|Day's Range||370.00 - 370.00|
(Bloomberg) -- Traveloka, Southeast Asia’s biggest online travel startup, is close to raising fresh funds at a private-market valuation of about $2.75 billion -- roughly 17% less than its most recent fundraising, according to people familiar with the matter.The Jakarta-based firm is in advanced negotiations with new strategic investors such as Siam Commercial Bank Pcl and Richard Li’s FWD Group Ltd., as well as existing backers GIC Pte. and East Ventures to secure about $250 million, the people said, asking not to be named because the discussions are private. The primary fundraising will be at a $2.75 billion valuation, while a secondary sale will be at $2.4 billion, one of the people said. Traveloka counts online travel site Expedia Group Inc. and JD.com Inc. among its existing backers.Terms of the fundraising could still change, they said. A Traveloka representative declined to comment.Traveloka, which has had its business hammered by the coronavirus fallout, is one of the first unicorns in Southeast Asia to experience a down-round -- raising funds at a lower valuation than the previous funding round. It reflects the sharp drop in business after lockdown orders halted flights and travel. Since the outbreak, the company has cut an unspecified number of positions, including about 80 jobs in Singapore in April.The travel industry is witnessing a sharp decline in business since the spread of the coronavirus. Expedia saw its total gross booking fall 39% in the first quarter, while its share price has dropped 21% this year. Vacation-rental startup Airbnb Inc. cut 25% of its workforce and raised an additional $2 billion in debt to help weather the downturn.Despite the slump, some Traveloka investors are betting on the travel industry’s eventual recovery, led by a rebound in tourism within countries, and a series of cost-cutting measures at the company, one of the people said. In Vietnam -- a model case in containing the pandemic with fewer than 400 cases and no deaths -- domestic travel has restarted.With a population of 570 million and growing middle class, Southeast Asia’s six largest economies are expected to see their online travel market more than double from $34 billion in 2019 to $78 billion in 2025, according to the most recent report by Google, Temasek and Bain released in October.Read more: Southeast Asia’s No. 1 Travel App Jumps on Fintech BandwagonSince its inception in 2012, Traveloka’s valuation climbed to $3.3 billion, according to the people. It has expanded across Southeast Asia, making it easier for consumers to book flights and hotels across countries. Like other startups in the region, Traveloka followed a popular playbook of providing multiple products and extending into financial services to complement its travel, accommodation and lifestyle offerings.Traveloka Chief Executive Officer Ferry Unardi said in an interview at the New Economy Forum in Beijing in November that the company is considering an initial public offering in Indonesia and in the U.S. in two to three years.Traveloka Looking to Grow Into Lifestyle, Financial Services: CEO (Video)(Adds forecast of Southeast Asia’s digital market in the seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Facebook Inc., Google and Twitter Inc. -- all of which are blocked in the mainland -- are now headed toward a showdown with China that could end up making Hong Kong feel more like Beijing.Hours after Hong Kong announced sweeping new powers to police the internet on Monday night, those companies plus the likes of Microsoft Corp. and Zoom Video Communications Inc. all suspended requests for data from the Hong Kong government. ByteDance Ltd.’s TikTok, which has Chinese owners, announced it would pull its viral video app from the territory’s mobile stores in the coming days even as President Donald Trump threatened to ban it in the U.S.Their dilemma is stark: Bend to the law and infuriate Western nations increasingly at odds with China over political freedoms, or simply refuse and depart like Google did in China a decade ago over some of the very same issues. Much like that seismic event shook the mainland in 2010, Big Tech’s reaction now could have a much wider impact on Hong Kong’s future as a financial hub -- potentially sparking an exodus of professionals and businesses.“Google is pretty important to people here, and if that’s cut off then it’s really extremely serious,” said Richard Harris, a former director at Citi Private Bank who now runs Port Shelter Investment Management in Hong Kong. “In Hong Kong we don’t know where the boundaries are, and that’s threatening to a lot of business people.”Over the past week, Hong Kong authorities have begun explaining how they’ll enforce a law that officials in Beijing called a “sword of Damocles” hanging over China’s most strident critics. The legislation, which sparked the threat of sanctions from the Trump administration and outrage elsewhere, has had a chilling effect on pro-democracy protesters who demonstrated for months last year while also raising fresh questions for businesses.On Monday night, the Hong Kong government announced sweeping new police powers, including warrant-less searches, property seizures and online surveillance. If a publisher fails to immediately comply with a request to remove content deemed in breach of the law, police can seek a warrant to “take any action” to remove it while also demanding “the identification record or decryption assistance.”