsuit in a New York federal court on Tuesday, and is seeking unspecified damages. Gannett argues in court documents that Google and its parent company, Alphabet, controls how publishers buy and sell ads online.

    “The result is dramatically less revenue for publishers and Google’s ad-tech rivals, while Google enjoys exorbitant monopoly profits,” the lawsuit states.

    Google controls about a quarter of the US digital advertising market, with Meta, Amazon and TikTok combining for another third, according to eMarketer. News publishers and other websites combine for the other roughly 40%. Big Tech’s share of the market is beginning to erode slightly, but Google remains by far the largest individual player.

    That means publishers often rely at least in part on Google’s advertising technology to support their operations: Gannett says Google controls 90% of the ad market for publishers.

    Michael Reed, Gannett’s chairman and CEO, said in a statement Tuesday that Google’s dominance in the online advertising industry has come “at the expense of publishers, readers and everyone else.”

    “Digital advertising is the lifeblood of the online economy,” Reed added. “Without free and fair competition for digital ad space, publishers cannot invest in their newsrooms.”

    Dan Taylor, Google’s vice president of global ads, told CNN that the claims in the suit “are simply wrong.”

    “Publishers have many options to choose from when it comes to using advertising technology to monetize – in fact, Gannett uses dozens of competing ad services, including Google Ad Manager,” Taylor said in a statement Tuesday. “And when publishers choose to use Google tools, they keep the vast majority of revenue.”

    He continued: “We’ll show the court how our advertising products benefit publishers and help them fund their content online.”

    The legal action from Gannett comes as Google faces a growing number of antitrust complaints in the United States and the European Union over its advertising business, which remains its central moneymaker.

    EU officials said last week that Google’s advertising business should be broken up, alleging that the tech giant’s involvement in multiple parts of the digital advertising supply chain creates “inherent conflicts of interest” that risk harming competition.

    Earlier this year, the Justice Department and eight states sued Google, accusing the company of harming competition with its dominance in the online advertising market and similarly calling for it to be broken up.

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  • Japan joins the US and Europe in chipmaking curbs on China | CNN Business

    Japan joins the US and Europe in chipmaking curbs on China | CNN Business

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    Hong Kong/Tokyo
    CNN
     — 

    Japan will restrict the overseas sale of chip manufacturing equipment, joining the United States and the Netherlands in curbing the export of key technology to China.

    The country announced Friday it would tighten exports of 23 types of advanced semiconductor manufacturing equipment.

    The rules will take effect in July, according to Japan’s minister of economy, trade and industry, Yasutoshi Nishimura.

    The ministry said it would require stricter procedures to export to about 160 destinations such as China, while 42 territories — including the United States, South Korea and Taiwan — are recognized by Japan as having adequate export controls in place.

    All exports to countries not formally recognized will now require approval from the Japanese trade ministry, it added.

    At a press conference, Nishimura said the new measures were aimed at preventing the equipment from being diverted for military use.

    “We will fulfill our responsibilities in the international community as a technology-owning country and contribute to maintaining international peace and security,” he told reporters.

    The restrictions are not aimed at a specific country, the trade ministry told CNN on Friday.

    But they follow a series of curbs enacted in recent months to clamp down on sales of chipmaking equipment to China as part of a coordinated international effort led by Washington.

    In October, the United States banned Chinese companies from buying advanced chips and chipmaking equipment without a license. It also restricted the ability of American citizens to provide support for the development or production of chips at certain facilities in China.

    Earlier this month, the Netherlands also unveiled new restrictions on overseas sales of semiconductor technology, citing the need to protect national security.

    Japan has been involved in three-way discussions with both countries, a source familiar with the talks previously told CNN.

    China has strongly criticized restrictions on tech exports, saying earlier this month that it “firmly opposes” such measures.

    Mao Ning, a Chinese foreign ministry spokesperson, also hit back at the latest move from Japan.

    “Weaponizing economic, trade and technology issues to deliberately destabilize the global industry chain will only harm others and harm oneself,” she said at a Friday news briefing.

    Japan is home to several chipmaking equipment producers, including Nikon

    (NINOY)
    and Tokyo Electron. The companies’ shares in Tokyo were little changed on Friday.

    Nikon and Tokyo Electron declined to comment.

    In recent reports to clients, Jefferies analysts had assessed the potential consequences of Japanese export controls to China, noting that Nikon did “not anticipate a major impact.”

    For Tokyo Electron, the tightening is also “unlikely to have much additional impact as long as they do not go further than the US sanctions,” they added.

    — Mengchen Zhang contributed to this report.

