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Europe’s battle to rein in Big Tech

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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 get US tech giants to stop avoiding tax, stifling competition, profiting from news content without paying and serving as platforms for disinformation and hate.

On Wednesday, Irish regulators slapped a fine of 390 million euros ($413 million) on Facebook owner Meta for breaking the rules on personal data collection — though the firm told AFP it would appeal.

Here is a summary of the tussles between Silicon Valley and Brussels.

– Stifling competition –

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

In July 2022, the European Parliament adopted the Digital Markets Act to curb the market dominance of Big Tech, with violators facing fines of up to 10 percent of their 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 in September 2022, 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 browser Internet Explorer on users of Windows 7.

The EU is also scrutinising Meta for tying its social media service Facebook to its classified ads service Facebook Marketplace.

– 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.

In October 2021, following extensive lobbying by European countries, the G20 group of nations agreed on a minimum 15-percent corporate tax rate.

– 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.

Last year, Irish authorities fined Instagram, a Meta subsidiary, 405 million euros for breaching regulations on the handling of children’s data.

In November, Facebook was fined 265 million euros over a massive data leak of more than half a billion users.

According to privacy activists, Wednesday’s ruling imposing a 390-million-euro fine also banned Facebook from collecting personal data unless the firm gives a “yes/no” consent option.

– Disinformation, hate speech –

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

In July last year, the European Parliament approved a Digital Services Act that forces big online companies to combat hate speech, disinformation and piracy, or face fines of up to six percent of their global turnover. It comes into effect in 2023.

– 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, the EU created a form of copyright called “neighbouring rights” that allows print media to demand compensation for use of their content. 

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

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ChatGPT: the promises, pitfalls and panic

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The excitement around ChatGPT - an easy to use AI chatbot that can deliver an essay or computer code upon request and within seconds - has sent schools into panic and turned Big Tech green with envy
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The excitement around ChatGPT – an easy to use AI chatbot that can deliver an essay or computer code upon request and within seconds – has sent schools into panic and turned Big Tech green with envy.

But behind the headlines, the potential impact of ChatGPT on society remains more complicated and unclear. Here is a closer look at what ChatGPT is (and is not):

– Is this a turning point? – 

It is entirely possible that November’s release of ChatGPT by California company OpenAI will be remembered as a turning point in introducing a new wave of artificial intelligence to the wider public. 

What is less clear is whether ChatGPT is actually a breakthrough with some critics calling it a brilliant PR move that helped OpenAI score billions of dollars in investments from Microsoft.

Yann LeCun, Chief AI Scientist at Meta and professor at New York University, believes “ChatGPT is not a particularly interesting scientific advance,” calling the app a “flashy demo” built by talented engineers.

LeCun, speaking to the Big Technology Podcast,  said ChatGPT is void of “any internal model of the world” and is merely churning “one word after another” based on inputs and patterns found on the internet.

“When working with these AI models, you have to remember that they’re slot machines, not calculators,” warned Haomiao Huang of Kleiner Perkins, the Silicon Valley venture capital firm.

“Every time you ask a question and pull the arm, you get an answer that could be marvelous…or not…The failures can be extremely unpredictable,” Huang wrote in Ars Technica, the tech news website.

– Just like Google –

ChatGPT is powered by an AI language model that is nearly three years old – OpenAI’s GPT-3 – and the chatbot only uses a part of its capability. 

The true revolution is the humanlike chat, said Jason Davis, research professor at Syracuse University.

“It’s familiar, it’s conversational and guess what? It’s kind of like putting in a Google search request,” he said.

ChatGPT’s rockstar-like success even shocked its creators at OpenAI, which received billions in new financing from Microsoft in January.

“Given the magnitude of the economic impact we expect here, more gradual is better,” OpenAI CEO Sam Altman said in an interview to StrictlyVC, a newsletter

“We put GPT-3 out almost three years ago… so the incremental update from that to ChatGPT, I felt like should have been predictable and I want to do more introspection on why I was sort of miscalibrated on that,” he said.