“We are absolutely headed for a showdown, and there are no indications that the Hong Kong government is particularly prepared if Facebook or another company refuses a removal request,” said James Griffiths, a journalist and author of “The Great Firewall: How to Build and Control an Alternative Version of the Internet.” “These companies appear to have realized that there is no compromise they could make that would truly satisfy Beijing or make them seem trustworthy. This could make them more willing to stand up against Chinese censorship in Hong Kong.”American internet giants have made overtures toward Beijing in recent years as the market exploded, but few have so far actually acceded to China’s censorship framework.Of the rare examples, Microsoft’s LinkedIn censors content to allow it to operate a Chinese version, while Apple Inc. complies with local regulations in policing its app store and other services. Reports that Google entertained the notion of returning -- via potentially a censored version of search called Project Dragonfly -- enraged lawmakers and its own employees torpedoed the idea.Worldwide CensorshipTwitter and Facebook have never been consistently available in China, but Mark Zuckerberg also flirted with Beijing before abandoning the notion as regulatory scrutiny and a user backlash grew at home. In both instances, external factors helped scupper the feasibility of operating in the world’s No. 2 economy.“I worked hard to make this happen. But we could never come to agreement on what it would take for us to operate there, and they never let us in,” he said last year in a speech at Georgetown University. “And now we have more freedom to speak out and stand up for the values we believe in and fight for free expression around the world.”Still, the internet heavyweights are already censoring content across the world for both authoritarian regimes and western democracies, according to Ben Bland, a research fellow at the Lowy Institute in Australia. After a mass shooting last March in Christchurch, New Zealand, top social media companies joined with more than 40 countries in a concerted call to end the spread of extremist messaging online.Germany has banned online Nazi and right-wing extremist content, and most countries have blocks in place against online pornography and criminal activity. In Thailand, strict lese majeste laws lead to censorship of content deemed offensive to the royal family, while Communist-run Vietnam expunges anything deemed “anti-state.”Reputational DamageBig tech companies must gauge the importance of the markets in China and Hong Kong with possible reputational damage in other places they operate, according to Stuart Hargreaves, a law professor at Chinese University of Hong Kong who researches surveillance and privacy issues.“I do not expect to see the Great Firewall extended from mainland China to Hong Kong, at least in the medium term,” he said. “It is not necessary for Beijing’s goal of tamping down certain sentiments and would be the obvious end of Hong Kong as a global city and its particular role as an Asian finance hub.”The exit of TikTok, the viral video app that has insisted it operates independently of Beijing, could actually benefit the Communist Party by removing a forum pro-democracy protesters have used to post videos calling for an independent Hong Kong. Last year, demonstrators used the Reddit-like forum LIHKG as well as Telegram to organize leaderless protests.TikTok on Tuesday played up its U.S. ties while pushing back against comments by U.S. Secretary of State Michael Pompeo, who said the government is considering a ban of the short video app. Trump later said the move may be one possible way to retaliate against China over its handling of the coronavirus.“We have never provided user data to the Chinese government, nor would we do so if asked,” a TikTok spokesperson said, adding that it’s led by an American CEO.Platforms like Telegram that provide end-to-end encryption could become increasingly popular, said Joyce Nip, senior lecturer in Chinese Media Studies at the University of Sydney. Telegram said it has never shared data with Hong Kong authorities, adding that it doesn’t have servers in the territory and doesn’t store data there.