The European Commission is planning to ban payment for order flow, paralleling potential U.S. moves to stem a practice that hit the headlines during the meme-stock mania.
A forthcoming review of the Markets in Financial Instruments Directive will include a ban amid other measures to increase transparency, such as a consolidated tape of information about transactions, people familiar with the matter said.
The U.S. Securities and Exchange Commission is separately weighing a ban on payment for order flow, in which trading firms pay retail brokerages to execute their trades. Regulators are concerned that video-game like prompts have encouraged excessive trading on app-based brokerages that fueled a explosive surge in value for GameStop Corp. and other stocks this year.
While the day-trading frenzy is far more muted in Europe than the U.S., the practice of zero-commission trading is starting to cross the Atlantic. That prompted the bloc’s markets watchdog to warn firms and investors in July of the risks arising from payment for order flow.
A spokesperson for the European Commission declined to comment.
Mairead McGuinness, the EU’s financial services commissioner, said this month regulators were “closely monitoring” payment for order flow. It was difficult to assess how problematic the practice is “because there is no consolidated view of all liquidity and prices of financial instruments traded across execution venues in the European markets.”
McGuinness said the payment for order flow “may lead to retail orders not being executed on terms most favorable to the client but instead on the terms most profitable to brokers,” according to a written response to a question from a European Union lawmaker.
“This would not be in line with the second Markets in Financial Instruments Directive,” she said. It’s also why regulators are “considering proposing legislation to facilitate a consolidated tape that provides all brokers and their clients with such a holistic view” of all liquidity and prices of financial instruments traded across execution venues in the European markets.
Consolidated Tape
The EU is planning to set a separate tape for each asset class, according to the people familiar. Details on delivery, specifications and speed would be set out later. There may be a tender process to choose the provider of a consolidated tape for an asset class.
The current draft notes a 15-minute delay to consolidate the data will remain acceptable, echoing current rules where exchanges should provide their data for free after 15 minutes. Those contributing data to the tape would share its revenue if the tape consolidates data in less than 15 minutes.
A Register reader triggered a kerfuffle for Samsung after asking the electronics biz if he could disable large and intrusive adverts splattered across his new smart TV’s programme guide.
Ross McKillop bought the telly from UK retailer John Lewis but felt distinctly undersold when he turned it on to find the internet-connected device displaying advertising on its electronic programme guide menu.
Ross McKillop’s Samsung TV displaying smart ads taking up half the screen space
“If you press the menu button to change between like TV or Netflix or, or whatever, even different sources, there’s an advert panel,” lamented McKillop to The Reg. “It seems that people accept this.”
Irritated by the giant advert for Samsung’s own wares, McKillop took to Twitter to ask the obvious question. The answer was surprisingly blunt.
Hey, Ross. Congratulations on your new TV. You wouldn’t be able to disable the ads we’re afraid. ^HA
“The more annoying [advert],” McKillop told us, “is the one that appears on the application menu, on every menu [level].”
Such a problem is, sadly, not new, as we reported about a year ago when other Samsung TV customers began wondering where the giant adverts splattered all over their TVs’ user interfaces had come from.
“I expect Netflix to promote Netflix’s products or Netflix programming on a service I pay for because it’s a service,” stormed McKillop, adding that he didn’t expect to have his TV’s manufacturer insert unavoidable advertising into his new box.
Smart readers (like our man Ross) know that you can kill ads at home with innovations such as the Pi-Hole home network-level adblocker.
Our reader also pointed out that the adverts on his new internet-connected telly were not visible in Samsung’s marketing videos about the product.
We asked Samsung if it wished to comment. The manufacturer failed to respond. McKillop has since returned his TV to retailer John Lewis.
Samsung has been relatively open about what its smart TVs do. A quick look at the “Samsung privacy policy – smart TV supplement” on its UK website reveals that the company hoovers up information about “your TV viewing history” including “information about the networks, channels, websites visited, and programs viewed on your Samsung Smart TV and the amount of time spent viewing them”.
This kind of subtle-but-invasive monitoring was the subject of a warning by an American university professor in 2019 who described it as “a cesspit of surveillance”.
The devices can pose a security risk unless they’re treated like any other internet-connectable device, as the Korean giant itself reminded tellywatchers a couple of years ago (well, they deleted that Twitter missive but El Reg doesn’t forget).
All in all, if you’re buying a Samsung TV, just remember that you’re not only paying for a big panel so you can watch reruns of Friends; you’re also paying to be part of Samsung’s global TV advertising network.
The civil trial of Ira Kleiman vs. Craig Wright started on Monday in Miami. The estate of David Kleiman is suing Craig Wright, the self declared inventor of bitcoin, for 50% ownership of 1.1 million bitcoins. The estate claims Kleiman was in a partnership with Wright to mine the coins but after Kleiman died in April 2013, Wright denied any partnership. At over $60,000 each per bitcoin, this case is currently worth $65 billion.
Craig Wright has previously claimed he is the inventor of Bitcoin, Satoshi Nakamoto, which has been met with skepticism based on his inability to show any proof. In this case, Wright has made numerous dubious claims. After the case was filed in 2018, Wright claimed he did not have the keys to the coins but that they would be arriving in January 2020 through a “bonded courier.” After January 2020, Wright provided keys to the estate for verification which the estate claims the bitcoins were fake. Expressing skepticism that the courier even existed, the estate asked for more information about the courier. Wright then claimed the identity of the courier and all communications were protected under attorney-client privilege as the courier was an attorney.
