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Amazon, Top Indian Seller Cloudtail End Relationship Amid Regulatory Heat Over Preferential Treatment

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By Reuters | Updated: 10 August 2021

Amazon and one of its biggest sellers in India, Cloudtail, have decided to end their relationship, they said on Monday, following years of allegations from brick-and-mortar retailers that the seller received preferential treatment.

A joint venture between Amazon and India’s Catamaran that controlled Cloudtail was coming up for renewal on May 19, 2022, and the two sides said in a joint statement they had mutually decided not to extend it beyond that date.

The decision comes after a Reuters investigation in February based on Amazon documents showed the US company had given preferential treatment for years to a small group of sellers, including Cloudtail, and used them to bypass Indian laws.

Amazon has said it does not give preferential treatment to any seller and that it complies with the law.

In their joint statement, Amazon and Catamaran did not say why they had decided to end their joint venture, but said the partnership ran successfully for seven years and made “tremendous strides.”

Cloudtail had been controversial, with Indian brick-and-mortar retailers for years accusing Amazon of giving it preferential treatment which hurt smaller retailers.

It was formed when Amazon entered a joint venture with an entity formed by one of India’s most famous tech moguls, N.R. Narayana Murthy, which was then used to create Cloudtail, which began offering goods on Amazon.in after it was set up in August 2014.

The Reuters investigation in February found Amazon publicly called Cloudtail an independent seller offering goods on its marketplace website, but internal company documents revealed the US company was deeply involved in expanding it and used it, among other sellers, to circumvent the country’s foreign investment laws.

The story had triggered calls for a ban and an investigation of Amazon, and the financial crime fighting agency was looking into its findings. The antitrust watchdog had said the story corroborated evidence it had against Amazon.

Arvind Singhal, chairman of retail consultancy Technopak Advisors, told Reuters that Amazon and Catamaran’s decision appeared aimed at defending against any possible future scrutiny of their business models.

“Before it comes under more scrutiny, they are basically disengaging themselves. But given the relationship has been there for years, this will still hang as a sword on their heads,” said Singhal.

India is a key growth market for Amazon, where it has committed investment of $6.5 billion (roughly Rs. 48,330 crores). But it’s one where it has faced several regulatory challenges, including stricter laws that apply to foreign e-commerce giants.

The Reuters investigation in February found Amazon gave Cloudtail, and another seller named Appario, discounted fees.

Amazon is also in talks with the parent of Appario to determine whether it wants to renew its joint venture next year, a source with direct knowledge told Reuters on Monday. Appario did not respond to a request for comment.

The source added that multiple sellers in India were likely to take over Cloudtail’s share on Amazon.in over time.

“There will be challenges, but the company is fairly confident it will manage,” the source added.

Separately, India’s Supreme Court on Monday ruled that Amazon and Walmart’s Flipkart will have to face antitrust investigations ordered against them in India, dealing a blow to the companies in their key growth market.

© Thomson Reuters 2021

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Facebook-Parent Meta Removes Iran-Based Fake Accounts Targeting Instagram Users in Scotland

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By Reuters | Updated: 21 January 2022

Facebook parent Meta Platforms removed a network of fake accounts that originated in Iran and targeted Instagram users in Scotland with content supporting Scottish independence, the company’s investigators said on Thursday.

The network used fake accounts to pose as locals in England and Scotland, posting photos and memes about current events and criticism of the United Kingdom’s government, Meta said.

The accounts organised their content around common hashtags promoting the cause, though they at times misspelled them, the company said. The accounts also posted about football and UK cities, likely to make the fictitious personas seem more authentic.

Some of the fake accounts used profile pictures likely created through AI techniques, while others used photos of media personalities and celebrities from the UK and Iraq as profile pictures, Meta said.

In a referendum on Scottish independence in 2014, Scots voted 55 percent-45 percent to remain in the United Kingdom, but both Brexit and the British government’s handling of the COVID-19 crisis have bolstered support for independence among Scots and demands for a second vote.

Meta said its investigation found links to individuals in Iran, including people with a background in teaching English as a foreign language.

It said the operation had some connections with a small Iran-based network it previously removed in December 2020, which mostly targeted Arabic, French, and English-speaking audiences using fake accounts, but did not provide further details on who might be behind the activity.

“We’ve seen a range of operations coming from Iran over the last few years,” said Ben Nimmo, Meta’s global threat intelligence lead for influence operations, in a press briefing. “It’s not a monolithic environment.”

The social media company said it had removed eight Facebook accounts and 126 Instagram accounts as part of this latest network in December for violating its rules against coordinated inauthentic behavior.

Meta also said in December it removed a network that originated primarily in Mexico and targeted audiences in countries including Honduras, Ecuador and El Salvador, and a network that originated in Turkey and targeted people in Libya.

