By Reuters | Updated: 2 August 2022
Apple was sued on Monday by French app developers that accused the iPhone maker of violating US antitrust law by overcharging them to use its app store.
The plaintiffs in the proposed class action include Société du Figaro, which develops the Figaro news app; L’Équipe 24/24, which develops the L’Équipe sports news and streaming app, and Le Geste, an association of French content providers.
According to the complaint filed in the federal court in Oakland, California, Apple has abused its monopoly power over app distribution on iOS-based mobile devices by mandating only one app store for those devices.
The plaintiffs said this has enabled the Cupertino, California-based company to charge “supracompetitive” 30 percent commissions for 14 years, as well as $99 (roughly Rs. 8,000) annual fees to app developers, while stifling innovation and consumer choice.
“There is no valid business necessity or pro-competitive justification for Apple’s conduct,” the complaint said. “Instead, Apple’s actions are designed to destroy competition.”
Apple did not immediately respond to requests for comment.
Monday’s complaint seeks an injunction against further anticompetitive conduct, plus triple damages for violating federal antitrust law and California state laws.
The plaintiffs are represented by the US law firm Hagens Berman Sobol Shapiro, and Paris-based Fayrouze Masmi-Dazi.
Monday’s lawsuit resembles an earlier Hagens Berman case against Apple, which resulted last August in a $100 million (roughly Rs. 800 crore) settlement for smaller iOS developers that called Apple’s commissions excessive.
In June, the firm reached a $90 million (roughly Rs. 700 crore) settlement with Alphabet’s Google over its app store’s treatment of developers.
The case is Société du Figaro et al v Apple Inc, US District Court, Northern District of California, No. 22-04437.
© Thomson Reuters 2022
WhatsApp Bans Over 23 Lakh Accounts in India in October, ‘Proactively’ Barred 8.1 Lakh Users
By ANI | Updated: 1 December 2022
Instant messaging and voice-over-IP service WhatsApp on Wednesday said the firm banned over 23 lakh accounts in the month of October, according to a spokesperson of WhatsApp. In another statement, it said as many as 811,000 of these 23 lakh accounts were proactively banned, before any reports from users.
A WhatsApp spokesperson in a statement said, “WhatsApp is an industry leader in preventing abuse, among end-to-end encrypted messaging services. Over the years, we have consistently invested in Artificial Intelligence and other state-of-the-art technology, data scientists and experts, and in processes, in order to keep our users safe on our platform.”
The spokesperson said, “In accordance with the IT Rules 2021, we’ve published our report for the month of October 2022. This user-safety report contains details of the user complaints received and the corresponding action taken by WhatsApp, as well as WhatsApp’s own preventive actions to combat abuse on our platform.”
As captured in the latest monthly report, WhatsApp banned over 23 lakh million accounts in the month of October, according to the spokesperson.
In a statement released by the firm, 26,85,000 WhatsApp accounts were banned from the instant messaging service between September 1 and 30 this year. As many as 872,000 of these accounts were proactively banned, before any reports from users.
According to the firm’s statement, in addition to responding to and taking action on user complaints through the grievance channel, WhatsApp also deployed tools and resources to prevent harmful behaviour on the platform. It said, “We are particularly focused on prevention because we believe it is much better to stop harmful activity from happening in the first place than to detect it after harm has occurred.”
It said the abuse detection operates at three stages of an account’s lifestyle: At registration, during messaging, and in response to negative feedback, which we receive in the form of user reports and blocks.
The statement from WhatsApp said a team of analysts augments these systems to evaluate edge cases and help improve our effectiveness over time.
Paytm to Resubmit Application for Authorisation of Payment Aggregator Services
By ANI | Updated: 26 November 2022
Digital payments and financial services company Paytm has shared an update with the exchanges about its 100 percent subsidiary, Paytm Payments Services.
The fintech company said that it has received a letter from the Reserve Bank of India (RBI) in response to an application from its subsidiary for the authorisation to provide payment aggregator services for online merchants.
