Consumer protection

Google files complaint to EU over Microsoft’s cloud tactics

Google has filed a formal complaint with the European Commission over Microsoft’s cloud business practices. The tech giant argues that Microsoft uses its dominant position with Windows Server to stifle competition and lock customers into its Azure platform. Specifically, Google claims Microsoft enforces heavy mark-ups on users of rival cloud services and restricts access to essential security updates.

The dispute follows a recent settlement where Microsoft paid €20 million to resolve concerns raised by European cloud providers. However, the agreement excluded key rivals like Google and Amazon Web Services (AWS), fuelling further criticism. Google insists only regulatory action will halt what it sees as Microsoft’s monopolistic approach, urging the EU to step in and ensure fair competition.

Microsoft denies the accusations, stating they have settled similar issues amicably with other European providers. A Microsoft spokesperson expressed confidence that Google would fail to persuade the European Commission, as it had failed with EU businesses.

Google believes immediate intervention is necessary to prevent the cloud market from becoming increasingly restrictive. They warn that Microsoft’s influence over the European cloud sector, which is growing rapidly, could limit options for customers and hurt competitors.

SEC faces off against Coinbase

In a crucial court case, Coinbase, the largest US cryptocurrency exchange, confronted the Securities and Exchange Commission (SEC) in Philadelphia. The exchange is calling on the SEC to create new regulations for digital assets stemming from a lawsuit over the agency’s failure to address a 2022 petition. The petition aimed to clarify when a digital asset is deemed a security and suggested a new regulatory framework specifically designed for the cryptocurrency sector.

The SEC rejected Coinbase’s request in December 2023, asserting that current regulations are adequate for the cryptocurrency sector. Coinbase’s attorney argued that the SEC’s refusal to clarify registration processes has hindered the exchange’s ability to operate within US laws. In contrast, an SEC lawyer maintained that the agency is not obligated to create new rules, suggesting that businesses like Coinbase must adapt to the existing regulatory framework.

This legal dispute highlights an ongoing tension between the cryptocurrency industry and the SEC, which asserts that many crypto tokens qualify as securities and fall under its jurisdiction. The crypto sector largely views itself as existing in a regulatory grey area, pushing for new legislation to provide more precise guidelines for managing digital assets. This ongoing struggle underscores the need for a cohesive framework that addresses the unique challenges of the rapidly evolving crypto market.

As the appeals court considers both sides, the outcome could have significant implications for how cryptocurrencies are regulated in the United States, potentially shaping the industry’s future.

New Cloudflare marketplace to help websites profit from AI scraping

Cloudflare is launching a marketplace that will let websites charge AI companies for scraping their content, aiming to give smaller publishers more control over how AI models use their data. Large AI models scrape thousands of websites to train their systems, often without compensating the content creators, which could threaten the business models of many smaller websites. The marketplace, launching next year, will allow website owners to negotiate deals with AI model providers, charging them based on how often they scrape the site or by setting their terms.

Cloudflare’s launch of AI Audit is a big step for website owners to gain better control over AI bot activity on their sites. Providing detailed analytics on which AI bots access their content empowers site owners to make informed decisions about managing bot traffic. The ability to block specific bots while allowing others can help mitigate issues related to unwanted scraping, which can negatively impact performance and increase operational costs. This tool could be handy for businesses and content creators who rely on their online presence and want to safeguard their resources.

Cloudflare’s CEO, Matthew Prince, believes this marketplace will create a more sustainable system for publishers and AI companies. While some AI firms may resist paying for currently free content, Prince argues that compensating creators is crucial for ensuring the continued production of quality content. The initiative could help balance the relationship between AI companies and content creators, allowing even small publishers to profit from their data in the AI age.

Amazon and Nokia face off in court over patent infringement

A German court has ruled that Amazon is using Nokia’s patented video technologies without obtaining a proper licence, according to a statement from Nokia. The decision, made by the Munich Regional Court, found that Amazon’s streaming devices are illegally utilising Nokia’s patented video-related technologies, which the Finnish company holds rights to.

Nokia’s Chief Licensing Officer, Arvin Patel, expressed satisfaction with the ruling, stating that Amazon has been selling these devices without the necessary licences in place. The ruling highlights ongoing disputes between tech giants over intellectual property.

In response to Nokia’s legal actions, Amazon filed a lawsuit in July in a Delaware federal court, accusing the company from Finland of infringing on a dozen Amazon patents related to cloud-computing technology.

This legal battle is part of a broader pattern of disputes between major tech companies, as patent rights continue to play a critical role in the development of new technologies and services.

US FTC highlights privacy concerns with social media data

A recent report from the US Federal Trade Commission (FTC) has criticised social media platforms for lacking transparency in how they manage user data. Companies such as Meta, TikTok, and Twitch have been highlighted for inadequate data retention policies, raising significant privacy concerns.

Social platforms collect large amounts of data using tracking technologies and by purchasing information from data brokers, often without users’ knowledge. Much of this data fuels the development of AI, with little control given to users. Data privacy for teenagers remains a pressing issue, leading to recent legislative moves in Congress.

Some companies, including X (formerly Twitter), responded by saying that they have improved their data practices since 2020. Others failed to comment. Advertising industry groups defended data collection, claiming it supports free access to online services.

FTC officials are concerned about the risks posed to individuals, especially those not even using the platforms, due to widespread data collection. Inadequate data management by social platforms may expose users to privacy breaches and identity theft.

Xiaomi challenges Flipkart report over data concerns

Xiaomi has urged India’s competition authority to recall an antitrust report concerning Walmart’s Flipkart. The Chinese smartphone maker claims the document contains confidential business information, which should have been redacted. The move could slow the ongoing investigation that began in 2021.