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  • Microsoft faces off against US government over Activision deal, with top execs set to testify | CNN Business

    Microsoft faces off against US government over Activision deal, with top execs set to testify | CNN Business

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    CNN
     — 

    Microsoft

    (MSFT)
    and the video game giant Activision Blizzard

    (ATVI)
    will face off Thursday against the US government in a high-stakes battle over one of the largest technology acquisitions in history.

    The showdown in federal court will have the CEOs of both companies taking the stand to defend their $69 billion merger against claims that the combination could violate US antitrust law and harm millions of consumers.

    The outcome of the fight will shape the future of the multibillion-dollar games industry. It will also impact enormously popular gaming franchises such as “Call of Duty” and “World of Warcraft,” which Activision owns and would be transferred to Microsoft under the deal.

    Also testifying will be the top financial executives from both companies; senior leaders from Microsoft’s Xbox division; the CEO of Microsoft Gaming, Phil Spencer; and a vocal critic of the deal, Sony gaming CEO Jim Ryan.

    The days-long affair begins Thursday and is scheduled to run through next week.

    In bringing the case, the Federal Trade Commission is asking a US district court judge for an injunction that would temporarily halt the deal. That would keep the companies from closing their merger, at least until the FTC’s in-house court rules in a separate proceeding on whether the acquisition is anticompetitive.

    But this week’s fight over a preliminary injunction may prove decisive for the deal as a whole. Microsoft has said that a victory for the FTC at this stage “will effectively block the transaction” overall.

    In this hearing, the FTC does not need to prove that the deal is anticompetitive. It just needs to show that the agency would be likely to succeed in doing so if the case moves ahead, and that otherwise its ability to enforce US antitrust law would be harmed.

    The clash comes as Microsoft and Activision face down a contractual July 18 deadline to consummate the deal. Failure to close, or any permanent court order to block the merger, could force Microsoft to pay a $3 billion breakup fee to Activision, according to the deal’s terms.

    The FTC lawsuit has put Microsoft under the harshest antitrust scrutiny in the US in more than two decades. It also could be a crucial test for the FTC at a time when it’s trying to rein in the tech industry broadly, with mixed success.

    In its initial challenge to the merger in its in-house court last year, the FTC alleged the deal would harm competition by turning Microsoft into the world’s third-largest video game publisher — allowing it to raise video game prices with impunity, restrict Activision titles from rival platforms and harm game quality and player experiences on consoles and gaming services.

    Some of those concerns have also been raised internationally. The UK government has challenged the acquisition, and the New Zealand government on Tuesday warned that the deal could be anticompetitive.

    Microsoft has sought to address the concerns by hammering out multi-year licensing agreements with competitors such as Nintendo and Nvidia to ensure that their platforms will continue to receive popular titles if the deal goes through.

    The company has also put forth an 11-point pledge to keep its platforms open, a commitment that applies not only to the Activision Blizzard deal but to virtually all of Microsoft’s gaming business going forward.

    Last month, Microsoft said the European Union would require it to license Activision games “automatically” to competing cloud gaming services as a condition of allowing the merger to proceed in the EU. That commitment, Microsoft said, “will apply globally and will empower millions of consumers worldwide to play these games on any device they choose.”

    Although EU regulators have said the concession addresses their concerns, officials in the US and the UK are continuing with their legal opposition to the deal.

    The standoff particularly focuses attention on FTC Chair Lina Khan, a tech industry critic who has argued for litigating difficult cases and for introducing novel legal theories to help adapt US antitrust law to the digital age.

    Khan won a significant victory last year when the FTC forced Nvidia to abandon its attempted acquisition of the chipmaker Arm. The deal would have combined two companies in adjacent industries in what is known as a vertical merger, a type of deal that is rarely blocked in the United States.

    But Khan also suffered a setback when the FTC unsuccessfully tried to block Facebook-parent Meta from acquiring Within Unlimited, a virtual reality startup. The FTC had argued that the acquisition was an attempt by Meta to quash competition in the nascent VR industry, but earlier this year, a federal judge declined to issue a preliminary injunction of the kind the FTC now seeks against Microsoft. The FTC dropped its case against Meta soon after.

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  • Federal judge rules Google tried to ‘hide the ball’ by deleting chat logs in a big antitrust case | CNN Business

    Federal judge rules Google tried to ‘hide the ball’ by deleting chat logs in a big antitrust case | CNN Business

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    Washington
    CNN
     — 

    Google intentionally sought to “hide the ball” in a high-profile antitrust case by automatically deleting employee chat messages that could have been used as evidence in the suit, a federal judge ruled Tuesday, dealing a blow to the tech giant.

    The ruling condemns Google’s document preservation practices and their impact on litigation, which could have a broader impact as the company defends a range of suits on multiple fronts.

