Jurisdiction

EU to fine Meta over anti-competitive practices

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.

Telegram’s Pavel Durov faces criminal probe in France under LOPMI law

France has taken a bold legal step with its new law, targeting tech executives whose platforms enable illegal activities. The pioneering legislation, enacted in January 2023, puts France at the forefront of efforts to curb cybercrime. The law allows for criminal charges against tech leaders, like Telegram CEO Pavel Durov, for complicity in crimes committed through their platforms. Durov is under formal investigation in France, facing potential charges that could carry a 10-year prison sentence and a €500,000 fine. He denies Telegram’s role in facilitating illegal transactions, stating the platform complies with the EU regulations.

The so-called LOPMI (Loi d’Orientation et de Programmation du Ministère de l’Intérieur) 2023-22 law, unique in its scope, is yet to be tested in court, making France the first country to target tech executives in this way directly. Legal experts point out that no similar laws exist in the US or elsewhere in the Western world.

What is LOPMI?

The LOPMI law for the Ministry of the Interior outlines a €15 billion plan over five years to address future security challenges by enhancing human, legal, and budgetary resources. It aims to modernise operations through digital transformation, with nearly half the budget dedicated to digitising services, modernising investigative tools, and improving cybercrime response. The law plans to create 8,500 new jobs, improve recruitment diversity, and double police and gendarme presence by 2030. It emphasises crisis management, especially for civil security and climate events, and strengthens public order for major international events like the 2024 Olympics. Additionally, it aims to improve border security through advanced technology and cooperation.

While the US has prosecuted individuals like Ross Ulbricht, founder of the Silk Road marketplace, those cases required proof of active involvement in criminal activity. However, French law seeks to hold platform operators accountable for illegal actions facilitated through their sites, even if they were not directly involved.

Prosecutors in Paris, led by Laure Beccuau, have praised the law as a powerful tool in their fight against organised cybercrime, including child exploitation, credit card trafficking, and denial-of-service attacks. The recent high-profile arrest of Durov and the shutdown of other criminal platforms like Coco highlight France’s aggressive stance in combating online crime. The J3 cybercrime unit overseeing Durov’s case has been involved in other relevant investigations, including the notorious case of Dominique Pelicot, who used the anonymous chat forum Coco to orchestrate heinous crimes.

While the law gives French authorities unprecedented power, legal and academic experts caution that its untested nature could lead to challenges in court. Nonetheless, France’s new cybercrime law seriously escalates the global battle against online criminal activity.

23andMe to pay $30 million in data breach settlement

American personal genomics and biotechnology company 23andMe has agreed to a $30 million settlement after a data breach exposed the personal information of 6.9 million users. The breach, which occurred last year, compromised sensitive data, including DNA Relatives profiles and Family Tree information. Affected users will receive financial compensation and three years of security monitoring under the Privacy & Medical Shield + Genetic Monitoring program.

The lawsuit also accused 23andMe of failing to inform customers of Chinese and Ashkenazi Jewish descent that they were specifically targeted in the breach. The stolen information was later found for sale on the dark web. A federal judge must now approve the proposed settlement, which the company considers fair and beneficial for its users.

Despite its financial challenges, the company expects to cover $25 million of the settlement with cyber insurance. The breach, which began in April 2023 and lasted five months, affected nearly half of the company’s 14.1 million customers at the time. 23andMe disclosed the incident in an October 2023 blog post.

The company, led by co-founder Anne Wojcicki, is also facing financial difficulties. It posted a significant quarterly loss and has been attempting to go private. Shares of 23andMe have been trading below $1 since December 2023, a sharp drop from its original public offering price.

Facebook and Instagram data to power Meta’s AI models

Meta Platforms will soon start using public posts on Facebook and Instagram to train its AI models in the UK. The company had paused its plans after regulatory concerns from the Irish privacy regulator and Britain’s Information Commissioner’s Office (ICO). The AI training will involve content such as photos, captions, and comments but will exclude private messages and data from users under 18.

Meta faced privacy-related backlash earlier in the year, leading to its decision to halt the AI model launch in Europe. The company has since engaged with UK regulators, resulting in a clearer framework that allows the AI training plans to proceed. The new strategy simplifies the way users can object to their data being processed.

From next week, Facebook and Instagram users in the UK will receive in-app notifications explaining how their public posts may be used for AI training. Users will also be informed on how to object to the use of their data. Meta has extended the window in which objections can be filed, aiming to address transparency concerns raised by both the ICO and advocacy groups.

Earlier in June, Meta’s AI plans faced opposition from privacy advocacy groups like NOYB, which urged regulators to intervene. These groups argued that Meta’s notifications did not fully meet the EU’s privacy and transparency standards. Meta’s latest updates are seen as an effort to align with these regulatory demands.

Elon Musk’s X may sidestep EU’s big tech regulations

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.

Antitrust investigation finds Amazon and Flipkart prioritised sellers

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.

