Amazon CEO Jeff Bezos told U.S. lawmakers last year that the company has a policy prohibiting employees from using data on specific sellers to help boost its own sales.
“I can’t guarantee you that that policy has never been violated,” he added.
Now it’s clear why he chose his words so carefully.
An internal audit seen by POLITICO warned Amazon’s senior leadership in 2015 that 4,700 of its workforce working on its own sales had unauthorized access to sensitive third-party seller data on the platform — even identifying one case in which an employee used the access to improve sales.
Fresh questions have been raised over Amazon’s tax planning after its latest corporate filings in Luxembourg revealed that the company collected record sales income of €44bn (£38bn) in Europe last year but did not have to pay any corporation tax to the Grand Duchy.
Accounts for Amazon EU Sarl, through which it sells products to hundreds of millions of households in the UK and across Europe, show that despite collecting record income, the Luxembourg unit made a €1.2bn loss and therefore paid no tax.
In fact the unit was granted €56m in tax credits it can use to offset any future tax bills should it turn a profit. The company has €2.7bn worth of carried forward losses stored up, which can be used against any tax payable on future profits.
The Luxembourg unit – which handles sales for the UK, France, Germany, Italy, the Netherlands, Poland, Spain and Sweden – employs just 5,262 staff meaning that the income per employ amounts to €8.4m.
The article goes on to blame Amazon, but tbh I don’t blame them much. It’s the EU and the tax haven system inside it that allows its member states to allow and even encourage this kind of tax avoidance that is to blame.
Russia said it had fined Apple $12 million for alleged [Note: why the use of this word? If the fine has been issued, then a Russian court has established guilt and there is no allleging about it!] abuse of its dominance in the mobile applications market, in the latest dispute between Moscow and a Western technology firm.
The Federal Antimonopoly Service (FAS) said on Tuesday that U.S. tech giant Apple’s distribution of apps through its iOS operating system gave its own products a competitive advantage.
[…]
The FAS said in a statement it had imposed a turnover fine on Apple of 906.3 million roubles ($12.1 million) for the alleged violation of Russian anti-monopoly legislation.
It determined in August 2020 that Apple had abused its dominant position and then issued a directive requiring the U.S. company to remove provisions giving it the right to reject third-party apps from its App Store.
That move followed a complaint from cybersecurity company Kaspersky Lab, which had said that a new version of its Safe Kids application had been declined by Apple’s operating system.
Epic Games is using its lawsuit against Apple to accuse the iPhone maker of being particularly greedy. As The Vergereports, expert witness Eric Barns testified that Apple supposedly had an App Store operating margin of 77.8 percent in 2019, itself a hike from 74.9 percent in 2018. He also rejected Apple witness’ claims that you couldn’t practically calculate profit, pointing to info from the company’s Corporate Financial Planning and Analysis group as evidence.
Apple unsurprisingly disagreed. The tech firm told The Verge the margin calculations are “simply” wrong and that it planned to fight the allegations at trial. The firm’s own witness, Richard Schmalensee, claimed that Barnes was looking at one iOS ecosystem element that distorted the apparent operating margin. The real figure was “unremarkable,” he said, adding that you couldn’t study App Store profit without looking at the broader context of devices and services.
The company doesn’t calculate profits and losses based on products and services, Schmalensee said.
There’s no guarantee the court will accept Barnes’ take. Apple’s overall gross profit margin has typically been high relative to much of the industry, but never that high — it was 42.5 percent during the company’s latest winter quarter. Apple has also tended to portray the App Store as a way to drive hardware sales rather than a money-maker in its own right.
The testimony nonetheless does more to explain how Epic will pursue its case against Apple as the court battle begins on May 3rd. The Fortnite creator not only wants to portray Apple as anti-competitive, but abusing its lock on iOS app distribution to reap massive profits.
Amazon may soon be more accountable for more products than the ones it directly sells. According to the LA Times, a California state appeals court has ruled that Amazon is responsible for the safety of third-party products available through its marketplace following a 2015 hoverboard fire. While the internet giant argued that it was only connecting buyers with sellers, judges determined that there was a “direct link” in distribution that made the company liable.
The company won the initial ruling. At the time, a judge sided with Amazon’s view that it was just advertising sellers’ products rather than participating in sales.
In a statement to the Times, Amazon said it “invests heavily” in product safety by screening sellers and products. it also keeps watch on the store for hints of problems. The company declined to comment on the appeal court decision, including whether it intended to challenge the ruling at the state Supreme Court.
The decision, if it holds, could force Amazon to change policies. The tech giant may have to step up its vetting process for sellers and be ready to accept liability for safety problems, including lawsuits. Other stores with similar third-party marketplaces would have to follow suit. That, in turn, might be good news for shoppers —you could see fewer sketchy products in online stores, and you’d have a better chance of resolving safety issues.
Bobby Kotick, the longtime CEO of “Call of Duty” and “Candy Crush” game maker Activision Blizzard, will see his base salary reduced by 50% and bonus potential slashed as part of a 15-month contract extension, the company reported Thursday in an SEC filing.
Why it matters: The cut isn’t a sign that the company is struggling. Activision, like most big gaming companies, is thriving. But it appears to show a company reacting to criticism of outsized executive compensation.
Kotick’s base salary will be cut in half to $875,000, and his amended contract establishes a reduction of $1.75 million in potential annual bonuses.