    Google will not face immediate sanctions for its missteps apart from having to cover the legal fees that plaintiffs incurred in bringing the sanctions motion, wrote Judge James Donato in his order. A non-monetary penalty could still be imposed following further court proceedings. But Donato repeatedly criticized Google this week for trying to keep sensitive chat logs out of the record.

    “The Court concludes that Google intended to subvert the discovery process, and that Chat evidence was ‘lost with the intent to prevent its use in litigation’ and ‘with the intent to deprive another party of the information’s use in the litigation,’” Donato wrote.

    In what Donato described as a “fundamental problem,” Google appeared to turn a blind eye to employees’ liberal use of a chat feature that deletes the logs after 24 hours, according to the ruling. The feature enabled Google employees to have conversations about topics relevant to its app store practices — and the topic of the lawsuit — with greater confidence the messages would not be used in court. Employees were also given the discretion to determine for themselves what constituted conversations that needed to be preserved, Donato wrote.

    That was “in sharp contrast” to how Google automatically preserves company emails that are subject to a litigation hold, he added, saying that Google omitted any mention of its practices surrounding chats until it was specifically forced to address the matter by the plaintiffs’ sanctions motion.

    The Justice Department has filed a similar sanctions motion against Google in an ongoing antitrust suit over Google’s search business. Though that case is unfolding in a different federal court, Donato’s ruling Tuesday could give other courts more ammunition to reach the same conclusion.

    In a statement, Google said it has endeavored to meet its discovery obligations.

    “Our teams have conscientiously worked, for years, to respond to Epic and the state AGs’ discovery requests and we have produced over three million documents, including thousands of chats,” said a Google spokexperson. “We’ll continue to show the court how choice, security, and openness are built into Android and Google Play.”

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  • Nvidia says US curbs on AI chip sales to China would cause ‘permanent loss of opportunities’ | CNN Business

    Nvidia says US curbs on AI chip sales to China would cause ‘permanent loss of opportunities’ | CNN Business

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    Hong Kong
    CNN
     — 

    Nvidia warned Wednesday that if the United States imposes new restrictions on the export of AI chips to China, it would result in a “permanent loss of opportunities” for US industry.

    The company’s chief financial officer, Colette Kress, said she didn’t anticipate any “immediate material impact” but tighter curbs would impact earnings in the future.

    US officials plan to tighten export curbs announced in October to restrict the sale of some artificial-intelligence chips to China, according to multiple media reports, including the Wall Street Journal and Financial Times. Washington has ramped up efforts to cut China off from key technologies that can support its military.

    The US Department of Commerce has not replied to a CNN request for comment.

    The rules, as reported, could make it harder for companies like Nvidia

    (NVDA)
    to sell advanced chips to China. Fueled by a boom in demand for its AI chips, the company briefly hit a market capitalization of $1 trillion in late May.

    “We are aware of reports that the US Department of Commerce is considering further controls that may restrict exports of our A800 and H800 products to China,” Kress told an investment conference.

    “Over the long-term, restrictions prohibiting the sale of our datacenter GPUs to China, if implemented, would result in a permanent loss of opportunities for US industry to compete and lead in one of the world’s largest markets and impact on our future business and financial results,” she said.

    GPUs refer to graphics processing units, which are chips or electronic circuits capable of rendering graphics for display on electronic devices.

    “Given the strength of demand for our products worldwide, we do not anticipate that such additional restrictions, if adopted, would have an immediate material impact on our financial results. We do not anticipate any immediate material impact on our financial results,” Kress added.

    Last October, the Biden administration unveiled a sweeping set of export controls that ban Chinese companies from buying advanced chips and chip-making equipment without a license.

    The new move is aimed in part at Nvidia’s A800 chip, which the US-based company created following the introduction of last year’s curbs in order to continue to sell to China, Bloomberg reported.

    China is a key market for Nvidia. Revenues from mainland China and Hong Kong accounted for 22% of the company’s revenue last year, according to its financial statements.

    On Wednesday, shares of Nvidia slumped as much as 3.2%, before recouping some of the losses. It ended down 1.8%. Chinese AI stocks suffered much heavier losses.

    Inspur Electronic Information Industry fell by 10%, the maximum allowed, on Wednesday in Shenzhen. It dropped again by 5.3% on Thursday. Chengdu Information Technology of Chinese Academy of Sciences slid 12% on Wednesday. Baidu

    (BIDU)
    , which is developing a rival to ChatGPT, sank 4.4% on Thursday in Hong Kong.

    “The US could ruin China’s AI party,” Jefferies analyst said in a research note. Local chipsets do not have Nvidia’s GPU ecosystem, thus every update may require reworking, resulting in lower efficiency and higher costs.

    The Biden administration’s chip curbs would be “much more effective” in limiting China’s advances in military power driven by AI than rules restricting US investment in China’s tech sector, the analysts added.

