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Poloniex Cryptocurrency Exchange Agrees to Pay $10.4 Million to Settle US SEC Charges



By Reuters | Updated: 10 August 2021

The US Securities and Exchange Commission said Poloniex has agreed to pay roughly $10.4 million (roughly Rs. 77.43 crores) to settle charges of operating as an unlicensed cryptocurrency exchange.

The US regulator said Poloniex agreed to settle without admitting or denying the charges.

Launched in 2014, Poloniex was acquired in 2018 by Circle, a payments and digital currency firm whose backers include Goldman Sachs.

Circle announced last month it plans to go public later this year through a merger with special-purpose acquisition company Concord Acquisition in a deal that would value the cryptocurrency firm at $4.5 billion (roughly Rs. 33,460 crores).

In Monday’s order, the SEC said from July 2017 through November 2019, Poloniex operated a Web-based global trading platform that “facilitated buying and selling digital assets, including digital assets that were investment contracts and therefore securities.” That trading platform was available to US investors as well.

The SEC said despite operating its trading platform, Poloniex did not register as a national securities exchange with regulators.

“Poloniex chose increased profits over compliance with the federal securities laws by including digital asset securities on its unregistered exchange,” said Kristina Littman, chief of the SEC enforcement division’s cyber unit.

The order came amid a commitment from SEC Commissioner Gary Gensler to better oversee the cryptocurrency sector. Gensler, at a global conference last week, urged Congress to give the agency more authority to police cryptocurrency trading, lending and platforms, which he called a “Wild West” riddled with fraud and investor risk.

© Thomson Reuters 2021


iPhone 14 Pro Models Likely to Get Up to 2TB Storage: Report



By ANI | Updated: 4 October 2021

The iPhone 14 series is still a year away from launching but leaks and reports about the next smartphone models are already underway. A report by MyDrivers suggests that the iPhone 14 might also get a 2TB storage option.

The report claims that 14 series will come with double the maximum storage available on this year’s iPhone 13 lineup. However, it is likely that this 2TB storage variant will be restricted to the iPhone 14 Pro models.

Apple doubled the maximum storage option on the iPhone 13 to 1TB this year. Now, reports suggest that the iPhone 14 is likely to come with up to a 2TB onboard storage option in 2022. Given the huge capacity, this variant is likely to be reserved for the ”Pro” models. The vanilla iPhone 14 and iPhone 14 Max might get up to 1TB storage, which would be a bump from the 512GB that is offered right now on the iPhone 13.

While 2TB of storage on a smartphone might seem to be overkill by a huge margin, the upcoming iPhone’s camera features might demand the added storage space. The current iPhone 13 Pro lineup only lets you shoot 4K ProRes footage at 30fps on 256GB variant and above.

The 128GB iPhone 13 Pro models are restricted to 1080p ProRes footage at 30fps. However, given how early this rumour has found us, a disclaimer should be issued that this might not translate into reality.

The iPhone 13 lineup starts off at 128GB of storage and goes up to 512GB while the ”Pro” models range from 128GB in capacity up to 1TB. The iPhone 13 lineup starts at Rs 69,900 for the 128GB iPhone 13 mini and goes up to Rs 1,79,900 for the 1TB iPhone 13 Pro Max.

The iPhone 14 is also expected to get a whole new design and size options.

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Squid Game Craze: Netflix Sued by South Korea Broadband Firm Over Traffic Surg



By Reuters | Updated: 4 October 2021

South Korean Internet service provider SK Broadband has sued Netflix to pay for costs from increased network traffic and maintenance work because of a surge of viewers to the US firm’s content, an SK spokesperson said on Friday. The move comes after a Seoul court said Netflix should “reasonably” give something in return to the Internet service provider for network usage, and multiple South Korean lawmakers have spoken out against content providers who do not pay for network usage despite generating explosive traffic.

Netflix said it will review SK Broadband’s claim, and seek dialogue and explore ways in the meantime to work with SK Broadband to ensure customers are not affected.

The popularity of the hit series Squid Game and other offerings have underscored Netflix’s status as the country’s second-largest data traffic generator after Google’s YouTube, but the two are the only ones to not pay network usage fees, which other content providers such as Amazon, Apple, and Facebook are paying, SK said.

Netflix’s data traffic handled by SK jumped 24 times from May 2018 to 1.2 trillion bits of data processed per second as of September, SK said, riding on the success of several Netflix productions from Korea including Squid Game and DP.

SK Broadband said it lodged a lawsuit against Netflix for it to pay for using SK’s networks since Netflix began using SK’s dedicated line starting 2018 to deliver increasingly larger amounts of data-heavy, high-definition video content to viewers in Korea from servers in Japan and Hong Kong.

Last year, Netflix had brought its own lawsuit on whether it had any obligation to pay SK for network usage, arguing Netflix’s duty ends with creating content and leaving it accessible. It said SK’s expenses were incurred while fulfilling its contractual obligations to Internet users, and delivery in the Internet world is “free of charge as a principle”, according to court documents.