Provisions for lucrative bonuses tied to stock performance have also been removed or rewritten to limit other potential bonus payouts. That follows reports that they triggered payments of as much as $200 million earlier this year.
In its filing, Activison’s board said the compensation changes were made after 12 months of “extensive shareholder outreach.”
[…]
The big picture: Kotick became CEO of Activision in 1991, when the company was a struggling player in a much smaller industry. Now it is one of gaming’s most successful.
That success hasn’t meant labor happiness for all. Activision has laid off waves of employees each of the last three years.
Kotick told Gamesbeat Wednesday that Activision needs to hire some 2,500 workers.
So people are still whining that he’s making actual money but these are the types for whom no pay level will ever be acceptable, even if they even out the pay levels throughout the whole company.
I think this is a great exemplary step forwards – the top shouldn’t be earning such stupid amounts more than the lowest employees. Next step, up the earnings of the lower paid people!
the European Union has charged Apple with allegedly “abus[ing] its dominant position” in the music streaming market.
The charges stem from an initial complaint filed by Spotify in 2019. At the time, Spotify accused Apple of having “an unfair advantage at every turn” by imposing a series of obstacles that favored its own services at the expense of competitors. As it turns out, the European Commission seems to agree with Spotify.
“By setting strict rules on the App Store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition,” the European Commission said in a tweet.
The Commission further explained in a press release that it took issue with Apple’s role as a gatekeeper to the iOS ecosystem. Because the App Store is the only venue for developers to reach iOS users, the Commission contends that elevates Apple to a dominant position within the music streaming market. In particular, it singled out Apple’s mandatory 30% commission for in-app purchases and “anti-steering provisions.” The latter refers to limitations within the App Store that prevent developers from informing consumers of alternative payment options that might be cheaper. That in turn forces rival music streaming services to raise subscription prices for consumers to make up for their higher costs—all while Apple benefits by acting as a middle man for in-app billing and communications with consumers.
[…]
It’s a no-brainer that each company would point to the other as being in the wrong here. But it’s clear that Apple’s 30% commission and control over in-app transactions is a sore point for multiple companies. Next week, Epic Games will also go to federal court to argue that Apple abused its power to kick Fortnite out of the App Store. That dramatic brouhaha last summer sparked a number of app developers—including Spotify, Tile, and Epic Games—to form the Coalition for App Fairness (CAF), a nonprofit that aims to fight against the so-called Apple tax and other anticompetitive app store policies.
[…]
. If found guilty, Apple could face up to a 10% fine on its annual revenue—which, any way you slice it would be a lot of money. However, the Commission says that there are “no legal deadlines for bringing an antitrust investigation to an end” and that an investigation will last as long as it needs to, “depend[ing] on a number of factors.” In other words, while this is a major milestone in Apple’s App Store antitrust saga, it’s far, far, far from being over.
I have been talking about ending the monopoly stranglehold big tech has been excersising since early 2019 so it’s good to see the end of this is all coming together finally
Microsoft is shaking up the world of PC gaming today with a big cut to the amount of revenue it takes from games on Windows. The software giant is reducing its cut from 30 percent to just 12 percent from August 1st, in a clear bid to compete with Steam and entice developers and studios to bring more PC games to its Microsoft Store.
“Game developers are at the heart of bringing great games to our players, and we want them to find success on our platforms,” says Matt Booty, head of Xbox Game Studios at Microsoft. “A clear, no-strings-attached revenue share means developers can bring more games to more players and find greater commercial success from doing so.”
These changes will only affect PC games and not Xbox console games in Microsoft’s store. While Microsoft hasn’t explained why it’s not reducing the 30 percent it takes on Xbox game sales, it’s likely because the console business model is entirely different to PC. Microsoft, Sony, and Nintendo subsidize hardware to make consoles more affordable, and offer marketing deals in return for a 30 percent cut on software sales.
Microsoft’s new reduction on the PC side is significant, and it matches the same revenue split that Epic Games offers PC game developers while also putting more pressure on Valve to reduce its Steam store cut. Valve still takes a 30 percent cut on sales in its Steam store, which is reduced to 25 percent when sales hit $10 million, and then 20 percent for every sale after $50 million.
Let’s be clear – it’s still taking 12% of everything it has put virtually no effort in to making. All it does is hold up an electronic store front on some servers. And the point the article is making: that it’s cheap compared to the seeming “industry standard” 30% shows really that there is and has been a price cartel between the tiny amount of major players in the electronic market place.
This is the kind of monopoloy I have been talking about since the beginning of 2019.
On Monday after the close of business, Tesla announced its Q1 2021 financial results in its quarterly earnings call. The company turned a surprisingly large profit this quarter, but it didn’t do it by selling cars. Q1 net profit reached a new record for Tesla, at $438 million. Revenue for the electric car company was up massively to $10.39 billion. Unfortunately, all of that profit is accounted for in the company selling $518 million in regulatory credits, and $101 million was found in buying and then later selling Bitcoin.
That second point is particularly interesting, as Tesla purchased $1.5 billion worth of BTC, announced that the company would begin accepting BTC as payment for its cars, which drove up the value of BTC, then sold enough BTC to make a hundred million in profit. Strange how that works, eh? Surely nothing untoward going on there. Not at all. DOGE TO THE MOON! #hodlgang
Without the $619 million in credits and BTC sales, Tesla would have actually managed to lose $181 million in Q1. In that time, the company shifted 184,800 3/Y units, and while it didn’t build a single X or S in Q1, it sold 2020 units from previously-built inventory. That means the company lost around $970 per car sold in Q1.