    China has strongly criticized US restrictions on tech exports, saying earlier this year that it “firmly opposes” such measures.

    In May, Beijing banned Chinese operators of critical information infrastructure from buying products from Micron Technology

    (MU)
    , in apparent retaliation against sanctions imposed by Washington and its allies on the country’s chip sector.

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  • China just played a trump card in the chip war. Are more export curbs coming? | CNN Business

    China just played a trump card in the chip war. Are more export curbs coming? | CNN Business

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    Hong Kong
    CNN
     — 

    A trade war between China and the United States over the future of semiconductors is escalating.

    Beijing hit back Monday by playing a trump card: It imposed export controls on two strategic raw materials, gallium and germanium, that are critical to the global chipmaking industry.

    “We see this as China’s second, and much bigger, counter measure to the tech war, and likely a response to the potential US tightening of [its] AI chip ban,” said Jefferies analysts. Sanctioning one of America’s biggest memory chipmakers, Micron Technology

    (MU)
    , in May was the first, they said.

    Here’s what you need to know about gallium and germanium, how they could play into the chip war and whether more countermeasures could be coming.

    Last October, the Biden administration unveiled a set of export controls banning Chinese companies from buying advanced chips and chip-making equipment without a license.

    Chips are vital for everything from smartphones and self-driving cars to advanced computing and weapons manufacturing. US officials have talked about the move as a measure to protect national security interests.

    But it didn’t stop there. For the curbs to be effective, Washington needed other key suppliers, located in the Netherlands and Japan, to join. They did.

    China eventually retaliated. In April, it launched a cybersecurity probe into Micron before banning the company from selling to Chinese companies working on key infrastructure projects. On Monday, Beijing announced the restrictions on gallium and germanium.

    Gallium is a soft, silvery metal and is easy to cut with a knife. It’s commonly used to produce compounds that are key materials in semiconductors and light-emitting diodes.

    Germanium is a hard, grayish-white and brittle metalloid that is used in the production of optical fibers that can transmit light and electronic data.

    The export controls have drawn comparisons with China’s reported attempts in early 2021 to restrict exports of rare earths, a group of 17 elements for which China controls more than half of the global supply.

    Gallium and germanium do not belong to this group of minerals. Like rare earths, they can be expensive to mine or produce.

    This is because they are usually formed as a byproduct of mining more common metals, primarily aluminum, zinc and copper, and processed in countries that produce them.

    China is the world’s leading producer of both gallium and germanium, according to the US Geological Survey. The country accounted for 98% of the global production of gallium, and 68% of the refinery production of germanium.

    “The economies of scale in China’s extensive and increasingly integrated mining and processing operations, along with state subsidies, have allowed it to export processed minerals at a cost that operators elsewhere can’t match, perpetuating the country’s market dominance for many critical commodities,” analysts from Eurasia Group said on Tuesday.

    Shares of Chinese producers of the two raw materials surged by 10% on Tuesday.

    Beyond China, Australian rare earths producers also advanced, as investors expected Beijing might extend export curbs to that group of strategically important minerals. Lynas Rare Earths

    (LYSCF)
    rose 1.5%.

    The United States is dependent on China for these the two critical elements. It imported more than 50% of the gallium and germanium it used in 2021 from the country, the US Geological Survey showed.

    Eurasia Group analysts described China’s export controls as a “warning shot.”

    “It is a shot across the bow intended to remind countries including the United States, Japan, and the Netherlands that China has retaliatory options and to thereby deter them from imposing further restrictions on Chinese access to high-end chips and tools,” Eurasia Group said in a research note.

    Chinese authorities may also intend to use its control over these niche metals as a possible bargaining chip in discussions with US Treasury Secretary Janet Yellen, who is scheduled to visit Beijing later this week.

    Jefferies analysts said the timing of the announcement was unlikely to be a casual decision.

    “It gives the US at least two days to digest and come up with a well-considered response,” they said.

    However, the move is not considered “a death blow” to the United States and its allies.

    China may be the industry leader, but there are alternative producers, as well as available substitutes for both minerals, the Eurasia Group analysts pointed out.

    The United States also imports a fifth of its gallium from the United Kingdom and Germany and buys more than 30% of its germanium from Belgium and Germany.

    That’s definitely possible, a former senior Chinese official has warned.

    The curbs announced this week are “just the start,” Wei Jianguo, a former deputy commerce minister, told the official China Daily on Wednesday, adding China has more tools in its arsenal with which to retaliate.

    “If the high-tech restrictions on China become tougher in the future, China’s countermeasures will also escalate,” he was quoted as saying.

    Analysts believe this too. Rare earths, which are not difficult to find but are complicated to process, are also critical in making semiconductors, and could be the next target.