The company can now resubmit the application within 120 calendar days for the payment aggregator services. Ahead of that, the company will seek necessary approval for past downward investment from Paytm into its subsidiary, to comply with foreign direct investment guidelines.
During this process, the company will not onboard new online merchants.
“We can continue to onboard new offline merchants and offer them payment services including All-in-One QR, Soundbox, Card Machines, etc. Similarly, PPSL can continue to do business with existing online merchants, for whom the services will remain unaffected,” said the company in its exchange filing on Saturday.
This essentially means that Paytm’s strong business momentum is likely to continue, with no impact on its profitability target as the company can continue to work with its existing online merchants.
Additionally, Paytm’s growing device deployments base and increasing offline payments base will also not be impacted with this development, as it can continue to onboard new merchants.
The company specifically outlined in its filing that this has no material impact on its business and revenues since the communication from RBI is applicable only to the onboarding of new online merchants.
“We are hopeful of receiving the necessary approvals in a timely manner and resubmitting the application,” said the company in the filing.
Zoom Annual Revenue Forecast Lowered Amid Decline in Online Business, Rising Inflation
By Reuters | Updated: 22 November 2022
Zoom Video Communications on Monday lowered its annual revenue forecast, as the video-conferencing platform expects a hit from declining online business. The company’s chief financial officer Kelly Steckelberg said during a post-earnings call that Zoom’s online business would decline nearly 8 percent during the year.
After recording blistering growth during the pandemic, Zoom, which competes with WeChat Work, Microsoft Teams, Cisco WebEx, and Slack, is facing a slowdown as red-hot inflation is dampening the spending power of customers.
The easing of pandemic-related restrictions across the world is also weighing on its business as people started spending less time online.
Shares of the San Jose, California-based company, which fell nearly 56 percent this year, were down 5 percent in trading after the bell.
Zoom now expects annual revenue to be between $4.37 billion (roughly Rs. 35,696 crore) and $4.38 billion (roughly Rs. 35,777 crore), compared with an earlier outlook of $4.39 billion (roughly Rs. 35,850 crore) and $4.40 (roughly Rs. 35,932 crore) billion.
“Guidance suggests further weakness in both enterprise and online. It is tough to disaggregate how much of this is macro (especially given slowing down in hiring or layoffs in tech) and how much is competition,” said RBC analyst Rishi Jaluria.
“The focus for Zoom remains on its ability to expand to become a larger platform,” he added.
The company, however, raised its annual adjusted profit per share to between $3.91 (roughly Rs. 320) and $3.94 (roughly Rs. 322), compared with the $3.66 (roughly Rs. 299) to $3.69 (roughly Rs. 301) forecast earlier.
Revenue for the third quarter that ended on October 31 rose 5 percent to $1.1 billion (roughly Rs. 9,000 crore), on the back of a 20 percent increase from high-paying enterprise customers, the company said.
On an adjusted basis, the pandemic winner earned $1.07 (roughly Rs. 87) per share during the quarter, compared with estimates of 84 cents (roughly Rs. 69), according to Refinitiv data.
© Thomson Reuters 2022
WhatsApp Business Chat to Drive Sales Sooner Than the Metaverse, Meta CEO Mark Zuckerberg Says
By Reuters | Updated: 18 November 2022
Meta Platforms Chief Executive Mark Zuckerberg told employees on Thursday that WhatsApp and Messenger would drive the company’s next wave of sales growth, as he sought to assuage concerns about Meta’s finances after its first mass layoffs.
Zuckerberg, addressing pointed questions at a company-wide meeting a week after Meta said it would lay off 11,000 workers, described the pair of messaging apps as being “very early in monetizing” compared to its advertising juggernauts Facebook and Instagram, according to remarks heard by Reuters.
“We talk a lot about the very long-term opportunities like the metaverse, but the reality is that business messaging is probably going to be the next major pillar of our business as we work to monetize WhatsApp and Messenger more,” he said.
Meta enables some consumers to speak and transact with merchants through the chat apps, including a new feature announced Thursday in Brazil.
The company did not immediately respond to a request for comment on Thursday’s internal forum.