U.S. tech giant Google has paid Russia more than 32 million roubles ($455,079) in fines for failing to delete content Moscow deems illegal, the company and a Russian lawmaker said after talks on Monday.
[…]
In 2020, Google’s compliance with requests to delete content was 96.2%, Pancini said, and in the first half of this year, it removed over 489,000 videos, but Russia said too much banned content still remained available.
Piskarev said last week that this included child pornography. Russia has ordered other foreign tech firms to delete posts promoting drug abuse and dangerous pastimes, information about homemade weapons and explosives, as well as ones by groups it designates as extremist or terrorist.
Around 2,650 pieces of illegal content on Google’s internet resources remained undeleted as of the start of October, the RIA news agency cited Piskarev as saying.
“Work has been carried out, as we see, however it is still very far from ideal,” he said.
Piskarev said Pancini had cited technical difficulties for Google’s failure to remove all the banned content.
The UK’s Competition and Markets Authority (CMA) has smacked Facebook with a £50m ($68.7m) fine for “deliberately” not giving it the full picture about its ongoing $400m acquisition of gif-slinger Giphy.
The move – fingered by the CMA as a “major breach” – comes just weeks after the antisocial network dismissed the UK’s regulator’s initial findings as being based on “fundamental errors” and just hours after the US Dept of Justice and its Department of Labor announced separate agreements with the firm in which it will fork over $14.25m to settle allegations of discriminatory hiring practices.
Facebook first announced its intention to buy the image platform, which hosts a searchable database of short looping soundless animated GIFs – many of which are sourced from reality TV and films – in May last year. Giphy also hosts MP4 looped video clips (so users can “enjoy” audio), which it also unaccountably calls gifs. Pinterest, Reddit and Salesforce’s comms firm Slack have all integrated Giphy into their platforms so you can “react” to friends and colleagues. Facebook’s acquisition values the company at $400m.
[…]
Bamford said companies were not required to seek the CMA’s approval before they completed an acquisition but noted that “if they decide to go ahead with a merger, we can stop the companies from integrating further if we think consumers might be affected and an investigation is needed.”
He added: “We warned Facebook that its refusal to provide us with important information was a breach of the order but, even after losing its appeal in two separate courts, Facebook continued to disregard its legal obligations.
“This should serve as a warning to any company that thinks it is above the law.”
Amazon.com Inc has been repeatedly accused of knocking off products it sells on its website and of exploiting its vast trove of internal data to promote its own merchandise at the expense of other sellers. The company has denied the accusations.
But thousands of pages of internal Amazon documents examined by Reuters – including emails, strategy papers and business plans – show the company ran a systematic campaign of creating knockoffs and manipulating search results to boost its own product lines in India, one of the company’s largest growth markets.
The documents reveal how Amazon’s private-brands team in India secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform. The employees also stoked sales of Amazon private-brand products by rigging Amazon’s search results so that the company’s products would appear, as one 2016 strategy report for India put it, “in the first 2 or three … search results” when customers were shopping on Amazon.in.
Among the victims of the strategy: a popular shirt brand in India, John Miller, which is owned by a company whose chief executive is Kishore Biyani, known as the country’s “retail king.” Amazon decided to “follow the measurements of” John Miller shirts down to the neck circumference and sleeve length, the document states.
When asked in July, 2020, by US Representative Pramila Jayapal (D-WA) whether Amazon ever mined data from its third-party vendors to launch competing products, founder and then CEO Jeff Bezos said he couldn’t answer “yes” or “no,” but insisted Amazon had rules disallowing the practice.
“What I can tell you is we have a policy against using seller-specific data to aid our private label business but I can’t guarantee that policy has never been violated,” Bezos said.
According to documents obtained by Reuters, Amazon’s employees in India flouted that policy by copying the products of Amazon marketplace sellers for its in-house brands and then manipulating search results on Amazon’s website to place its knockoffs at the top of search results lists.
“The documents reveal how Amazon’s private-brands team in India secretly exploited internal data from Amazon.in to copy products sold by other companies, and then offered them on its platform,” said Reuters reporters Aditya Kalra and Steve Stecklow in a report published on Wednesday.
“The employees also stoked sales of Amazon private-brand products by rigging Amazon’s search results so that the company’s products would appear, as one 2016 strategy report for India put it, ‘in the first 2 or three … search results’ when customers were shopping on Amazon.in.”
Last year, the Wall Street Journal published similar allegations that the company used third-party merchant data to develop competing products, which prompted Rep. Jayapal’s question to Bezos. Such claims are central to the ongoing antitrust investigations of Amazon being conducted in the US, Europe, and India.
Epic Games CEO Tim Sweeney, whose high-profile antitrust lawsuit against Apple is now under appeal, is today calling out the iPhone maker for giving itself access to an advertising slot its competitors don’t have: the iPhone’s Settings screen. Some iOS 15 users noticed Apple is now advertising its own services at the top of their Settings, just below their Apple ID. The services being suggested are personalized to the device owner, based on which ones they already subscribe to, it appears.
For example, those without an Apple Music subscription may see an ad offering a free six-month trial. However, current Apple Music subscribers may instead see a prompt to add on a service they don’t yet have, like AppleCare coverage for their devices.
Sweeney suggests this sort of first-party advertising is an anticompetitive risk for Apple, as some of the services it’s pushing here are those that directly compete with third-party apps published on its App Store. But those third-party apps can’t gain access to the iPhone’s Settings screen, of course — they can only bid for ad slots within the App Store itself.
