Economic Archives | Page 632 of 714 | Digital Watch Observatory

US DoJ aims to break Google’s search engine monopoly

The US government is considering drastic measures to break up Google’s dominance in the online search industry, which could lead to the company divesting critical parts of its business, such as its Chrome browser and Android operating system. The potential legal move follows a judge’s August ruling that declared Google had illegally established a monopoly in online search. With the tech giant controlling about 90% of internet searches in the US, the Justice Department is pushing for remedies that could transform how Americans access information and shrink Google’s revenue while creating more opportunities for competitors.

One of the government’s proposals involves halting Google’s massive payments to ensure its search engine remains the default on new devices. In 2021 alone, Google paid $26.3 billion to companies like Apple to keep its search engine pre-installed on smartphones and browsers. The Justice Department argues that ending these agreements is necessary to prevent Google from maintaining its dominant position in search distribution today and in the future, particularly as the market expands into AI.

Prosecutors are also eyeing Google’s role in the growing AI sector. They propose opening up Google’s vast indexes, data, and models to its rivals to prevent the company from monopolising AI-driven search technologies. Additional suggestions include limiting Google’s ability to make deals, restricting competitors’ access to web content and allowing websites to opt out of having their data used for AI training. Google, however, has pushed back, arguing that such interventions could distort the rapidly developing AI industry and stifle innovation at a crucial moment.

The stakes are high for Google, which plans to appeal the proposed remedies, calling them ‘radical’ and far beyond the scope of the legal case. Google maintains that its search engine’s popularity is due to its superior quality and points to competition from companies like Amazon as proof of a competitive market. Meanwhile, the company faces mounting legal battles, including a separate ruling forcing it to open its Play app store to greater competition.

The Justice Department is expected to submit more detailed proposals by 20 November, with Google having until 20 December to respond with its suggestions.

Why does it matter?

The antitrust case is seen as a significant victory for regulators seeking to rein in the power of Big Tech, with similar lawsuits already filed against Meta, Amazon, and Apple. Smaller competitors, like Yelp and DuckDuckGo, have voiced support for breaking up Google’s assets, advocating for changes that could level the playing field in both search and AI.

Elon Musk prepares to launch Tesla’s Cybercab

Tesla is at a pivotal juncture as CEO Elon Musk is set to reveal the long-awaited Cybercab robotaxi at Warner Bros. Hollywood studio on Thursday. While there are rising doubts about electric vehicle growth, the announcement has reignited interest in Tesla’s stock. The Cybercab will function autonomously on Tesla’s ride-hailing platform, enabling vehicle owners to generate income by utilising their cars as self-driving cabs—an idea Musk describes as a combination of Airbnb and Uber.

Tesla intends to leverage its current camera-based technology and AI for the Cybercab, steering clear of the costly radar and lidar systems used by competitors. Musk is confident that improvements in this technology will allow Tesla to penetrate a tough market where others have faced substantial losses. Investors are keen to view a prototype and learn about the timeline for mass production and profitability. They also seek clarity on the regulatory hurdles and safety issues surrounding the existing partial automation system, known as Full Self-Driving (FSD).

While expectations for the event are high, analysts caution that the announcement may lack immediate deliverables or financial impact. Many observers do not anticipate a fully functional product at this stage, noting Tesla’s history of optimism regarding its FSD technology. The company may also provide updates on more affordable vehicle options and its humanoid robot, Optimus, during the event.

Since Musk announced the shift to robotaxis in April, Tesla shares have surged nearly 50%. However, concerns linger about competition from electric vehicle rivals and the stock’s inherent volatility. The journey to market for self-driving vehicles has proven complicated and expensive for other companies, with Waymo being the only US firm currently operating uncrewed robotaxis. Analysts highlight that reaching high levels of automation without driver supervision will encounter considerable technological, safety, and regulatory challenges, raising doubts about the timeline for achieving Musk’s ambitious goals.

