Big tech companies to face UK probes over cloud service, messenger and smart speaker dominance

Ofcom, the broadcasting and telecoms regulator in the UK, is launching a probe to look into the cloud services tech giants offer in the coming weeks to ensure that there’s healthy competition in the space. Further, the regulator has revealed that it will examine messaging and video calling services, as well as smart and connected devices in the near future. For its cloud investigation, Ofcom’s market study will focus on the biggest cloud providers in the region, namely Amazon Web Services (AWS), Microsoft and Google. 

The three providers generate 81 percent of the revenue in the UK’s £15 billion (US$16.95) cloud infrastructure services market. Ofcom’s study will assess how well the market is working with these tech giants dominating the space. It will also examine the strength of the competition and whether the market, in its current state, makes it difficult for other players to enter and expand their share. 

Ofcom explains that it’s looking to nip any potential competition concerns in the bud to prevent them from becoming a huge issue as the cloud services market matures. The lack of healthy competition, after all, could stifle growth and innovation and could lead to low quality of service. If the regulator determines that the market isn’t working well, it can recommend regulatory changes to the government, take enforcement action itself or refer the situation to the Competition and Markets Authority (CMA). To note, the CMA has a separate and ongoing investigation into Google’s ad tech practices.

The regulator will also launch probes to look into other digital markets over the next year. It will assess the impact of messaging and video calling services, such as WhatsApp, FaceTime and Zoom, on traditional methods of calling and messaging. Ofcom aims to determine how competition in this area could evolve in the coming years and whether the lack of cross-messaging and cross-calling capabilities between the services is a cause of concern. 

The agency also intends to investigate the competition in the smart speaker and TV space. It plans to analyze consumer behavior, as well as the bargaining power of major players with companies that provide content for the devices.

Selina Chadha, Ofcom’s Director of Connectivity, said:

“The way we live, work, play and do business has been transformed by digital services. But as the number of platforms, devices and networks that serve up content continues to grow, so do the technological and economic issues confronting regulators.

That’s why we’re kick-starting a programme of work to scrutinise these digital markets, identify any competition concerns and make sure they’re working well for people and businesses who rely on them.”

American Airlines says hackers obtained some customer and employee data

American Airlines says that hackers may have obtained personal information for a “very small number” of customers and employees. The company did not say exactly how many people were impacted, though it noted there’s no evidence that the attackers have misused the information. It told affected customers that names, driver’s license and passport numbers, addresses, email addresses, phone numbers, dates of birth and medical information may have been compromised.

The hackers gained access to American’s email system through a phishing campaign, as the Associated Press reported. The company told regulators in Montana that it discovered the intrusion in July. It started informing affected customers last week. American says it has secured the breached email accounts and brought in a third-party cybersecurity firm to investigate.

American said it’s putting more technical measures in place to prevent similar breaches from occurring. The company has also offered customers affected by the breach two years of identity theft-protection coverage.

An American Airlines spokesperson provided the following statement to Engadget:

“American Airlines is aware of a phishing campaign that led to the unauthorized access to a limited number of team member mailboxes. A very small number of customers and employees’ personal information was contained in those email accounts. While we have no evidence that any personal information has been misused, data security is of the utmost importance and we offered customers and team members precautionary support. We are also currently implementing additional technical safeguards to prevent a similar incident from occurring in the future.”

Justice Department officials want to take part in Epic v. Apple appeal

The Department of Justice has asked a US federal judge to participate in the upcoming appeals case between Epic and Apple, according to court documents seen by Reuters. The companies will return to court next month to argue over the outcome of their 2020 antitrust case.

The Justice Department filed a brief to enter the case at the start of the year. The agency said it was concerned that Judge Yvonne Gonzalez Rogers had improperly interpreted US antitrust law. In 2019, reports surfaced that the DOJ was preparing to launch a probe of Apple’s business practices. A decision to uphold the company’s win over Epic could limit the DOJ’s ability to sue it for antitrust violations.

“The United States believes that its participation at oral argument would be helpful to the court, especially in explaining how the errors (in antitrust law interpretation) could significantly harm antitrust enforcement beyond the specific context of this case,” the Justice Department wrote on Friday.

The agency has asked for 10 minutes of the court’s time. Neither side is against the Justice Department’s involvement, though Apple has requested that the DOJ’s argument time count against Epic’s total time allotment or that the court extends the proceedings.

California sues Amazon for preventing third-party sellers offering cheaper prices elsewhere

Amazon still can’t avoid lawsuits over third-party prices. The New York Timesreports California has filed an antitrust lawsuit accusing Amazon of violating both the Cartwright Act and state competition law through its pricing rules. The internet giant is stifling competition by preventing sellers from offering lower prices on other sites, according to Attorney General Rob Bonta. If they defy Amazon, they risk losing buy buttons, prominent listings or even basic access to Amazon’s marketplace.

If successful, the lawsuit would bar any contracts deemed anti-competitive and notify sellers that they’re free to reduce prices elsewhere. Amazon would also have to pay damages, return “ill-gotten gains” and appoint a court-approved overseer.