‘Knife Edge’Hong Kong’s leader, Carrie Lam, didn’t answer a question Tuesday on her response to tech companies that stopped processing data requests from her government. Still, she played down any long-term impact on the city’s position as a financial hub around the same time that Pompeo released a statement blasting the Communist Party’s “Orwellian censorship” in Hong Kong.There “has been an increasing appreciation of the positive effect of this national security legislation, particularly in restoring stability in Hong Kong as reflected by some of the market sentiments in recent days,” Lam said a day after local stocks entered a bull market. “Surely this is not doom and gloom for Hong Kong.”The regulations stemmed from a new national security committee created by the law that includes Lam and Luo Huining, Beijing’s top official in the city. While China’s leaders know Hong Kong needs a free flow of information to function as a world-class financial center, “much seems to rest in the hands of the few newly empowered bureaucrats who will police the new laws,” according to Steve Vickers, chief executive officer of Steve Vickers and Associates, a political and corporate risk consultancy.“Foreign firms are on something of a knife edge here, caught between their natural affinity with freedom of information and their commercial desire to operate in the huge Chinese market,” said Vickers, a former head of the Royal Hong Kong Police Criminal Intelligence Bureau. “It is now more a matter of what is actually done, as opposed to what is being said -- by either China or the foreign IT companies -- that will be the key.”(Updates with Trump comment in third paragraph)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
NVIDIA (NASDAQ: NVDA) announced on Tuesday that just weeks after its release, the A100 Tensor Core graphics processing unit (GPU) has been adopted by Google Cloud, a division of Alphabet (NASDAQ: GOOGL) (NASDAQ: GOOG). The Accelerator-Optimized VM (A2) family, available on Google Compute Engine, is designed specifically to handle some of the most demanding applications out there, including artificial intelligence (AI) workloads and high performance computing (HPC). This makes Google the first cloud service provider to offer the new NVIDIA GPUs.
The popular video-sharing app TikTok may be in the White House’s crosshairs. Secretary of State said on Fox News Monday night that the U.S. is considering banning Chinese-owned social media apps like TikTok. Pompeo pointed to similar actions the U.S. took against Huawei and ZTE (ticker: 763.Hong Kong) over national security concerns.
(Bloomberg) -- The coronavirus pandemic is exacerbating wealth and racial inequalities around the world. Nowhere is that more apparent than in San Francisco.While many low-income employees in the service sector have been laid off or risk getting sick if they do go to work, the city’s high-paid tech workers have been mostly shielded. The engineers and product managers who helped push up the cost of living in the area over the last 15 years aren’t nearly as affected by the pandemic, with companies like Alphabet Inc. and Facebook Inc. giving them cash bonuses to upgrade their home offices and organizing virtual yoga sessions to help them stay fit.Most tech employees aren’t worried about getting fired and the mostly-digital nature of software work means they can safely do their jobs from home. Many have even left the Bay Area completely.To help staff cope while working remotely, companies are rolling out perks. Salesforce.com Inc. recently sponsored a virtual talent show and is running a week-long “adventurers club” to entertain workers’ kids while they’re stuck at home, in addition to providing benefits such as six additional weeks of parental leave. Microsoft Corp. is also offering parents extra leave time amid school and camp closings.At the same time, service industry workers like Joe Grandov, who has a part-time security job at San Francisco International Airport, are struggling.Grandov, 65, says his hours have been cut by up to 20 a week since the pandemic began because he hasn’t been able to pick up overtime shifts. He also used to earn extra money driving for Lyft Inc. but said he had to stop because he was making as little as $35 a week, hardly enough to justify the health risks the gig posed. Business travel has come to a halt, which is hurting jobs like his that depend on a lively tech sector.“It’s not been easy,” said Grandov, who is a member of the airport’s local union. “We’ve been selling things we don’t need because we need the money more.”This divide between the tech and service industry is compounding the income disparities that have plagued the Bay Area for years. Since January, earnings among low-income workers in San Francisco County have fallen 52.1%, among the highest in the state, according to data from Opportunity Insights, a Harvard University research lab.“The service sector already had stagnating wages, then you introduce a pandemic, and it becomes not just an income gap but a stark divide between those who will survive versus those who can’t,” said Russell Hancock, chief executive officer of Joint Venture Silicon Valley, a nonprofit that analyzes the region’s economy.The changes cut across racial lines too, deepening inequalities between White and non-White workers in the area. More than 30% of the Bay Area is Black or Latino, according to the Bay Area Equity Atlas. Fewer than 10% of Facebook and Google staff are Black or Latino, according to the companies’ latest diversity reports.The inequalities extend to the virus impact: In San Francisco, Hispanic and Latino people make up 50% of cases and about 15% of the