But the Seoul Central District Court ruled against Netflix in June, saying that SK is seen as providing “a service provided at a cost” and it is “reasonable” for Netflix to be “obligated to provide something in return for the service”.

SK estimated the network usage fee Netflix needed to pay was about KRW 27.2 billion (roughly Rs. 170 crores) in 2020 alone, the court document said.

Netflix has appealed against the ruling, court records showed, with fresh proceedings to start in late December.

Netflix said in a statement on Wednesday that it contributed to the creation of about 16,000 jobs in South Korea stemming from about KRW 770 billion (roughly Rs. 4,840 crores) in investments, as well as an economic effect of about KRW 5.6 trillion (roughly Rs. 35,200 crores).

Ruling party lawmaker Kim Sang-hee said on Wednesday that out of South Korea’s top 10 data traffic generators, 78.5 percent of the traffic came from foreign content providers, up from 73.1 percent a year earlier, with “Google-YouTube and Netflix that account for the majority turning a blind eye to network usage fees”.

In the United States, Netflix has been paying a fee to broadband provider Comcast for over seven years for faster streaming speeds.

© Thomson Reuters 2021

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Facebook Research Shows Company Knew of Instagram Harm to Teens, Say US Senators



By Reuters | Updated: 1 October 2021 

US senators on Thursday grilled Facebook on its plans to better protect young users on its apps, drawing on leaked internal research that showed the social media giant was aware of how its Instagram app harmed the mental health of teens.

The hearing in front of the Senate consumer protection subcommittee was called after the Wall Street Journal published several stories earlier this month about how Facebook knew Instagram caused some teen girls in particular to feel badly about their self-image. After growing opposition to the project, Facebook put plans for Instagram Kids, aimed at pre-teens, on hold this week.

Antigone Davis, Facebook’s global head of safety, disputed the committee and WSJ’s conclusions of the research documents throughout the hearing, and said the company was working to release additional internal studies in an effort to be more transparent about its findings.

“This research is a bombshell,” said Senator Richard Blumenthal, a Democrat, during the hearing. “It is powerful, gripping, riveting evidence that Facebook knows of the harmful effects of its site on children, and that it has concealed those facts and findings.”

“IG stands for Instagram, but it also stands for Insta-greed,” said Senator Edward Markey, a Democrat from Massachusetts.

The senators pressed Davis on several major themes, including what identifiable data Facebook collects on users under the age of 13, to what extent the company views young users as a growth area and to confirm whether it knew that Instagram led some children to consider suicide.

Davis reiterated that kids under 13 were not allowed on Facebook, adding 0.5 percent of teens in the company’s research connected their “suicidal ideation” to Instagram, lower than the figures the Journal had reported.

“You’ve cherry-picked part of the research that you think helps your spin right now,” said Senator Ted Cruz, a Republican from Texas, demanding Facebook commit to releasing its full research on the links between Instagram and youth suicide.

A second hearing is planned for Tuesday and will feature a Facebook whistleblower. The whistleblower is expected to reveal their identity on Sunday in a recorded interview for TV news programme “60 Minutes,” which in a preview described the woman as a former Facebook employee who left with tens of thousands of pages of research.

Davis said Thursday that Facebook would not retaliate against the whistleblower for sharing confidential documents with the senators.

© Thomson Reuters 2021

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Zoom, Five9 to Terminate Nearly $15 Billion Deal After Shareholder Vote



By Reuters | Updated: 1 October 2021

Five9 shareholders voted down the call center software firm’s $14.7 billion (roughly Rs. 1,09,260 crores) sale to Zoom Video on Thursday, a major blow to Zoom’s plan to expand its offerings following its pandemic boom. The termination of what would have been Zoom’s biggest-ever acquisition comes after proxy advisory firm Institutional Shareholder Services (ISS) and Glass Lewis earlier this month recommended that Five9 shareholders vote against the deal, citing growth concerns, and dual-class shares.

Under the deal terms announced in July, Five9 shareholders would have received 0.5533 Zoom share for every Five9 share. The terms implied a 12.8 percent premium over Five9’s market price and valued the company at $14.7 billion (roughly Rs. 1,09,260 crores).

Since then, Zoom’s stock has dropped over 25 percent as the virtual conferencing giant reported slower growth on its second-quarter earnings call.

“The all-stock deal exposes FIVN shareholders to a more volatile stock whose growth prospects have become less compelling as society inches towards a post-pandemic environment,” ISS said in its report earlier this month.

San Ramon, California-based Five9 said the merger agreement did not receive enough approval votes from its shareholders, and it will continue to operate as a standalone publicly traded company.

Five9 presented an attractive means to bring to customers an integrated contact centre offering, Zoom CEO Eric Yuan said on Thursday.