During the first quarter, Google parent Alphabet Inc. saved $268 million in expenses from company promotions, travel and entertainment, compared to same period a year earlier, “primarily as a result of COVID-19,” according to a company filing.
On an annualized basis, that would be more than $1 billion. Indeed, Alphabet said in its annual report earlier this year that advertising and promotional expenses dropped by $1.4 billion in 2020 as the company reduced spending, paused or rescheduled campaigns, and changed some events to digital-only formats due to the pandemic. Travel and entertainment expenses fell by $371 million.
The savings offset many of the costs that came with hiring thousands more workers. And the pandemic prudence allowed the company to keep its marketing and administrative costs effectively flat for the first quarter, despite boosting revenue by 34%.
[…]
Google is notorious for perks such as massage tables, catered cuisine and corporate retreats, which have influenced much of Silicon Valley work culture. Most Google staff have worked remotely and without those perks since March of 2020.
Google shifted more than $75.4 billion (€63 billion) in profits out of the Republic using the controversial “double-Irish” tax arrangement in 2019, the last year in which it used the loophole.
The technology giant availed of the tax arrangement to move the money out of Google Ireland Holdings Unlimited Company via interim dividends and other payments. This company was incorporated in Ireland but tax domiciled in Bermuda at the time of the transfer.
The move allowed Google Ireland Holdings to escape corporation tax both in the Republic and in the United States where its ultimate parent, Alphabet, is headquartered. The holding company reported a $13 billion pretax profit for 2019, which was effectively tax-free, the accounts show.
A year earlier, Google Ireland Holdings paid out dividends of €23 billion, having recorded turnover of $25.7 billion.
Google has used the double Irish loophole to funnel billions in global profits through Ireland and on to Bermuda, effectively putting them beyond the reach of US tax authorities.
Companies exploiting the double Irish put their intellectual property into an Irish-registered company that is controlled from a tax haven such as Bermuda.
Ireland considers the company to be tax-resident in Bermuda, while the US considers it to be tax-resident here. The result is that when royalty payments are sent to the company, they go untaxed – unless or until the money is eventually sent home to the US parent.
The “double Irish” was abolished in 2015 for new companies establishing operations in the Republic. However, controversially, it allowed those already using it until the end of 2020 to phase it out.
Google overhauled its global tax structure and consolidated its intellectual property holdings back to the United States in early 2020, meaning 2019 was the final year in which it availed of the arrangement.
Up to late 2019, Google Ireland Holdings Unlimited Company was an intellectual property licensing company with turnover derived from the licensing of IP to subsidiaries. The accounts state it had no employees and that it was tax resident at the time in Bermuda, where the “standard rate tax is 0 per cent”.
Apple has been hit with a lawsuit alleging that its media services terms and conditions, which permit the company to terminate an Apple ID, are “unlawful” and “unconscionable.”
The complaint, filed on Tuesday in the U.S. District Court for the Northern District of California, goes after an Apple services clause that states a user with a terminated Apple ID cannot access media content that they’ve purchased.
Through its terms and conditions, Apple retains the right to terminate an Apple ID. More than that, the lawsuit claims that Apple can terminate an account based on mere suspicion.
“Apple’s unlawful and unconscionable clause as a prohibited de facto liquidated damages provision which is triggered when Apple suspects its customers have breached its Terms and Conditions,” the lawsuit reads.
[…]
The plaintiff in the case, Matthew Price, reportedly spent nearly $25,000 on content attached to an Apple ID. When Apple terminated Price’s Apple ID for an alleged violation of its terms and conditions, Price lost access to all of that content.
Federal police in Turkey are investigating Thodex, a cryptocurrency trading platform that handles hundred of millions of dollars in trades every day, after users complained they’d been locked out of their accounts, according to new reports from Reuters and Turkey’s TRT World news service. CEO Faruk Fatih Ozer reportedly fled Turkey on Tuesday and 62 people connected to Thodex have reportedly been detained.
Investigators raided Thodex’s headquarters in Istanbul on Thursday after
“thousands” of people in Turkey filed criminal complaints, according to TRT World. Users have been unable to access money in their accounts over the past three days and federal authorities have issued at least 78 arrest warrants, according to Reuters.
[…]
There have been thousands of criminal complaints made in many places around Turkey,” he told Reuters, adding that the platform had 400,000 users, 391,000 of whom were active.
While Reuters reports the CEO had fled to the city of Tirana, Albanian, apparently people at Thodex insist he will be returning to Turkey soon. He’s going to be returning to a lot of pissed off people.
Well, if you have an iPhone, now you can turn practically anything into a unique, one-of-a-kind digital token. A new app is out that, by its own admission, lets you turn “every idea” into an NFT. It’s called S!NG, and it is the first and only free iOS app designed to let you create as many NFTs as you want. Where previously you would have had to pay a crypto exchange to get your asset minted, S!NG does all the minting for you, free of charge.
Founded by ex-Apple executive Geoff Osler, the company has sought to make its product really easy to use, too: it has a point-and-click function—so it’s basically as simple as taking a picture or making a recording on your phone to create them. You can also upload files.