    “If this action doesn’t change the US-China dynamics, more rare earth export controls should be expected,” Jefferies analysts said.

    However, analysts from Eurasia Group warned that restricting exports is a “double-edged sword.”

    Past attempts by China to leverage its dominance in rare earths have reduced availability and raised prices. Higher prices have spurred greater competition by making mining and processing ventures outside of China more cost-competitive, they said.

    China cut its rare earths export quota in 2010 amid tensions with the United States.

    That resulted in greater efforts by companies outside of the country to produce the metals. US data showed that China’s global market share dropped from 97% in 2010 to about 60% in 2019.

    “Imposing export restrictions risks reducing market dominance,” the Eurasia Group analysts said.

    CNN’s Hanna Ziady and Xiaofei Xu contributed to reporting.

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  • Meta could become even more dominant in social media with Threads | CNN Business

    Meta could become even more dominant in social media with Threads | CNN Business

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    Washington
    CNN
     — 

    In less than 48 hours, Meta’s Twitter rival Threads has surpassed 70 million sign-ups, upended the social media landscape and appears to have rattled Twitter enough that it is now threatening legal action against Meta.

    But even as users signed up for Threads in droves, with some clearly eager to flee the chaos of Elon Musk’s Twitter, the sudden success of Meta’s app could raise a new set of concerns.

    Meta has long been criticized for its market dominance, and for allegedly trying to choke off competition by copying and killing rival applications. Now, some competition experts and even some Threads users worry that if the new app’s traction continues, it may simply lead to the accumulation of even more power and dominance for Meta and its CEO Mark Zuckerberg.

    “The prospect of total monopoly by Meta, yikes,” wrote one user. “It’s a real problem for society when a few dozen people and companies own every single thing so that no alternative paradigms can exist that they don’t co-opt from the cradle,” replied another.

    Twitter had always been much smaller than Meta’s platforms, but it had an outsized influence in tech, media and politics. As Twitter faltered under Musk, though, a cottage industry emerged of smaller apps trying to capture some of its magic. Now more than any of them, Meta seems best positioned to claim the crown.

    Threads’ blockbuster launch this week highlights the uncomfortable reality of the modern digital economy: To potentially beat some of the biggest players in the industry, you might have to be a giant yourself.

    The overnight success of Threads is a testament both to the dissatisfaction with Musk’s ownership of Twitter and to the unique power and reach of one of Meta’s most important properties: Instagram.

    Instagram has more than two billion users, far more than the 238 million users Twitter reported having in the months before Musk took over. When new users sign up for Threads, which they do using an Instagram account, the app prompts them to follow all of their existing Instagram contacts with a single tap. It’s optional, but is easy to accept, and it takes a conscious decision to decline.

    By promoting Threads through Instagram, and by sharing Instagram user data with Threads to let people instantly recreate their social networks, Meta has significantly greased the onboarding process. That frictionless experience has allowed Threads to leapfrog what’s known in the industry as the “cold start” problem, in which a new platform struggles to gain new users because there are no other users there to attract them.

    Thanks to the Instagram integration, “that biggest problem, the chicken-egg problem, has been solved from the jump,” Reddit co-founder and venture investor Alexis Ohanian said in a video Thursday (posted, naturally, on Threads).

    That Threads appeared to clear that hurdle easily, Ohanian said, makes him “bullish” on the new app.

    But that same innovation that made signing up so many users so quickly may raise competition concerns, particularly in Europe where new antitrust rules for digital platforms are set to go into effect in a matter of months.

    “From a competition perspective this can be problematic because Meta can use it to leverage its market power and raise barriers to entry, as other rivals would not have the customer base Meta has via Instagram,” said Agustin Reyna, director of legal and economic affairs at the Brussels-based consumer advocacy organization BEUC.

    Under the EU’s Digital Markets Act (DMA), “digital gatekeepers” — a term that’s expected to cover Meta and/or its subsidiaries — will be prohibited from combining a user’s data from multiple platforms without consent, Reyna said. Another restriction forbids requiring users to sign up for one platform as a condition of using another.

    Instagram CEO Adam Mosseri appeared to acknowledge those issues this week in an interview with The Verge. Threads won’t be launching in the EU for now, he said, because of “complexities with complying with some of the laws coming into effect next year” — a statement The Verge suggested was a reference to the DMA.

    The DMA was passed specifically to deal with the antitrust concerns raised by large tech platforms. That Threads apparently cannot (yet) comply with rules designed to protect competition underscores uncertainty about the app’s potential competitive impact.

    Meta’s approach to Threads could also revive longstanding criticisms about the company’s alleged practice of copying and killing rivals, particularly as Twitter has warned Meta it may sue over claims of trade secret theft (an allegation Meta denies).