“That said, it was in no way foundational to the success of our platform nor was it the only way for us to offer our customers a compelling contact centre solution,” Yuan added.

The company said it would launch Zoom Video Engagement Center, its cloud-based contact centre solution, in early 2022.

Five9 said it would continue the partnership with Zoom that was in place prior to the announcement.

Zoom became a household name and an investor favourite as the pandemic clamped down on activity and businesses and schools adopted its services to hold virtual classes and office meetings.

But with rapid vaccination and life creeping back to normal, Zoom was looking for revenue sources beyond its core video conferencing business, which faces stiff competition from rivals Microsoft, Cisco Systems, and Salesforce’s Slack.

A US Justice Department-led committee had been reviewing Zoom’s proposed purchase of Five9 over possible national security concerns, according to a letter filed with US regulators, though analysts last week said the deal was unlikely to be scrapped as a result.

Zoom’s connection with China has been scrutinised in recent years.

Five9’s shares, which gained as much 19.3 percent since the deal was announced in July, fell 1.1 percent to $157.9 (roughly Rs. 11,740) in extended trading on Thursday.

Five9, whose call center software is used by more than 2,000 clients across the globe, counts firms such as Under Armour, Lululemon Athletica, and Olympus as customers.

© Thomson Reuters 2021

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China Says Governance Rules for Algorithms Coming in Next 3 Years



By Reuters | Updated: 29 September 2021

China’s cyberspace watchdog and other government bodies will set up governance rules for algorithms in around three years, it said on Wednesday, as Beijing seeks to tighten its grip on the algorithms technology companies use to attract users.

The Cyberspace Administration of China (CAC) said in a statement that algorithms developed by technology firms should uphold core values of socialism and that enterprises should set systems for algorithm safety and responsibility.

CAC also said it would establish professional evaluation teams to deeply analyse the mechanism of the algorithm and algorithms should become “fair and transparent”.

It will “vigorously promote the research on algorithm innovations … and enhance the core competitiveness of China’s algorithms,” the regulator added.

Algorithms are widely used by tech companies in China, including recommendation algorithms used by Alibaba’s ecommerce marketplace Taobao, ByteDance’s short video app Douyin, Tencent-backed Kuaishou, as well delivery algorithms used by food delivery platforms Meituan and Alibaba-owned

In August, CAC issued sweeping draft guidelines to regulate algorithms that include proposals that companies should not set up algorithm models that entice users to spend large amounts of money and that users should be given the option to easily turn off algorithm recommendation services.

Algorithms have been in the crosshairs of regulators around the world. The White House has called on tech companies to tweak their algorithms to root out false information and has singled out Facebook, while the European Union has drafted rules that threaten fines on big tech firms if they do not do more to tackle illegal content.

© Thomson Reuters 2021

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Google’s Confidentiality Request Accepted by CCI, Regulator Denies Allegations of Leaking Report to Media



By Reuters | Updated: 28 September 2021

India’s antitrust watchdog has agreed to Google’s request to keep confidential some information the company provided during an investigation into its business, though the regulator denied allegations it leaked a report on the probe to the media, a judge said on Monday.

Alphabet’s Google sued the Competition Commission of India (CCI) at a New Delhi court last week, urging a judge to direct the watchdog to prevent leaks of information.

The filing came after The Times of India and Reuters reported this month, citing a confidential CCI report, that the regulator’s probe had found that the US tech giant abused the dominant position of its Android operating system in India, unfairly using its “huge financial muscle” to hurt competitors.

Google, in its 188-page court filing seen by Reuters, said it was aggrieved by the CCI’s rejection of its request, made before the media reports, that “highly business sensitive information” it had provided to the regulator during the course of the investigation be kept confidential.

On Monday, Justice Rekha Palli said the CCI had agreed to accept Google’s request to keep its submissions confidential, without elaborating on the details of the agreement between the watchdog and the company.

If Google “still has a grievance that any information is being leaked”, it can seek legal recourse, Justice Palli added.

However the justice said CCI had rejected as untrue Google’s allegations that it had leaked any information to the media.

Google and the CCI did not immediately respond to requests for comment.

On Friday, in a near hour-long showdown in court, Google had called the CCI a “habitual offender” in terms of leaking confidential information. The watchdog’s counsel repeatedly denied the allegations, and accused the US company of frustrating the investigative process.

Google’s filing to the court, reviewed by Reuters, said the publication of the investigation report’s findings caused “irreversible damage” to its reputation.

The CCI ordered the competition probe in 2019, saying Google appeared to have leveraged its dominance to reduce device makers’ ability to opt for alternate versions of its mobile operating system, and to force them to pre-install Google apps.

Reuters reported on September 18, citing the confidential CCI report, that the watchdog had found the mandatory pre-installation of apps on Android devices “amounts to imposition of unfair conditions on the device manufacturers” in violation of India’s competition law.

© Thomson Reuters 2021

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