[…]
As the name of the app might suggest, it’s being marketed to artists and musicians. A video on the company’s website claims that S!NG wants to use NFTs to protect creators from intellectual property theft—which is an interesting idea. The thinking here seems to be that because the non-fungibles designate specific ownership over a unique digital asset, they can preclude you from getting your song lyrics or digital recording copied and legally foisted away from you. Thus, the website claims S!NG is the “easiest way to put a stamp on an idea, label it as your own, convert to an NFT and stored in a centralized portfolio,” also adding that the app is a space where ideas can be shared “confidently and hesitation free, without having to lawyer up.” In other words, it’s like that old trick of sending yourself a certified letter to copyright text or song lyrics: it works, but only barely.
While this all sounds pretty good, the flip side is that it makes S!NG sound almost like a notepad app, where every note becomes an NFT. When you consider the ecological toll that NFTs purportedly are wreaking on the world, maybe it’s not a great idea to make every thought you jot down a non-fungible? Then again, people are apparently working on this problem, so maybe we can assume it’ll be a short-lived issue.
Amazon reportedly pressured smart-thermostat maker Ecobee to fork over data from its voice-enabled devices even when customers weren’t actively using them. When Ecobee pushed back, the e-commerce giant threatened to box the company out of high-profile selling events like Prime Day or refuse Alexa certification for future devices, according to a Wall Street Journal report this week.
Last year, Amazon approached Ecobee among other Alexa-enabled device sellers about sharing “proactive state” data from customers, several company executives confirmed to the Journal. With this data, Amazon would receive updates about the device’s status at all times even when customers weren’t using them, such as the temperature of their home or whether their doors are locked, among other examples.
[…]
However, when Ecobee initially refused to provide users’ proactive state data, Amazon warned that a refusal might bar the company from major selling events like Prime Day or prevent its future devices from receiving Alexa certification, said one of the people the Journal spoke with. Given that Amazon controls a huge chunk of the global e-commerce market (nearly 40% in the U.S. alone), that kind of move can bankrupt smaller companies like Ecobee.
[…]
In addition to stealing designs from other companies for its AmazonBasics line, Amazon also purportedly pressures industry partners to use its logistics arm, Fulfillment by Amazon, by threatening to make it more difficult to sell products on its marketplace, according to the Journal. Amazon even reportedly competes with the companies it invests in, of which Ecobee is one, using its position as a shareholder to access confidential information and develop similar products.
Last October, a House Judiciary antitrust subcommittee concluded what we all already knew: That Amazon and other tech giants have “monopoly power” in their respective markets and “abuse their power by charging exorbitant fees, imposing oppressive contract terms, and extracting valuable data from the people who rely on them.”
A $291 Adobe cancelation fee has provoked fierce criticism of the creative software company.
A post from a customer has gone viral on Twitter, after he discovered that he would have to pay nearly $300 to bring his Creative Cloud subscription to an end.
It has sparked a discussion about Adobe’s practices, with many others coming forward to say that they too have faced extremely steep cancelation fees when they’ve tried to cut ties with the company.
A screenshot uploaded to the micro-blogging site by Twitter user @Mrdaddguy showed that they faced a $291.45 fee to cancel their Adobe Creative Cloud plan.
At the time of publication the tweet has attracted more than 13,000 retweets, more than 4,000 quote tweets, and more than 70,000 likes.
Twitter users have been almost universally in agreement in their criticism of the company, with some describing the cancelation fee as “absurd”, “disgusting,” and likening it to being held hostage by the company.
“Adobe has been holding me hostage for the better part of a year on a free trial that magically converted to a yearlong subscription with a wild cancellation fee,” wrote Twitter user Laura Hudson. “Blink twice if they have you too.”
Some have weighed into the conversation by suggesting alternatives to Adobe’s suite of products, such as Clip Studio Paint, Procreate, Blender, Krita, Paint tool Sai, many of which are either free to use or available as one-time purchases.
Others, meanwhile, are arguing that Adobe’s penalty fees are so severe that it should be considered “morally correct” to pirate the company’s software in revenge.
“Adobe on their hands and knees begging us to pirate their software,” wrote Twitter user JoshDeLearner.
“This thread is a great reminder of why it’s morally correct to pirate Adobe products,” wrote Dozing Starlight. A multitude of similar tweets can be found here.
About two weeks ago, millions of Google Chrome users were signed up for an experiment they never agreed to be a part of. Google had just launched a test run for Federated Learning of Cohorts—or FLoC–a new kind of ad-targeting tech meant to be less invasive than the average cookie. In a blog post announcing the trial, the company noted that it would only impact a “small percentage” of random users across ten different countries, including the US, Mexico, and Canada, with plans to expand globally as the trials run on.
These users probably won’t notice anything different when they click around on Chrome, but behind the scenes, that browser is quietly keeping a close eye on every site they visit and ad they click on. These users will have their browsing habits profiled and packaged up, and shared with countless advertisers for profit. Sometime this month, Chrome will give users an option to opt-out of this experiment, according to Google’s blog post—but as of right now, their only option is to block all third-party cookies in the browser.
That is if they even know that these tests are happening in the first place. While I’ve written my fairshare about FLoC up until this point, the loudest voices I’ve seen pipe up on the topic are either marketing nerds, policy nerds, or policy nerds that work in marketing. This might be due to the fact that—aside from a few blog posts here or there—the only breadcrumbs Google’s given to people looking to learn more about FLoC are inscrutable pages of code, an inscrutable GitHub repo, and inscrutable mailing lists. Even if Google bothered asking for consent before enrolling a random sample of its Chrome user base into this trial, there’s a good chance they wouldn’t know what they were consenting to.