population. In Santa Clara County, Latinos are 47% of cases and 26% of the population.Some of the companies boosting perks for their own employees are also acting to address economic and racial inequities. Salesforce is adding diversity recruiters and spending $200 million on organizations that are working to advance racial equality, and pledged to “advocate at federal, state, and local levels for policies to address the equity gap, exacerbated by Covid-19.”The effects of low-income job losses are already weighing on workers, according to Richard Garbarino, mayor of South San Francisco. While the city of about 68,000 hasn’t had major food insecurity issues in the past, it recently partnered with a food bank to distribute 750 meal boxes a week. The pandemic has hit low income families the hardest because they often rely on multiple part-time jobs, Garbarino said.Over 55% of leisure and hospitality jobs were cut between May 2019 and May 2020 in San Francisco and San Mateo Counties, the most of any industry in the area, according to data from California’s Employment Development Department. Over the same period, professional and business services, which includes computer engineering and management, saw a 2% drop.San Francisco’s economy may face even more challenges the longer tech employees stay home. Google and Facebook have told their staff to prepare to work remotely until 2021. Twitter Inc. says anyone who wants to can work from home forever.“Restaurant and service workers are currently paid really well because they’re supported by big companies. When they take their work away, or those jobs away, that ripples through the rest of the economy,” said Jay Cheng, public policy director at the San Francisco Chamber of Commerce. If that happens, “San Francisco is no longer going to be able to be the golden child of the United States economy.”(Adds details on Salesforce policies in fourth and 12th paragraphs.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Augmented reality startup Magic Leap Inc. has hired Peggy Johnson, a Microsoft Corp. executive, to take over as chief executive officer starting next month, as the company continues to reshape itself as a provider of business services.Magic Leap had been one of the buzziest startups in recent years. It raised more than $2 billion from high-profile investors including Alphabet Inc., largely on the promise that it would turn augmented reality into a viable consumer technology. Rony Abovitz, the company founder and CEO, became the de facto evangelist for augmented reality, with bold and colorful pronouncements of its potential.But the Florida-based company struggled to execute, and sales of its flagship product, the Magic Leap One headset, never took off after extensive delays. The company said late last year it would focus more on business applications, and cut more than half of its workforce in April. Selling to companies is a far different prospect than building a consumer product, and one Abovitz rarely showed as much enthusiasm for. He announced in May he would step down once the company found a replacement.Johnson, who spent more than two decades at Qualcomm Inc., brings extensive experience negotiating partnerships with other large businesses. She joined Microsoft in 2014 as one of CEO Satya Nadella’s first major hires, at a time when the software maker’s dealings with other companies were often contentious. As head of business development, Johnson worked to repair Microsoft’s relationships with partners like Salesforce.com Inc. and Samsung Electronics Co., becoming the face of a new, friendlier company. In 2016 she started Microsoft’s venture capital arm M12.“I look forward to strategically building enduring relationships that connect Magic Leap’s game-changing technology and pipeline to the wide-ranging digital needs of enterprises of all sizes and industries,” Johnson said Tuesday in a statement.Microsoft also makes one of the main rivals to Magic Leap, the Hololens, which it has always positioned primarily as a business tool. A Microsoft spokesperson said the company is satisfied that any confidentiality issues arising from Johnson moving to a direct competitor have been addressed.Microsoft will conduct an internal and external search to find Johnson’s replacement and her duties will be assumed in the short term by Chief Financial Officer Amy Hood, who already oversees mergers and acquisitions, according to a spokesperson.(Updates with background on Johnson in the fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Nvidia's new A100 flagship GPU is powering a new family of Google cloud computing instances -- including one that provides access to 16 GPUs.
Chief executives of Google parent Alphabet Inc. , Amazon.com Inc. , Apple Inc. , and Facebook Inc. are set to testify July 27 before the House Judiciary Antitrust Subcommittee, a committee spokesperson said in an email. The hearing is part of the committee's investigation of competition in the digital marketplace. Under House Rules, the CEOs -- Alphabet's Sundar Pichai, Amazon's Jeff Bezos, Apple's Tim Cook, and Facebook's Mark Zuckerberg -- can appear virtually.
