Spain’s antitrust regulator, the CNMC, has launched an investigation into Apple’s App Store for potentially anti-competitive behaviour. The investigation focuses on Apple’s alleged imposition of unequal commercial conditions on developers of mobile applications sold through its platform.
The CNMC has suggested that these practices could constitute a serious violation of competition law. If Apple is found guilty, it could face a substantial fine of up to 10% of its global revenues. The following investigation in Spain highlights ongoing concerns about Apple’s dominance in the app store market and its impact on competition and developers.
The US Federal Trade Commission (FTC) announced a probe into eight companies using AI-powered ‘surveillance service pricing’ to evaluate its impact on privacy, competition, and consumer protection. The companies under scrutiny include Mastercard, JPMorgan Chase, Revionics, Bloomreach, Task Software, PROS, Accenture, and McKinsey & Co. These firms use AI to adjust pricing based on consumer behaviour, location, and personal data, potentially leading to different prices for different customers.
The FTC’s investigation aims to uncover the types of surveillance pricing services developed by these companies and their current applications. The agency seeks to understand how these AI-driven pricing models affect consumer pricing and whether they exploit personal data to charge higher prices. FTC Chair Lina M. Khan emphasised the risks to privacy and the potential exploitation of personal data in her statement, highlighting the need for transparency in how businesses use consumer information.
This inquiry reflects growing concerns about using AI and other technologies to set personalised prices based on detailed consumer data. The FTC’s actions aim to shed light on these practices and ensure consumer protection in an increasingly data-driven market.
Top competition authorities from the EU, UK, and US have issued a joint statement emphasising the importance of fair, open, and competitive markets in developing and deploying generative AI. Leaders from these regions, including Margrethe Vestager of the European Commission, Sarah Cardell of the UK Competition and Markets Authority, Jonathan Kanter of the US Department of Justice, and Lina M. Khan of the US Federal Trade Commission, highlighted their commitment to ensuring effective competition and protecting consumers and businesses from potential market abuses.
The officials recognise the transformational potential of AI technologies but stress the need to safeguard against risks that could undermine fair competition. These risks include the concentration of control over essential AI development inputs, such as specialised chips and vast amounts of data, and the possibility of large firms using their existing market power to entrench or extend their dominance in AI-related markets. The statement also warns against partnerships and investments that could stifle competition by allowing major firms to co-opt competitive threats.
The joint statement outlines several principles for protecting competition within the AI ecosystem, including fair dealing, interoperability, and maintaining choices for consumers and businesses. The authorities are particularly vigilant about the potential for AI to facilitate anti-competitive behaviours, such as price fixing or unfair exclusion. Additionally, they underscore the importance of consumer protection, ensuring that AI applications do not compromise privacy, security, or autonomy through deceptive or unfair practices.
Nigeria’s Federal Competition and Consumer Protection Commission (FCCPC) has imposed a fine of $220 million on Meta Platforms Inc., the parent company of Facebook, for ‘multiple and repeated’ breaches of local consumer data protection laws in a move to enforce data privacy regulations.
The FCCPC’s investigation into Meta began last year following Nigerian consumers’ complaints regarding personal data mishandling. The investigation revealed that Meta had failed to comply with several provisions of Nigeria’s data protection regulations, including obtaining proper consent from users before collecting their data and ensuring the security of the information gathered, a direct violation of the Nigeria Data Protection Regulation (NDPR), following a 38 months investigation. The NDPR, enacted in 2019, mandates that organisations must seek explicit consent from individuals before collecting their personal information, aiming to safeguard the privacy of their citizens.
The fine is one of the largest penalties imposed by an African regulator on a global tech company. It signals a growing trend among nations to assert digital sovereignty and enforce stringent data protection measures. The action against Meta is expected to have far-reaching implications, prompting other multinational companies to reassess their data practices in Nigeria and potentially other African markets.
Why does this matter?
The company has faced similar regulatory challenges worldwide, including a $5 billion fine by the US Federal Trade Commission in 2019 for privacy violations, a €265 million fine by the Irish Data Protection Commission in 2022 for breaches of the EU’s General Data Protection Regulation (GDPR) and a $37 million fine by the competition board.
The following development highlights the regulatory pressure on technology companies to prioritise data protection. As digital services expand globally, enforcing stringent data privacy laws is becoming more critical. For Nigeria, the fine against Meta expresses the country’s commitment to holding multinational companies accountable and protecting the rights of its citizens in the digital landscape.
A South Korean court is reviewing a prosecution request to arrest Brian Kim, the billionaire founder of Kakao Corp, for alleged stock manipulation during a 2023 acquisition. The development follows a hearing last year involving Kakao and an executive over similar accusations. Prosecutors claim Kim manipulated the stock price of SM Entertainment to obstruct Hybe’s acquisition attempt. Kim, not formally charged, denies any wrongdoing.
Kim, the largest shareholder of Kakao Corp, holds a 24% stake through his entities. The court’s decision, expected late Monday or early Tuesday, will determine the necessity of a warrant without ruling on the allegations. Analysts warn that a conviction could jeopardise Kakao group’s control over KakaoBank Corp, as financial crime rules restrict ownership stakes in banks.