© Thomson Reuters 2022

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Apple Complies With Dutch Watchdog Ruling on Dating App Payment Options

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By Reuters | Updated: 17 January 2022

Apple said on Saturday it would allow developers of dating apps in the Netherlands to offer non-Apple payment options to their users, complying with an order from the country’s market regulator to do so by January 15 or face fines.

The country’s Authority for Consumers and Markets found in a decision published on December 24 that Apple had abused its market position by requiring dating app developers, including Tinder owner Match Group, to exclusively use Apple’s in-app payment system.

Apple’s practice of requiring developers to use its system and pay commissions of 15-30 percent on digital goods purchases has come under scrutiny from regulators and lawmakers around the world, but the Dutch ruling applies only in the Netherlands and only for dating apps.

In a post on its developers’ blog on Saturday, Apple said it would comply with the decision and introduce “two optional new entitlements exclusively applicable to dating apps on the Netherlands App Store that provide additional payment processing options for users”.

However it noted that developers were not required to use the non-Apple tools, and warned that Apple would not be able to help with safety or refunds of payments that take place outside its systems because it will “not be directly aware of them”.

Apple is appealing the Dutch decision.

© Thomson Reuters 2022

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Netflix Raises Monthly Subscription Prices in US, Canada

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By Reuters | Updated: 15 January 2022

Netflix has raised its monthly subscription price by $1 to $2 (roughly Rs. 75 to Rs. 150) per month in the United States depending on the plan, the company said on Friday, to help pay for new programming to compete in the crowded streaming TV market.

The standard plan, which allows for two simultaneous streams, now costs $15.49 (roughly Rs. 1,100) per month, up from $13.99(roughly Rs. 1,000), in the United States.

Prices also went up in Canada, where the standard plan climbed to CAD 16.49 (roughly Rs. 970) from CAD 14.99 (roughly Rs. 880).

The price increases, the first in those markets since October 2020, took effect immediately for new customers. Existing members will see the new prices in the coming weeks when they receive their monthly bills. The price increases have not been previously reported.

“We understand people have more entertainment choices than ever and we’re committed to delivering an even better experience for our members,” a Netflix spokesperson said.

“We’re updating our prices so that we can continue to offer a wide variety of quality entertainment options. As always we offer a range of plans so members can pick a price that works for their budget,” the spokesperson added.

The world’s largest streaming service is facing the most competition ever from companies looking to attract viewers to online entertainment. Walt Disney, AT&T’s WarnerMedia, Amazon and Apple are among the rivals pouring billions into new programming.

Netflix had said it would spend $17 billion (126457.05 crore) on programming in 2021. The company has not disclosed spending for 2022.

The US price of Netflix’s premium plan, which enables four streams at a time and streaming in ultra HD, was increased by $2 to $19.99 (roughly Rs. 140 to Rs. 1400) per month. For Netflix’s basic plan, with one stream, the cost rose by $1 to $9.99 (roughly Rs. 74 to Rs. 740) per month.

In Canada, the premium plan rose by CAD 2 to CAD 20.99 (roughly Rs. 118 to Rs. 1,200), and the basic plan was unchanged at CAD 9.99 (roughly Rs. 600).

The United States and Canada are Netflix’s largest region with 74 million customers as of September 2021. Most of the company’s recent growth has come from overseas.

Netflix’s subscriber growth slowed from a boom early in the COVID-19 pandemic but rebounded with help from global phenomenon Squid Game, a dystopian thriller from South Korea released in September. Total global subscriptions reached 213.6 million.

The company’s next subscriber report is due Thursday when Netflix posts quarterly earnings. Analysts project the company will report 8.5 million new sign-ups from October through December, according to Thomson Reuters I/B/E/S data, bringing its global subscriber base to 222 million.

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Google, Facebook CEOs Colluded in Online Advertisement Sales, Lawsuit Alleges

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By Associated Press | Updated: 15 January 2022

Newly unredacted documents from a state-led antitrust lawsuit against Google accuse the search giant of colluding with rival Facebook to manipulate online advertising sales. The CEOs of both companies were aware of the deal and signed off on it, the lawsuit alleges.

The original, redacted lawsuit, filed in December 2021, accused Google of “anti-competitive conduct” and of teaming up with the social networking giant. But the unredacted version offers details on the involvement of Alphabet CEO Sundar Pichai and Facebook CEO Mark Zuckerberg in approving the deal. Facebook has since renamed itself Meta.

According to the lawsuit, Facebook’s Chief Operating Officer, Sheryl Sandberg, was “explicit that ‘this is a big deal strategically'” in a 2018 email thread about the deal that included Facebook’s CEO. While the names of the Facebook executives are still redacted in the suit, their titles are visible.

When the two sides hammered out the terms of the agreement, “the team sent an email addressed directly to CEO” Zuckerberg, the lawsuit states.

“We’re nearly ready to sign and need your approval to move forward,” the email read, according to the complaint. Zuckerberg wanted to meet with Sandberg and his other executives before making a decision, the complaint states.