Writes Sweeney: “New from the guys who banned Fortnite: settings-screen ads for their own music service, which come before the actual settings, and which aren’t available to other advertisers like Spotify or Sound Cloud.”
Apple’s decision to only allow Apple Pay to access the NFC chip in iPhones could result in the Silicon Valley giant paying hefty anti-monopoly fines in Europe.
The EU is set to file anti-competitive charges against Cupertino regarding its tap-to-pay system, Reuters reported, citing sources. Euro antitrust watchdogs are apparently not happy that the NFC chips in iPhones and iPads are restricted to the iGiant’s Pay software, unfairly locking out alternative wireless payment apps.
The charges will be the result of a European Commission investigation that started last year into Apple’s terms and conditions with merchants, the limited access to the NFC hardware, and more.
“It is important that Apple’s measures do not deny consumers the benefits of new payment technologies, including better choice, quality, innovation and competitive prices,” said Competition Commissioner Margrethe Vestager in 2020. “I have therefore decided to take a close look at Apple’s practices regarding Apple Pay and their impact on competition.”
Kremlin spokesman Dmitry Peskov meanwhile questioned the reliability of the “unsubstantiated” information, after it detailed hidden wealth linked to President Putin and members of his inner circle.
BBC Panorama and the Guardian have led the investigation in the UK.
Other leaders linked to the leak include:
Czech Prime Minister Andrej Babis, who allegedly failed to declare an offshore investment company used to purchase two villas for £12m in the south of France
Kenyan President Uhuru Kenyatta, who – along with six members of his family – has been linked to 13 offshore companies
Chile’s President Sebastián Piñera, a billionaire businessman, who is accused of selling a copper and iron mine in an environmentally sensitive area to a childhood friend, as detailed in Spain’s El Pais newspaper
And Azerbaijan’s President Ilham Aliyev, whose family and close associates have allegedly been secretly involved in property deals in the UK worth more than £400m
Coinbase, a major U.S.-based bitcoin and cryptocurrency exchange, disclosed today that a hacker was able to bypass the company’s SMS multi-factor authentication mechanism and steal funds from 6,000 users, Bleeping Computer reported.
The breach of Coinbase customers’ accounts happened between March and May 20, 2021, in a hacking campaign that combined phishing scams and a vulnerability exploit on the company’s security measures.
The U.S.-based exchange, which has approximately 68 million users from more than 100 countries, reportedly said that in order to conduct the attack, the hackers needed to know the user’s email address, password, and phone number, as well as have access to their email accounts. It is not clear how the hackers gained access to that information.
“In this incident, for customers who use SMS texts for two-factor authentication, the third party took advantage of a flaw in Coinbase’s SMS Account Recovery process in order to receive an SMS two-factor authentication token and gain access to your account,” Coinbase told customers in electronic notifications.
Beyond stealing funds, the hackers also exposed customers’ personal information, “including their full name, email address, home address, date of birth, IP addresses for account activity, transaction history, account holdings, and balances,” per the report.
Today, Tim Sweeney confirmed on Twitter just how massive of an “L” Epic took in its recent trial against Apple. Apple has effectively “blacklisted” Fortnite from all Apple products until the legal clash between the two massive corporations reaches its conclusion, which could take as long as five years. (It’s even longer in Peely years.)
In the tweet, Sweeney posted a letter Epic had received from Apple confirming that Epic’s Apple developer account will not be reinstated, and that Epic cannot even request reinstatement until “the court’s judgement becomes final and unappealable.” That can take up to five years, according to Sweeney, who also claims that this is a renege on Apple’s previous position expressed to both the court and the press. However, given that Epic is currently trying to appeal the decision, I’d argue that Apple’s reticence to let it return to the platform makes perfect sense.
This letter reinforces the reality of this trial, that both Epic and Apple resoundingly lost. There was no court order to get Fortnite back on the store, and Apple lost its ability to refuse payments outside of its ecosystem. Both massive corporations lost, and all other developers will reap the rewards of Epic’s hubris.
China’s central bank said on Friday that all cryptocurrency-related transactions are illegal in the country and they must be banned, citing concerns around national security and “safety of people’s assets.” The world’s most populated nation also said that foreign exchanges are banned from providing services to users in the country.
In a joint statement, ten Chinese government agencies vowed to work closely to maintain a “high pressure” crackdown on trading of cryptocurrencies in the nation. The People’s Bank of China separately ordered internet, financial and payment companies from facilitating cryptocurrency trading on their platforms.
The central bank said cryptocurrencies, including Bitcoin and Tether, cannot be circulated in the market as they are not fiat currency. The surge in usage of cryptocurrencies has disrupted “economic and financial order,” and prompted a proliferation of “money laundering, illegal fund-raising, fraud, pyramid schemes and other illegal and criminal activities,” it said.
Offenders, the central bank warned, will be “investigated for criminal liability in accordance with the law.”
The Chinese government will “resolutely clamp down on virtual currency speculation, and related financial activities and misbehaviour in order to safeguard people’s properties and maintain economic, financial and social order,” the People’s Bank of China said in a statement.
The move has already started to cause panic among some crypto traders, sending the price of bitcoin and several other currencies down. Bitcoin was down 5.5% at the time of publication.
NEW DELHI, Sept 18 (Reuters) – Google abused the dominant position of its Android operating system in India, using its “huge financial muscle” to illegally hurt competitors, the country’s antitrust authority found in a report on its two-year probe seen by Reuters.
Alphabet Inc’s (GOOGL.O) Google reduced “the ability and incentive of device manufacturers to develop and sell devices operating on alternative versions of Android,” says the June report by the Competition Commission of India’s (CCI) investigations unit.