In a statement, an Amazon spokesperson said California had the situation “exactly backwards.” Third-parties still have control over prices, Amazon claimed, and inclusion in the “Buy Box” space supposedly shows that a deal is truly competitive. It further contended that the suit would raise prices. You can read the full statement below.

The case is similar to a District of Columbia lawsuit. The region’s Superior Court dismissed that case in March citing a lack of evidence, but Attorney General Karl Racine is appealing the decision.

Amazon is facing increasing government scrutiny of its practices. The Federal Trade Commission has been investigating issues ranging from major acquisitions through to withheld driver tips, while EU pressure prompted Amazon to revise its seller program and improve third parties’ chances of competing with direct sales. The tech firm has balked at these moves, and went so far as to both demand the FTC chair’s recusal as well as fight agency requests to interview executives. Don’t expect either side to back down any time soon, in other words.

“Similar to the D.C. Attorney General—whose complaint was dismissed by the courts—the California Attorney General has it exactly backwards. Sellers set their own prices for the products they offer in our store. Amazon takes pride in the fact that we offer low prices across the broadest selection, and like any store we reserve the right not to highlight offers to customers that are not priced competitively. The relief the AG seeks would force Amazon to feature higher prices to customers, oddly going against core objectives of antitrust law. We hope that the California court will reach the same conclusion as the D.C. court and dismiss this lawsuit promptly.”

HP’s construction robot puts blueprints on site floors

Construction workers might soon spend more time building and less time preparing. HP has unveiled a SitePrint robot that autonomously prints layouts on construction site floors. With the help of a remote control tablet and cloud tools, the machine can outline walls, doors and other elements with little intervention — it can avoid unexpected obstacles, including steep drops. The company claims the bot can finish a layout in a “fraction” of the time humans require, although this will vary by the complexity of the project.

The robot includes two batteries that can each handle up to four hours of printing. It can print on surfaces like concrete, plywood and terrazzo, even if they’re rough. You can also choose inks that last days or months to suit the timeline for a given job.

HP is making the SitePrint robot available to North American companies this month as part of an early access program. The finished automaton and a full-scale launch are due sometime in 2023. The hardware has already been tested with projects ranging from airports to hospitals.

There’s clearly a concern SitePrint might automate people out of jobs. The robot only requires one operator versus the two or three people typically needed for manual layouts. However, its timing might be particularly apt. As in many other fields, the construction industry is grappling with labor shortages. Robots like SitePrint could help builders make the most of limited staff, or take on more ambitious tasks without hiring larger crews.

Google fails to overturn EU Android antitrust ruling but reduces its fine by 5 percent

Google has failed to convince Europe’s General Court to overturn the Commission’s ruling on its Android antitrust case and its decision to slap the company with a €4.3 (US$4.3) billion fine. The General Court upheld the Commission’s original ruling back in 2018 that Google used its dominant position in the market to impose restrictions on manufacturers that make Android phones and tablets. It did, however, reduce the fine a bit, deciding that €4.125 (US$4.121) billion is the more appropriate amount based on its own findings.

The Commission previously found that Google acted illegally by making it mandatory for Android manufacturers to pre-install its apps and its search engine. By doing so, the Commission said that the company was able to “cement its dominant position in general internet search.” Approximately 80 percent of smart devices in Europe as of July 2018 were running Android OS, and people tend to be content with the default options they’re given.

That is a huge deal according to FairSearch, the group of organizations lobbying against Google’s search dominance and the original complainant in the case, because Google’s search engine is monetized with paid advertising. The tech giant makes most of its money from online ads — based on information from Statista, Google’s ad revenue in 2021 amounted to $209.49 billion. FairSearch also said that by making it mandatory for Android manufacturers to install its apps and search engine, Google is denying competitors the chance to compete fairly.

In addition to imposing restrictions on Android manufacturers, EU officials also found that Google “made payments to certain large manufacturers and mobile network operators” in an alleged effort to ensure that carriers only installed Google Search on the devisions they sell. The General Court has agreed with the Commission, as well, when it comes to the anti-fragmentation agreements Android manufacturers have to sign. These agreements seek to “prevent the development and market presence of devices running a non-compatible Android fork,” the court wrote in its decision. 

In a statement provided to Engadget, Google has expressed its disappointment in the court’s decision and insisted that Android has created more choices for consumers:

“We are disappointed that the Court did not annul the decision in full. Android has created more choice for everyone, not less, and supports thousands of successful businesses in Europe and around the world.”

The General Court is the EU’s second highest court. Google could still pursue a dismissal, and the case could go to the European Court of Justice.

Google’s Jedi Blue ad deal with Meta wasn’t unlawful, judge rules

A New York federal judge has ruled that that multi-state antitrust lawsuit against Google spearheaded by the Attorney General of Texas can move forward. That said, Judge P. Kevin Castel has also dismissed the plaintiffs’ claim that Google’s online ad deal with Meta, codenamed Jedi Blue, was an unlawful restraint of trade. The judge said that “there is nothing inexplicable or suspicious” about the two companies entering the agreement. 