Indian crypto exchange faces investigation after $235 million crypto hack

India’s Financial Intelligence Unit is investigating the Indian cryptocurrency exchange WazirX following a significant cyberattack that resulted in the theft of $235 million. The exchange is cooperating with government agencies and has provided authorities with extensive server logs and transaction data related to the incident, which occurred in July. Although no physical assets have been seized, WazirX is actively engaging with regulatory bodies to understand the broader implications of the hack on the unregulated crypto sector.

In a bid to enhance transparency, WazirX plans to publicly disclose wallet addresses through court affidavits and has committed to addressing user concerns. The exchange aims to establish a 10-member committee of creditors by 9 October to assist in its restructuring efforts, to return 52-55% of the remaining crypto assets to affected clients within six months.

Additionally, WazirX’s parent company, Zettai, is in discussions with 11 potential partners to explore capital injections and profit-sharing strategies that could aid in user recoveries. Following the hack, WazirX has sought a Scheme of Arrangement in Singapore under local insolvency laws. An independent audit revealed no evidence of wrongdoing by its custodian partner, Liminal Custody.

UK pushes for tech growth with regulatory innovation office

The UK is setting up a Regulatory Innovation Office (RIO) to fast-track the approval of new technologies, including artificial intelligence, drones, and healthcare advancements. This initiative is a key part of the Labour government’s efforts to boost economic growth by reducing bureaucratic barriers and supporting innovation in critical sectors. By easing regulatory hurdles, the RIO aims to encourage businesses to bring cutting-edge technologies to market more quickly, stimulating growth and job creation.

The launch of the RIO comes ahead of a major investment summit on 14 October 2024, where Prime Minister Keir Starmer and Finance Minister Rachel Reeves will meet with global investors. The government hopes to demonstrate that the UK is open for business and committed to fostering a thriving tech and innovation sector. The summit will target infrastructure and clean energy investment as part of the country’s transition to a net-zero economy.

Science and Technology Minister Peter Kyle emphasised that the RIO will help industries such as bioengineering and healthcare, enabling earlier diagnosis of diseases, the development of cleaner fuels, and more sustainable agricultural practices. The new office will collaborate with existing regulators to reduce red tape and unlock economic potential, creating more jobs and strengthening the UK economy.

Worldcoin shifts focus to Asia for biometric tech

Worldcoin is redirecting its attention from Europe to Asia, aiming to engage markets that are more receptive to its biometric technology. The company, co-founded by Sam Altman, seeks regions where local businesses and governments embrace innovative solutions. Fabian Bodensteiner, managing director of Worldcoin’s European operations, highlighted the need to prioritise markets that present the most significant business opportunities, as the company continues to navigate its limited workforce.

The shift comes amid regulatory scrutiny in Europe, with Bavaria’s data protection authority set to make a decision that could affect Worldcoin’s operations in the region. In May, Hong Kong’s privacy regulator found that Worldcoin had violated local privacy laws by excessively handling biometric data. However, a spokesperson for the Worldcoin Foundation asserted the company’s commitment to operating within legal frameworks concerning data collection and usage.

Despite stepping back from Europe as a primary focus, Worldcoin has expanded into Poland and Austria this year and maintains its presence in Germany. Bodensteiner affirmed the company’s intention to remain engaged in the European market, stating, “We want to stay in the conversation and we want to stay committed to the market.” As of now, Worldcoin is trading at $1.92, reflecting a 4.44% increase.

Hong Kong set to grant more crypto exchange licences by year-end

Hong Kong’s financial regulator, the Securities Futures Commission (SFC), has announced plans to grant more licences to crypto exchanges and digital asset firms by the end of the year.

SFC CEO Julia Leung stated that progress would be made in issuing licences to 11 currently operating Virtual Asset Trading Platforms (VATPs) from the regulator’s list of potential licensees, according to an 6 October report from local media outlet HK01. She added that the licences would be granted in batches, aiming to ensure better compliance across exchanges.