Illegal gun parts from China seized by US authorities

US authorities have taken down over 350 websites selling gun silencers and parts from China used to convert semiautomatic pistols into fully automatic machine guns. The move follows an investigation that started in August 2023, targeting illegal sales of these dangerous devices.

Undercover operations revealed shipments from China, falsely labelled as items such as ‘necklaces’ or ‘toys’. Instead, these packages contained machine gun conversion devices, known as ‘switches’, and ‘silencers’, both banned under the National Firearms Act. Some websites even sold counterfeit goods, misusing the trademark of gun manufacturer Glock Inc.

Acting US Attorney Joshua Levy emphasised the importance of seizing these websites to halt the influx of illegal and dangerous contraband. Law enforcement has so far seized over 700 machine gun conversion devices, 87 illegal suppressors, 59 handguns, and 46 long guns.

Officials highlighted the growing problem of such devices being easily accessible, posing a serious threat to public safety. The seizures are part of a broader effort to tackle the illegal gun parts trade and protect communities.

Former Google exec reveals giant’s strategy to crush ad rivals

In 2009, Google’s goal was to ‘crush’ rival ad networks, as revealed by a former executive in a point highlighted in the ongoing US Department of Justice antitrust trial against the tech giant. The remarks, made by David Rosenblatt, Google’s former president of display advertising, surfaced as part of the prosecution’s argument that Google has been trying to monopolise the online adtech market, dominating both publisher ad servers and advertiser ad networks.

The trial is gaining momentum and has introduced evidence of Google’s internal strategies since it acquired DoubleClick in 2008. Rosenblatt’s comments, referenced in court notes, underscored Google’s aim to control the digital advertising ecosystem. He compared the company’s adtech ambitions to those of major financial institutions, stating that Google wanted to achieve in display ads what it had already done with search ads.

Google has denied the allegations, asserting it faces strong competition from other major players like Microsoft, Amazon, and Meta. The company argues that its advertising tools are common in the industry. However, the prosecution contends that Google’s integrated ad services give it an unfair advantage, particularly by making it difficult for publishers to switch platforms, a challenge Rosenblatt described as a ‘nightmare.’

Should the court rule against Google, prosecutors have called for the company to sell off its Google Ad Manager, including its publisher ad server and ad exchange, to restore competition in the digital advertising market.

Major data centre investment by Amazon in the UK

Amazon has announced plans to invest £8 billion in the UK to expand its data centre operations. The investment will be made by Amazon Web Services (AWS) over the next five years, aiming to meet growing demand for cloud computing, largely driven by AI advancements.

This new investment will add to AWS’s previous contributions of £3 billion since 2022, with facilities already in London and Manchester. The company expects the project to contribute £14 billion to the UK economy and support more than 14,000 jobs by the end of 2028.

AWS’s investment follows significant European cloud computing expansions, including substantial projects in Spain and Germany. After a pause last year, many corporate clients have resumed cloud spending, driven by a renewed interest in AI.

The announcement has been welcomed by the UK government, with Finance Minister Rachel Reeves highlighting its importance ahead of an upcoming investment summit. The exact locations of the new data centres will not be disclosed due to security reasons, but they will meet growing demand around London.

Russia to invest $660 million in modernising internet censorship

Russia is ramping up its efforts to control the internet by allocating nearly 60 billion roubles ($660 million) over the next five years to upgrade its web censorship system, known as TSPU. The system, developed by state regulator Roskomnadzor, is designed to filter and block content deemed harmful or illegal by the government. The funding, part of a broader ‘Cybersecurity Infrastructure’ project, will acquire new software and hardware and expand the system’s capabilities.

The initiative is seen as part of Moscow’s broader crackdown on online freedoms, which has intensified since Russia‘s invasion of Ukraine in 2022. The government has been targeting independent media and social media platforms, blocking websites, and cracking down on using Virtual Private Networks (VPNs), which many Russians use to bypass government restrictions. Roskomnadzor has been increasingly influential in blocking access to these tools, with officials planning to enhance the system’s efficiency further.

The TSPU system was introduced under a 2019 law that requires internet service providers to install government-controlled equipment to monitor and manage web traffic. As of late 2022, over 6,000 TSPU devices had been deployed across Russian networks. The new funding will modernise this infrastructure and improve the system’s ability to detect and block VPN services, making it harder for Russians to access uncensored content.

Why does this matter?

While the Kremlin continues to position these measures as necessary for national security, critics see them as a blatant attack on free speech. Digital rights activists, including those from Roskomsvoboda, warn that while new investments in censorship technology will tighten government control, it is unlikely to eliminate access to independent information. Developers of VPNs and other circumvention tools remain determined, stating that innovation and motivation are essential in the ongoing struggle between censorship and free access.

Russia’s battle with VPNs and independent media is part of a broader campaign against what it calls Western information warfare. Despite the government’s efforts to clamp down, demand for alternative ways to access the internet remains high. Developers are working on more resilient tools, even as the state pours resources into strengthening its censorship apparatus. This tug-of-war between government control and free access to information seems set to continue, with both sides ramping up their efforts.