Zuckerberg’s comments there reflect a shift in tone and emphasis after focusing heavily on extended reality hardware and software investments since announcing a long-term ambition to build out an immersive metaverse last year.
Investors have questioned the wisdom of that decision as Meta’s core advertising business has struggled this year, more than halving its stock price.
In his remarks to employees, Zuckerberg played down how much the company was spending in Reality Labs, the unit responsible for its metaverse investments.
People were Meta’s biggest expense, followed by capital expenditure, the vast majority of which went to infrastructure to support its suite of social media apps, he said. About 20 percent of Meta’s budget was going to Reality Labs.
Within Reality Labs, the unit was spending over half of its budget on augmented reality (AR), with smart glasses products continuing to emerge “over the next few years” and some “truly great” AR glasses later in the decade, Zuckerberg said.
“This is in some ways is the most challenging work … but I also think it’s the most valuable potential part of the work over time,” he said.
About 40 percent of Reality Labs’ budget went toward virtual reality, while about 10 percent was spent on futuristic social platforms such as the virtual world it calls Horizon.
Chief Technology Officer Andrew Bosworth, who runs Reality Labs, said AR glasses need to be more useful than mobile phones to appeal to potential customers and meet a higher bar for attractiveness.
Bosworth said he was wary of developing “industrial applications” for the devices, describing that as “niche,” and wanted to stay focused on building for a broad audience.
© Thomson Reuters 2022
Apple vs Epic Games: Fortnite Developer, iPhone Maker Square Off in Court Battle Over iPhone App Store
By Associated Press | Updated: 15 November 2022
Apple and the company behind the popular video game Fortnite squared off Monday before three federal appellate judges who will render the next decision in a high-stakes battle over whether Apple created an illegal monopoly via its exclusive control of its iPhone app store. Such monopolies typically stifle competition and drive up consumer prices.
The oral arguments laid out in the Ninth Circuit Court of Appeals by lawyers from Apple and Fortnite maker Epic Games follow a September 2021 lower court ruling that largely preserved Apple’s sway over the apps it allows on more than 1 billion iPhones worldwide. The 75-minute session was a prelude to an expected ruling by the appeals court, likely to be issued sometime next year.
A so-called “walled garden” protecting the iPhone app store includes a payment system that funnels Apple commission revenue ranging from 15 percent to 30 percent on the purchases of some subscriptions and other digital services through its storefront. The setup generates an estimated $15 billion (roughly Rs. 1,21,900 crore) to $20 billion (roughly Rs. 1,62,535 crore) for Apple every year, which has helped lift its market value to nearly $2.4 trillion (roughly Rs. 1,95,04,300 crore).
Epic lawyer Thomas Goldstein depicted Apple’s walled garden as a pretext for increasing its profits at the expense of the companies making the apps that have helped make iPhones so popular.
“The only thing that is kept out by Apple’s walled garden is competitors,” Goldstein said.
Apple lawyer Mark Perry defended that walled garden as an indispensable feature prized by consumers who want the best protection available for their personal information. He also described the barrier as a way for the iPhone to distinguish itself from devices running on Google’s Android software, which isn’t as restrictive and is licensed to a wide range of manufacturers.
“Apple made the decision to make this the safest, the most secure, the most private computing device that the world has ever known,” Perry boasted to the three judges. He added: “What is kept out by walled gardens is fraudsters, ‘pornsters’ and hackers.”
Perry pointed to previous sworn testimony provided by Epic CEO Tim Sweeney, who attended Monday’s arguments. As a witness in last year’s trial, Sweeney acknowledged that he owns an iPhone himself, partly because of its security and privacy features.
During their questioning, two of the three judges — Milan D. Smith Jr. and Michael J. McShane — seemed to be struggling with whether Epic had done enough to prove its case in the first place.
At various times, Smith wondered whether Epic had even been able to successfully define the market in question — a key factor in antitrust cases — while McShane asked whether Epic had proven that Apple had made it too cumbersome and expensive for consumers unhappy with the iPhone to switch to an Android device.