Currently, 16 companies await decisions on their VATP applications. Eleven of these firms are already operating under a “deemed to be licensed” status, though the SFC has advised traders against doing business with them until full approval is granted.

The SFC recently revealed its 2024-2026 roadmap, focusing on further regulation of crypto platforms, promoting Real World Asset (RWA) tokenisation, and exploring blockchain technologies. This comes after Hong Kong prioritised the licensing of crypto firms in the wake of a $165 million scandal involving the Dubai-based exchange JPEX.

Telegram unveils new features amid Toncoin market struggles

Telegram recently introduced several new features, including the ability to send gifts, improved moderation tools, and enhanced video chats for iOS and Android users. However, Toncoin (TON) has failed to capitalise on these developments, with the coin’s price continuing to drop despite favourable market conditions. TON has fallen 2.7% in the past 24 hours and over 10% during the last week.

Telegram’s CEO, Pavel Durov, revealed that users could convert some of these limited-edition gifts into TON-based NFTs, adding an extra layer of functionality to the platform. Yet, despite these innovations, TON’s price has struggled to recover from its mid-2024 downturn, following Durov’s arrest.

Though TON traded above $8 earlier this year, it now sits at $5.22. Despite the slow recovery, the community remains hopeful that future developments might turn the tide for the coin.

Bitcoin faces slight drop but whales hold steady

Bitcoin briefly surpassed the $62,000 mark earlier in October before seeing a slight correction, with the price settling around $61,950. Despite the dip, data shows that large holders, known as whales, didn’t participate in the recent sell-off. Whale transaction volumes also dropped by nearly half, suggesting the possibility of price consolidation and reduced volatility.

Over the past week, Bitcoin has seen a net outflow from centralised exchanges, with around $153 million withdrawn. This could indicate growing accumulation as investors maintain bullish expectations for the cryptocurrency this October.

However, the broader crypto market remains susceptible to external influences, with geopolitical tensions and macroeconomic events likely to affect price movements in the near term.

New AI model by Meta elevates video editing

Meta has launched Movie Gen, a powerful AI model designed to produce 1080p videos with synchronised audio. The system can edit videos based on instructions, allowing for personalised content creation using user-supplied images.

With a transformer model containing 30 billion parameters, Movie Gen can generate 16-second videos at 16 frames per second. The model’s advanced techniques improve video motion realism, trained on over 100 million video-text pairs and 1 billion image-text pairs.

Movie Gen outperforms previous models, including Runway Gen3 and OpenAI Sora, particularly in video editing and text-to-video tasks. Benchmarks show its superiority in maintaining video structure and fine details, especially in the TGVE+ test.

Future developments for Movie Gen include improving scene understanding, safeguarding against misuse, and making the system more accessible. Meta envisions applications in social media, film production, and marketing campaigns.

Samsung rejects foundry spin-off rumours, strengthens integrated semiconductor strategy

Samsung Electronics, the world’s largest memory chipmaker, has dismissed speculation that it will spin off its foundry business, which produces semiconductors for other companies. Chairperson Jay Y. Lee emphasised the company’s commitment to growing the foundry business within Samsung’s broader semiconductor operations, citing the advantages of leveraging synergies between its memory and logic chip divisions.

The pressure to keep pace with industry leader TSMC has fueled talk of a possible spin-off, as analysts suggest it could allow Samsung to operate more independently and attract additional clients. However, Samsung believes keeping the foundry business aligned with its overall operations is strategically beneficial, enabling it to streamline processes and stay competitive in a technology-driven industry.

The company is focused on expanding production, particularly in advanced technologies like 3-nanometer chips, and aims to overtake TSMC as the largest contract chipmaker by 2030. Despite these ambitions, Samsung faces challenges, including delays in its new Texas chip factory due to shifting US policies and financial losses in its foundry unit.

Nonetheless, the company remains committed to its current structure, viewing it as key to pushing the boundaries of semiconductor innovation and maintaining its market position amid fierce competition.