Facebook’s owner company, Meta, is bracing for a substantial fine from the European Union, according to sources familiar with the matter. The penalty stems from allegations that Meta is leveraging its dominance in social networking to stifle competition in the classified advertising sector. The company’s practice of linking its free Marketplace service with Facebook has raised concerns among the EU regulators, who view this strategy as an attempt to edge out rivals.
The decision is expected as soon as next month, and it could be one of the final significant moves overseen by the EU’s current competition chief, Margrethe Vestager, before her departure. The investigation into Meta’s business practices marks a continuation of the EU’s broader efforts to crack down on the monopolistic behaviour of tech giants.
Currently, neither Meta nor the EU regulators have commented on the looming decision. However, this case could signal a more stringent approach to maintaining a level playing field in the digital marketplace, where tech companies have long held considerable power. The ruling could have substantial financial and operational consequences for Meta, potentially setting the tone for future regulatory actions in the tech industry.
The Biden administration is proposing new rules that could raise the cost of shipping goods from Chinese e-commerce platforms like Shein and Temu to the US. The aim is to crack down on the ‘de minimis exception,’ which currently allows products under $800 to be shipped duty-free. Biden has pointed out a surge in shipments using this exception, jumping from 140 million annually a decade ago to over 1 billion, mostly from Chinese platforms.
The new rules would block duty-free shipments of tariffed goods and require e-commerce platforms to provide more detailed information, such as the 10-digit tariff code. Both Shein and Temu have defended their practices, emphasising their commitment to affordable products and compliance with import rules. However, US safety regulators are pushing for investigations into product safety on these platforms.
The proposal follows warnings from the US-China Economic and Security Committee, which argues that platforms like Shein are using loopholes to outcompete US companies. Biden has vowed to explore further actions to protect American workers and strengthen enforcement against illegal imports.
Elon Musk’s social media platform, X, is likely to avoid being subjected to the EU’s stringent new tech regulations aimed at curbing the power of Big Tech. The company is expected to fall outside the scope of the Digital Markets Act (DMA), which imposes strict rules on firms that act as key intermediaries between businesses and consumers.
The European Commission investigated X in May, exploring whether the platform met the criteria to be classified as a ‘gatekeeper’ under the DMA. To qualify, a company must have over 45 million active users and a market capitalisation of at least €75 billion. Gatekeepers must open their messaging apps to rival services, allow users more control over pre-installed apps, and avoid giving preferential treatment to their products.
X has argued that it does not serve as a critical gateway between businesses and consumers, distancing itself from the obligations set by the DMA. While the investigation remains ongoing, the Commission has not provided further comment on its findings.
However, X faces more pressing issues under the EU’s newly implemented Digital Services Act (DSA), which requires large platforms to actively combat harmful or illegal content or face significant fines—up to 6% of their global turnover. X is under scrutiny as part of several ongoing investigations related to its compliance with the DSA.
Hawaii’s new cryptocurrency regulations are attracting major Web3 firms, including MetaMask and Transak, which are now establishing operations in the state. As of July 2024, crypto companies in Hawaii will no longer be required to obtain a money transmitter licence to operate, a significant departure from the strict regulations seen in most other US states. That regulatory shift is expected to transform Hawaii into a growing hub for the cryptocurrency industry, making it an appealing destination for businesses looking to expand within the United States.
The change comes after Hawaii’s four-year Digital Currency Innovation Lab initiative, which offered a regulated sandbox for crypto firms. With the end of this programme and the introduction of the new regulations, Hawaii is now poised to take on a larger role in the global crypto ecosystem. Companies like Transak view this as an opportunity to enhance their services without the challenges of third-party involvement, positioning Hawaii as a key player in the Web3 sector.
The relaxed regulatory environment is especially advantageous for smaller crypto businesses, which often face difficulties obtaining a money transmitter licence in the US. With Hawaii’s more flexible approach, the state is likely to attract even more crypto companies, cementing its position as a strategic market for innovation in the industry.
The Central Bank of the United Arab Emirates (CBUAE) has approved a new product offering custodial risk insurance for digital asset platforms, developed by Hong Kong-based OneDegree in partnership with Dubai Insurance. Available under the brand “OneInfinity,” this insurance aims to protect Web3 exchanges, asset managers, and custodians from the risk of losing customer funds, including through hacking, internal fraud, or damage to storage systems.
According to Robin Scott, general manager of OneDegree in the Middle East, the introduction of custodial risk insurance brings a layer of protection similar to deposit protection schemes in traditional banking. It allows crypto platforms to offer peace of mind to clients by ensuring their assets are safeguarded. Many global regulators, including those in the UAE, are making such insurance mandatory to prioritise consumer protection.
The CBUAE’s approval marks the first time UAE-based companies can obtain custodial risk insurance locally, which is expected to draw significant interest as more firms seek licences to operate in the region. OneDegree and Dubai Insurance have already started issuing policies to UAE clients and anticipate high demand for the product.
