Consumer protection

Google faces expanded regulatory oversight from CFPB

The United States Consumer Financial Protection Bureau (CFPB) is reportedly moving to place Alphabet’s Google under formal federal supervision, according to a Washington Post report. This development comes after months of confidential talks, during which Google has strongly resisted the idea. If implemented, federal oversight would provide regulators with access to Google’s internal records, marking a significant step in regulatory scrutiny of the tech behemoth. The CFPB, which typically oversees financial firms, is now expanding its reach to include more tech companies, particularly those with extensive consumer data handling.

This move is yet another regulatory challenge for Google, which is already facing multiple legal hurdles. Current government actions include pressure for the company to divest parts of its operations and a court mandate to open up its mobile app store to competition. Antitrust lawsuits and investigations continue to question Google’s dominance in digital markets, pushing the company to defend its business practices amid mounting legal pressure.

Google, alongside Alphabet, declined to comment on the CFPB’s intentions. However, industry analysts note that increased federal oversight could lead to greater regulatory enforcement on how tech giants manage consumer data and financial operations. As regulatory measures tighten, Google may have to adopt new strategies to mitigate risks and comply with evolving US oversight regulations.

South Korea’s FTC intensifies scrutiny on AI semiconductor mergers amidst geopolitical pressures

The Korea Fair Trade Commission (FTC) has announced its intention to closely monitor mergers and acquisitions (M&As) in the rapidly growing AI semiconductor sector to assess potential anti-competitive effects. With the increasing pace of technological advancements and the rising demand for AI technologies, the FTC recognises that M&As could significantly impact market competition, particularly by reducing the number of players in the industry.

Given the sector’s dynamic nature and the challenges posed by factors like the US-China tech rivalry, the FTC’s role is crucial in ensuring that these business combinations do not result in unfair market practices, such as price increases or the exclusion of competitors. Therefore, through careful scrutiny of M&As, the FTC aims to preserve healthy competition, support technological innovation, and protect the overall market ecosystem.

In addition, the Korea Fair Trade Commission (FTC) is reviewing several significant mergers, including combining Synopsys and Ansys and acquiring ZT Systems by AMD. These deals could profoundly impact the AI semiconductor market, especially regarding access to essential design software and hardware technologies.

To enhance its understanding of the potential anti-competitive effects of these M&As, the FTC is gathering input from industry experts and academic leaders. This collaborative approach, including forums like the ‘AI Semiconductor-Related Business Combination Forum,’ helps the FTC stay informed about emerging trends and refine its strategies for safeguarding fair competition in the rapidly evolving AI semiconductor sector.

Airbus CEO criticises EU antitrust rules

Guillaume Faury, CEO of Airbus, raised concerns about how antitrust regulations hinder the European aerospace sector’s ability to compete with US-based SpaceX. Speaking at an aviation industry event in Frankfurt, Faury acknowledged SpaceX’s success, particularly its reusable Falcon 9 rocket, but highlighted how Europe’s regulatory framework restricts similar consolidation. Unlike SpaceX, which manufactures 80% of its components in-house, European companies like Airbus face complex supply chains and fragmented production models due to antitrust rules that require manufacturing distribution across multiple countries.

Faury pointed out that this fragmented system, while pleasing many stakeholders, limits efficiency and competitive flexibility. This is evident when comparing SpaceX’s cost-cutting ability with the struggles of Europe’s Ariane 6, which has yet to launch commercially despite plans for multiple flights per year. Meanwhile, SpaceX’s low-cost launches have revolutionised satellite deployment, launching nearly 7,000 satellites and creating fierce competition in the space industry.

Faury warned that unless European regulations adapt, the region risks falling behind in satellite and launch sectors, with Airbus already feeling the pressure, including a planned reduction of 2,500 jobs in its satellite division. SpaceX’s influence extends beyond commercial aerospace, as the company is also a major player in military and defence with initiatives like Starlink and lunar landing technology, supported by NASA and the US government.

However, concerns about SpaceX’s dominance in the US have also emerged, with NASA and the Pentagon seeking to reduce dependence on the company by promoting more competition in the aerospace sector, although antitrust complaints have not yet significantly affected SpaceX’s position.

Turkey sanctions Twitch for user data breach

Turkey‘s Personal Data Protection Board (KVKK) has fined Amazon’s gaming platform Twitch 2 million lira ($58,000) following a significant data breach, the Anadolu Agency reported. The breach, involving a leak of 125 GB of data, affected 35,274 individuals in Türkiye.

KVKK’s investigation revealed that Twitch failed to implement adequate security measures before the breach and conducted insufficient risk and threat assessments. The platform only addressed vulnerabilities after the incident occurred. As a result, KVKK imposed a 1.75 million lira fine for inadequate security protocols and an additional 250,000 lira for failing to report the breach promptly.

This penalty underscores the increasing scrutiny and regulatory actions against companies handling personal data in Türkiye, highlighting the importance of robust cybersecurity measures to protect user information.

Meta defends Instagram, WhatsApp acquisitions in high-stakes antitrust trial

A US judge has ruled that Meta Platforms, the parent company of Facebook, must face trial in an antitrust lawsuit filed by the Federal Trade Commission (FTC). The lawsuit, initiated during the Trump administration, alleges that Meta’s acquisitions of Instagram in 2012 and WhatsApp in 2014 were intended to stifle emerging competition and maintain a social media monopoly. Meta has countered the FTC’s claims, arguing that the regulators ignore substantial competition from platforms like TikTok, YouTube, and LinkedIn.