[…]
Its findings are the latest antitrust setback for Google in India, where it faces several probes in the payments app and smart television markets. The company has been investigated in Europe, the United States and elsewhere. This week, South Korea’s antitrust regulator fined Google $180 million for blocking customised versions of Android.
‘VAGUE, BIASED AND ARBITRARY’
Google submitted at least 24 responses during the probe, defending itself and arguing it was not hurting competition, the report says.
Microsoft Corp (MSFT.O), Amazon.com Inc (AMZN.O), Apple Inc (AAPL.O), as well as smartphone makers like Samsung and Xiaomi, were among 62 entities that responded to CCI questions during its Google investigation, the report says.
Android powers 98% of India’s 520 million smartphones, according to Counterpoint Research.
When the CCI ordered the probe in 2019, it said Google appeared to have leveraged its dominance to reduce device makers’ ability to opt for alternate versions of its mobile operating system and force them to pre-install Google apps.
The 750-page report finds the mandatory pre-installation of apps “amounts to imposition of unfair condition on the device manufacturers” in violation of India’s competition law, while the company leveraged the position of its Play Store app store to protect its dominance.
Play Store policies were “one-sided, ambiguous, vague, biased and arbitrary”, while Android has been “enjoying its dominant position” in licensable operating systems for smartphones and tablets since 2011, the report says.
The probe was triggered in 2019 after two Indian junior antitrust research associates and a law student filed a complaint, Reuters reported.
Federal Trade Commission chair Lina Khan signaled changes are on the way in how the agency scrutinizes acquisitions after revealing the results of a study of a decade’s worth of Big Tech company deals that weren’t reported to the agency.
Why it matters: Tech’s business ecosystem is built on giant companies buying up small startups, but the message from the antitrust agency this week could chill mergers and acquisitions in the sector.
What they found: The FTC reviewed 616 transactions valued at $1 million or more between 2010 and 2019 that were not reported to antitrust authorities by Amazon, Apple, Facebook, Google and Microsoft.
94 of the transactions actually exceeded the dollar size threshold that would require companies to report a deal. The deals may have qualified for other regulatory exemptions.
79% of transactions used deferred or contingent compensation to founders and key employees, and nearly 77% involved non-compete clauses.
36% of the transactions involved assuming some amount of debt or liabilities.
What they’re saying: In a statement, Khan said the report shows that loopholes may be “unjustifiably enabling deals to fly under the radar.”
Matt Stoller, director of research at the American Economic Liberties Project, said the high percentage of non-compete clauses was especially troubling.
“If nothing else, it’s a clear anticompetitive intent to just take talent and prevent them from competing with you,” Stoller said. “And there is a limited amount of tech talent.”
The other side: Nothing in the report indicates that rules were broken or that the deals were anticompetitive, Neil Chilson, a former FTC adviser, pointed out.
“I think the message is pretty clear from the chair: She’s suspicious of mergers, no matter what the size, just based on a belief that mergers at any size are suspect and should be reviewed,” Chilson, now senior research fellow for Tech and Innovation at Stand Together, told Axios.
“The law certainly is not behind her on that, and I don’t think the economics are particularly there either, and nothing in the report supports that assertion.”
A man who the Department of Justice says unlocked AT&T customers’ phones for a fee was sentenced to 12 years in prison, in what the judge called “a terrible cybercrime over an extended period,” which allegedly continued even after authorities were on to the scheme.
According to a news release from the DOJ, in 2012, Muhammad Fahd, a citizen of Pakistan and Grenada, contacted an AT&T employee via Facebook and offered the employee “significant sums of money” to help him secretly unlock AT&T phones, freeing the customers from any installment agreement payments and from AT&T’s service.
Fahd used the alias Frank Zhang, according to the DOJ, and persuaded the AT&T employee to recruit other employees at its call center in Bothell, Washington, to help with the elaborate scheme. Fahd instructed the AT&T employees to set up fake businesses and phony bank accounts to receive payments, and to create fictitious invoices for deposits into the fake accounts to create the appearance that money exchanged as part of the scheme was payment for legitimate services.
In 2013, however, AT&T put into place a new unlocking system which made it harder for Fahd’s crew to unlock phones’ unique IMEI numbers, so according to the DOJ he hired a developer to design malware that could be installed on AT&T’s computer system. This allegedly allowed him to unlock more phones, and do so more efficiently. The AT&T employees working with Fahd helped him access information about its systems and other employees’ credentials, allowing his developer to tailor the malware more precisely, the DOJ said.
A forensic analysis by AT&T showed Fahd and his helpers fraudulently unlocked more than 1.9 million phones, costing the company more than $200 million. Fahd was arrested in Hong Kong in 2018 and extradited to the US in 2019. He pleaded guilty in September 2020 to conspiracy to commit wire fraud.
It’s not clear from the DOJ release whether anyone besides AT&T was harmed as a result of the scheme; there’s no mention of customers’ phones being otherwise compromised or any personal data being accessed. We’ve reached out to the DOJ to clarify whether any AT&T customers were affected.
South Korea’s competition regulator on Tuesday announced it will fine Google 207.4 billion Korean won ($176.9 million) for allegedly using its dominant market position in the mobile operating system space to stifle competition.
Google’s Android operating system currently holds the lion’s share of the smartphone market, ahead of Apple’s iOS platform.
The U.S. tech giant allegedly used its market position to block smartphone makers like Samsung from using operating systems developed by rivals, according to the Korea Fair Trade Commission.
