LONDON (Reuters) – Music streaming leader Spotify (SPOT.N) on Thursday reported results mostly in line with forecasts, as the number of paid subscribers rose 10 percent over the last three months, but revenue growth was slowed by new European data privacy rules.
FILE PHOTO: The Spotify logo is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York, U.S., May 3, 2018. REUTERS/Brendan McDermid/File Photo
Monthly subscribers, which account for around 90 percent of revenue, rose to 83 million at the end of June, up from 75 million in the first three months of 2018. Analysts, on average, was looking for 82 million subs, a Thomson Reuters poll showed.
Second-quarter revenue rose 26 percent to 1.27 billion euros, roughly in line with market expectations. Fifteen analysts polled by Thomson Reuters had forecast, on average, 1.26 billion euros.
“We did see some GDPR disruption across our European markets during Q2 but seem to be largely past that now,” the company said in a statement, referring to the European Union’s General Data Protection Regulation that came into effect in May.
Reporting by Eric Auchard in London; Editing by Adrian Croft
TOKYO (Reuters) – Japanese regulators on Wednesday said Apple Inc (AAPL.O) may have breached antitrust rules by forcing mobile service providers to sell its iPhones cheaply and charge higher monthly fees, denying consumers a fair choice.
FILE PHOTO: A member of Apple staff takes pictures as new iPhone X begins to sell at an Apple Store in Beijing, China November 3, 2017. REUTERS/Damir Sagolj/File Photo
The Fair Trade Commission (FTC) said that Apple had forced NTT Docomo Inc (9437.T) , KDDI Corp (9433.T) and SoftBank Group Corp (9984.T) to offer subsidies and sell iPhones at a discount.
The FTC, which began looking into Apple’s sales practices in 2016, did not punish Apple as the U.S. company had agreed to revise its contracts with the carriers, it said.
Reporting by Makiko Yamazaki and Yoshiyasu Shida; Editing by Ritsuko Ando
In his recently released book, Unscaled, venture capitalist Hemant Taneja writes about the next chapter in the Silicon Valley story. The book chronicles Silicon Valley’s transition over the last few years from an enterprise software-focused community to one developing platforms for all facets of society. Taneja, who has been a successful entrepreneur and venture capitalist in Boston and the Bay Area, uses several of his portfolio companies, including Stripe and Snapchat, as examples of the ambitious technology platforms that entrepreneurs are building.
The prequel to this story is the well-chronicled rise of “social, mobile and cloud” – or social media, mobile phones and tablets, and the migration to cloud computing solutions. Taneja adds two important links to this chain – artificial intelligence and Big Data. With new tools for AI and analytics, and an already reduced cost of doing business, writes Taneja, even early-stage Silicon Valley startups have been able to compete head-on with large companies in their core business areas. Instead of just developing software to make business more efficient, startups are becoming platform enablers of commerce using Big Data, analytics and AI to increase the speed of product iteration. Taneja uses Stripe, Snap and Warby Parker as examples of companies that have remained, by and large, extraordinarily product-focused, and were able to ignore other things that go with being a global company, such as infrastructure, human resources and operations, until they had to. They “rent” as much as they can for as long as they can.
When speaking with Taneja, he recognizes, as do most Silicon Valley veterans, that this model doesn’t yet work well for more complicated sectors, such as life sciences, space, hard sciences, or anything requiring the management of intellectual property, which defies iteration. While many scientists are trying to use Silicon Valley principles to speed drug discovery and share knowledge (pre-patent), there are vested interests and government regulations that prevent them from doing so. Today software for the sciences is still predominantly about efficiency. It will slowly move towards discovery, and according to Taneja, will help shift the biotech and pharma sectors from the blockbuster model to more narrowly targeted communities and populations.
The recent scandals at Facebook and Uber underline the growing pains facing fast-growing, unscaled companies that are readily embraced by consumers but unprepared for their responsibilities as a corporate actor. “Move fast and break things” might have been okay in the past, but not in an economy where a small startup is also a household brand. Taneja cites Warby Parker as an example of a company that has been thoughtful about its growth, and identified the right time to invest in corporate leadership, infrastructure and HR as it moved from a web-based retailer to bricks and mortar stores.