(For the record, you can check whether you’ve been opted into this initial test using this handy tool from the Electronic Frontier Foundation.)
[…]
The trackers that FLoC is meant to replace are known as “third-party cookies.” We have a pretty in-depth guide to the way this sort of tech works, but in a nutshell: these are snippets of code from adtech companies that websites can bake into the code underpinning their pages. Those bits of code monitor your on-site behavior—and sometimes other personal details—before the adtech org behind that cookie beams that data back to its own servers.
[…]
The catch is that Google still has all that juicy user-level data because it controls Chrome. They’re also still free to keep doing what they’ve always been doing with that data: sharing it with federal agencies, accidentally leaking it, and, y’know, just being Google.
[…]
“Isn’t that kind of… anti-competitive?”
It depends on who you ask. Competition authorities in the UK certainly think so, as do trade groups here in the US. It’s also been wrapped up into a Congressional probe, at least one class action, and a massive multi-state antitrust case spearheaded by Texas Attorney General Ken Paxton. Their qualms with FLoC are pretty easy to understand. Google already controls about 30% of the digital ad market in the US, just slightly more than Facebook—the other half of the so-called Duopoly—that controls 25% (for context, Microsoft controls about 4%).
While that dominance has netted Google billions upon billions of dollars per year, it’s recently netted multiple mounting antitrust investigations against the company, too. And those investigations have pretty universally painted a picture of Google as a blatant autocrat of the ad-based economy, and one that largely got away with abhorrent behavior because smaller rivals were too afraid—or unable—to speak up. This is why many of them are speaking up about FLoC now.
“But at least it’s good for privacy, right?”
Again, it depends who you ask! Google thinks so, but the EFF sure doesn’t. In March, the EFF put out a detailed piece breaking down some of the biggest gaps in FLoC’s privacy promises. If a particular website prompts you to give up some sort of first-party data—by having you sign up with your email or phone number, for example—your FLoC identifier isn’t really anonymous anymore.
Aside from that hiccup, the EFF points out that your FLoC cohort follows you everywhere you go across the web. This isn’t a big deal if my cohort is just “people who like to reupholster furniture,” but it gets really dicey if that cohort happens to inadvertently mold itself around a person’s mental health disorder or their sexuality based on the sites that person browses. While Google’s pledged to keep FloC’s from creating cohorts based on these sorts of “sensitive categories,” the EFF again pointed out that Google’s approach was riddled with holes.
Zachary Horwitz never made it big on the Sunset Strip — there was the uncredited part in Brad Pitt’s “Fury” and a host of roles in low-budget thrillers and horror flicks. But federal charges suggest he had acting talent, duping several financial firms out of hundreds of millions of dollars and enabling him to live the Hollywood dream after all.
That meant chartered flights and a $6 million mansion — replete with wine cellar and home gym. Horwitz even included a bottle of Johnnie Walker Blue Label, which retails for more than $200, as a gift to investors along with his company’s “annual report.”
The claims are outlined in legal documents that U.S. prosecutors and the Securities and Exchange Commission released this week alleging Horwitz, 34, was running a massive Ponzi scheme. His scam: a made-up story that he had exclusive deals to sell films to Netflix Inc. and HBO. Dating back to 2014, the SEC said he raised a shocking $690 million in fraudulent funds. On Tuesday, Horwitz was arrested.
Horwitz, who went by the screen name “Zach Avery,” used fabricated contracts and fake emails to swindle at least five firms, according to the government. Investors were issued promissory notes through his firm 1inMM Capital to acquire the rights to movies that would be sold to Netflix and HBO for distribution in Latin America, Australia, New Zealand and other locations.
The claims of business relationships with the media companies were bogus, according to prosecutors, with a Netflix executive going so far as to send a cease-and-desist order to Horwitz and his attorney in February.
While Horwitz promised returns in excess of 35%, he was actually relying on new investors to pay off old ones, according to the SEC, which won a court order to freeze his assets. Ryan Hedges, Horwitz’s attorney, didn’t respond to requests for comment.
China’s antitrust regulators slapped a record fine on one of the country’s largest technology conglomerates, closing a months-long investigation that began
and setting the precedent for the government to use anti-monopoly rules to regulate the country’s Big Tech.
Alibaba Group Holding, the world’s largest e-commerce company and owner of this newspaper, was fined 18.2 billion yuan (US$2.8 billion) by the State Administration for Market Regulation (SAMR).
The Hangzhou-based company “abused its dominant market position in China’s online retail platform service market since 2015 by forcing online merchants to open stores or take part in promotions on its platforms,” compelling the market to “
, the world’s largest supplier of mobile chips, in 2015.
[…]
The antitrust investigation of Alibaba was part of the Chinese government’s effort to tame the unfettered growth of the country’s tech behemoths, and to ringfence financial security and prevent risk amid a period of slowing economic growth during the coronavirus pandemic. It has been widely watched, for ramifications that could potentially affect the entire ecosystem of businesses and economy centred around the internet.
The hefty fine was aimed at promoting the “healthy and continuous development of the country’s internet industry” and was by no means a denigration of the “important role of internet platforms in economic and social development,” and shows no change in the state’s “attitude of supporting internet platforms,” according to a commentary by the People’s Daily, the mouthpiece newspaper of the ruling Communist Party.