(Bloomberg Opinion) -- Robin King, this week's guest on Masters in Business, didn't expect to be involved with the Naval Special Warfare program. When her photographer husband followed his older brother into the Navy Seals program, King, decided to put her business degree to good use. (Her past employers were Walt Disney and McDonnell Douglas, later bought by Boeing).She began working in the finance department of a nonprofit serving the special warfare community. Then a $100,000 donation came in with a small catch: It had to go to an IRS- recognized, tax-deductible organization. Thus, the Navy SEAL Foundation was born.King began in the finance department, eventually becoming chief financial officer and then chief executive officer. The organization provides critical support and assistance to the Naval Special Warfare community and its families.King discusses the balance that all special forces spouses seem to adapt to: being both independent when your spouse goes off to battle, yet part of a larger community supporting families through trauma and tragedy. She discusses why she (and other special forces wives and husbands) don’t stress out while their spouses are in harm’s ways: Their equipment, training, planning and leadership are so good it imbues them all with a reassuring sense of confidence in their team and their own abilities. It is not just that they like their chances, it is that they have done everything possible to tilt the odds in their own favor.Her favorite books are here; a transcript of our conversation is here.You can stream and download our full conversation, including the podcast extras on iTunes, Spotify, Overcast, Google, Bloomberg and Stitcher. All of our earlier podcasts on your favorite pod hosts can be found here.Next week, we speak with Martin Franklin of Mariposa Capital. Franklin has founded and run numerous companies, including Element Solutions Inc. and Jarden Corp., since acquired by Newell Brands. He has also created more than a dozen special purpose acquisition companies, co-investing with money managers such as Bill Ackman of Pershing Square Capital.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Barry Ritholtz is a Bloomberg Opinion columnist. He is chairman and chief investment officer of Ritholtz Wealth Management, and was previously chief market strategist at Maxim Group. He is the author of “Bailout Nation.”For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
The Hong Kong law brings Alphabet's (GOOGL) Google to pause user data processing requests from the Hong Kong government.
Augmented Reality market booms with its increasing use cases. Companies like Microsoft (MSFT), Amazon and Facebook among others are putting strong efforts to bolster presence.
The focus on racial injustice following the murder of George Floyd, among others, has brought many more supporters to the #BlackLivesMatter Movement. Many leaders are diversity and inclusion optimists; they care about the right things — but fail to turn their intention into action. 1. Clothing retailer Gap (GPS) announced via an email to its employees (later posted on its website and online shopping sites) that it is committed to doubling the representation of Black and Latinx employees at all levels in their U.S. offices by 2025.
Amazon's (AMZN) Twitch sees an increase in viewer base in second-quarter 2020 on account of lockdowns due to the COVID-19 outbreak.
Here we present five technology stocks poised to benefit from the growing adoption of digital payment solution especially amid coronavirus outbreak such as FB, AMZN & others.
Dow Jones futures fell Tuesday after Monday's strong coronavirus stock market rally, as Apple, Amazon and Tesla led the way. Alibaba broke out.
