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Europe’s battle with Big Tech: billions in fines and tough laws

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Tech giants have been targeted by the EU for a number of allegedly unfair practices
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The European Union is on a mission to rein in US tech giants, which have been accused of tax avoidance, stifling competition, raking in billions from news without paying for it and spreading misinformation.

In the past few years, the EU has slapped eye-watering fines on Apple and Google in tax and competition cases, and drawn up a landmark law to curb the market dominance of Big Tech. Brussels has also toughened its code of conduct on disinformation and hate speech.

As a European court on Wednesday rejected Google’s appeal against a 4.3-billion-euro antitrust fine ($5 billion at the time it was levied), we look at the battle between Brussels and Silicon Valley:

– Stifling competition –

The digital giants are regularly criticised for dominating markets by elbowing out rivals.

In July, the European Parliament adopted the Digital Markets Act to curb the market dominance of Big Tech, with violations punishable with fines of up to 10 percent of a company’s annual global sales.

Brussels has slapped over eight billion euros in fines on Google alone for abusing its dominant market position. 

In 2018, the company was fined 4.3 billion euros — the biggest ever antitrust penalty imposed by the EU — for abusing the dominant position of its Android mobile operating system to promote Google’s search engine. 

Google lost its appeal against that decision on Wednesday, though the fine was reduced to 4.1 billion euros.

The firm is also challenging a 2.4-billion-euro fine from 2017 for abusing its power in online shopping and a separate 1.5-billion-euro fine from 2019 for “abusive practices” in online advertising. 

The EU has also gone after Apple, accusing it of blocking rivals from its contactless iPhone payment system, and fined Microsoft 561 million euros in 2013 for imposing its search engine Internet Explorer on users of Windows 7.

Italy joined in the action last year, hitting Amazon with a 1.1-billion-euro antitrust fine for abusing its dominance to push its logistics business.

– Taxation – 

The EU has had less success in getting US tech companies to pay more taxes in Europe, where they are accused of funnelling profits into low-tax economies like Ireland and Luxembourg.

In one of the most notorious cases, the European Commission in 2016 found that Ireland granted illegal tax benefits to Apple and ordered the company pay 13 billion euros in back taxes.

But the EU’s General Court later overturned the ruling, saying there was no evidence the company broke the rules.

The Commission also lost a similar case involving Amazon, which it had ordered to repay 250 million euros in back taxes to Luxembourg.

Frustrated by the lack of progress, France, Italy and several other European nations forged ahead with their own taxes on tech companies while waiting for a global agreement on the issue.

That came in October 2021 when the G20 group of nations agreed on a minimum 15 percent corporate tax rate. Nearly 140 countries signed up to the deal.

– Personal data –

Tech giants are regularly criticised over how they gather and use personal data.

The EU has led the charge to rein them in with its 2018 General Data Protection Regulation, which has since become an international reference.

Companies must now ask for consent when they collect personal information and may no longer use data collected from several sources to profile users against their will.

Amazon was fined 746 million euros by Luxembourg in 2021 for flouting the rules.

Earlier this month, Irish authorities fining Instagram, a Meta subsidiary, 405 million euros for breaching EU regulations on the handling of children’s data. 

– Fake news and hate speech –

Social networks, particularly Facebook and Twitter, are often accused of failing to tackle disinformation and hate speech.

In July, the European Parliament approved a Digital Services Act that forces big online companies to reduce risks linked to disinformation or face fines of up to six percent of their global turnover.

– Paying for news –

Google and other online platforms are also accused of making billions from news without sharing the revenue with those who gather it.

To tackle this, an EU law in 2019 created a form of copyright called “neighbouring rights” allowing for print media to demand compensation for use of their content. 

France was the first country to implement the directive.

After initial resistance, Google and Facebook agreed to pay French media, including AFP, for articles shown in web searches.

That did not stop the company being fined half-a-billion euros by France’s competition authority in July 2021 for failing to negotiate “in good faith”, a ruling Google has appealed.

Facebook has also agreed to pay for some French content.

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UK eyes big TikTok fine over child privacy lapse

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A UK regulator said TikTok ay have processed the data of children under the age of 13 without appropriate parental consent
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Britain on Monday warned it could fine TikTok £27 million ($29 million) over a potential failure to protect children’s privacy on the Chinese-owned video app.

The Information Commissioner’s Office said the social media company “may have processed the data of children under the age of 13 without appropriate parental consent”.

The ICO also found that the short-form video platform may have “failed to provide proper information to its users in a concise, transparent and easily understood way”.

The watchdog has served the group with a notice of intent — which is a legal document that precedes a possible fine — over the possible breach of UK data protection law.

