Competition regulation

TikTok prepares for possible US shutdown

TikTok is preparing to shut down its US operations on Sunday unless a federal ban is averted at the last minute, according to sources. The ban, stemming from a law signed last April, requires TikTok’s Chinese parent company, ByteDance, to sell its US assets by January 19 or face nationwide restrictions. The Supreme Court is currently deliberating on whether to uphold or pause the ban, but no ruling has been made yet.

President-elect Donald Trump, set to take office the day after the ban would take effect, is reportedly considering a temporary suspension of the shutdown. However, legal uncertainty clouds the possibility of such action. Meanwhile, the Biden administration, in its final days, has signalled it will not block the ban without a credible divestment plan from ByteDance. TikTok has argued that the law violates First Amendment rights and warned that a prolonged ban could lead to significant user loss and global disruptions to its services.

If the ban proceeds, TikTok plans to display a pop-up message informing users of the shutdown and allow them to download their data. The app would become largely inoperable as US companies would no longer be permitted to provide critical services for its maintenance. TikTok has emphasised its ability to restore operations quickly if the ban is reversed but warned that the shutdown would impact not just American users but its global platform due to its reliance on US-based infrastructure.

The political and legal standoff has sparked widespread public and corporate reactions. Social media users have expressed disappointment at the impending ban, while TikTok’s US operations, employing over 7,000 workers, hang in the balance. Despite ongoing efforts to delay the enforcement, the platform faces an uncertain future as Sunday’s deadline looms.

US chip industry criticises Biden’s export control policies

Several chip and manufacturing industry groups have criticised the Biden administration’s new export controls, arguing they were implemented without sufficient consultation. A private letter sent to President Joe Biden on January 13 expressed concerns that the rules could harm US companies and shift market share to global competitors.

The Semiconductor Industry Association (SIA) and SEMI, representing chipmakers and manufacturing equipment firms, objected to the new licensing requirements for AI chip exports, including advanced high-bandwidth memory. They argued the lack of public input ignored the regulations’ economic and international consequences.

High-bandwidth memory, essential for AI chip production, is primarily manufactured by US and South Korean companies. The new rules could restrict its sale to China, further tightening controls on advanced technology exports.

A separate source suggested the restrictions may also affect companies like Lam Research, which previously benefited from a rule interpretation allowing expanded sales in China. Neither the SIA, SEMI, nor Lam Research commented immediately.

Meta faces new challenge in India over data sharing

Meta may be forced to halt or modify features in India after an antitrust ruling banned its WhatsApp messaging service from sharing user data with Meta for advertising purposes. The Competition Commission of India (CCI) imposed a $24.5 million fine and a five-year ban on the practice, accusing the company of abusing its dominance and coercing WhatsApp users into accepting a 2021 privacy policy that allegedly expanded data sharing unfairly.

India, Meta’s largest market with over 500 million WhatsApp users and 350 million Facebook users, is crucial for the company’s operations. The data-sharing ban could impact Meta’s ability to offer personalised ads on Facebook and Instagram, the company said in its court filing. Meta argued that this restriction could harm businesses, such as fashion brands, that rely on personalised ads to connect with customers. The US firm also warned the ruling could threaten its commercial viability in the region.

Meta has publicly defended its 2021 policy changes but criticised the CCI’s decision in a 2,000-page tribunal appeal, claiming the watchdog lacks the technical expertise to assess the implications of its ruling. The Indian appeals tribunal is set to hear Meta’s case, with the possibility of pausing the CCI directive while the legal process unfolds.

This challenge in India adds to Meta’s global struggles, including prior accusations in the EU over unclear privacy policy changes. The CCI’s ruling now requires WhatsApp to give users the choice to opt out of data sharing with Meta, signaling a broader push for greater transparency and user control in data practices worldwide.

SEC takes legal action against Musk for Twitter shares

The US Securities and Exchange Commission (SEC) has filed a lawsuit against Elon Musk, accusing him of delaying the disclosure of his 2022 Twitter stake, which violated federal securities laws. According to the complaint, Musk waited 11 days beyond the required 10-day window to reveal his 5% ownership of Twitter, enabling him to purchase over $500 million worth of shares at lower prices before disclosing his 9.2% stake on April 4, 2022. Twitter’s stock price surged by more than 27% following the announcement.

The SEC seeks civil penalties and a repayment of profits it claims Musk gained unfairly. Musk’s attorney, Alex Spiro, dismissed the lawsuit as a ‘sham,’ arguing it stems from a minor administrative oversight. Musk has previously clashed with the SEC, including a 2018 settlement over misleading tweets about taking Tesla private, which resulted in a $20 million fine and other conditions.

This lawsuit is the latest in a series of legal challenges Musk faces over his $44 billion purchase of Twitter, now rebranded as X. Musk, who is worth $417 billion, according to Forbes, has also been sued by former Twitter shareholders in Manhattan federal court for the delayed disclosure, which they claim caused them financial harm. The SEC’s action comes just days before Chair Gary Gensler’s scheduled departure, marking another chapter in Musk’s contentious history with the regulatory body.

TikTok prepares to halt operations in the US, The Information reports

TikTok plans to disable its app for all US users on Sunday if the Supreme Court does not block a federal ban, according to a report by The Information. This action would go beyond the law’s requirement, which mandates a ban only on new downloads from Apple and Google app stores while allowing existing users to continue using the app temporarily.

Under TikTok’s plan, users attempting to access the app will be redirected to a website explaining the ban. The company also intends to allow users to download their data for future use. TikTok and its parent company ByteDance have yet to comment on these developments.