Yonhap News added that the regulator, which published its decision in Korean, said the tech giant required smartphone makers to agree to an “anti-fragmentation agreement (AFA)” when signing key contracts with Google over app store licenses and early access to the operating system.
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That agreement prevented device makers from installing modified versions of the Android operating system, known as “Android forks,” on their handsets, Yonhap reported.
The regulator alleged that Google’s practice stifled innovation in the development of new operating systems for smartphones, the news site added. The KFTC has asked the tech giant to stop forcing companies to sign AFAs and ordered it to take corrective steps, according to Yonhap.
[…]
Tuesday’s fine is small compared with the tech giant’s quarterly figures. Last quarter, Google’s parent company Alphabet reported $61.88 billion in revenue.
[…]
In late August, the country’s parliament approved a bill that will allow app developers to avoid paying hefty commissions to major app store operators, including Google, by directing users to pay via alternate platforms.
Docker will restrict use of the free version of its Docker Desktop utility to individuals or small businesses, and has introduced a new more expensive subscription, as it searches for a sustainable business model.
The company has renamed its Free plan to “Personal” and now requires that businesses with 250 or more employees, or higher than $10m in annual revenue, must use a paid subscription if they require Docker Desktop. There are no changes to the command-line Docker Engine. The $5/month Pro and $7/month Teams subscriptions continue as before, but a new $21/month Business subscription adds features including centralized management, single sign-on, and enhanced security.
The new Docker plans
The Docker platform has a number of components, of which Docker Desktop is just one part. Docker images define the contents of containers. Docker containers are runnable instances of images. The Docker daemon is a background application that manages and runs Docker images and containers. The Docker client is a command-line utility that calls the API of the Docker daemon. Docker registries contain images, and the Docker Hub is a widely used public registry. Much of Docker (but not Desktop) is open source under the Apache v2 licence.
OnlyFans dropped plans to ban pornography from its service, less than a week after the U.K. content-creator subscription site had announced the change citing the need to comply with policies of banking partners.
On Wednesday, the company said it “secured assurances necessary to support our diverse creator community,” suggesting that it has new agreements with banks to pay OnlyFans’ content creators, including those who share sexually explicit material.
[…]
An OnlyFans spokesperson declined to say which bank or banks it has new or renewed payment-processing agreements with. “The proposed Oct. 1, 2021 changes are no longer required due to banking partners’ assurances that OnlyFans can support all genres of creators,” the rep said.
So was this all much ado about nothing?
OnlyFans may have been able to resolve its conflict with banks, some of which had refused to do business with the site, by going public with the issue — and publicizing the large amount of money that flows through the site, on the order of $300 million in payouts per month.
OnlyFans founder and CEO Tim Stokely put the blame for the porn ban on banks in an interview with the Financial Times published Aug. 24, saying that banks including JP Morgan Chase, Bank of New York Mellon and the U.K.’s Metro Bank had cut off OnlyFans’ ability to pay creators.
The furious backlash among OnlyFans creators also certainly pushed the company to quickly resolve the problem. OnlyFans’ decision to ban porn had infuriated sex workers who have relied on the site to support themselves. In frustration, some adult creators had already nixed their OnlyFans pages and moved to alternate platforms.
Epic Games’ objections to Google’s business practices became clearer on Thursday with the release of previously redacted accusations in the gaming giant’s lawsuit against the internet goliath.
Those accusations included details of a Google-run operation dubbed Project Hug that aimed to sling hundreds of millions of dollars at developers to get them to remain within Google Play; and a so-called Premiere Device Program that gave device makers extra cash if they ensured users could only get their apps from the Play store, locking out third-party marketplaces and incentivizing manufacturers not to create their own software souks.
[…]
As part of the litigation, Epic made some accusations under seal last month [PDF] because Google’s attorneys designated the allegations confidential, based on Google’s habit of keeping business arrangements secret.
But on Wednesday, Judge James Donato issued an order disagreeing with Google’s rationale and directing the redacted material to be made public.
“Google did not demonstrate how the unredacted complaints might cause it commercial harm, and permitting sealing on the basis of a party’s internal practices would leave the fox guarding the hen house,” the judge wrote [PDF].
The unredacted details, highlighted in a separate redlined filing [PDF] and incorporated into an amended complaint filed on Friday [PDF], suggest Google has gone to great lengths to discourage competing app stores and to keep developers from making waves.
For example, the documents explain how Google employs revenue-sharing and licensing agreements with Android partners (OEMs) to maintain Google Play as the dominant app store. One filing describes “Anti-Fragmentation Agreements” that prevent partners from modifying the Android operating system to offer app downloads in a way that competes with Google Play.
“Google’s documents show that it pushes OEMs into making Google Play the exclusive app store on the OEMs’ devices through a series of coercive carrots and sticks, including by offering significant financial incentives to those that do so, and withholding those benefits from those that do not,” the redlined complaint says .
These agreements allegedly included the Premiere Device Program, launched in 2019, to give OEMs financial incentives like 4 per cent, or more, of Google Search revenues and 3-6 per cent of Google Play spending on their devices in return for ensuring Google exclusivity and the lack of apps with APK install rights.
[…]
Google’s highest level execs, it’s claimed, suggested giving Epic Games a deal “worth up to $208m (incremental cost to Google of $147m) over three years” to keep the game maker compliant. And if Epic did not accept, the court filing alleges, “a senior Google executive proposed that Google ‘consider approaching Tencent,’ a company that owns a minority stake in Epic, ‘to either (a) buy Epic shares from Tencent to get more control over Epic,’ or ‘(b) join up with Tencent to buy 100 per cent of Epic.'”