Signal announced on Tuesday that as a part of its latest beta, it’s adding support for a new Signal Payments feature that allows Signal users to send “privacy focused payments as easily as sending or receiving a message.”
These payments are only going to be available to Android and iOS Signal users in the UK during this beta, and will use one specific payment network: MobileCoin, an open-source cryptocurrency that is itself still a prototype, according to the MobileCoin GitHub repo. The same page notes that the MobileCoin Wallet that someone would need in order to send these payments back and forth isn’t yet available for download by anyone in the U.S. As Wired notes, however, this is a new feature that the company wants to expand globally once it’s out of its infancy.
Unlike other popular texting apps that also offer a payment component—like, say, Facebook Messenger—MobileCoin doesn’t rely on funneling money from a user’s bank account in order to function. Instead, it’s a currency that lives on the blockchain, allowing payments made over MobileCoin to bypass the banking systems that routinely work with major data brokers in order to pawn off people’s transaction data.
Many technologists viscerally felt yesterday’s announcement as a punch to the gut when we heard that the Signal messaging app was bundling an embedded cryptocurrency. This news really cut to heart of what many technologists have felt before when we as loyal users have been exploited and betrayed by corporations, but this time it felt much deeper because it introduced a conflict of interest from our fellow technologists that we truly believed were advancing a cause many of us also believed in. So many of us have spent significant time and social capital moving our friends and family away from the exploitative data siphon platforms that Facebook et al offer, and on to Signal in the hopes of breaking the cycle of commercial exploitation of our online relationships. And some of us feel used.
Signal users are overwhelmingly tech savvy consumers and we’re not idiots. Do they think we don’t see through the thinly veiled pump and dump scheme that’s proposed? It’s an old scam with a new face.
Allegedly the controlling entity prints 250 million units of some artificially scarce trashcoin called MOB (coincidence?) of which the issuing organization controls 85% of the supply. This token then floats on a shady offshore cryptocurrency exchange hiding in the Cayman Islands or the Bahamas, where users can buy and exchange the token. The token is wash traded back and forth by insiders and the exchange itself to artificially pump up the price before it’s dumped on users in the UK to buy to allegedly use as “payments”. All of this while insiders are free to silently use information asymmetry to cash out on the influx of pumped hype-driven buys before the token crashes in value. Did I mention that the exchange that floats the token is the primary investor in the company itself, does anyone else see a major conflict of interest here?
Let it be said that everything here is probably entirely legal or there simply is no precedent yet. The question everyone is asking before these projects launch now though is: should it be?
Some people on Reddit are throwing about that they donated so they feel they should be able to tell the developers what they should and should not be doing as well.
IMHO an open source developer is free to work on whatever projects they choose and combine them as much as they want. They are not “paid” by the couple of dollars someone donates every month. This is a completely optional extra setting which is off by default. Signal is not mining crypto with the app. People are free to fork Signal into another project without the payment option. Is it a pump and dump? I hope not. What is for sure though is that money is tight in the Free Open Source (FOSS) arena and it’s not surprising that people are jumping in strange directions to find a way to monetise a hugely popular product which is only causing them stress due to rude, know it all users who refuse to actually contribute, an idealistic fanatic mindset by the FOSS group who have salaries and hardly any income at all.
Before he lost it all—all $20 billion—Bill Hwang was the greatest trader you’d never heard of.
Starting in 2013, he parlayed more than $200 million left over from his shuttered hedge fund into a mind-boggling fortune by betting on stocks. Had he folded his hand in early March and cashed in, Hwang, 57, would have stood out among the world’s billionaires. There are richer men and women, of course, but their money is mostly tied up in businesses, real estate, complex investments, sports teams, and artwork. Hwang’s $20 billion net worth was almost as liquid as a government stimulus check. And then, in two short days, it was gone.
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Modest on the outside, Hwang had all the swagger he needed inside the Wall Street prime-brokerage departments that finance big investors. He was a “Tiger cub,” an alumnus of Tiger Management, the hedge fund powerhouse that Julian Robertson founded. In the 2000s, Hwang ran his own fund, Tiger Asia Management, which peaked at about $10 billion in assets.
It didn’t matter that he’d been accused of insider trading by U.S. securities regulators or that he pleaded guilty to wire fraud on behalf of Tiger Asia in 2012. Archegos, the family office he founded to manage his personal wealth, was a lucrative client for the banks, and they were eager to lend Hwang enormous sums.
On March 25, when Hwang’s financiers were finally able to compare notes, it became clear that his trading strategy was strikingly simple. Archegos appears to have plowed most of the money it borrowed into a handful of stocks—ViacomCBS, GSX Techedu, and Shopify among them.
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At least once, Hwang stepped over the line between aggressive and illegal. In 2012, after years of investigations, the U.S. Securities and Exchange Commission accused Tiger Asia of insider trading and manipulation in two Chinese bank stocks. The agency said Hwang “crossed the wall,” receiving confidential information about pending share offerings from the underwriting banks and then using it to reap illicit profits.
Hwang settled that case without admitting or denying wrongdoing, and Tiger Asia pleaded guilty to a U.S. Department of Justice charge of wire fraud.
[…]
U.S. rules prevent individual investors from buying securities with more than 50% of the money borrowed on margin. No such limits apply to hedge funds and family offices. People familiar with Archegos say the firm steadily ramped up its leverage. Initially that meant about “2x,” or $1 million borrowed for every $1 million of capital. By late March the leverage was 5x or more.
