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Apple vs Epic: Fortnite Maker’s Narrow Win in App Store Case Toughens Fight Against Google Play Rules

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By Reuters | Updated: 11 September 2021

Android app makers suing to stop Alphabet’s Google from siphoning up to 30 percent of their sales received little reassurance about their chances on Friday as a judge allowed a comparable fee charged by Apple Inc to stand.

Developers including “Fortnite” maker Epic Games in the last year took aim at the two biggest mobile app stores, run by Apple and Google. The critics view the fee as needlessly high, costing developers collectively billions of dollars a year, and a function of the two big tech companies having monopoly power.

Google’s trial is at least a year away, time both sides could use to hone arguments based on the Apple decision, legal experts said.

In a ruling on Friday following a trial between Epic Games and Apple, US District Judge Yvonne Gonzalez Rogers required Apple to let developers tell customers about ways to pay outside of its App Store, leading Apple shares to fall 3.3 percent. Alphabet dropped 1.9 percent.

Google’s Play store employs rules similar to the ones struck down in the Apple case, limiting developer communications with their customers, and Tom Forte, an analyst at DA Davidson, said Google could be at risk, too. He also noted the remaining risk of new regulatory action by lawmakers.

But Gonzalez Rogers allowed to stand requirements that developers bemoan even more. Those rules, including that in-app payments be made on Apple’s own system, allow the company to collect its 15-30 percent fee.

Apple General Counsel Katherine Adams told reporters that her company was “extremely pleased.” Epic Chief Executive Tim Sweeney wrote on Twitter that, “Today’s ruling isn’t a win for developers or for consumers.”

Vanderbilt Law School professor Rebecca Haw Allensworth said she agreed Gonzalez Rogers’ findings were discouraging for the case against Google, while Valarie Williams, an antitrust partner at law firm Alston & Bird, said Google “will likely be encouraged by the ruling.”

The judge said the Apple restrictions allow users to rest assured that the apps they buy for the most part are free of viruses and pornography and that what they paid for will be delivered.

“App distribution restrictions increase security in the ‘broad’ sense by allowing Apple to filter fraud, objectionable content, and piracy during app review while imposing heightened requirements for privacy,” Gonzalez Rogers wrote.

Apple’s fee leads to “extraordinary profits,” according to her ruling. But if she forced Apple to ease restrictions, the company might struggle to gain any remuneration for providing a platform to developers, she said. Apple’s selling point to consumers about having strong security and a centralized system also would be undermined, the judge added.

Its 30 percent rate, she said, was set “almost by accident when it first launched the App Store” rather than as a result of market power.

Google has made similar arguments of privacy and security benefits as justification for its rules and fee, and it has long followed Apple’s lead on commission levels, Google documents revealed in lawsuits show.

With Google’s smaller share in the US mobile app market, plaintiffs may have to reframe arguments to succeed against Google. Gonzalez Rogers said Epic’s challenge of any commission at all was an unreasonable position versus Apple, and that Epic failed to offer clear evidence of the iPhone maker being a monopolist.

Tweaked arguments may not be enough. The case against Google has been more difficult from the start. Google makes it possible to install apps from other sources, taking away from the monopoly argument. It also historically has been more lenient in enforcing some of its policies.

Google, Epic and attorneys for other developers suing the Play Store operator declined to comment. Utah’s attorney general, which is helping lead a related lawsuit by US.states, said it is reviewing the judgment.

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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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Electronic Entertainment Expo, E3, CES, CES 2022

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By Reuters | Updated: 7 January 2022

China’s copyright authority said on Thursday digital music platforms are not allowed to sign exclusive copyright agreements except in special circumstances, amid a regulatory crackdown on monopolistic behaviour in the country’s private sector.

The National Copyright Administration of China (NCAC) gave the order on Thursday at a meeting in Beijing with influential digital music platforms, as well as record and songwriting copyright companies, according to a statement published on the NCAC’s official WeChat account.

The order comes amid a widening crackdown by Chinese regulators on the country’s technology sector, which has focused on issues such as monopolistic behaviour, unfair competition and consumer rights..

Last year, Tencent Holdings announced it had ended all exclusive music copyright agreements after it was ordered by China’s market regulator to do so. The regulator had said the firm held more than 80 percent of exclusive music library resources which increased its leverage over upstream copyright parties and allowed it to restrict new entrants.

The NCAC did not mention which companies were called in on Thursday. Besides Tencent, smartphone maker Xiaomi, telecommunications provider China Mobile, and Internet tech giant Netease all own popular streaming services in China. Globally popular streaming services like Spotify are banned in mainland China.

The NCAC said that while copyright practices had improved since 2015, when the authority banned unlicensed music streaming and ordered platforms to remove millions of songs, the industry still needed to be further standardised.

“The talks emphasised that record companies, songwriting copyright companies and digital music platforms should … settle payment according to a guaranteed sum plus a share of actual usage, and should not sign exclusive copyright agreements except under special circumstances,” it said.

© Thomson Reuters 2022

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Donald Trump to Launch His Truth Social App on February 21, App Store Listing Shows

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By Reuters | Updated: 7 January 2022

Former President US Donald Trump’s new media venture plans to launch its social media app Truth Social on February 21, according to an Apple App Store listing.

Truth Social, the Trump Media & Technology Group (TMTG) alternative to Twitter, is available for pre-order before going live on the US Presidents’ Day holiday.

Similar to Twitter, the app offers features to follow other people and trending topics, according to demo photos. Its message equivalent of a tweet will be dubbed “truth”.

The app’s launch would come 13 months after Meta Platforms’s Facebook and Twitter banned Trump for encouraging his supporters to participate in the January 6 attack on the US Capitol based on unsubstantiated claims of widespread fraud in the 2020 presidential election.

Marking the one-year anniversary of the attack, US President Joe Biden said on Thursday that his predecessor’s false claims could unravel the rule of law and subvert future elections.

TMTG and Apple did not respond to requests for comment, but a source familiar with the matter confirmed that February 21 is the planned launch date of the app.

The launch is expected to be the first of three stages in TMTG’s development. The second would be a subscription video-on-demand service called TMTG+ with entertainment, news and podcasts, according to the company website. A November investor presentation indicated that TMTG also wants to launch a podcast network.

TMTG is valued at $5.3 billion (roughly Rs. 39,430 crore) based on the stock price of Digital World Acquisition, which rose 20 percent after Reuters reported the app’s listing on the App Store. TMTG agreed in October to merge with the blank-check firm at a valuation of $875 million (roughly Rs. 6,510 crore).

Trump supporters and retail investors have snapped up Digital World’s stock, betting that Trump’s popularity with his Republican political base will translate into commercial runaway success.

The blank-check acquisition deal faces regulatory risk. Democratic US Senator Elizabeth Warren asked Securities and Exchange Commission Chairman Gary Gensler last month to investigate the planned merger for potential violations of securities laws around disclosure. The SEC has declined to comment on whether it plans any action.

TMTG last month raised an additional $1 billion (roughly Rs. 7,440 crore) from private investors.

Trump cancelled a news conference at his Mar-a-Lago estate in Florida that had been scheduled for January 6, marking the one-year anniversary of the Capitol attack. He said he will instead deliver remarks at a rally in Arizona on January 15.

© Thomson Reuters 2022

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