The filing contends that in 2019 Google’s internal estimate was that the company could lose between $1.1bn and $6bn by 2022 if Android app stores operated by Amazon and Samsung gain traction. The Epic Games Store, it’s said, could have cost Google $350m during that period.
And this kind of nasty pressure is how monopolies strongarm their dominance
Court documents reveal that LG, Motorola, and HMD Global, which makes Nokia phones, are part of the Premier Device Program. Premier devices are effectively mandated to make Google’s services the “defaults for all key functions” for up to 90% of the manufacturer’s Android phones. This includes blocking apps with the ability to install APKs on the device, except for the app stores designed for and managed by the respective original equipment manufacturers (OEMs). In turn, Google promised a higher cut of search revenue earned on the device, raising the rate from 8% to 12%, which is not an insignificant increase. In some instances, Google also agreed to share up to 6% of the “Play spend” revenue from the Play Store, essentially how much money that phone made for Google based on the user’s interactions.
In addition to the other brands mentioned above, Xiaomi, Sony, Sharp, and BBK Electronics, which owns OnePlus, and overseas brands like Oppo and Vivo, were all involved in the program in varying capacities. Google even had contracts with carriers to dissuade them from launching app stores that would compete with Android’s app marketplace—explicitly demonstrating deep pockets prevent competition and innovation.
display items that come from the same category as the target product, such as a board game matched with other board games, enhance the chances of a target product’s purchase. In contrast, consumers are less likely to buy the target product if it is mismatched with products from different categories, for example, a board game displayed with kitchen knives.
The study utilized eye-tracking—a sensor technology that makes it possible to know where a person is looking—to examine how different types of displays influenced visual attention. Participants in the study looked at their target product for the same amount of time when it was paired with similar items or with items from different categories; however, shoppers spent more time looking at the mismatched products, even though they were only supposed to be there “for display.”
“What is surprising is that when I asked people how much they liked the target products, their preferences didn’t change between display settings,” Karmarkar said. “The findings show that it is not about how much you like or dislike the item you’re looking at, it’s about your process for buying the item. The surrounding display items don’t seem to change how much attention you give the target product, but they can influence your decision whether to buy it or not.”
Karmarkar, who holds Ph.D.s in consumer behavior and neuroscience, says the findings suggests that seeing similar options on the page reinforces the idea to consumers that they’re making the right kind of decision to purchase an item that fits the category on display.
Receiving a publishing deal from an indie publisher can be a turning point for an independent developer. But when one-man team Jakefriend was approached with an offer to invest half a million Canadian dollars into his hand-drawn action-adventure game Scrabdackle, he discovered the contract’s terms could see him signing himself into a lifetime of debt, losing all rights to his game, and even paying for it to be completed by others out of his own money.
In a lengthy thread on Twitter, indie developer Jakefriend explained the reasons he had turned down the half-million publishing deal for his Kickstarter-funded project, Scrabdackle. Already having raised CA$44,552 from crowdfunding, the investment could have seen his game released in multiple languages, with full QA testing, and launched simultaneously on PC and Switch. He just had to sign a contract including clauses that could leave him financially responsible for the game’s completion, while receiving no revenue at all, should he breach its terms.
“I turned down a pretty big publishing contract today for about half a million in total investment,” begins Jake’s thread. Without identifying the publisher, he continues, “They genuinely wanted to work with me, but couldn’t see what was exploitative about the terms. I’m not under an NDA, wanna talk about it?”
Over the following 24 tweets, the developer lays out the key issues with the contract, most especially focusing on the proposed revenue share. While the unnamed publisher would eventually offer a 50:50 split of revenues (albeit minus up to 10% for other sundry costs, including—very weirdly—international sales taxes), this wouldn’t happen until 50% of the marketing spend (approximately CA$200,000/US$159,000) and the entirety of his development funds (CA$65,000 Jake confirms to me via Discord) was recouped by sales. That works out to about 24,000 copies of the game, before which its developer would receive precisely 0% of revenue.
Even then, Scrabdackle’s lone developer explains, the contract made clear there would be no payments until a further 30 days after the end of the next quarter, with a further clause that allowed yet another three month delay beyond that. All this with no legal requirement to show him their financial records.
Should Jake want to challenge the sales data for the game, he’d be required to call for an audit, which he’d have to pay for whether there were issues or not. And should it turn out that there were discrepancies, there’d be no financial penalty for the publisher, merely the requirement to pay the missing amount—which he would have to hope would be enough to cover paying for the audit in the first place.
Another section of the contract explained that should there be disagreement about the direction of the game, the publisher could overrule and bring in a third-party developer to make the changes Jake would not, at Jake’s personal expense. With no spending limit on that figure.
But perhaps most surprising was a section declaring that should the developer be found in breach of the contract—something Jake explains is too ambiguously defined—then they would lose all rights to their game, receive no revenue from its sales, have to repay all the money they received, and pay for all further development costs to see the game completed. And here again there was no upper limit on what those costs could be.
It might seem obvious that no one should ever sign a contract containing clauses just so ridiculous. To be liable—at the publisher’s whim—for unlimited costs to complete a game while also required to pay back all funds (likely already spent), for no income from the game’s sales… Who would ever agree to such a thing? Well, as Jake tells me via Discord, an awful lot of independent developers, desperate for some financial support to finish their project. The contract described in his tweets might sound egregious, but the reality is that most of them offer some kind of awful term(s) for indie game devs.