    The issue isn’t limited to the realm of social media. As the world races to develop artificial intelligence, Threads represents a huge new opportunity for Meta to gather training data for its own AI technology, in a way that could help it catch up to industry leaders such as OpenAI and Google. That could complicate any attempt at a comprehensive analysis of what Threads means for competition in tech.

    Part of what makes the debate so complicated is Threads’ seemingly very real threat to Twitter.

    If Threads puts pressure on Twitter to improve its service, that is a form of competition between apps, said Geoffrey Manne, founder of the Portland, Oregon-based International Center for Law and Economics.

    But, he added, if it leads to a concentration of power in the social media industry more broadly, it could mean a reduction in competition overall. It all depends on how you define the market.

    “I’m inclined to say it does both simultaneously, and the ultimate consequences aren’t so clear,” Manne said.

    Rather than viewing it through the lens of a social media market, one helpful way to look at the issue is from the perspective of the advertising market, he said. It’s possible that once Threads introduces advertising — which Zuckerberg has said won’t happen until the app has increased to significant scale — Threads simply reinforces Meta’s advertising market power, Manne said. That could lead to further antitrust scrutiny for Meta even if the question about competition in social media is ambiguous.

    Jeff Blattner, a former DOJ antitrust official, said it can only benefit consumers to have Threads as a rival to Twitter.

    “Two platforms run by maniac billionaires are better than one,” he wrote on Threads — though if Threads is so successful as to effectively knock out Twitter altogether, then in some ways the original question about Meta’s dominance will still stand.

    Threads has one thing going for it that may nip any competition concerns in the bud: A commitment to integrate with the same open protocols used by other distributed social media alternatives, such as Mastodon.

    That would give users the option to migrate their accounts, along with all their follower data intact, to a rival like Mastodon that isn’t controlled by Meta.

    While that interoperability isn’t available yet, Mosseri has repeatedly highlighted it as a priority on his to-do list.

    When and if it happens, that could be a significant step. What may appear now as an audience grab by Meta could someday wind up being how millions of people were onboarded to a massive, decentralized social networking infrastructure that is not controlled by any single company, individual or organization.

    “This is why we think interoperability requirements are so important,” said Charlotte Slaiman, a competition expert at the Washington-based consumer group Public Knowledge. If users could port their entire social graph from one rival to another whenever they wanted, she said, “we could have more fair competition based on the quality of the product, not just incumbency advantage.”

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  • Seagate to pay $300 million penalty for shipping Huawei hard drives in violation of US export control laws | CNN Business

    Seagate to pay $300 million penalty for shipping Huawei hard drives in violation of US export control laws | CNN Business

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    Reuters
     — 

    Seagate Technology has agreed to pay a $300 million penalty in a settlement with US authorities for shipping over $1.1 billion worth of hard disk drives to China’s Huawei in violation of US export control laws, the Department of Commerce said on Wednesday.

    Seagate

    (STX)
    sold the drives to Huawei between August 2020 and September 2021 despite an August 2020 rule that restricted sales of certain foreign items made with US technology to the company. Huawei was placed on the Entity List, a US trade blacklist, in 2019 to reduce the sale of US goods to the company amid national security and foreign policy concerns.

    The penalty represents the latest in a string of actions by Washington to keep sophisticated technology from China that may support its military, enable human rights abuses or otherwise threaten US security.

    Seagate shipped 7.4 million drives to Huawei for about a year after the 2020 rule took effect and became Huawei’s sole supplier of hard drives, the Commerce Department said.

    The other two primary suppliers of hard drives ceased shipments to Huawei after the new rule took effect in 2020, the department said. Though they were not identified, Western Digital

    (WDC)
    and Toshiba

    (TOSBF)
    were the other two, the US Senate Commerce Committee said in a 2021 report on Seagate.

    The companies did not respond to requests for comment.

    Even after “its competitors had stopped selling to them … Seagate continued sending hard disk drives to Huawei,” Matthew Axelrod, assistant secretary for export enforcement at the Commerce Department’s Bureau of Industry and Security said in a statement. “Today’s action is the consequence.”

    Axelrod said the administrative penalty was the largest in the history of the agency not tied to a criminal case.

    Seagate’s position was that its foreign-made drives were not subject to US export control regulations, essentially because they were not the direct product of US equipment.

    “While we believed we complied with all relevant export control laws at the time we made the hard disk drive sales at issue, we determined that … settling this matter was the best course of action,” Seagate CEO Dave Mosley said in a statement.

    In an order issued on Wednesday, the government said Seagate wrongly interpreted the foreign product rule to require evaluation of only the last stage of its manufacturing process rather than the entire process.

    Seagate made drives in China, Northern Ireland, Malaysia, Singapore, Thailand and the United States, the order said, and used equipment, including testing equipment, subject to the rule.

