US

Oracle warns of significant financial impact from potential US TikTok ban

Oracle has cautioned investors that a potential US ban on TikTok could negatively impact its financial results. A new law signed by President Biden in April could make it illegal for Oracle to provide internet hosting services to TikTok unless its China-based owners meet certain conditions. Oracle warned that losing TikTok as a client could harm its revenue and profits, as TikTok relies on Oracle’s cloud infrastructure for storing and processing US user data.

Analysts consider TikTok one of Oracle’s major clients, contributing significantly to its cloud business revenue. Estimates suggest Oracle earns between $480 million to $800 million annually from TikTok, while its cloud unit generated $6.9 billion in sales last year. The cloud business’s growth, driven by demand for AI work, has boosted Oracle’s shares by 34% this year.

Why does it matter?

The new law requires TikTok to find a US buyer within 270 days or face a ban, with a possibility of extension. TikTok, which disputes the security concerns, has sued to overturn the law. It highlights its collaboration with Oracle, termed ‘Project Texas,’ aimed at safeguarding US data from its Chinese parent company, ByteDance. Despite this, Oracle has remained discreet about its relationship with TikTok, not listing it among its key cloud customers and avoiding public discussion.

US record labels sue Suno and Uncharted Labs for copyright infringement

Major US record labels are suing AI music startups Suno and Uncharted Labs, accusing them of mass copyright infringement. The lawsuits, filed in federal courts in Massachusetts and New York, represent content creators’ efforts to challenge the use of copyrighted works in the training and operation of generative AI systems, arguing that it does not constitute ‘fair use.’

The plaintiffs, including Sony Music Entertainment, UMG, and Warner Records, seek a declaration of copyright infringement, an injunction to prevent further violations and monetary damages. Mitch Glazier, CEO of the Recording Industry Association of America, emphasised the industry’s willingness to collaborate with responsible AI developers but stressed the need for cooperation to succeed.

Suno’s CEO, Mikey Shulman, defended the technology, claiming it generates new outputs without memorising or replicating existing content and stating that prompts referencing specific artists are not allowed.

The lawsuit adds to the growing number of legal challenges from various content creators against generative AI systems, which argue that both the training and output of these systems violate copyright laws. The outcome of these cases could set significant legal precedents for AI and copyright.

US DoJ to file lawsuit against TikTok for alleged children’s privacy violations

TikTok will be sued again by the US Department of Justice (DoJ) in a consumer protection lawsuit against ByteDance’s TikTok later this year, focusing on alleged children’s privacy violations. The incentive for the legal move comes on behalf of the Federal Trade Commission (FTC), but the DoJ will not pursue allegations that TikTok misled US consumers about data security, specifically dropping claims that the company failed to inform users that China-based employees could access their personal and financial information.

The decision suggests that the primary focus will now be on how TikTok handles children’s privacy. The FTC had referred to the DoJ a complaint against TikTok and its parent, ByteDance, concerning potential violations of children’s privacy, stating that it investigated TikTok and found evidence suggesting they may be breaking the Children’s Online Privacy Protection Act. The federal act requires apps and websites aimed at kids to get parental consent before collecting personal information from children under 13.

Simultaneously, TikTok and ByteDance are challenging a US law that aims to ban the popular short video app in the United States starting from 19 January next year.

ByteDance challenges US TikTok ban in court

ByteDance and its subsidiary company TikTok are urging a US court to overturn a law that would ban the popular app in the USA by 19 January. The new legal act, signed by President Biden in April, demands ByteDance divest TikTok’s US assets or face a ban, which the company argues is impractical on technological, commercial, and legal grounds.

ByteDance contends that the law, driven by concerns over potential Chinese access to American data, violates free speech rights and unfairly targets TikTok while ‘ignores many applications with substantial operations in China that collect large amounts of US user data, as well as the many US companies that develop software and employ engineers in China.’ They argue that the legislation represents a substantial departure from the US tradition of supporting an open internet and sets a dangerous precedent.