Hwang also kept his banks in the dark by trading via swap agreements. In a typical swap, a bank gives its client exposure to an underlying asset, such as a stock. While the client gains—or loses—from any changes in price, the bank shows up in filings as the registered holder of the shares.
That’s how Hwang was able to amass huge positions so quietly. And because lenders had details only of their own dealings with him, they, too, couldn’t know he was piling on leverage in the same stocks via swaps with other banks. ViacomCBS Inc. is one example. By late March, Archegos had exposure to tens of millions of shares of the media conglomerate through Morgan Stanley, Goldman Sachs Group Inc., Credit Suisse, and Wells Fargo & Co. The largest holder of record, indexing giant Vanguard Group Inc., had 59 million shares.
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At some point in the past few years, Hwang’s investments shifted from mainly tech companies to a more eclectic mix. Media conglomerates ViacomCBS and Discovery Inc. became huge holdings. So did at least four Chinese stocks: GSX Techedu, Baidu, Iqiyi, and Vipshop.
Although it’s impossible to know exactly when Archegos did those swap trades, there are clues in the regulatory filings by his banks. Starting in the second quarter of 2020, all Hwang’s banks became big holders of stocks he bet on. Morgan Stanley went from 5.22 million shares of Vipshop Holdings Ltd. as of June 30, to 44.6 million by Dec. 31.
Leverage was playing a growing role, and Hwang was looking for more. Credit Suisse and Morgan Stanley had been doing business with Archegos for years, unperturbed by Hwang’s brush with regulators. Goldman, however, had blacklisted him. Compliance officials who frowned on his checkered past blocked repeated efforts internally to open an account for Archegos, according to people with direct knowledge of the matter.
[…]
The fourth quarter of 2020 was a fruitful one for Hwang. While the S&P 500 rose almost 12%, seven of the 10 stocks Archegos was known to hold gained more than 30%, with Baidu, Vipshop, and Farfetch jumping at least 70%.
All that activity made Archegos one of Wall Street’s most coveted clients. People familiar with the situation say it was paying prime brokers tens of millions of dollars a year in fees, possibly more than $100 million in total. As his swap accounts churned out cash, Hwang kept accumulating extra capital to invest—and to lever up. Goldman finally relented and signed on Archegos as a client in late 2020. Weeks later it all would end in a flash.
Damage to Hwang’s Investments
Share price
Data: Compiled by Bloomberg
The first in a cascade of events during the week of March 22 came shortly after the 4 p.m. close of trading that Monday in New York. ViacomCBS, struggling to keep up with Apple TV, Disney+, Home Box Office, and Netflix, announced a $3 billion sale of stock and convertible debt. The company’s shares, propelled by Hwang’s buying, had tripled in four months. Raising money to invest in streaming made sense. Or so it seemed in the ViacomCBS C-suite.
Instead, the stock tanked 9% on Tuesday and 23% on Wednesday. Hwang’s bets suddenly went haywire, jeopardizing his swap agreements. A few bankers pleaded with him to sell shares; he would take losses and survive, they reasoned, avoiding a default. Hwang refused, according to people with knowledge of those discussions, the long-ago lesson from Robertson evidently forgotten.
That Thursday his prime brokers held a series of emergency meetings. Hwang, say people with swaps experience, likely had borrowed roughly $85 million for every $20 million, investing $100 and setting aside $5 to post margin as needed. But the massive portfolio had cratered so quickly that its losses blew through that small buffer as well as his capital.
The dilemma for Hwang’s lenders was obvious. If the stocks in his swap accounts rebounded, everyone would be fine. But if even one bank flinched and started selling, they’d all be exposed to plummeting prices. Credit Suisse wanted to wait.
Late that afternoon, without a word to its fellow lenders, Morgan Stanley made a preemptive move. The firm quietly unloaded $5 billion of its Archegos holdings at a discount, mainly to a group of hedge funds. On Friday morning, well before the 9:30 a.m. New York open, Goldman started liquidating $6.6 billion in blocks of Baidu, Tencent Music Entertainment Group, and Vipshop. It soon followed with $3.9 billion of ViacomCBS, Discovery, Farfetch, Iqiyi, and GSX Techedu.
When the smoke finally cleared, Goldman, Deutsche Bank AG, Morgan Stanley, and Wells Fargo had escaped the Archegos fire sale unscathed. There’s no question they moved faster to sell. It’s also possible they had extended less leverage or demanded more margin. As of now, Credit Suisse and Nomura appear to have sustained the greatest damage. Mitsubishi UFJ Financial Group Inc., another prime broker, has disclosed $300 million in likely losses.
It’s all eerily reminiscent of the subprime-mortgage crisis 14 years ago. Then, as now, the trouble was a series of increasingly irresponsible loans. As long as housing prices kept rising, lenders ignored the growing risks. Only when homeowners stopped paying did reality bite: The banks all had financed so much borrowing that the fallout couldn’t be contained.
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The best thing anyone can say about the Archegos collapse is that it didn’t spark a market meltdown. The worst thing is that it was an entirely preventable disaster made possible by Hwang’s lenders. Had they limited his leverage or insisted on more visibility into the business he did across Wall Street, Archegos would have been playing with fire instead of dynamite. It might not have defaulted. Regulators are to blame, too. As Congress was told at hearings following the GameStop Corp. debacle in January, there’s not enough transparency in the stock market. European rules require the party bearing the economic risk of an investment to disclose its interest. In the U.S., whales such as Hwang can stay invisible.