“My close indie dev friends discuss what we’re able to of contracts frequently,” he says, “and the only thing surprising to them about mine is that it hit all the typical red flags instead of typically most of them. We’re all extremely fatigued and disheartened by how mundane an unjust contract offer is. It’s unfair and it’s tiring.”
Jake makes it clear that he doesn’t believe the people who contacted him were being maliciously predatory, but rather they were simply too used to the shitty terms. “I felt genuinely no sense of wanting to give me a bad deal with the scouts and producers I was speaking to, but I have to assume they are aware of the problems and are just used to that being the norm as well.”
Since posting the thread, Jake tells me he’s heard from a lot of other developers who described the terms to which he objected as, “sadly all-too-familiar.” At one point creator of The Witness, Jonathan Blow, replied to the thread saying, “I can guess who the publisher is because I have seen equivalent contracts.” Except Jake’s fairly certain he’d be wrong.
“The problem is so widespread,” Jake explains, “that when you describe the worst of terms, everyone thinks they know who it is and everyone has a different guess.
While putting this piece together, I reached out to boutique indie publisher Mike Rose of No More Robots, to see if he had seen anything similar, and indeed who he thought the publisher might be. “Honestly, it could be anyone,” he replied via Discord. “What [Jake] described is very much the norm. All of the big publishers you like, his description is all of their contracts.”
This is very much a point that Jake wants to make clear. In fact, it’s why he didn’t identify the publisher in his thread. Rather than to spare their blushes, or harm his future opportunities, Jake explains that he did it to ensure his experience couldn’t be taken advantage of by other indie publishers. “I don’t want to let others with equally bad practices off the hook,” he tells me. “As soon as I say ‘It was SoAndSo Publishing’, everyone else can say, ‘Wow, can’t believe it, glad we’re not like that,’ and have deniability.”
I also reached out to a few of the larger indie publishers, listing the main points of contention in Jake’s thread, to see if they had any comments. The only company that replied by the time of publication was Devolver. I was told,
“Publishing contracts have dozens of variables involved and a developer should rightfully decline points and clauses that make them feel uncomfortable or taken advantage of in what should be an equitable relationship with their partner—publisher, investor, or otherwise. Rev share and recoupment in particular should be weighed on factors like investment, risk, and opportunity for both parties and ultimately land on something where everyone feels like they are receiving a fair shake on what was put forth on the project. While I have not seen the full contract and context, most of the bullet points you placed here aren’t standard practice for our team.”
Where does this leave Jake and the future of Scrabdackle? “The Kickstarter funds only barely pay my costs for the next 10 months,” he tells Kotaku. “So there’s no Switch port or marketing budget to speak of. Nonetheless, I feel more motivated than ever going it alone.”
I asked if he would still consider a more reasonable publishing deal at this point. “This was a hobby project that only became something more when popular demand from an incredible and large community rallied for me to build a crowdfunding campaign…A publisher can offer a lot to an indie project, and a good deal is the difference between gamedev being a year-long stint or a long-term career for me, but that’s not worth the pound of flesh I was asked for.”
Ethereum is making big changes. Perhaps the most important is the jettisoning of the “miners” who track and validate transactions on the world’s most-used blockchain network. Miners are the heart of a system known as proof of work. It was pioneered by Bitcoin and adopted by Ethereum, and has come under increasing criticism for its environmental impact: Bitcoin miners now use as much electricity as some small nations. Along with being greener and faster, proponents say the switch, now planned to be phased in by early 2022, will illustrate another difference between Ethereum and Bitcoin: A willingness to change, and to see the network as a product of community as much as code.
[…]
the system’s electricity usage is now enormous: Researchers at Cambridge University say that the Bitcoin network’s annual electric bill often exceeds that of countries such as Chile and Bangladesh. This has led to calls from environmentally conscious investors, including cryptocurrency booster Elon Musk and others, to shun Bitcoin and Ethereum and any coins that use proof of work. It’s also led to a growing dominance by huge, centralized mining farms that’s antithetical to a system that was designed to be decentralized, since a blockchain could in theory be rewritten by a party that controlled a majority of mining power.
[…]
The idea behind proof of stake is that the blockchain can be secured more simply if you give a group of people carrot-and-stick incentives to collaborate in checking and crosschecking transactions. It works like this:
* Anyone who puts up, or stakes, 32 Ether can take part. (Ether, the coin used to operate the Ethereum system, reached values of over $4,000 in May.)
* People in that pool are chosen at random to be “validators” of a batch of transactions, a role that requires them to order the transactions and propose the resulting block to the network.
* Validators share that new chunk of blockchain with a group of members of the pool who are chosen to be “attestors.” A minimum of 128 attestors are required for any given block procedure.
* The attestors review the validator’s work and either accept it or reject it. If it’s accepted, both the validators and the attestors are given free Ether.
5. What are the system’s advantages?
It’s thought that switching to proof of stake would cuts Ethereum’s energy use, estimated at 45,000 gigawatt hours by 99.9%. Like any other venture depending on cloud computing, its carbon footprint would then be only be that of its servers. It also is expected to increase the network speed. That’s important for Ethereum, which has ambitions of becoming a platform for a vast range of financial and commercial transactions. Currently, Ethereum handles about 30 transactions per second. With sharding, Vitalik Buterin, the inventor of Ethereum, thinks that could go to 100,000 per second.