AI and a new generation of startups
The book also provokes some important public policy questions that have yet to be discussed in Washington or state capitals. Taneja talks about Khan Academy, a non-profit online learning platform used by an enormous number of schools and families around the world. And yet, the tenets of Khan Academy’s successful use of technology to simplify and teach concepts has yet to be embraced in education policy or practice.
Likewise, the unscaled phenomenon and the rise of unicorns presents interesting questions for our oversight of the corporate sector. Is a unscaled company like Airbnb a monopoly? It has the largest share of rooms of any hospitality brand, but has minimal assets. It’s not like Microsoft or ATT – where market share could be measured in traditional ways and anti-competitive practices could be monitored and remedied with oversight. Its not clear how that our federal agencies or policies are prepared to regulate an Airbnb or Uber in this way.
Taneja talks about the importance of connecting technology, and it’s often-insulated workforce, with the values of society. He hopes the book leads to a discussion about responsible innovation that focuses on transparency, accountability and plain English explanations about technology and its impact. He calls for an “algorithmic canary” for bad actors in technology that sounds the alarm for industry and the general public before its too late.
WASHINGTON (Reuters) – The Federal Communications Commission said in a notice on Thursday that landmark 2015 U.S. open-internet rules will cease on June 11, and new rules handing providers power over what content consumers can access will take effect.
FILE PHOTO: The Federal Communications Commission (FCC) logo is seen before the FCC Net Neutrality hearing in Washington, U.S., February 26, 2015. REUTERS/Yuri Gripas/File Photo
The FCC in December repealed the Obama-era “net neutrality” rules, allowing internet providers to block or slow websites as long as they disclose the practice. The FCC said the new rules will take effect on June 11.
A group of states and others have sued to try to block the new rules from taking effect. The revised rules were a win for internet service providers like AT&T Inc (T.N) and Comcast Corp (CMCSA.O) but are opposed by internet firms like Facebook Inc (FB.O) and Alphabet Inc (GOOGL.O).
“The agency failed to listen to the American public and gave short shrift to their deeply held belief that internet openness should remain the law of the land,” FCC Commissioner Jessica Rosenworcel, a Democrat, said Thursday. “The FCC is on the wrong side of history, the wrong side of the law, and the wrong side of the American people.”
The U.S. Senate is set to vote as early as next week on whether to reject the FCC repeal of the net neutrality rules – but that effort faces an uphill battle.
Slideshow (3 Images)
Proponents currently have the backing of 47 Democrats and two independents who caucus with Democrats, as well as Republican Senator Susan Collins. With the prolonged absence of Republican Senator John McCain due to illness, proponents believe they will win on a 50-49 vote.
Senator Ed Markey said it was “likely” the vote will take place in the middle of next week. On Wednesday, senators officially filed a petition to force a net neutrality vote and 10 hours of floor debate under the Congressional Review Act.
Following the FCC announcement, Markey wrote on Twitter, “the Senate must act NOW and pass my resolution to save the internet as we know it.”
The FCC voted 3-2 to reverse Obama-era rules barring service providers from blocking, slowing access to or charging more for certain online content.
Once they take effect, the new FCC rules would give internet service providers sweeping powers to change how consumers access the internet but include new transparency requirements that require them to disclose any changes to consumers.
If the Senate approves the measure, it would not likely pass the Republican-controlled House of Representatives. If the legislation were to pass the House, President Donald Trump would be expected to veto it.
In February, a coalition of 22 state attorneys general refiled legal challenges intended to block the Trump administration’s repeal of net neutrality.
FCC Chairman Ajit Pai has often said he is confident the agency’s order will be upheld.
Democrats have said they believe the issue would be key in November’s midterm congressional elections, especially among younger internet-savvy voters.
Republicans have said the FCC repeal would eliminate heavy-handed government regulations, encourage investment and return the internet to pre-2015 rules.
Reporting by David Shepardson; editing by Jonathan Oatis
WASHINGTON (Reuters) – The U.S. Transportation Department has sent two proposed rules to the White House to regulate the increased use of unmanned aerial vehicles, the agency said on Tuesday as it prepared to unveil the winners of new drone pilot projects.
One of the new rules would allow drones to fly over people while the other would allow for remote identification and tracking of unmanned aircraft in flight. After both are formally proposed, it would take months or even more than a year before they are finalized.
Current rules prohibit nighttime drone flights or operations over people without a waiver from the Federal Aviation Administration. The FAA has no requirements or voluntary standards for electrically broadcasting information to identify an unmanned aircraft.