The ban stems from a law signed by President Joe Biden in April 2024, requiring ByteDance to sell its US assets by January 19, 2025, or face a nationwide ban. TikTok has challenged the law, arguing that it violates First Amendment protections. In a recent court filing, the company warned that a month-long ban could result in one-third of its 170 million US users leaving the platform permanently.

This potential shutdown reflects the escalating tensions surrounding TikTok’s operations in the United States, as debates over data security and free speech continue.

Russia slaps Google with $78 million fine

A Russian court has imposed an 8 billion rouble ($78 million) fine on Google for failing to comply with previous penalties related to administrative offences, according to the Moscow courts’ press service. The fine marks a sharp increase from the usual smaller penalties issued to foreign tech companies operating in Russia.

Russia has repeatedly demanded that foreign platforms, including YouTube, remove content it deems illegal. Critics argue that the government’s pressure on YouTube, once a major platform in Russia, is aimed at limiting access to dissenting voices. YouTube’s daily users in Russia have plummeted from 50 million to 12 million amid growing restrictions and alleged speed disruptions.

The Kremlin denies any deliberate interference with YouTube, instead blaming Google for failing to upgrade its infrastructure in the country, a claim the tech giant disputes. Meanwhile, President Vladimir Putin has accused Google of acting as a tool for US political influence, further straining relations.

Nvidia revenue at risk due to US AI chip export limits

Nvidia faces significant revenue pressure following new US restrictions on artificial intelligence chip exports. The regulations, aimed at limiting the distribution of advanced processors to most countries outside close US allies, are intended to prevent China from accessing technology that could strengthen its military capabilities. Analysts warn these curbs could hinder Nvidia’s growth, as nearly half of its chip sales could be affected.

A substantial portion of Nvidia’s revenue comes from global markets, with 56% of sales outside the US and China accounting for around 17%. The company’s stock dropped by 2% following the announcement. Nvidia Vice President of Government Affairs Ned Finkle argued the restrictions could stifle global innovation and weaken US leadership in AI development by imposing bureaucratic control over chip design and marketing.

Industry experts believe major cloud providers such as Microsoft, Google, and Amazon could benefit from the new rules. These firms may receive exemptions for data centre development, allowing them to expand market share as AI leaders. Their financial strength and advanced infrastructure make them well-positioned to thrive under the revised framework.

Uncertainty remains over the long-term impact of the export curbs, with the rules set to take effect in 120 days. Some analysts suggest the incoming Trump administration might revise the policy, potentially negotiating new deals with individual firms and countries while maintaining a focus on national security.

Apple’s new app fees face EU antitrust scrutiny

Apple’s latest charges for app developers are under fresh scrutiny from the European Union’s antitrust regulators. Concerns have been raised over the company’s new ‘core technology fee,’ which requires developers to pay €0.50 per installed app. Regulators are investigating whether the fee could increase costs for software makers or force them to change their business models.

The European Commission has circulated new questionnaires to developers, seeking insights on the financial impact of the fee and Apple’s claim that the changes will lower costs for most developers. The inquiry comes as major US tech companies urge President-elect Donald Trump to challenge EU regulations targeting American firms. Apple has not yet responded to the EU’s latest investigation.

Under the EU’s Digital Markets Act (DMA), Apple must comply with stricter rules on how it operates its App Store. The legislation allows regulators to fine major tech platforms up to 10% of their annual revenue for non-compliance. Apple, which has faced ongoing scrutiny in both the US and Europe over developer fees, says that 85% of developers using its App Store do not pay any commission.

EU reevaluates big tech probes amid shifting political landscape

The European Commission is reassessing its investigations into major tech companies, including Apple, Meta, and Google, under its landmark Digital Markets Act (DMA), according to the Financial Times. The review, which covers cases initiated since March 2024, comes as tech giants urge President-elect Donald Trump to push back against EU regulatory scrutiny. Sources suggest Trump’s presidency has influenced the review, though it was not the direct trigger.

The DMA, implemented in 2022, seeks to curb the dominance of Big Tech by imposing strict rules on their practices and fines of up to 10% of annual revenue for violations. The review may lead to narrowing or altering the scope of current probes, with all decisions and potential fines paused during this process. Technical work on the cases, however, will continue.

This development coincides with Meta’s recent overhaul of its US fact-checking program and CEO Mark Zuckerberg’s signals of a more conciliatory stance toward the Trump administration. Meanwhile, EU regulators are also examining whether Elon Musk’s social media platform X has violated content moderation rules, further highlighting the tech industry’s complex regulatory challenges.

Apple faces $1.8 billion UK lawsuit

Apple is defending itself against a $1.8 billion mass lawsuit in a London tribunal, accused of abusing its market dominance by charging app developers a 30% commission through its App Store. The lawsuit, brought on behalf of around 20 million UK iPhone and iPad users, claims the fees have unfairly inflated app costs for consumers.

Rachael Kent, the academic leading the case, argues Apple has leveraged its monopoly to exclude competition and impose restrictive terms on app developers. Apple’s lawyers counter that the fees reflect the benefits of its iOS ecosystem, emphasising its focus on security, privacy, and innovation. They also noted that most developers are exempt from paying commissions.

This trial marks the UK’s first class-action-style lawsuit against a tech giant under its evolving legal framework. Similar cases against Google, Meta, and Amazon are in progress, including a $1.1 billion lawsuit against Google over Play Store fees scheduled for later this year. The trial is expected to last seven weeks, with testimony from Apple’s CFO anticipated soon.