6. What are its downsides?
In a proof of stake system, it would be harder than in a proof of work system for a group to gain control of the process, but it would still be possible: The more Ether a person or group stakes, the better the chance of being chosen as a validator or attestor. Economic disincentives have been put in place to dissuade behavior that is bad for the network. A validator that tries to manipulate the process could lose part of the 32 Ether they have staked, for example. Wilson Withiam, a senior research analyst at Messari, a crypto research firm, who specializes in blockchain protocols, said the problem lies at the heart of the challenge of decentralized systems. “This is one of the most important questions going forward,” he said. “How do you help democratize the staking system?”
7. How else is Ethereum changing?
The most recent change was called the London hard fork, which went into effect in early August. The biggest change to the Ethereum blockchain since 2015, the London hard fork included a fee reduction feature called EIP 1559. The fee cut reduces the supply of Ether as part of every transaction, creating the possibility that Ethereum could become deflationary. As of mid-August, 3.2 ether per minute were being destroyed because of EIP 1559, according to tracking website ultrasound.money. That could put upward pressure on the price of Ether going forward. Another change in the works is called sharding, which will divide the Ethereum network into 64 geographic regions. Transactions within a shard would be processed separately, and the results would then be reconciled with a main network linked to all the other shards, making the overall network much faster.
The Open App Markets Act, which is being spearheaded by Sens. Richard Blumenthal, and Marsha Blackburn, is designed to crack down on some of the scummiest tactics tech players use to rule their respective app ecosystems, while giving users the power to download the apps they want, from the app stores they want, without retaliation.
“For years, Apple and Google have squashed competitors and kept consumers in the dark—pocketing hefty windfalls while acting as supposedly benevolent gatekeepers of this multibillion-dollar market,” Blumenthal told the Wall Street Journal. As he put it, this bill is tailor-made to “break these tech giants’ ironclad grip open the app economy to new competitors and give mobile users more control over their own devices.”
The antitrust issues facing both of these companies—along with fellow tech giants like Facebook and Amazon—have come to a boiling point on Capitol Hill over the past year. We’ve seen lawmakers roll out bill after bill meant to target some of the most lucrative monopolies these companies hold: Amazon’s marketplace, Facebook’s collection of platforms, and, of course, Apple and Google’s respective app stores. Last month, three dozen state attorneys general levied a fresh antitrust suit against Google for the Play Store fees forced on app developers. Meanwhile, Apple is still in a heated legal battle with Epic Games over its own mandated commissions, which can take up to 30% from every in-app purchase users make.
Blumenthal and Blackburn target these fees specifically. The bill would prohibit app stores from requiring that developers use their payment systems, for example. It would also prevent app stores from retaliating against developers who try to implement payment systems of their own, which is the exact scenario that got Epic booted from the App Store last summer.
On top of this, the bill would require that devices allow app sideloading by default. Google’s allowed this practice for a while, but this month started taking steps to narrow the publishing formats developers could use. Apple hardware, meanwhile, has never been sideload-friendly—a choice that’s meant to uphold the “privacy initiatives” baked into the App Store, according to Apple CEO Tim Cook.
Here are some other practices outlawed by the Open App Markets Act: Apple, Google, or any other app store owner would be barred from using a developer’s proprietary app intel to develop their own competing product. They’d also be barred from applying ranking algorithms that rank their own apps over those of their competitors. Users, meanwhile, would (finally) need to be given choices of the app store they can use on their device, instead of being pigeonholed into Apple’s App Store or Google’s Play Store.
Like all bills, this new legislation still needs to go through the regulatory churn before it has any hope of passing, and it might look like a very different set of rules by the time it finally does. But at this point, antitrust action is going to come for these companies whether they like it or not.
Google Pay is an online paying system and digital wallet that makes it easy to buy anything on your mobile device or with your mobile device. But if you’re concerned about what Google is doing with all your data (which you probably should be), Google doesn’t make it easy for Google Pay has some secret settings to manage your settings.
A report from Bleeping Computer shows that privacy settings aren’t available through the main Google Pay setting page that is accessible through the navigation sidebar.
On that screen, users can adjust all the same settings available on the other settings page, but they can also address three additional privacy settings—controlling whether Google Pay is allowed to share account information, personal information, and creditworthiness.
Here’s the full language of those three options:
-Allow Google Payment Corporation to share third party creditworthiness information about you with other companies owned and controlled by Google LLC for their everyday business purposes.
-Allow your personal information to be used by other companies owned and controlled by Google LLC to market to you. Opting out here does not impact whether other companies owned and controlled by Google LLC can market to you based on information you provide to them outside of Google Payment Corporation.
-Allow Google LLC or its affiliates to inform a third party merchant, whose site or app you visit, whether you have a Google Payments account that can be used for payment to that merchant. Opting out may impact your ability to use Google Payments to transact with certain third party merchants.
According to Bleeping Computer, the default of Google Pay is to enable all the above settings. In order to opt out, users have to go to the special URL that is not accessible through the navigation bar.
As the Reddit post that inspired the Bleeping Computer report claims, this discrepancy makes it appear that Google Pay is hiding its privacy options. “Google is not walking the talk when it claims to make it easy for their users to control the privacy and use of their own data,” the Redditor surmised.
A Google spokesperson told Gizmodo they’re working to make the privacy settings more accessible. “The different settings views described here are an issue resulting from a previous software update and we are working to fix this right away so that these privacy settings are always visible on pay.google.com,” the spokesperson told Gizmodo.
“All users are currently able to access these privacy settings via the ‘Google Payments privacy settings page’ link in the Google Pay privacy notice.”
Here’s hoping that my bank can set up it’s own version of Google Pay instead of integrating with it. I definitely don’t want Google or Apple getting their grubby little paws on my financial data.