In a statement, Google spokesperson Peter Schottenfels said the lawsuit is “full of inaccuracies and lacks legal merit.”

In September 2018, the complaint says, the two companies signed the agreement. Sandberg, who was once the head of Google’s ad business, and Pichai personally signed off on the deal, per the states’ complaint.

Meta spokesperson Chris Sgro said Friday that the company’s ad bidding agreement with Google and similar agreements it has with other bidding platforms “have helped to increase competition for ad placements.”

“These business relationships enable Meta to deliver more value to advertisers while fairly compensating publishers, resulting in better outcomes for all,” Sgro said.

Internally, Google used the code phrase “Jedi Blue” to refer to the 2018 agreement, according to the lawsuit. Google kept this code phrase secret.

Google’s Schottenfels said the lawsuit’s allegation that Pichai approved the deal with Facebook “isn’t accurate.”

“We sign hundreds of agreements every year that don’t require CEO approval, and this was no different,” he said, adding that the agreement “was never a secret.”

The lawsuit is led by Texas Attorney General Ken Paxton and was joined by the attorneys general of Alaska, Arkansas, Florida, Idaho, Indiana, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nevada, North Dakota, Puerto Rico, South Carolina, South Dakota and Utah.

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Amazon Warehouse Workers in Alabama to Hold Union Vote, Counting to Begin on March 28

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By Reuters | Updated: 12 January 2022

The US National Labor Relations Board said on Tuesday that it will send unionisation ballots to workers at an Amazon warehouse in Bessemer, Alabama, on February 4, setting the stage for the next labour contest facing the online retailer.

Votes in the mail-ballot election, which is a re-run after the NLRB found Amazon interfered last year, will be counted starting on March 28, according to a notice published by the NLRB. The Retail, Wholesale and Department Store Union (RWDSU) has been seeking to represent the workers.

Scrutiny of working conditions at Amazon has intensified in recent months, with some employees seeking to organise at facilities in New York and Canada. A victory at even one warehouse would be a milestone that labour experts say could invigorate the US labour movement.

In a statement, Amazon spokeswoman Barbara Agrait said, “Our employees have always had the choice of whether or not to join a union, and they overwhelmingly chose not to join the RWDSU last year. We look forward to our team in (the warehouse) having their voices heard again.”

In last year’s count, workers at the Bessemer warehouse rejected forming a union by a more than 2-to-1 margin. The organising drive had garnered support from US lawmakers and President Joe Biden.

Then in August, an NLRB hearing officer determined the company had interfered with the vote. As example, the officer said workers may have felt they were being surveilled when dropping ballots in a mailbox on Amazon’s property that the company encouraged them to use. Amazon also put a campaign slogan around the mailbox. An NLRB regional director, Lisa Henderson, officially called for a re-run in November.

In an order accompanying Tuesday’s election notice from the NLRB, Henderson said that the same mailbox would be in a “neutral location” on Amazon’s property for the forthcoming vote and that no party could put a banner around it or issue a directive on its use.

The RWDSU said it was still worried about Amazon “continuing its objectionable behaviour in a new election”. It said it was especially concerned that same mailbox will remain on Amazon’s property for voting, which it believes will create an impression of surveillance that undermines a free and fair election.

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Facebook-Parent Meta’s Antitrust Dismissal Request Shut Down, US Judge Says Case Can Proceed

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By Associate Press | Updated: 12 January 2022

A federal judge has ruled that the Federal Trade Commission’s revised antitrust suit against Meta, formerly known as Facebook, can proceed, shutting down the social media company’s request for a dismissal. In a revised complaint filed last August, the FTC argues that the company pursued a “buy or bury” strategy against rivals to suppress competition.

This is the FTC’s second antitrust run at the company. A federal judge in June dismissed antitrust lawsuits brought against Facebook by the agency and a broad coalition of state attorneys general that were among multiplying efforts by federal and state regulators to rein in tech titans’ market power.

The FTC is seeking remedies that could include a forced spinoff of Facebook’s popular Instagram and WhatsApp messaging services, or a restructuring of the company.

US District Judge James Boasberg, who in June ruled that the FTC’s original lawsuit was “legally insufficient” and didn’t provide enough evidence to prove that Facebook was a monopoly, said in Tuesday’s ruling that the first complaint “stumbled out of the starting blocks.”

But he added that, though the “core theory” of the lawsuit — that Facebook is a monopoly engaging in anticompetitive behaviour — remains unchanged, the facts alleged this time around are “far more robust and detailed than before.”

Meta said in an emailed statement it is “confident the evidence will reveal the fundamental weakness of the claims.”

“Our investments in Instagram and WhatsApp transformed them into what they are today,” the company said. “They have been good for competition, and good for the people and businesses that choose to use our products.”

Holly Vedova, director of the FTC’s bureau of competition, said the agency presented a “strong amended complaint a strong amended complaint, and we look forward to trial.”

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