“We all want children to be able to learn and experience the digital world, but with proper data privacy protections,” said Information Commissioner John Edwards.

“Companies providing digital services have a legal duty to put those protections in place, but our provisional view is that TikTok fell short of meeting that requirement.”

In response, TikTok said it disagreed with the ICO’s provisional views and stressed that no final conclusions had been reached.

“While we respect the ICO’s role in safeguarding privacy in the UK, we disagree with the preliminary views expressed and intend to formally respond to the ICO in due course,” TikTok said in a statement.

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Apple to make iPhone 14 in India in shift away from China

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The Apple logo at a store in New York
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Apple will manufacture its new flagship smartphone in India, the US tech giant said Monday, as it seeks to diversify production away from a dependence on China.

The iPhone supply chain is based mainly in China but the country’s zero-Covid policies and tensions with the United States have hurt production, analysts say.

“We’re excited to be manufacturing iPhone 14 in India,” Apple said in a brief statement.

The California-based firm already makes older iPhone models in India via Taiwanese manufacturers such as Foxconn, which has a factory in the southern state of Tamil Nadu.

The latest announcement comes just weeks after Apple launched new smartphones. The tech behemoth is commencing production of the iPhone 14 in India much earlier than it did for previous models, Canalys analyst Sanyam Chaurasia said.

“Over the last couple of years, it has been increasingly diversifying its supply chain to India,” Chaurasia told AFP.

About 7.5 million iPhones — around three percent of Apple’s global production — were made in India last year, the analyst added.

“We expect that the local production of iPhones could reach more than 11 million this year,” he said.

Apple’s announcement will be a boost to Prime Minister Narendra Modi’s “Make in India” strategy under which he has urged foreign businesses to manufacture goods in the South Asian nation.

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US charges Boeing with misleading investors on 737 MAX safety, fined $200 mn

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US regulators say Boeing and its former CEO 'put profits over people,' misleading the public about the safety of the 737 MAX aircraft
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US securities officials fined Boeing $200 million over the aviation giant’s misleading assurances about the safety of the 737 MAX airplane following two deadly crashes, regulators announced Thursday.

Boeing agreed to the penalty to settle charges it “negligently violated the antifraud provisions” of US securities laws, the Securities and Exchange Commission said in a statement, saying the company and its leader “put profits over people.”

Boeing’s former chief executive, Dennis Muilenburg, also agreed to pay $1 million to settle the same charges in the civil case.

The settlement marks the latest hit to Boeing over the MAX following the Lion Air Crash in Indonesia in October 2018 and the Ethiopian Airlines crash in Ethiopia in March 2019, which together claimed nearly 350 lives. 

One month after the first crash, a Boeing press release approved by Muilenburg “selectively highlighted certain facts,” implying pilot error and poor aircraft maintenance contributed to the crash.

The press release also attested to the aircraft’s safety, not disclosing that Boeing knew a key flight handling system, the Maneuvering Characteristics Augmentation System (MCAS), posed safety issues and was being redesigned.

After the second crash, Boeing and Muilenburg assured the public that there was “no surprise or gap” in the federal certification of the MAX despite being aware of contrary information, the SEC said.

– Boeing ‘failed’ –

“In times of crisis and tragedy, it is especially important that public companies and executives provide full, fair, and truthful disclosures to the markets,” said SEC Chair Gary Gensler in a press release. 

“The Boeing Company and its former CEO, Dennis Muilenburg, failed in this most basic obligation. They misled investors by providing assurances about the safety of the 737 MAX, despite knowing about serious safety concerns.”

The SEC said both Boeing and Muilenburg, in agreeing to pay the penalties, did not admit or deny the agency’s findings.

Boeing said the agreement “fully resolves” the SEC’s inquiry and is part of the company’s “broader effort to responsibly resolve outstanding legal matters related to the 737 MAX accidents in a manner that serves the best interests of our shareholders, employees, and other stakeholders,” a company spokesman said.

“We will never forget those lost on Lion Air Flight 610 and Ethiopian Airlines Flight 302, and we have made broad and deep changes across our company in response to those accidents.”

US air safety authorities cleared Boeing’s 737 MAX to resume service in November 2020 following a 20-month grounding after the crashes.

A principal cause of the two crashes was identified as the MCAS, which was supposed to keep the plane from stalling as it ascended but instead forced the nose of the plane downward. The Federal Aviation Administration required Boeing to upgrade this system to address the flaw.

In January 2021, Boeing agreed to pay $2.5 billion to settle a US criminal charge over claims the company defrauded regulators overseeing the 737 MAX.

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