    In August, the US Department of Commerce sent the company a “proposed charging letter,” warning the company that it may have violated export control laws. The letter kicked off some eight months of negotiations.

    Seagate’s $300 million penalty is due in installments of $15 million per quarter over five years, with the first payment due in October. It also agreed to three audits of its compliance program, and is subject to a five-year suspended order denying its export privileges.

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  • 14 promises Donald Trump has made in his campaign for a second term | CNN Politics

    14 promises Donald Trump has made in his campaign for a second term | CNN Politics

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    CNN
     — 

    Former President Donald Trump has hit the 2024 campaign trail and is giving voters a preview of what a second Trump presidency could look like if he’s elected. He’s made many campaign promises – many of which are often vague and lacking in details or specifics – including ending the war in Ukraine, building 10 new cities and giving drug smugglers the death penalty.

    Here are some of the policies he says he would enact if elected for a second term.

    “The drug cartels are waging war on America—and it’s now time for America to wage war on the cartels,” former President Donald Trump said in a January campaign video.

    If elected, Trump said in his November 2022 campaign announcement that he would ask Congress to ensure that drug smugglers and human traffickers can receive the death penalty for their “heinous acts.” The former president also vowed to “take down” drug cartels by imposing naval embargos on cartels, cutting off cartels’ access to global financial systems and using special forces within the Department of Defense to damage the cartels’ leadership.

    “When I am president, we will put parents back in charge and give them the final say,” Trump said in a January campaign video, speaking about education

    The former president said he would give funding preferences and “favorable treatment” to schools that allow parents to elect principals, abolish teacher tenure for K-12 teachers, use merit pay to incentivize quality teaching and cut the number of school administrators, such as those overseeing diversity, equity and inclusion initiatives.

    Trump also said in the campaign video that he would cut funding for schools that teach critical race theory and gender ideology. In a later speech, Trump said he would bring back the 1776 Commission, which was launched in his previous administration to “teach our values and promote our history and our traditions to our children.”

    Lastly, the former president said he would charge the Department of Justice and the Department of Education with investigating civil rights violations of race-based discrimination in schools while also removing “Marxists” from the Department of Education. A second Trump administration would pursue violations in schools of both the Constitution’s Establishment and Free Exercise clauses, which prohibit the government establishment of religion and protect a citizen’s right to practice their own religion, he said.

    “I will revoke every Biden policy promoting the chemical castration and sexual mutilation of our youth and ask Congress to send me a bill prohibiting child sexual mutilation in all 50 states,” Trump said at the 2023 Conservative Political Action Conference in March.

    Trump added in a campaign video that he would issue an executive order instructing federal agencies to cut programs that promote gender transitions, as well as asking Congress to stop the use of federal dollars to promote and pay for gender-affirming procedures. The former president added that his administration would not allow hospitals and healthcare providers to meet the federal health and safety standards for Medicaid and Medicare if they provide chemical or physical gender-affirming care to youth.

    Trump said in two February campaign videos that, if “Marxist” prosecutors refuse to charge crimes and surrender “our cities to violent criminals,” he “will not hesitate to send in federal law enforcement to restore peace and public safety.”

    Trump added that he would instruct the Department of Justice to open civil rights investigations into “radical left” prosecutors’ offices that engaged in racial enforcement of the law, encourage Congress to use their legal authority over Washington, DC, to restore “law and order” and overhaul federal standards of disciplining minors to address rising crimes like carjackings.

    Addressing policies made in what Trump calls the “Democrats’ war on police,” the former president vowed in a campaign video that he would pass a “record investment” to hire and retrain police, strengthen protections like qualified immunity, increase penalties for assaulting law enforcement officers and deploy the National Guard when local law enforcement “refuses to act.” The former president added that he would require law enforcement agencies that receive money from his funding investment or the Department of Justice to use “proven common sense” measures such as stop-and-frisk.

    “Shortly after I win the presidency, I will have the horrible war between Russia and Ukraine settled,” Trump said at a New Hampshire campaign event, adding in another speech that it would take him “no longer than one day” to settle the war if elected. Trump offered no details on how he would end the war in Ukraine.

    Trump further addressed his strategy of stopping the “never-ending wars” by vowing to remove warmongers, frauds and “failures in the senior ranks of our government,” and replace them with national security officials who would defend America’s interests. The former president added in a campaign video that he would stop lobbyists and government contractors from pushing senior military officials towards war.

    Trump said he would restore his “wonderful” travel ban on individuals from several majority-Muslim countries to “keep radical Islamic terrorists out of our country” after President Joe Biden overturned the ban in 2021.

