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Tech Roundup: Litigation, Products, Prime Day, Auto, More

Sejuti Banerjea
Square (SQ) saw a big move last session, as its shares jumped more than 6% on the day, amid huge volumes.

Litigation of various kinds constituted most of the big news from last week. But there were also tidbits about products, Amazon’s AMZN Prime Day, self-driving cars, brain drain from Europe and other matters. Here are the details-

Litigation

One of the joys of being a technology company these days is in dealing with a ton of litigation. It could be about patent infringements, it could be about privacy violations, or security issues, or any other thing.

So last week, the European Commission sent questionnaires to Facebook’s FB customers and competitors about a range of practices, as it tries to investigate the company’s sales platform and how it uses and shares data from apps. Companies are required to respond by this week.

Austrian privacy activist Max Schrems is taking on Facebook at the European Court of Justice (ECJ) in Luxembourg. At issue are the standard clauses that technology companies use to pull data out of the countries in which they originate. Schrems, an Austrian law student, claims that this affects a user’s privacy, which is a valid point.

But whether the law provides for a redressal or not (especially in light of the recently-enacted GDPR) is the question, and one that will determine whether the practice will stop or not. Facebook’s main regulator, the Irish Data Protection agency, took the case to the High Court in Ireland, from where it reached the ECJ. This could be a backlash from what Edward Snowden revealed in 2013 about mass U.S. surveillance.

The Competition and Markets Authority (CMA) in the UK is joining other European regulators in France and Germany to examine how the online advertising market functions. The study will be conducted over a one-year period, but an interim report will be published after six months.

If it is found that the marketing power of companies like Alphabet GOOGL and Facebook was harming competition, they would make operating rules tougher. They could limit the way prices are set with advertisers and even call for separation of business units.

The CMA would have started investigations earlier if not for uncertainties regarding its role in a post-Brexit world. As it is, CEO Andrea Coscelli and other directors are ruing the approvals they have granted earlier for acquisitions like Instagram, for example.

Facebook was fined 2 million euros for under-reporting complaints about illegal content on its platform, as required under Germany’s NetzDG network transparency law. Newly appointed Justice Minister Christine Lambrecht also pointed out that the option for making a complaint under the transparency law was harder to find on Facebook than an option for complaining that a post violated the platform's community standards, so it was obviously not in correspondence with the standards of the law. Facebook said that it was in compliance with the law but that some parts of it "lacked clarity." It said it reserved its right to appeal.

New York Governor Andrew Cuomo has ordered the U.S. Department of Financial Services to investigate reports that state-regulated advertisers were using zip code information on Facebook to exclude consumers based on race, color, national origin, religion, familial status, sex and disability, and other classifications.

The federal government is also investigating Facebook for selling targeted ads that discriminated between customers in violation of the U.S. Fair Housing Act. Earlier, in settlement with various civil rights groups, Facebook agreed to modify its advertising platform to remove these discriminatory practices.

Amazon (and other online marketplaces) can be held liable for defective products sold on its websites. Overturning the order of a lower court, Circuit Judge Jane Richards Roth, on behalf of a 2-1 majority of a three-judge panel, said that Amazon may be held partly liable because its business model "enables third-party vendors to conceal themselves from the customer, leaving customers injured by defective products with no direct recourse to the third-party vendor."

This is an unusual order and Amazon will likely appeal because it will be a very big deal if it is help personally liable for the millions of products it sells on its platform (around half of which, like this one are sold by third party sellers, directly to customers). On the other hand, a sure-shot way of dealing with the counterfeit problem is by making the marketplace liable.

Products/Patents

These are the things that customers keep coming back to, even when they know that their privacy, security, etc are in question. So it’s a very important topic.

Samsung appears to have solved the screen problems that led it to recall its $1,980 Galaxy Fold soon after launch in April this year. A new class of phones that will help users double the screen size when required, but otherwise keep it small enough to fit in the pocket, the flexible design means a foldable screen that can peel off or crease, leading to malfunction of the device. This problem appears solved now, which means Samsung will have it for the holiday season, and possibly, challenge Apple AAPL, Huawei and other Chinese makers. But we don’t have a release date yet.

Apple will be having live concerts for people 16 years and older, featuring popular artists like Khalid, Bad Bunny, Jessie Reyez, King Princess, Lewis Capaldi, Daniel Caesar, and Ashley McBryde. The goal is to bring traffic to the stores and also promote Apple Music.

XDA Developers has discovered, according to endgadget, special Snapchat-like “Effects” in the camera that Google appears to be testing. There are five effects available, including your face in the middle of a cartoon airplane that flies away, balloons that float around your face, fireworks doing a similar thing, a confetti effect and an angel with a halo effect. There’s no announcement from the company, so we don’t know when all this will be available, or if at all.

NVIDIA NVDA announced the GeForce RTX 2080 Super, 2070 Super and 2060 Super, more powerful (more cores, more memory) versions of its GeForce RTX 2080, 2070 and 2060 gaming GPUs at $699, $499 and $399, respectively. The first one goes on sale on July 23, while the other two go on sale today. They’re pitted against AMD’s 5000 series. While they offer a slight performance advantage in some technical parameters, they’re also slightly more expensive.

Intel INTC is auctioning 8,500 patents related to the mobile modem business that was losing a billion dollars a year. The technology was being developed with Apple in mind, but the iPhone maker realized it would not make the deadline and went back to Qualcomm products until it could develop its own. In the process, it has poached Intel talent and negotiated with the company for its patents.