Finding an extra $10 charge on your groceries is enough to make most people angry, but what if you paid twice for a a $56,000 car? Tesla buyers have been reporting that they’ve been double-charged on cars for recent purchases and have had trouble contacting the company and getting their money back, according to a report from CNBC and posts on Twitter and the Tesla Motors Club forum.
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As of yesterday, the customers mentioned in the CNBC report have yet to receive their refunds and all have refused to take delivery until the problem is resolved. “This was not some operator error,” Peterson said. “And for a company that has so much technology skill, to have this happening to multiple people really raises questions.” Engadget has reached out for comment.
A tech CEO who lied to investors to get funding and then blew millions of it on maintaining a luxury lifestyle, which included private jets and top seats at sporting events, has been sentenced to just over eight years in prison.
Daniel Boice, 41, set up what he claimed would be the “Uber of private investigators,” called Trustify, in 2015. He managed to pull in over $18m in funding from a range of investors by lying about how successful the business was.
According to the criminal indictment [PDF] against him, investors received detailed financial statements that claimed Trustify was pulling in $500,000 a month and had hundreds of business relationships that didn’t exist. Boice also emailed, called, and texted potential investors claiming the same. But, prosecutors say, the truth was that the biz was making “significantly less” and the documentation was all fake.
The tech upstart started to collapse in November 2018 when losses mounted to the point where Boice was unable to pay his staff. When they complained, he grew angry, fired them, and cut off all company email and instant messaging accounts, they allege in a separate lawsuit [PDF] demanding unpaid wages.
Even as Trustify was being evicted from its office, however, Boice continued to lie to investors, claiming he had $18m in the bank when accounts show he had less than $10,000. Finally in 2019 the company was placed into corporate receivership, leading to over $18m in losses to investors and over $250,000 in unpaid wages.
As well as creating false income and revenue documents, Boice was found to have faked an email from one large investor saying that it was going to invest $7.5m in the business that same day – and then forwarded it to another investor as proof of interest. That investor then sank nearly $2m into the business.
Profligate
While the business was failing, however, Boice used millions invested in it to fund his own lifestyle. He put down deposits on two homes in the US – a $1.6m house in Virginia and a $1m beach house in New Jersey – using company funds. He also paid for a chauffeur, house manager, and numerous other personal expenses with Trustify cash. More money was spent on holidays, a $83,000 private jet flight to Vermont, and over $100,000 was spent on seats at various sporting events. His former employees also allege in a separate lawsuit that he spent $600,000 on a documentary about him and his wife.
Google will reduce the service fee it charges Android developers from 30 per cent to 15 per cent, though only on the first $1m in Google Play revenue.
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Google’s change of heart follows a similarly structured fee abatement by Apple last year and lawsuits filed recently in the US, the UK, and Australia by Epic Games against both Apple and Google over their app store commissions and restrictions.
“Apple and Google demand that game developers use their payment processing service, which charges an exorbitant rate of 30 per cent,” Epic Games said in its announcement of its lawsuit in Australia. “Apple and Google block developers from using more efficient payment methods such as Mastercard (including Apple Card), Visa, and PayPal, which charge rates of 2.5 per cent to 3.5 per cent, and therefore prevent developers from passing the savings on to customers.”
[…]
Google’s Android revenue concession also arrives in the wake of federal and state antitrust lawsuits against the company and iOS app makers banding together to lobby against Apple’s platform limitations. In 2018, the European Union concluded Google had abused its control over the Android platform and fined the company €4.3bn ($5bn) for forcing hardware makers to pre-install Google apps in order to access the Google Play app store.
A PR move – follow the money
Tim Sweeney, CEO of Epic Games, dismissed the fee reduction as a public relations ploy.
“It’s a self-serving gambit: the far majority of developers will get this new 15 per cent rate and thus be less inclined to fight, but the far majority of revenue is in apps with the 30 per cent rate,” he said via Twitter. “So Google and Apple can continue to inflate prices and fleece consumers with their app taxes.”
According to app analytics biz Sensor Tower, iOS app makers earnings less than $1m account for 97.5 per cent of publishers but only 4.8 percent of the $59.3bn in the Apple App Store revenue between January 1 and October 31, 2020.
After years of aggressively fighting any efforts to force it to recognize its drivers as employees, on Tuesday Uber performed a U-turn on the streets of Britain and recognized all of its drivers as working for the company rather than serving as freelancers.
The change is the result of a court ruling last month that entitled workers to seek more pay and benefits but resisted classifying them as employees. That decision by the UK’s Supreme Court, making it definitive, was unanimous, and actively rejected Uber’s argument that it was just a technology platform that connected suppliers with customers. The court was having none of that, and decided that since Uber set the prices, connected drivers and passengers, and decided which route the drivers should follow, it was more employer than platform.
The ride-hailing app maker initially downplayed the legal loss, and argued the decision only directly benefited the handful of drivers in that specific case. However, experts pointed out that every other Uber driver in the UK could cite the ruling at a tribunal to demand what was owed to them, and reality has since dawned on Uber.
As such, Uber has complied with the court’s wishes, and said that its 70,000 UK drivers will henceforth be “workers” entitled to a minimum wage – £8.72 ($12.11) an hour – plus vacation pay, and a pension plan. The details are laid out in this filing [PDF] to America’s financial watchdog.