Regulatory and social scrutiny might impact Kakao’s bold investment decisions, including plans for AI services and fundraising through IPOs. Kim chairs a council coordinating Kakao group’s 128 affiliates, guiding their business focus. The outcome of the case could influence the company’s strategic moves in the near future.
Kakao plans to launch new AI services this year, amid growing challenges from legal and regulatory pressures. The decision on Kim’s arrest warrant will be crucial for the future direction of the tech giant and its numerous affiliates.
A recent study has revealed that AI chatbots pose significant risks to children, who often view them as lifelike and trustworthy. Dr Nomisha Kurian from the University of Cambridge calls for urgent action to prioritise ‘child-safe AI’ in the development of these technologies.
Kurian’s research highlights incidents where AI chatbots provided harmful advice to children, such as Amazon’s Alexa instructing a child to touch a live electrical plug and Snapchat’s My AI giving tips on losing virginity.
These cases underscore the ’empathy gap’ in AI, where chatbots fail to respond appropriately to children’s unique needs and vulnerabilities.
The study proposes a 28-item framework to help developers create safer AI by working closely with educators and child safety experts. Kurian argues that AI has great potential if designed responsibly, but proactive measures are essential to protect young users.
The French competition authority has officially launched an investigation into chipmaker Nvidia for suspected anti-competitive behaviour, confirming ongoing scrutiny of the company’s practices. Benoit Coeure, the agency’s president, affirmed during a press briefing that Nvidia could face charges pending the outcome of the investigation.
Earlier reports, based on insider information, indicated that Nvidia was likely to be formally charged by the antitrust regulator in France. The investigation focuses on allegations of practices that may hinder competition within the market.
Nvidia, a prominent player in the semiconductor industry, faces increasing regulatory scrutiny globally amid concerns over its market dominance and business practices. The outcome of the investigation by the French authority could have significant implications for Nvidia’s operations and market strategy moving forward.
Poland’s antitrust and consumer protection watchdog, UOKiK, has fined PayPal Europe 106.6 million zlotys ($27.3 million) for failing to clearly outline activities that could incur penalties in its contractual clauses. UOKiK stated that PayPal’s descriptions of prohibited activities could have been more precise, making it difficult for users to understand what actions were not allowed and the potential consequences.
UOKiK’s head, Tomasz Chrostny, criticised PayPal’s clauses as general, ambiguous, and incomprehensible, giving the company excessive discretion to determine whether a user has committed a prohibited act and what penalties to impose. That could include actions like blocking money on accounts.
PayPal responded by emphasising its commitment to fair treatment and transparent communication with customers. The company stated that it has been cooperating with UOKiK during the investigation and is reviewing the decision. PayPal also noted that the decision is not final and that it has the opportunity to appeal in court.
India’s antitrust body, the Competition Commission of India (CCI), has concluded its investigation into Apple’s practices within the Indian app market, finding the tech giant engaged in abusive conduct. According to a confidential report viewed by Reuters, the CCI alleges Apple exploited its dominant position in the iOS app ecosystem by mandating developers to use its proprietary in-app purchase system. This requirement, the CCI asserts, limits competition and imposes unfair terms on developers who rely on Apple’s platform to reach consumers.
The 142-page report highlights Apple’s significant influence over digital products and services distribution through its App Store on iOS devices. It describes the App Store as a crucial channel for app developers, who must comply with Apple’s terms, including its billing and payment system. Both Apple and the CCI declined to comment on the report’s findings.
The CCI report marks a pivotal phase in India’s investigation, pending review by senior officials. It could result in fines and directives for Apple to revise its business practices. The case originated from complaints by a non-profit group and Indian startups, alleging Apple’s practices stifle competition and inflate costs for developers and consumers.
Why does this matter?
The investigation mirrors the heightened scrutiny Apple faces globally. In June, the EU regulators accused Apple of breaching antitrust laws, potentially leading to substantial fines. Apple is also under investigation for new fees imposed on developers, responding with plans to allow alternative app distribution in the EU under the Digital Markets Act.
The report underscores the regulatory pressure tech giants face worldwide, with similar antitrust actions targeting Google in India over its in-app payment policies. As the CCI deliberates its next steps, Apple’s market practices remain a focal point amid broader concerns over fair competition in the digital economy.
The Australian Competition and Consumer Commission (ACCC) has reached agreements with Telstra and Optus regarding Google’s search services following an investigation into potential anticompetitive practices. The ACCC found that Google had arrangements with Telstra and Optus since at least 2017, ensuring its search services were pre-installed as the default on Android devices supplied by these telecom companies. These agreements restrict competition by limiting the visibility of rival search engines.
Telstra and Optus have cooperated with the ACCC and agreed that, as of 30 June 2024, they will not renew or enter into any new agreements with Google that mandate its search services as the exclusive default option on devices they distribute. These undertakings aim to promote competition and consumer choice in Australia’s digital market.
ACCC Commissioner Liza Carver emphasised the importance of these undertakings in enhancing consumer choice and fostering competition in digital platforms. She noted that practices such as exclusivity agreements can stifle innovation and limit options for consumers, highlighting the need for digital platforms to adhere to Australia’s competition laws.
The ACCC’s broader investigation into Google’s practices continues, focusing on potential competition concerns raised by these agreements and their impact on the digital economy. The commission plans to submit further reports on its findings, including recommendations for regulatory reforms aimed at promoting fair competition among digital platforms in Australia.