(Bloomberg Opinion) -- For months, President Donald Trump’s Justice Department has hinted that it intends to crack down on Silicon Valley. It recently took a big step closer as senior antitrust officials met with their state counterparts to plot out a case against Alphabet Inc.’s Google. Quite what they plan to argue isn’t yet clear. But as the final months of Trump’s first term wind down, and an election draws near, some exceptional skepticism is in order.One reason for caution is that Attorney General William Barr has not exactly been a disinterested enforcer of competition law. Quite the opposite: In recent testimony, a senior Justice Department whistle-blower described how Barr pressured antitrust prosecutors to harass automakers (and others) for transparently political reasons. Now, according to news reports, Barr has taken an unusual interest in the Google case. Why? In a recent interview with Fox News, he intimated that he hopes to use antitrust law to punish tech companies for censoring conservative viewpoints, a frequent preoccupation of Trump’s. Never mind that this accusation is false, and that tech companies would be entirely within their rights to so discriminate if they chose. The whole thing has nothing to do with antitrust.Perhaps Barr was musing idly, and perhaps the department has more legitimate objections in mind. But even under more traditional theories of competition law, Google makes an odd target.Feasibly, a case might be made against its dominance of the online advertising market, for instance. Combined with Facebook, Google took in about 60% of digital ad spending last year. Yet there’s no law against building a good product. And with pressure rising from Amazon and other contenders, online ad rates have fallen by more than 40% over the past decade. That doesn’t look like a market lacking in competition.Nor could anyone credibly argue that Google has harmed consumers, the standard traditionally applied in antitrust analysis. To the contrary, it gives them (among other things) access to limitless email, a smartphone operating system, innovative mapping software and a search engine that ranks among the greatest inventions of the last century — all for free. Its targeted advertising has been a boon to businesses big and small. That’s to say nothing of its work on driverless cars, quantum computing or esoteric life-extension technologies.Even an otherwise blameless company shouldn’t get a pass for anticompetitive behavior, of course. And some allege that Google has unfairly privileged its own products, pursued harmful mergers and engaged in other dubious conduct. If the Justice Department imposed targeted remedies for such violations after a transparent investigation, it would be entirely appropriate.Yet the Trump administration has suggested nothing of the sort publicly. If its track record is any guide, this case is more likely to amount to a political attack with a belabored legal rationale attached. Even if its motives are pure, the administration should be wary: Government intervention in a market where no obvious harm has been caused to consumers — and in pursuit of vague or unrelated objectives — is a recipe for disaster.The fact is, for all the criticism leveled at tech companies, they employ hundreds of thousands of people, create immensely useful products, propel what growth the American economy still enjoys and are among the most trusted brands going. They need to follow the rules like everyone else. But abusing antitrust law to clobber them for electoral gain won’t end well for anyone.Editorials are written by the Bloomberg Opinion editorial board.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Alphabet’s Google and Deutsche Bank have announced to form a strategic partnership to provide the German lender access to cloud services and create innovation in technology-based financial products for clients.
(Bloomberg) -- Google, Facebook Inc., Microsoft Corp. and Twitter Inc. won’t process user data requests from the Hong Kong government amid concerns that a new security law could criminalize protests.Last Wednesday, when the law took effect, Google paused production on any new information requests from Hong Kong authorities, said a spokesperson for the Alphabet Inc. unit. “We’ll continue to review the details of the new law,” the spokesperson added.It’s unclear what types of actions will violate the new law, but police arrested a man last week for brandishing a Hong Kong independence flag. Protesters have rallied against the law, and the government has threatened fines and imprisonment for service providers that fail to remove messages. In response, the U.S. has revoked some trade benefits with Hong Kong related to sensitive technology. American officials have expressed fears that the new law signals Beijing’s intention to take full control of Hong Kong, which has operated with more autonomy and freedom than cities on the mainland.Zoom Video Communications Inc. and Microsoft joined their internet peers in hitting pause on data requests while they examined the new law, spokespersons for both companies said in separate statements. Microsoft said it “typically received only a relatively small number of requests from Hong Kong authorities, but we are pausing our responses to these requests as we conduct our review.”In 2019, the Hong Kong government requested data from Google users 105 times, according to the company’s reported figures.Facebook typically works with law enforcement to follow local laws where the company operates, but said it has paused sharing user data with Hong Kong authorities while it conducts a “human-rights” assessment. The pause applies to all Facebook properties, including its core social network, Instagram and WhatsApp.