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Digital Digest – 01 December

In this week’s digital digest, we look at Google’s alleged anti-competitive behaviour and the CMA ordering Meta to sell Giphy.  

We then take a look at big tech as Jack Dorsey resigns from Twitter, Bitcoin transactions face digital tax raids and an Australian facial recognition firm faces a £17m fine. 

Closer To Home

Google commits to play ball with CMA over anti-competitive ‘Sandbox’

The Competition and Markets Authority launched an investigation into alleged anti-competitive behaviour by Google at the start of the year due to concerns that changes made by Google could negatively impact competition in the digital advertising market. Google had proposed changes to its ‘Privacy Sandbox’ project which would allow them to remove third-party cookies on Google browsers and replace them with new tools for targeted advertising. The watchdog will consult on the new commitments until mid-December. This is the latest in a slew of high-profile CMA investigations into big tech, with no indication the regulator is slowing down.

Meta ordered to sell Giphy by UK regulator The Competition and Markets Authority (CMA) has officially ruled that Meta, previously Facebook, must sell “Giphy in its entirety to an approved buyer.” The decision follows an investigation into the anti-competitive nature of the sale arguing it could deny or limit other media platforms’ access to GIFs and therefore drive more traffic to Meta’s platforms, i.e. Facebook, WhatsApp and Instagram.  Despite the decision being the first time the CMA has reversed a completed transaction by a tech giant, it shouldn’t come as a total surprise as the authority previously announced its leanings and has ramped up its intervention in mergers and acquisitions across sectors in the past 18 months.  It is likely Meta will appeal the decision given its previous response to other CMA competition concerns. In response to the CMA’s provisional findings, the social media giant argued the CMA was “sending a chilling message to start-up entrepreneurs: do not build new companies because you will not be able to sell them.”

Big Tech

Jack Dorsey resigns as Twitter CEO

Jack Dorsey, founder and CEO of Twitter, has stepped down from his role as chief executive, however will remain on the board until May to help with the transition. Parag Agrawal, the company’s former CTO will replace him, effective immediately.

There was no explanation for Dorsey’s resignation asides from the statement the company was “ready to move on from its founders.” An individual with knowledge of the situation has said, despite the purported shock of the announcement, the succession had in fact been planned for more than a year after investors pushed for Dorsey’s removal. Dorsey was seen to be distracted by his other venture, Square, and his interest in cryptocurrency.

Bitcoin exchanges face digital tax raid HMRC has said that cryptocurrencies do not qualify for an exemption from the digital services tax and furthermore do not qualify as commodities or money. The move is designed to ensure (big) tech firms pay appropriate taxes to the Exchequer, meaning that online exchanges selling cryptocurrencies are unable to claim exemptions granted to other financial services companies. Industry bodies are currently lobbying HMRC and The Treasury regarding the exemptions, arguing it is unfair to differentiate between cryptocurrencies and other financial assets – in the USA they are currently treated as commodities. Crypto has faced regulatory scrutiny and a number of restrictions with the FCA introducing an “arduous” licensing regime recently and debate on the use of crypto as a legal tender frequenting the media and financial spheres. All we can say is, watch this space as it’s a topic of conversation which will not be going anywhere any time soon.

Australian facial recognition firm faces possible £17m privacy fine The UK’s Information Commissioner’s Office (ICO) has told the Australian firm, Clearview AI, to stop processing UK personal data as well as delete existing data. The firm provides facial recognition software to police forces, advertising its service as resembling a “Google search for faces.”  While Clearview AI does not currently have any UK customers, the ICO has said that their database included data of UK citizens which may have been gathered without their knowledge and therefore failed to comply with UK data protection laws.  It should not be surprising that the ICO has taken this view considering the recent focus on data protection and facial recognition technology. Many have argued that the widespread deployment of facial recognition systems can disproportionately impact minority groups as well as lead to major concerns over privacy and use of information. 

Also in the news

  1. Walmart hovers closer to drone delivery, leapfrogging Amazon in the race to rollout airborne deliveries. See here.

  2. Extinction Rebellion protesters cause Black Friday chaos at Amazon. See here.

  3. ‘Critically flawed’: a review of the new Tesla sparks debate after writer claims problems with autopilot. See here.

  4. Working of algorithms used in government decision-making to be revealed as the Cabinet office announces a new standard. See here.

  5. AI weapons pose a threat to humanity, warns top scientist Stuart Russell. See here.

Worth a read

  1. The Times: The robot that can send your hug around the world

  2. Wired: A hacking spree against Iran spills out into the physical world

  3. The Drum: China warns firms to stop using Tencent’s apps

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