    Trump said in multiple campaign videos that he would spearhead an effort to build Freedom Cities to “reopen the frontier, reignite American imagination, and give hundreds of thousands of young people and other people, all hardworking families, a new shot at home ownership and in fact, the American Dream.”

    In his plan, the federal government would charter 10 new cities on federal land, awarding them to areas with the best development proposals. The former president said in a campaign video that the Freedom Cities would bring the return of US manufacturing, economic opportunity, new industries and affordable living.

    In the March video, Trump added that the US under a second Trump administration would lead in efforts to “develop vertical-takeoff-and-landing vehicles for families and individuals,” not letting China lead “this revolution in air mobility.” The former president said these airborne vehicles would change commerce and bring wealth into rural communities.

    “When I am president, this whole rotten system of censorship and information control will be ripped out of the system at large. There won’t be anything left,” Trump said in a January video.

    To address the “disturbing” relationship between technology platforms and the government, the former president said he would enact a seven-year cooling off period before employees at agencies such as the FBI or CIA can work for platforms that oversee mass user data.

    Trump added in multiple campaign releases that he would task the Department of Justice with investigating and prosecuting the online censorship “regime,” ban federal agencies from “colluding” to censor citizens, fire bureaucrats who are believed to engage in federal censorship and suspend federal money to universities participating in “censorship-supporting activities.”

    On false information, the president would ban the use of taxpayer dollars to label any domestic speech as mis- or disinformation, as well as stopping federal funding of nonprofits and academic programs that study mis- or disinformation.

    Under the proposed Trump Reciprocal Trade Act, the former president said if other countries impose tariffs in the US, “we charge THEM – an eye for an eye, a tariff for a tariff, same exact amount.”

    Trump vowed in a campaign video to impose the same tariffs that other countries may impose on the US on those countries. The goal, the former president said, is to get other countries to drop their tariffs.

    As part of a larger strategy to bring jobs back into the US, Trump said he would also implement his America First trade agenda if elected. Setting universal baseline tariffs on a majority of foreign goods, the former president said Americans would see taxes decrease as tariffs increase. His proposal also includes a four-year plan to phase out all Chinese imports of essential goods, as well as stopping China from buying up America and stopping the investment of US companies in China.

    “With victory, we will again build the greatest economy ever,” Trump said in his November campaign announcement. “It will take place quickly. We will build the greatest economy ever,” though he didn’t provide specific policy proposals or explain how he would improve the economy.

    Trump said he would repeal Biden’s tax hikes, “immediately tackle” inflation and end what he called Biden’s “war” on American energy production.

    At CPAC, Trump promised to, “fire the unelected bureaucrats and shadow forces who have weaponized our justice system like it has never been weaponized before…” Trump also said in a campaign video that he would reinstate a 2020 executive order to remove “rogue” bureaucrats and propose a constitutional amendment for term limits on members of Congress.

    Trump also pledged to “appoint US Attorneys who will be the polar opposite of the Soros District Attorneys and others that are being appointed throughout the United States.” The former president added on to this message, vowing to end the “reign” of such investigations and district attorneys and overhaul the Department of Justice and the FBI.

    “I will take Biden’s executive order directing the federal government to target the firearms industry, and I will rip it up and throw it out on day one,” Trump said at the 2023 National Rifle Association Institute for Legislative Action leadership forum in April.

    The former president also promised in the speech that the government would not infringe on citizens’ Second Amendment rights and that he would push Congress to pass a concealed carry reciprocity.

    “I will create a special team to rapidly review every action taken by federal agencies under Biden’s ‘equity’ agenda that will need to be reversed. We will reverse almost all of them,” Trump said in a campaign video.

    Trump added in multiple campaign videos that he would revoke Biden’s equity executive order that required federal agencies to deliver equitable outcomes in policy and conduct equity training. If elected, Trump said he would also fire staffers hired to implement Biden’s policy, and then reinstate his 2020 executive order banning racial and sexual stereotyping in the federal government.

    “When I’m president, I will ensure that America’s future remains firmly in American hands just as I did when I was president before,” Trump said in a campaign video.

    Trump vowed to restrict Chinese ownership of US infrastructure such as energy, technology, telecommunications and natural resources. The former president also said he would force the Chinese to sell current holdings that may put national security at risk. “Economic security is national security,” he said.

    Trump vowed in a June campaign video to reinstate his previous executive order that the US government would pay the same price for pharmaceuticals as other developed countries to “end this global freeloading on American consumers for once and for all.”

    Some of the former presidents’ pharmaceutical policies were overturned by Biden. Trump said in the video his administration would pay the best prices offered to other countries, who he said often pay lower pharmaceutical prices than Americans. This policy, Trump believes, would cause the pharmaceutical industry to raise prices for other countries while lowering costs for Americans.

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