This case is part of a broader crackdown on Big Tech by United States regulators. The FTC and the Department of Justice are pursuing major antitrust lawsuits against several technology giants, including Amazon and Apple. Alphabet’s Google also faces two significant legal challenges, with one case already finding that the company unlawfully restricted competition among search engines. These lawsuits reflect intensified regulatory efforts to address concerns over the market power of leading technology firms.

Meta’s legal battle could set a significant precedent for how tech conglomerates operate and acquire competitors. Critics argue that Meta’s dominance has harmed innovation and user choice, while the company insists it faces robust competition across the digital landscape. As Meta prepares for trial, the outcome could have far-reaching implications for the tech industry and future regulatory actions against monopolistic practices.

South Africa plans tax relief on smartphones amid network upgrade

South Africa is considering reducing taxes on smartphones to make them more affordable as the country prepares to phase out 2G and 3G networks. Communications Minister Solly Malatsi revealed he has had initial discussions with the Treasury about cutting the ad valorem tax, which currently increases smartphone prices. The goal is to support accessibility to newer, faster networks like 4G and 5G.

The government’s policy, outlined in the Next Generation Radio Frequency Spectrum Policy paper, aims to fully shut down older networks by 31 December 2027. The phasing out of these networks is intended to free up valuable radio waves for advanced technologies. However, critics argue that the move could worsen the digital divide, particularly impacting low-income and rural populations who may struggle to afford smartphones compatible with faster networks.

Malatsi emphasised that making smart devices more affordable is crucial, noting that eliminating the luxury excise tax could significantly reduce costs. The country’s largest telecom operators, MTN and Vodacom, have called for collaboration between industry stakeholders and the government to manage the transition. The Association of Comms and Technology has also urged the government to ease the transition by lowering taxes and reconsidering a strict shutdown deadline.

Tech entrepreneur sentenced for bitcoin theft

Ilya Lichtenstein, a New York tech entrepreneur, was sentenced to five years in prison for laundering stolen cryptocurrency from Bitfinex, one of the world’s largest exchanges. Lichtenstein admitted to hacking Bitfinex in 2016, stealing around 120,000 bitcoin using advanced tools. At the time of the theft, the bitcoin was valued at $71 million but had soared to $4.5 billion by his arrest in 2022.

Lichtenstein and his wife, Heather Morgan, were arrested in February 2022. Morgan, a self-styled rapper known as “Razzlekhan,” also pleaded guilty to conspiracy charges and is set to be sentenced on November 18. US authorities recovered $3.6 billion of the stolen funds in what Deputy Attorney General Lisa Monaco called the largest financial seizure in the Justice Department’s history.

Alongside his prison term, Lichtenstein will serve three years of supervised release, marking a significant milestone in the fight against cryptocurrency-related crimes.

US states file lawsuit against SEC

Attorneys General from 18 US states have launched a joint lawsuit against the Securities and Exchange Commission (SEC), its Commissioners, and Chair Gary Gensler. The coalition, led by states such as Kentucky, Texas, Florida, and Nebraska, accuses the SEC of overstepping its constitutional authority with aggressive actions against the cryptocurrency industry. The lawsuit seeks court intervention to curb what they describe as “unconstitutional persecution” of the sector.

The complaint argues that states have successfully fostered innovation and safeguarded consumers through local regulatory frameworks, enabling blockchain experimentation and adaptation to regional needs. Examples include licensing requirements for digital asset platforms, taxation rules for digital currencies, and procedures for handling unclaimed digital property. The lawsuit claims the SEC has ignored these efforts, instead attempting to impose federal mandates without Parliamentary approval.

The Attorneys General allege that the SEC’s enforcement actions violate the separation of powers, undermining state authority over crypto regulation. With all 18 Attorneys General being Republicans, the lawsuit calls for judicial intervention to reaffirm states’ rights and halt the SEC’s centralised approach.

FTC looks into Microsoft’s cloud business

According to sources, the Federal Trade Commission is preparing to investigate Microsoft’s cloud computing business over allegations of anti-competitive practices. The probe will focus on claims that Microsoft uses restrictive licensing terms to deter customers from moving data from its Azure cloud service to competitors.

Reportedly, Microsoft has been accused of tactics such as raising subscription fees for departing customers, imposing steep exit charges, and making its Office 365 products incompatible with rival cloud platforms. These practices could potentially leverage the company’s market power in productivity software to stifle competition.

While the FTC declined to comment on the investigation, Microsoft has yet to respond to the allegations. The Financial Times was the first to report on the probe.

EU hits Meta with $800M antitrust fine

Meta, the parent company of Facebook, has been fined nearly €800M by the European Union for anti-competitive practices related to its Marketplace feature. The European Commission accused the tech giant of abusing its dominant position by tying Marketplace to Facebook’s social network, forcing exposure to the service and disadvantaging competitors.

This marks the first time the EU has penalised Meta for breaching competition laws, though the company has faced previous fines for privacy violations. The investigation found that Meta unfairly used data from competitors advertising on Facebook and Instagram to benefit its own Marketplace, giving it an edge that rivals couldn’t match.

Meta rejected the claims, arguing that the decision lacks evidence of harm to competition or consumers. While the company pledged to comply with the EU’s order to cease the conduct, it plans to appeal the ruling. The case highlights ongoing EU scrutiny of Big Tech, with Meta facing additional investigations on issues like privacy, child safety, and election integrity.