The FAA has said regulations are necessary to protect the public and the National Airspace System from bad actors or errant hobbyists. Several incidents around major airports have involved drones getting close to aircraft.
The National Transportation Safety Board said in December a September collision between a small civilian drone and a U.S. Army helicopter was caused by the drone operator’s failure to see the helicopter because he was intentionally flying the drone out of visual range.
The helicopter landed safely but a 1-1/2 inch (3.8 cm) dent was found on the leading edge of one of its four main rotor blades and parts of the drone were found lodged in its engine oil cooler fan.
Later on Tuesday, U.S. Transportation Secretary Elaine Chao will unveil the winners for 10 drone projects involving cities, universities, an Indian tribe, counties and states. Reuters reported Tuesday that major technology and aerospace companies including Amazon.com Inc, Apple Inc, Intel Corp, Qualcomm Inc and Airbus SE are vying to take part in the new slate of drone tests.
The wide interest in the U.S. initiative, launched by President Donald Trump last year, underscores the desire of a broad range of companies to have a say in how the fledgling industry is regulated and ultimately win authority to operate drones for purposes ranging from package delivery to crop inspection.
Reporting by David Shepardson; Editing by Richard Chang
MUNICH (Reuters) – Facebook executives are fanning out across Europe this week to address the social media giant’s slow response to abuses on its platform, seeking to avoid further legislation along the lines of a new hate speech law in Germany it says goes too far.
Facebook’s communications and public policy chief used an annual meeting in Munich of some of Europe and Silicon Valley’s tech elite to apologize for failing to do more, earlier, to fight hate speech and foreign influence campaigns on Facebook.
“We have to demonstrate we can bring people together and build stronger communities,” the executive, Elliot Schrage, said of the world’s biggest information-sharing platform, which has more than 2 billion monthly users.
“We have over-invested in building new experiences and under-invested in preventing abuses,” he said in a keynote speech at the DLD Munich conference on Sunday.
In the United States, lawmakers have criticized Facebook for failing to stop Russian operatives using its platform to meddle in the 2016 presidential elections, while Britain’s parliament is looking again at the role such manipulation may have played in Britain’s Brexit vote to leave the European Union.
A German law that took effect at the start of the year requires social networks such as Facebook, Google and Twitter to remove online hate speech or face heavy fines. (reut.rs/2rm6AI2)
“It sets forth the right idea for the relation between government and the private sector but it also goes farther than … we think it should go,” Schrage said of the law.
”At the same time the law places the responsibility on us to be judge and jury and enforcer determining what is legally compliant and not. I think that is a bad idea.
“The challenge is how to define where the violation has been or not,” he said.
By contrast, Schrage praised the approach of the European Union in demanding that internet companies adhere to a code of conduct and respond quickly to requests to take down illegal content rather than being required to make those decisions themselves.
“That’s an example of how we can work with governments to be more responsive to their concerns,” Schrage said of the EU.
The EU has put internet companies on notice that it will legislate if they don’t do a better job self-policing their services for extremist propaganda, hate speech and other abuses. (reut.rs/2DmXGeU)
NO WILD WEST
Far from being a “Wild West of content”, Schrage argued, Facebook’s policies on policing content are far more in line with Europe’s strict boundaries governing hate speech than the anything-goes reputation it has coming from Silicon Valley.
“We are often criticised for being an American company. But our policies with respect to speech and expression are much closer to how the standards have evolved in Europe than they are in the United States,” Schrage said.
“We do not permit hate speech, we do not permit incitement. There is a tremendous amount of content we remove regularly. When we see content related to terrorism, to hate speech, to incitement, we reach out to law enforcement,” he said.
But several tech leaders in the audience said Facebook had long ignored what are effectively editorial responsibilities for policing abusive content on its platform.
Schrage said Facebook now employed thousands of people to monitor content and to work more closely with law enforcement, while automated algorithms detect and delete 99 percent of Islamic State and al Qaeda content before any Facebook users ever see it.
Paul-Bernhard Kallen, chief executive of Hubert Burda Media, one of Germany’s largest publishers, said Facebook has avoided responsibility for moderating content on its platform.
“From my perspective, Facebook is a media company. One way or the other, Facebook should accept it,” Kallen said of taking more control over content or facing regulatory demands to do so.