If you’ll recall, the states that filed the lawsuit accused Google of entering a deal with Meta that gave the latter certain advantages on the ad exchange the tech giant runs. As Bloomberg notes, Meta allegedly had to abandon its plans to adopt a new technology that would’ve hurt Google’s monopoly and to back the tech giant’s Open Bidding approach when it comes to selling ads in exchange.

Texas Attorney General Ken Paxton announced that he was filing a “multi-state lawsuit against Google for anti-competitive conduct, exclusionary practices and deceptive misrepresentations” back in 2020. The lawsuit focused on Google’s advertising tech practices and how, Paxton said, the company uses its “monopolistic power to control pricing” of ads and “engage in market collusions.”

Google sought to dismiss the lawsuit earlier this year. While it failed to convince Judge Castel to fully toss the lawsuit out, the company still posted a celebratory note about the decision. “Importantly, the Court dismissed the allegations about our Open Bidding agreement with Meta — the centerpiece of AG Paxton’s case,” the company wrote in a blog post. The tech giant added that the agreement had never been a secret and that it was pro-competitive. It also called Paxton’s case “deeply flawed.”

Although the judge for this case dismissed the claim that Jedi Blue was unlawful, the deal and Google’s ad tech practices as a whole are still under scrutiny by authorities. The European Commission and UK’s Competition and Markets Authority launched an antitrust investigation into the companies’ agreement back in March. And just last month, Bloomberg had reported that the US Department of Justice was preparing to sue Google over its dominance in the ad market sometime this September.

Twitter shareholders vote to approve Elon Musk’s $44 billion acquisition

A majority of Twitter’s shareholders have voted to approve Elon Musk’s $44 billion takeover. During a special meeting of shareholders that lasted about seven minutes, stockholders approved of two proposals: one to adopt the merger agreement with Musk, and one related to how the company’s executives will be compensated as a result of the deal.

Both measures were approved, though Twitter will disclose the final breakdown of votes “at a later date” when it files paperwork with the Securities and Exchange Commission.

Though shareholders formally approved the deal, which valued each share at $54.20, an October trial in Delaware’s Court of Chancery will determine whether Musk is able to terminate the agreement. Musk initially cited concerns about bots and spam as reasons for ending the merger agreement, though Twitter’s lawyers argued he was actually concerned about “World War 3.” The judge in the case ruled that Musk will be able to add claims raised by the company’s former security chief turned whistleblower, Peiter Zatko, to his legal bid.

Separately, Zatko testified at a Judiciary Committee hearing Tuesday, during which he shed new light on his allegations that Twitter’s security practices are a risk to the United States’ national security.

Twitter’s $7 million whistleblower payout violates purchase deal, Musk’s lawyers argue

A judge recently ruled that Elon Musk can use the allegations made by Twitter whistleblower Peiter Zatko as part of the arguments in his countersuit against the company. As it turns out, Musk intends to use not just Zatko’s claims to win his case, but also the fact that the former Twitter executive received a settlement to get out of the $44 billion acquisition deal he made with the social network. As The Washington Post reports, Musk’s lawyers sent a letter to Twitter, telling the company that the severance payment worth $7.75 million that it made to Zatko in June violated a provision in their sales agreement. 

In the letter uploaded to the SEC website, Musk’s lawyers cited Section 6.1(e) of the merger agreement, which says Twitter promised not to “grant or provide any severance or termination payments or benefits to any Company Service Provider other than the payment of severance amounts or benefits in the ordinary course of business consistent with past practice and subject to the execution and non-revocation of a release of claims in favor of the Company and its Subsidiaries.” Former employees are considered Company Service Providers.

Musk and Twitter entered the purchase agreement in April, and it wasn’t until June when Zatko received his severance pay. The company didn’t seek Musk’s consent before making the payment or notify him of the transaction, the lawyers said in the letter. Musk apparently only found out about the settlement when Twitter included the information in its court filing on September 3rd. As such, Musk’s camp argues that the settlement serves as an additional basis to terminate the parties’ purchase agreement. As The Post notes, it’s now up to Twitter to prove that such a big payout to a former employee wasn’t out of the ordinary. We’ve reached out to Twitter for a statement, and we’ll update this post when we hear back.

Also known as “Mudge,” Zatko accused the the social network of having “extreme, egregious deficiencies” in security. He said in a complaint filed with the Securities and Exchange Commission that Twitter violated the terms it had agreed to when it settled a privacy dispute with the FTC back in 2011. The whistleblower also claimed that he couldn’t get a direct response from Twitter regarding the actual number of bots on the website. If you’ll recall Musk previously accused Twitter of fraud for hiding the real number of bots on its platform and told the court in a legal filing that 10 percent — not just 5 percent as the social network maintains — of its daily active users who see ads are inauthentic accounts.

Twitter and Musk are set to face off in court in a five-day trial scheduled to start on October 17th.