While questioning Epic’s Goldstein, Smith at one point observed that Apple seemed to “have made a pretty good case for ‘failure of proof'” in the lower court trial. Signaling he didn’t believe Epic’s contention that Apple has locked consumers into keeping their iPhones, McShane pointed out that isn’t why he doesn’t change the kind of smartphone he uses. “I am too lazy to switch,” McShane said. “There are a lot of reasons people don’t switch phones.”
The third judge on the panel, Sidney R. Thomas, asked only one question about a complex issue that provided little insight into which way he might be leaning.
Apple vs Epic Games: Antitrust Battle Over iPhone App Store Heads to US Appeals Court
By Associated Press | Updated: 14 November 2022
Apple is heading into a courtroom faceoff against the company behind the popular Fortnite video game, reviving a high-stakes antitrust battle over whether the digital fortress shielding the iPhone’s app store illegally enriches the world’s most valuable company while stifling competition.
Oral arguments Monday before three judges on the Ninth Circuit Court of Appeals are the latest volley in legal battle revolving around an app store that provides a wide range of products to more than 1 billion iPhone handsets and serves as a pillar in Apple’s $2.4 trillion (roughly Rs. 1,94,77,360 crore) empire.
It’s a dispute likely to remain unresolved for a long time. After hearing Monday’s arguments in San Francisco, the appeals court isn’t expected to rule for another six months to a year. The issue is so important to both companies that the losing side is likely to take the fight to the US Supreme Court, a process that could extend into 2024 or 2025.
The tussle dates back to August 2020 when Epic Games, the maker of Fortnite, filed an antitrust lawsuit in an attempt to obliterate the walls that have given Apple exclusive control over the iPhone app store since its inception 14 year ago.
That ironclad control over the app store has enabled Apple to impose commissions that give it a 15 percent to 30 percent cut of purchases made for digital services sold by other companies. By some estimates, those commissions pay Apple $15 billion (roughly Rs. 1,21,820 crore) to $20 billion (roughly Rs. 1,62,430 crore) annually — revenue that the Cupertino, California, company says helps cover the cost of the technology for the iPhone and a store that now contains nearly 2 million mostly free apps.
US District Judge Barbara Gonzalez Rogers sided almost entirely with Apple in a 185-page ruling issued 13 months ago. That followed a closely watched trial that included testimony from Apple CEO Tim Cook and Epic CEO Tim Sweeney, as well as other top executives.
Although she declared Apple’s exclusive control over iPhone apps wasn’t a monopoly, Gonzalez Rogers opened one loophole that Apple wants to close. The judge ordered Apple to allow apps to provide links to payment alternatives outside the app store, a requirement that has been put off until the appeals court rules.
Monday’s arguments are expected to open with Epic lawyer Thomas Goldstein trying to persuade the trio of judges — Sidney R. Thomas, Milan D. Smith Jr., and Michael J. McShane — why Gonzalez Rogers should have looked at the iPhone app store and the payment system as distinctly separate markets instead of bundling them together.
A lawyer for the Justice Department will also get a chance to explain why the agency believes Gonzalez Rogers interpreted the federal antitrust law too narrowly, jeopardizing future enforcement actions against potentially anti-competitive behavior in the technology industry. Although the department technically isn’t taking sides, its arguments are expected to help Epic make its case that the appeals court should overturn the lower court decision.
Another lawyer for the California Attorney General’s office will present arguments defending the law that Gonzalez Rogers cited in ordering Apple to provide links to alternative ways to pay outside its app store.
Apple lawyer Mark Perry will get the chance to make the final arguments, giving him an opportunity to tailor a presentation aimed at answering some of the questions that the judges may ask the lawyers preceding him.
Much of what Perry says is likely to echo the successful case that Apple presented in the lower court.
During his testimony in lower court, Cook argued that forcing Apple to allow alternative payment systems would weaken the security and privacy controls prized by consumers who buy iPhones instead of devices running on Google’s Android software. That scenario would create “a toxic kind of mess,” Cook warned on the witness stand.
Even as he railed against Apple’s ironclad grip on the app store, Sweeney acknowledged he owns an iPhone himself, partly because of its security and privacy features.
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