Facebook Chief Operating Officer Sheryl Sandberg is meeting policymakers in Paris and Brussels, while Schrage is touring Germany. Later this week they will converge on Davos, the annual policy gathering of world politicians, business chiefs, bankers and celebrities taking place in the Swiss Alps.
Facebook founder and chief executive Mark Zuckerberg, who has declared earlier this year that his 2018 goal is to “fix” Facebook, is staying home (reut.rs/2F2w8g6).
Reporting by Eric Auchard and Douglas Busvine in Munich; Editing by Adrian Croft
TARTU, Estonia (Reuters) – A group of NATO allies are considering a more muscular response to state-sponsored computer hackers that could involve using cyber attacks to bring down enemy networks, officials said.
A man types into a keyboard during the Def Con hacker convention in Las Vegas, Nevada, U.S. on July 29, 2017. REUTERS/Steve Marcus
The United States, Britain, Germany, Norway, Spain, Denmark and the Netherlands are drawing up cyber warfare principles to guide their militaries on what justifies deploying cyber attack weapons more broadly, aiming for agreement by early 2019.
The doctrine could shift NATO’s approach from being defensive to confronting hackers that officials say Russia, China and North Korea use to try to undermine Western governments and steal technology.
“There’s a change in the (NATO) mindset to accept that computers, just like aircraft and ships, have an offensive capability,” said U.S. Navy Commander Michael Widmann at the NATO Cooperative Cyber Defence Centre of Excellence, a research center affiliated to NATO that is coordinating doctrine writing.
Washington already has cyber weapons, such as computer code to take down websites or shut down IT systems, and in 2011 declared that it would respond to hostile cyber acts.
The United States, and possibly Israel, are widely believed to have been behind “Stuxnet”, a computer virus that destroyed nuclear centrifuges in Iran in 2010. Neither has confirmed it.
Some NATO allies believe shutting down an enemy power plant through a cyber attack could be more effective than air strikes.
“I need to do a certain mission and I have an air asset, I also have a cyber asset. What fits best for the me to get the effect I want?” Widmann said.
The 29-nation NATO alliance recognized cyber as a domain of warfare, along with land, air and sea, in 2014, but has not outlined in detail what that entails.
In Europe, the issue of deploying malware is sensitive because democratic governments do not want to be seen to be using the same tactics as an authoritarian regime. Commanders and experts have focused on defending their networks and blocking attempts at malicious manipulation of data.
Senior Baltic and British security officials say they have intelligence showing persistent Russian cyber hacks to try to bring down European energy and telecommunications networks, coupled with Internet disinformation campaigns.
They believe Russia is trying to break Western unity over economic sanctions imposed over Moscow’s 2014 annexation of Crimea and its support for separatists in eastern Ukraine.
“They (Russia) are seeking to attack the cohesion of NATO,” said a senior British security official, who said the balance between war and peace was becoming blurred in the virtual world. “It looks quite strategic.”
Moscow has repeatedly denied any such cyber attacks.
ESTONIAN ‘CYBER COMMAND’
The United States, Britain, the Netherlands, Germany and France have “cyber commands” — special headquarters to combat cyber espionage and hacks of critical infrastructure.
Estonia, which was hit by one of the world’s first large-scale cyber attacks a decade ago, aims to open a cyber command next year and make it fully operational by 2020, with offensive cyber weapons.
“You cannot only defend in cyberspace,” said Erki Kodar, Estonia’s undersecretary for legal and administrative affairs who oversees cyber policy at the defense ministry.
Across the globe this year computer hackers have disrupted multinational firms, ports and public services on an unprecedented scale, raising awareness of the issue.
NATO held its biggest ever cyber exercise this week at a military base in southern Estonia, testing 25 NATO allies against a fictional state-sponsored hacker group seeking to infiltrate NATO air defense and communication networks.
“The fictional scenarios are based on real threats,” said Estonian army Lieutenant-Colonel Anders Kuusk, who ran the exercise.
NATO’s commanders will not develop cyber weapons but allied defense ministers agreed last month that NATO commanders can request nations to allow them use of their weapons if requested.
MOSCOW (Reuters) – Uber [UBER.UL] and Yandex’s ride-sharing businesses can merge in Russia, anti-monopoly regulator FAS ruled on Friday, but stipulated that the combined company not bar drivers from working for competitors.