But Intel has obviously lost enough, especially since it isn’t in the best of conditions at the moment, having squandered its process lead. So, the 6,000 patents in 3G, 4G and 5G mobile modem standards, 1,700 patents around wireless implementation technologies and 500 patents with “broad applicability” across the semiconductor and electronics industries, will all go to the highest bidder.

Prime Day

With deals and steals galore, this day brings forward the back-to-school season, essentially increasing competition for other players in this space. It’s also a way to promote Amazon’s own private-label products. And more.

Amazon says, “With incredible deals on top products from pop culture icons across entertainment, fashion, style and food, we’re bringing the best of shopping and entertainment to our members again this year.” This is actually where the next phase of growth in Internet commerce is going to come from. Big platforms, having exhausted the paths open to them to woo customers, are now banking on celebrities and influencers (China has been using this method for some time already).

Twitch Prime is also bringing celebs for live competition on July 11, 12 and 13.

Coupon-code tracking site CouponFollow has been collecting data. This data says that 58% of Amazon’s 100 million+ Prime users plan to shop on Prime Day. The hottest category is electronics, computers and office (with 56.7% wanting to buy), followed by clothing, shoes and accessories (39.3%) and movies, music and games (28%).

Automated Driving

This is the new rage as drivers become more expensive and cars are driven toward a more sustainable future. It’s also a gateway for tech entry into the automotive market.

A group of 11 automotive and technology leaders (Aptiv, Audi, Baidu, BMW, Continental, Daimler, FCA US LLC, HERE, Infineon, Intel and Volkswagen) have published what they call a “Safety First for Automated Driving” (SaFAD) guide for the development, testing and validation of  safe automated passenger vehicles.

It outlines 12 guiding principles that are fine-tuned to generate safe-by-design elements; and a summary of widely-known safety-by-design and verification and validation methods of Level 3 and Level 4 automated driving as defined by the SAE. This will presumably be built up to create certain industry standards with the goal of creating an automated driving experience that is “safer than the average driver”.

California’s Public Utilities Commission has granted Alphabet’s Waymo permission to participate (for three years) in California’s Autonomous Vehicle Passenger Service pilot program along with Zoox, Autox Technologies and Pony.ai. But at this stage, it will have to include a human driver and also not be able to charge for the service. This is other than the 60 companies that have been allowed by the Department of Motor Vehicles to test autonomous vehicles in the state.

Morgan Stanley analyst Adam Jonas has commented about the state of the autonomous driving opportunity. According to him, regulators’ leaning towards including a human driver in automated cars is a likely positive for well-funded operations like Alphabet’s Waymo and Apple. But long term adoption by companies like Uber UBER, Lyft or even Tesla depends on the technology reaching Level 5 status with no human driver present. It just won’t make sense from a cost perspective otherwise.

Employment

Cry all you want, but big tech is sucking up all the brains.

Leaning on a report from advisory firm Mind the Bridge, which estimates that around 562, or 44% of European startups were bought by U.S. firms between 2012 and 2016, Bloomberg’s Lionel Laurent lamented the way Europe’s tech brains are moving to the U.S.

He said that while Germany and Britain have the best universities, creating the best talent, researchers’ pay is not attractive enough to stop the brain drain. He suggested that public funds be used to retain this talent given the growing importance of artificial intelligence (AI) in among other things, the military. He called out politicians’ near-sighted thinking on the issue that leads them to approve of investment by American firms.

Another Bloomberg story talked about Amazon looking to hire 2,000 new engineers, software developers and data scientists to take its technology efforts forward. By year-end, the company expects to have 2,000 Britons on its payroll in a variety of roles including cloud and machine learning experts, official staff, and fulfillment and delivery workers.

Reuters reported that Amazon will also create 1,800 permanent contract positions this year in France, its largest European market after Britain and Germany. By year-end, its total headcount in the country will jump to 9,300.

Netflix is setting up a dedicated production hub at the Pinewood Group-owned Shepperton Studios in Surrey, southwest London. A bizjournals story mentioned that the facility, spanning 14 sound stages, workshops and office space, would be used to produce new and existing series and movies. It also said that as a result of this venture the number of people employed in the country would be up from more than 25,000 cast, crew and extras that worked on nearly 40 originals and co-productions last year.

China

This is less on people’s mind as the U.S. appears to be going back to the negotiation table.

But Google was caught on the wrong foot recently when Shumin Zhai, a lead scientist in its AI group was found to have co-authored a Chinese research paper about new computer-human interaction technology with possible application in defense, medicine and education, according to Chinese Academy of Sciences, the largest government science institute.

The institute said that the smart target-selection assistant could speed up on-screen mobile target selection by more than 50% and improve accuracy by nearly 80%, making it eligible for deployment in China’s J20 stealth fighter plane.

A researcher from the People’s Liberation Army (PLA) added to the speculation by saying things like, "They will have no security clearance to get access to sensitive information, for sure," and "But it does not matter. What we need is their brain.” and "For instance, they can be asked to develop an algorithm but not briefed on the details of how the algorithm would be used."

Defending itself, Google said that the project its engineer was involved in was not about military application and used “long-existing statistical modelling techniques, not AI or deep learning models”.

Meanwhile, Apple, HP, Dell Microsoft, Amazon, Sony and Nintendo are all looking to move more of their production away from China to comply with America’s requirement for products not manufactured in China.  The move is less about supporting the government’s punitive tariffs and more about keeping cost under control (because the tariffs raise the cost of production and final price of products).

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