The US Court of Appeals for the District of Columbia will hear oral arguments on this case on 16 September, a decision that could shape the future of TikTok in the US. ByteDance claims lengthy negotiations with the US government, which ended abruptly in August 2022, proposed various measures to protect US user data, including a ‘kill switch’ for the government to suspend TikTok if necessary. Additionally, the company made public a 100-plus page draft national security agreement to protect US TikTok user data and claims it has spent more than $2 billion on the effort. However, they believe the administration prefers to shut down the app rather than finalise a feasible agreement.

The Justice Department, defending the law, asserted that it addresses national security concerns appropriately. Moreover, the case follows a similar attempt by former President Trump to ban TikTok, which was blocked by the courts in 2020. This time, the new law would prohibit app stores and internet hosting services from supporting TikTok unless ByteDance divests it.

SoftBank to expand US power generation for AI

Founder Masayoshi Son announced that Japan’s SoftBank Group plans to expand its power generation business in the US to support global generative AI projects. SB Energy, backed by SoftBank, focuses on developing and operating renewable energy projects across the US. The initiative aligns with SoftBank’s strategy to explore new investment opportunities outside Japan.

Why does it matter?

At the annual shareholder meeting of SoftBank Corp, the group’s telecom arm, Son highlighted the importance of seeking innovative investments. He emphasised that SoftBank’s future growth would rely on identifying and nurturing emerging technologies and markets beyond Japan.

The current strategy reflects SoftBank’s commitment to advancing its global presence and influence in the tech and renewable energy sectors.

TikTok’s fate in US to be decided before election

A US appeals court has scheduled oral arguments for 16 September to address legal challenges against a new law requiring ByteDance, the China-based parent company of TikTok, to divest its US assets by 19 January or face a ban. The law, signed by President Joe Biden on 24 April, aims to eliminate Chinese ownership of TikTok due to national security concerns. TikTok, ByteDance, and a group of TikTok creators have filed lawsuits to block the law, arguing that it significantly impacts American life, with 170 million Americans using the app.

The hearing will coincide with the final weeks of the 2024 presidential election, and both parties are seeking a ruling by 6 December to allow for a potential Supreme Court review. The law also prohibits app stores like Apple and Google from offering TikTok and bars internet hosting services from supporting it unless ByteDance divests. Such a measure reflects US lawmakers’ fears that China could use TikTok to access American data or conduct espionage.

Google’s bid to end US antitrust case over digital advertising rejected

Google has lost its bid to dismiss a US government lawsuit accusing it of monopolistic practices in the digital advertising market in an ongoing antitrust scrutiny of major tech companies. The ruling marks a critical juncture in the broader effort to regulate and curtail the market power of tech giants. US District Judge Leonie Brinkema in Alexandria, Virginia, denied Google’s motion to dismiss the case during a recent hearing, as documented in court records.

The decision allows the lawsuit, originally filed by the Department of Justice (DOJ) in January 2023, to proceed. The DOJ alleges that Google has engaged in anti-competitive behavior to maintain its dominance in the digital advertising market, using its position to unfairly disadvantage competitors, violating Section 2 of the Sherman Antitrust Act. The lawsuit is part of a broader wave of antitrust actions targeting Big Tech, as regulators aim to address concerns over market monopolization and its effects on competition, consumers, and innovation. According to the DOJ, Google has employed various strategies to stifle competition, including acquiring competitors, favoring its own services, and implementing restrictive policies that disadvantage rival ad tech firms.

Last week, Google achieved a notable victory when Judge Brinkema allowed the trial to proceed without a jury, following a settlement of claims that its conduct harmed the US government. Judge Brinkema is scheduled to preside over the trial on September 9. In response to the ruling, a Google spokesperson expressed disappointment, stating that the company strongly disagrees with the DOJ’s claims and plans to vigorously defend itself in court. Google maintains that its digital advertising products benefit publishers and advertisers by providing efficient, effective tools that foster competition.

Why does it matter?

The outcome of this case could have implications for the tech industry, particularly for digital advertising. If the court ultimately rules against Google, it could lead to significant changes in how digital advertising markets operate, potentially requiring Google to divest parts of its advertising business or change its business practices. The case against Google is pivotal to the ongoing debate over the power and influence of tech giants. It reflects increasing regulatory scrutiny and a shift towards more aggressive antitrust enforcement.

The ruling not only impacts Google but also sets a precedent for future actions against other major players in the tech industry. As the case moves forward, it will be closely watched by industry stakeholders, policymakers, and consumers alike, as it holds the potential to reshape the digital advertising ecosystem and redefine the boundaries of acceptable business practices for tech companies.