FILE PHOTO: A taxi with the logo of Russian online taxi service Yandex Taxi drives past a terminal of the Domodedovo Airport outside Moscow, Russia, November 2, 2017. REUTERS/Maxim Shemetov
Uber and Yandex, often referred to as the “Google of Russia”, announced plans in July to combine operations in 127 cities in Russia, Armenia, Azerbaijan, Belarus, Georgia and Kazakhstan.
San Francisco-based Uber has agreed to invest $ 225 million while Yandex will contribute $ 100 million into a new joint company in which Yandex will own 59.3 percent.
The two companies must allow their partners, drivers and passengers to work for or use competitors’ services and fully inform users of the legal entity providing the service, the FAS said in a statement.
Yandex said consumers would be able to use both Yandex.Taxi and Uber apps, while their driver apps will be integrated, leading to shorter passenger wait times, increased driver utilization rates, and higher service reliability.
The companies aim to close the deal in January 2018, after the New Year holidays in Russia, Yandex said in a statement.
Moscow-listed Yandex was up 3.47 percent as of 1123 GMT.
It said the anti-monopoly regulator in Belarus had also approved the deal while a decision by the Kazakh regulator was pending.
Reporting by Maria Kiselyova; editing by Jason Neely
But broadened rules might be hard for the small company to enforce.
Reddit, a large internet community that has sometimes been accused of incubating hate groups, announced on Wednesday that its content policy would become more restrictive. Several pages dedicated to hateful speech or ideologies were quickly banned.
Reddit’s new policy was outlined in statements on the site’s Help page and on a message board for the volunteer moderators of the site’s thousands of community pages, known as subreddits. The change expands a prior ban on “inciting” violence to include “any content that encourages, glorifies, incites, or calls for violence or physical harm against an individual or group of people” or against animals.
The broadened restrictions seem intended, in part, to tamp down on hate groups and racist ideology on the site. The New York Times reported that at least three subreddits were swiftly banned after the announced changes: r/NationalSocialism, r/Nazi, and r/Far_Right.
Reddit has previously banned a number of subreddits, particularly those glorifying or enabling sexual crimes or targeted harassment. But the latest wave of shutdowns comes amid a broader move away from free-speech absolutism on platforms including Twitter and Facebook, both of which have announced plans to further restrict content considered hateful.
Those efforts have shown mixed results, and Reddit’s new approach is likely to be even more constrained, simply because of the company’s size. Reddit was recently valued at $ 1.8 billion, compared to around $ 16 billion for Twitter and $ 516 billion for Facebook. Facebook employs thousands of content screeners, while Reddit’s entire staff numbers fewer than 300.
Twitter has responded to people who criticized it for not taking down President Donald Trump’s bellicose tweet about North Korea, which led the country to claim he had declared war on it. The tweet was too newsworthy to take down, the social media platform said.
The tweet, which Trump posted on Saturday, followed a speech to the United Nations General Assembly by North Korean foreign minister Ri Yong Ho.
Ri said it was “inevitable” that his country would fire missiles at the U.S. mainland. In response, Trump tweeted: “Just heard Foreign Minister of North Korea speak at U.N. If he echoes thoughts of Little Rocket Man, they won’t be around much longer!”
Twitter’s terms of service claim the company does not “tolerate behavior that crosses the line into abuse, including behavior that harasses, intimidates, or uses fear to silence another user’s voice.” Many people have wondered why, given the nature of Trump’s Twitter activity, this rule hasn’t led to his suspension from the platform.
In a thread late Monday, Twitter’s policy team addressed the question. The team insisted that it holds “all accounts to the same rules,” but pointed out the factors it takes into account when assessing violations.
“Among the considerations is ‘newsworthiness’ and whether a tweet is of public interest,” the policy team wrote. “This has long been internal policy and we’ll soon update our public-facing rules to reflect this.”
“We need to do better on this, and will,” the team added.
Twitter has a longstanding problem with abuse that many see as contributing to its stagnant user growth. It has brought in several new measures this year to address the issue, such as making it harder for abusive tweets to reach the eyes of their targets, and banning more people for their trollish behavior.
The U.S. administration has strongly denied that Trump’s Saturday tweet was a declaration of war, with White House spokesperson Sarah Sanders calling the assertion “absurd.”