“Freedom of expression is a fundamental human right and support the right of people to express themselves without fear for their safety or other repercussions,” a Facebook spokesperson said in a statement. “We have a global process for government requests and in reviewing each individual request, we consider Facebook’s policies, local laws and international human-rights standards.”Twitter operates in much the same way and paused data requests immediately following the law’s implementation last week, a Twitter spokesperson said, adding that the company has “grave concerns regarding both the developing process and the full intention of this law.”Facebook and Twitter don’t operate in China but do in Hong Kong, where they have offices. Google has a significant presence in Hong Kong, which includes sales staff that works with Chinese companies running digital advertising outside of China.(Updates with Zoom joining the action from the fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Several United States-based tech companies such as Alphabet Inc (NASDAQ GOOGL) (NASDAQ: GOOG), Facebook Inc (NASDAQ: FB), and Twitter Inc (NYSE: TWTR) will no longer provide Hong Kong Law enforcement with user data.What Happened On Monday, Facebook and Whatsapp, the company's messaging app, said that they would suspend the review of Hong Kong government requests on user data, reported MarketWatch.Both platforms will examine the recently-passed National Security Law and hold consultations with international human rights experts in the interim.Twitter is also putting on hold all data and information requests from Hong Kong officials, while Google said that it had "paused production on any new data requests from Hong Kong authorities," while it continues to study the new law.China-based ByteDance, the owner of TikTok, said that the short-form video app would exit Hong Kong, and it too has stopped yielding to local government requests for user data. Why It Matters The National Security Law was introduced last week on the day marking the return of Hong Kong to China from Britain. The Hong Kong government has said that if an internet company fails to comply with a court order to provide user data, it could be fined $13,000 and an employee of the erring firm could face six months in prison, reported the New York Times. Under the new law, police have received sweeping powers and can order the deletion of posts that threaten national security. Individuals who are ordered to remove internet posts under the law can face up to a year in prison if they refuse to comply. Complying with the Hong Kong law may make bring U.S. firms under pressure at home, while not adhering could hurt the companies and put their local employees at risk of arrest. See more from Benzinga * SiriusXM Buying Stitcher Podcasting Unit For 0M From Scripps: Report * Samsung Forecasts 23% Rise In Q2 Operating Profits * Facebook Launching Courses In India Centered Around Jobs, Digital Safety, Augmented Reality(C) 2020 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
(Bloomberg) -- Wirecard AG’s collapse displayed a growing blind spot for the guardians of the world’s financial system: how do you regulate a firm that acts like bank, but isn’t really a bank?For years, Germany’s supposed fintech star escaped strict scrutiny because financial watchdog BaFin was focused on its banking unit rather than Wirecard as a whole. With the scandal undermining Germany’s reputation as a place to do business, the government is overhauling who regulates who, but it could also spark a regulatory rethink with consequences for the broader fintech industry.As banks retrenched after the 2008 financial crisis and spent billions on settling the resulting litigation, rather than new technology, other companies stepped in. Wirecard and competitors like Adyen NV process payments far quicker than traditional banks while also offering clients services to manage their risk and learn more about their own customers. Technology giants like Amazon.com Inc. and Google parent Alphabet Inc. are also increasingly offering financial services.Swathes of the fintech sector are currently unsupervised, particularly in the area of cryptocurrencies. Around 31% of fintech firms in Europe are not subject to any regulation, according to the European Banking Authority.“We need regulation that addresses banks and non-banks on a level playing field,” says Benoit Coeure, head of innovation at the Bank for International Settlements, better known as the central bank for central banks. Fintech companies play an important role in wider financial markets and not just in payments, he said in an interview with Bloomberg TV’s Nejra Cehic on Friday.At issue is whether fintechs and other digital payments firms should be subject to the same type of strict regulation as the banks and financial companies they are trying to disrupt. There are already some regulatory overlaps in many cases but some experts say more gaps need to be covered to ensure the digital companies are supervised as financial firms.In Europe, a company crosses the line into finance and all the regulatory scrutiny that entails when more than 50% of its business is associated with financial activities like lending and taking deposits, according to the EBA. Banks have faced tougher reporting and compliance obligations since the financial crisis.Wirecard wasn’t classified as a finance company in previous assessments by BaFin and other institutions. While its German bank and its U.K. unit were supervised by local regulators, oversight of the group company was essentially limited to whether it met the disclosure obligations of a German listed company, watched over by BaFin.BaFin President Felix Hufeld has described the collapse of Wirecard as a “massive fraud.” But for some, the debate about changing or increasing regulation is a distraction from the failure by authorities like BaFin to enforce existing rules.A Wirecard spokeswoman declined to comment on Hufeld’s characterization.