US lawmakers question NewsBreak over Chinese origins and AI-generated stories

Three US lawmakers have raised concerns about NewsBreak, a popular news aggregation app, due to its Chinese origins and use of AI tools that have produced erroneous stories. Senator Mark Warner, chair of the Intelligence Committee, emphasised the threat posed by technologies from adversarial countries. At the same time, Representative Raja Krishnamoorthi highlighted the need for transparency regarding any ties to the Chinese Communist Party (CCP). Representative Elise Stefanik pointed to the backing by IDG Capital, a Beijing-based private equity firm, as a reason for increased scrutiny.

NewsBreak, launched in the US in 2015, was originally a subsidiary of the Chinese news app Yidian, founded by Jeff Zheng. Despite being labelled an American company by its spokesperson, court documents and other evidence reveal historical links to Chinese investors and engineers based in China. Notably, Yidian has received praise from Chinese Communist Party officials for disseminating government propaganda, although there is no evidence that NewsBreak has censored or produced pro-China news.

The primary investors in NewsBreak include San Francisco-based Francisco Partners and Beijing-based IDG Capital. IDG Capital, which the Pentagon has listed as allegedly working with Beijing’s military, denies any such association. Francisco Partners has described the scrutiny as ‘false and misleading,’ but the lawmakers maintain their stance on carefully examining the app’s potential risks to US interests.

US tech giants urge Indian government to reconsider proposed competition law

A US lobby group representing tech giants Google, Amazon, and Apple has urged India to reconsider its proposed competition law, similar to the EU’s Digital Markets Act (DMA). The group argues that the new regulations, which aim to prevent the misuse of non-public data and preferential treatment of partners, could increase user costs and discourage investment in the country. The draft ‘Digital Competition Bill’ targets large firms with significant global turnover and local user bases, aiming to curb monopolistic practices and promote fair competition.

India’s Corporate Affairs Ministry is working on the bill, which proposes strict penalties for violations, including fines of up to 10% of a company’s annual global turnover. The proposed law addresses concerns about the growing market power of a few dominant digital companies in India. However, the US-India Business Council (USIBC) warns that the legislation’s broad scope could lead to reduced investments, higher digital service prices, and a narrower range of consumer offerings.

Why does it matter?

Despite opposition from major US tech firms, a coalition of 40 Indian startups supports the new law, arguing it will help level the playing field and combat monopolistic practices. The Indian government is reviewing the proposal’s feedback and will seek parliamentary approval in the coming months, with or without modifications.

Report reveals surge in fake accounts on X targeting US presidential election

Fake accounts discussing the US presidential election are increasing on the social media platform X, according to a report by Cyabra, an Israeli tech company specialising in AI-driven analysis. The report found that 15% of accounts praising former President Donald Trump and criticising President Joe Biden are fake, while 7% of accounts praising Biden and criticising Trump are fake.

Cyabra’s study analysed posts on X over two months, starting 1 March, focusing on popular hashtags and sentiment. The analysis showed a tenfold increase in fake accounts during March and April. Specifically, 12,391 out of 94,363 pro-Trump accounts and 803 out of 10,065 pro-Biden accounts were found to be bogus.

The report also noted that fake pro-Trump accounts appear to be part of a coordinated campaign pushing messages like ‘Vote for Trump’ and ‘Biden is the worst president the US has ever had,’ while fake pro-Biden accounts did not show coordinated activity.

Although X did not respond to requests for comments, Elon Musk recently announced efforts to purge bots and trolls from the platform, including testing a ‘Not a Bot’ program in New Zealand and the Philippines.

Why does it matter?

Since Russia’s interference in the 2016 election, social media platforms have faced increased scrutiny. With the upcoming election on 5 November, Cyabra’s findings on fake accounts are a cause of alarm for election officials and misinformation experts. The situation is even more concerning, given X’s history of downplaying the presence of fake accounts on its platform. According to Reuters, in May 2022, Twitter claimed that fewer than 5% of its daily active users were ‘false or spam’ based on an internal review. However, Cyabra estimated that 13.7% of Twitter profiles were inauthentic.