An Indian antitrust investigation has concluded that Amazon and Walmart’s Flipkart breached competition laws by favouring select sellers on their platforms. The probe, initiated by the Competition Commission of India (CCI), revealed that both companies created an ecosystem that prioritised certain sellers, making it harder for other retailers to compete.
Reports found that these preferred sellers were given an unfair advantage, appearing higher in search results and receiving additional services, leading to deep discounting practices. The findings highlighted that these practices harmed smaller retailers and stifled competition, especially in the mobile phone sector.
Both Amazon and Flipkart are expected to review the reports and submit objections before any fines are imposed. These companies have consistently denied any wrongdoing and argued that their operations comply with Indian regulations.
The investigation stemmed from complaints by traditional retailers and follows growing concerns about the dominance of e-commerce giants in India. Both Amazon and Flipkart remain major players in a market projected to be worth $160 billion by 2028.
Connectly, a startup specialising in conversational commerce through AI-driven personalised messaging has secured $20 million in a Series B funding round. The round was led by Alibaba and included participation from several notable investors, such as Unusual Ventures and Volpe Capital. This new investment boosts Connectly’s total funding to $37.2 million and brings its valuation close to $100 million.
The funds will be used to advance AI research and support Connectly’s expansion into the US and European markets. Additionally, the company plans to strengthen its engineering presence in Greece, aiming to make it a key hub alongside San Francisco. Connectly, a company that uses AI models to help retailers enhance customer engagement and drive sales, has experienced significant growth in the past year.
The successful funding round follows Connectly’s launch of its advanced AI recommendation tool, ‘Sofia AI,’ and its expansion into the US market. The partnership with Alibaba is expected to accelerate Connectly’s global reach further, integrating its AI solutions into Alibaba’s international e-commerce platforms. With plans to grow its workforce to 80 by year-end and a current client base of 300, Connectly is well-positioned to continue its impactful growth in the retail industry.
Adobe has announced the upcoming release of a generative AI-powered video creation tool named Adobe Firefly Video Model. Scheduled for a limited beta release later this year, this tool will extend Adobe’s Firefly suite, which currently includes applications for generating still images and designs. The new model will allow users to create a five-second video clip from a single text or image prompt, with options to specify camera angles, motion, and zoom.
The introduction of this tool marks Adobe’s entry into the competitive AI video generation market, which already features offerings from companies like OpenAI and Stability AI. Adobe aims to differentiate itself by focusing on quality and user-guided prompt understanding, addressing specific needs of videographers.
Adobe assures that the model is trained exclusively on public domain or licensed content from its Adobe Stock database, which includes 400 million curated images and videos, avoiding any intellectual property issues. Additionally, Adobe is launching Generative Extend, a feature for Premiere Pro that extends video clips by generating content to fill gaps.
The US government is reportedly considering allowing Nvidia to export advanced AI chips to Saudi Arabia. These chips would assist the kingdom in developing and operating cutting-edge models. The move could play a crucial role in Saudi Arabia’s AI strategy, which was a key focus at the recent GAIN summit.
Efforts are underway in Saudi Arabia to meet US security requirements, which could expedite the acquisition of Nvidia’s H200 chips. These chips are expected to boost Saudi Arabia’s capabilities, as they are also used in advanced platforms like OpenAI’s GPT-4. Saudi officials have expressed their intention to comply with US regulations.
The Biden administration had imposed restrictions on AI chip exports, particularly targeting China, but also extending to the UAE and other Middle Eastern countries. However, Saudi Arabia has been careful to manage its relationship with both the US and China, ensuring access to key technologies remains open.
Nvidia and the US Department of Commerce declined to comment on the potential chip sales. The Department of Commerce noted that export control decisions involve multiple government departments, including Defense, State, and Energy.
The GSMA and Connect Europe underscore the urgent need for Europe to enhance its digital infrastructure to remain globally competitive. They highlight that current over-regulation and structural issues are stifling investment and innovation within the telecom sector.
Supporting Mario Draghi’s recommendations, they advocate for a revised EU Telecoms Act and a new industrial strategy to create a more conducive environment for growth. Furthermore, they emphasise the importance of scaling the telecom sector to effectively compete with major global players such as the US and China. Reforms to merger regulations are essential to prevent Europe from falling further behind in the global digital economy.
Reducing regulatory burdens is also needed to better align with market dynamics, promote investment, and encourage innovation. This includes implementing fair competition rules for telecom operators and Big Tech companies to ensure equitable commercial outcomes.
The GSMA and Connect Europe also urge the adoption of harmonised spectrum licensing procedures across member states to stimulate growth and encourage cross-border investment. They advocate for longer-duration licenses and fewer restrictions to create a unified market and enhance regulatory alignment. Additionally, they stress the need for immediate legislative action to address these issues, secure Europe’s digital and economic future, and prevent further decline in competitiveness in an increasingly digital and globalised world.