The Competition Commission of India (CCI) has previously responded to similar concerns, such as with Apple, leading to the recall of an antitrust report. Xiaomi is concerned that sensitive data, like model-specific sales figures, was shared without proper redaction, potentially harming its business.

The CCI report also found that e-commerce platforms, such as Amazon and Flipkart, gave preferential treatment to certain sellers, launching exclusive products from companies like Xiaomi. The commission has asked involved parties to return the report, allowing it to be reviewed again for necessary redactions.

Xiaomi’s concern with the report focuses on Flipkart’s involvement, while its dealings with Amazon remain unaffected. The CCI’s broader investigation includes various smartphone companies, with Samsung, Vivo, and Motorola also named for participating in exclusive online product launches.

UK user data pulled from LinkedIn’s AI development

LinkedIn has paused the use of UK user data to train its AI models after concerns were raised by the Information Commissioner’s Office (ICO). The Microsoft-owned social network had quietly opted users worldwide into data collection for AI purposes but has now responded to the UK regulator’s scrutiny. LinkedIn acknowledged the concerns and expressed willingness to engage with the ICO further.

The decision to halt AI training with UK data follows growing privacy regulations in the UK and the European Union. These rules limit how tech companies, including LinkedIn, can use personal data to develop generative AI tools like chatbots and writing assistants. Like other platforms, LinkedIn had been leveraging user-generated content to enhance these AI models but has now introduced an opt-out mechanism for UK users to regain control over their data.

Regulatory bodies like the ICO continue to monitor big tech companies, emphasising the importance of privacy rights in the development of AI. As a result, LinkedIn and other platforms may face extended reviews before resuming AI-related activities that involve user data in the UK.

US moves to ban Chinese tech in smart vehicles

The US Commerce Department is set to introduce a new regulation to ban Chinese software and hardware in autonomous and connected vehicles in the country, citing national security concerns. The proposal, expected to be announced soon, reflects growing worries from the Biden administration about the potential risks posed by Chinese companies collecting sensitive data on US drivers and infrastructure. Additionally, there are fears that foreign actors could manipulate connected vehicles, potentially creating significant security threats.

The proposed restrictions would apply to Chinese-made vehicles with communication or autonomous driving systems, escalating trade tensions between the US and China. The proposal follows last week’s move by the Biden administration to impose steep tariffs on Chinese imports, including electric vehicles and key components like batteries. Commerce Secretary Gina Raimondo has been vocal about the potential dangers of Chinese technology in US vehicles, stressing the catastrophic risks if critical software were turned off in large numbers of cars.

President Joe Biden had already initiated a review of whether Chinese vehicle imports posed security threats due to their integration with connected-car technology. The new rules could come into effect gradually, with software restrictions starting as early as the 2027 model year and hardware prohibitions beginning in 2029 or 2030. These measures would cover vehicles equipped with specific Bluetooth, satellite, wireless features and fully autonomous cars capable of operating without drivers.

Why does this matter?

US lawmakers have raised concerns about Chinese companies gathering sensitive data, and the proposed restrictions would also extend to other foreign adversaries like Russia. However, automakers, including major companies like General Motors and Toyota, have expressed worries about the time and complexity required to replace existing systems, noting that vehicle components undergo extensive testing and cannot easily be swapped.

Although Chinese-made vehicles currently make up a small fraction of US imports, the new rule aims to ensure the long-term security of connected cars on US roads. The White House recently approved the final proposal, which would not apply to specialised vehicles like those used in agriculture or mining but will impact all other sectors. The move seems a clear effort to protect the US supply chain in an increasingly connected world where cars function as ‘smartphones on wheels.’

Open Rights Group slams LinkedIn for data use in AI without consent

LinkedIn has come under scrutiny for using user data to train AI models without updating its privacy terms in advance. While LinkedIn has since revised its terms, United States users were not informed beforehand, which usually allows them time to make decisions about their accounts. LinkedIn offers an opt-out feature for data used in generative AI, but this was not initially reflected in their privacy policy.

LinkedIn clarified that its AI models, including content creation tools, use user data. Some models on its platform may also be trained by external providers like Microsoft. LinkedIn assures users that privacy-enhancing techniques, such as redacting personal information, are employed during the process.

The Open Rights Group has criticised LinkedIn for not seeking consent from users before collecting data, calling the opt-out method inadequate for protecting privacy rights. Regulatory bodies, including Ireland‘s Data Protection Commission, have been involved in monitoring the situation, especially within regions under GDPR protection, where user data is not used for AI training.

LinkedIn is one of several platforms reusing user-generated content for AI training. Others, like Meta and Stack Overflow, have also begun similar practices, with some users protesting the reuse of their data without explicit consent.

EU will not investigate Microsoft-Inflection merger amid court decision

European antitrust regulators will not take action against Microsoft’s acquisition of staff from AI startup Inflection, including its co-founders, following the withdrawal of requests from seven European Union countries. These countries dropped their requests for the European Commission to investigate, due to a recent court ruling that limits the regulator’s ability to examine mergers below the EU’s revenue threshold.

The court ruling has been viewed by some as a correction against regulatory overreach. The European Commission, in response, stated it would not pursue the case further. Despite this, the Commission acknowledged the Microsoft-Inflection deal as a merger due to its restructuring of Inflection’s business focus towards AI development.

The agreement between Microsoft and Inflection represents a significant market shift. Under the EU’s merger rules, it is considered a concentration, reflecting the ongoing transformations in the AI industry.