“The real issue is that BaFin didn’t use the powers they had already,” said Sven Giegold, a member of the European Parliament for the Green party. “This is negligence by the supervisor, so this doesn’t need a new approach to financial regulation of fintechs.”While classifying Wirecard as a financial company would have given BaFin more access, the regulator was already able to pursue red flags at Wirecard. BaFin received documents alleging irregularities at the company in January 2019 and asked Germany’s accounting watchdog to look into it. Yet that group failed to deliver a report before Wirecard itself disclosed the 1.9 billion euros of missing cash in June this year. BaFin has also been faulted for moving too slowly.Hufeld has acknowledged that BaFin is among institutions that fell short in the supervision of Wirecard and has pledged to review any failings. Germany’s Justice Ministry canceled its contract with the accounting enforcement watchdog, known as FREP, while the Finance Ministry has said investigative powers should be handed to BaFin.To get a license to process payments, companies like Wirecard need to provide documentation on governance to national regulators and are required to keep their customer funds separate from their own revenues. Management also need to be screened by regulators and the banking arms need to maintain a certain level of financial strength.“The regulatory framework that’s there is fit for purpose,” said John Ahern, a partner at law firm Covington & Burling, who advises clients on financial regulation. “The question is whether the supervision of regulated entities is sufficiently effective.”Hufeld said he has been pressing the issue of oversight over technology companies for two years, but that ultimately it’s a political decision. Germany took over the rotating presidency of the European Union this month, meaning it could press for changes, although it may be more focused on the response to the coronavirus pandemic.Wirecard exposed a failure in oversight both by accountants and regulators, but Europe’s regulatory structure also contains gaps which will be more in focus as electronic payments grow, says Huw van Steenis, senior adviser to the CEO at UBS Group AG.“Europe has been so keen to drive open the payments market to break the banks’ monopoly that the regulatory change has meant that payments firms fall between the cracks,” he said in a Bloomberg TV interview. “Addressing this payments regulatory gap is going to be ever more important in the post-pandemic economy.”For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
Deutsche Bank <DBKGn.DE> said on Tuesday it has agreed a strategic, multi-year partnership with Google <GOOGL.O> to give the German lender access to cloud services and drive innovation in technology-based financial products for clients. Earlier this year, Deutsche invited bids from Google, Microsoft <MSFT.O>, and Amazon <AMZN.O> to overhaul the bank's outdated and fragmented technology networks. The deal is part of a 13 billion euro ($14.70 billion)technology investment Deutsche has planned up to 2022 as it restructures to recover from years of losses.
Yahoo Finance's Tech Editor Dan Howley joins The First Trade to discuss the possible ban of Chinese social media apps in the United States and more.
Yahoo Finance’s Brian Sozzi, Alexis Christoforous, and Jess Smith discuss what to expect when big tech CEOs testify before Congress on July 27th.
Facebook, Google and Twitter suspended processing government requests for user data in Hong Kong, on Monday (July 6). The moves come in response to China's establishment of a sweeping new national security law for Hong Kong. And in an illustration of worries about the law, short-form video app TikTok announced -- it would be pulling out of the Hong Kong market. Facebook, which also owns WhatsApp and Instagram, said in a statement that it was pausing reviews of all of its services "pending further assessment of the National Security Law." Google, and Twitter said they suspended their reviews of data requests from Hong Kong authorities immediately after the law went into effect last week. Although the social network declined to comment, Twitter cited quote "grave concerns" about the laws implications. Google said it would continue reviewing Hong Kong goverment requests for removing user-generated content from its services, while Facebook did not respond to a request for comment. Tech companies have long operated freely in Hong Kong, where internet access has been unaffected by the firewall imposed in mainland China, which blocks Google, Twitter and Facebook. Social networks often apply localized restrictions to posts that violate local laws. And in the second half of last year Facebook restricted nearly 400 such pieces of content in Hong Kong. Adding to the Monday announcements -- TikTok, owned by China-based ByteDance, said it would pull out of Hong Kong within days. A source told Reuters that the move was made because it was not clear if Hong Kong would now fall entirely under Beijing's jurisdiction in light of the new law. Asked about the moves by the U.S. tech firms and prospects for media freedom, Hong Kong Chief Executive Carrie Lam said on Tuesday "the law would not undermine human rights and freedoms." Since the law came into force some Hong Kongers have started reviewing or deleting social media posts they thought would be too sensitive. On the streets many Hong Kongers say they're worried about online freedom of expression. "Meanwhile the fear has already spread over Hong Kong about cyber expression, the freedom here." Messaging app Signal, which promises end-to-end encryption, has seen a surge in sign ups in Hong Kong.