The risk, Altman added, was startling the public and policymakers and on Tuesday his company unveiled a tool for detecting text generated by AI amid concerns from teachers that students may rely on artificial intelligence to do their homework.

– What now? –

From lawyers to speechwriters, from coders to journalists, everyone is waiting breathlessly where the disruption from ChatGPT will be felt first, with a pay version of the chatbot expected soon.

For now, officially, the first significant application of OpenAI’s tech will be for Microsoft software products. 

Though details are scarce, most assume that ChatGPT-like capabilities will turn up on the Bing search engine and in the Office suite.

“Think about Microsoft Word. I don’t have to write an essay or an article, I just have to tell Microsoft Word what I wanted to write with a prompt,” said Davis.

He believes influencers on TikTok and Twitter will be the earliest adopters of this so-called generative AI since going viral requires huge amounts of content and ChatGPT can make the chore almost instantaneous.

This of course raises the specter of disinformation and spamming carried out at an industrial scale. 

For now, Davis said the reach of ChatGPT is very limited by computing power, but once this is ramped up, the opportunities and potential dangers will grow exponentially.

And much like the ever imminent arrival of self-driving cars that never quite happens, experts disagree on whether that is a question of months or years.

– Ridicule –

LeCun said Meta and Google have refrained from releasing AI as potent as ChatGPT out of fear of “ridicule” and backlash.

Quieter releases of language-based bots – like Meta’s Blenderbot or Microsoft’s Tay for example – were quickly shown capable of generating racist or inappropriate content.

Tech giants have to think hard before releasing something “that is going to spew nonsense” and disappoint, he said.

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Business and consumers hamper climate fight: report

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Corporate responses and consumption patterns are 'undermining' efforts to cut emissions, the researchers said
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Corporations and consumers are the main obstacle to the emissions cuts needed to keep global warming to the 1.5-degree Celsius limit, researchers said Wednesday, adding that “positive signs” in other areas are not yet enough to meet climate goals.

The report by a multidisciplinary team of researchers warned that staying within the 1.5C goal was “not plausible”, but that this could change if societies stepped up their efforts to cut emissions. 

“We see all kinds of positive signs, for example, the political protests, divestment decisions, climate litigation cases, transnational initiatives, this is all on the rise,” said one of the study authors Anita Engels. “So you could think that we are really on a good track.”

But she added: “We need to do so much more”.

The report, the Hamburg Climate Futures Outlook, assessed the plausibility of achieving the emissions reductions necessary to limit temperatures in line with the Paris Agreement. 

That 2015 deal saw nations agree to limit global warming to well below two degrees Celsius since pre-industrial times, preferably 1.5C. 

Researchers looked at 10 societal factors that they considered to be the most important drivers of decarbonisation and found that currently none are yet at a level that would lead to the dramatic emissions reductions needed by 2050.

– Media ‘ambivalent’ –

Using global databases and computer modelling, the authors found that seven social trends were moving tentatively in the right direction — including United Nations climate governance, regulation, litigation, and divestment from fossil fuels.

One — the media — was seen as “ambivalent”. 

But the two heading in the wrong direction were corporate responses and consumption patterns, which the researchers said “continue to undermine the pathways to decarbonisation”. 

The two are closely interlinked, said Engels. 

“It would be so much easier if the way the products are produced is regulated in a way that (consumers) are not forced to buy climate destructive products,” she told AFP. 

The report said it was still too early to assess the potential impact of recent events such as Russia’s invasion on Ukraine.

Researchers also looked at six physical processes around the planet, from the melting of ice sheets to fears that a deforested Amazon rainforest will transform into savannah. 

Jochem Marotzke from the Max Planck Institute for Meteorology said that these and other physical processes were important, but that “we’re not on a slippery slope”.  

It was human agency that would prove most decisive, he said.

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Sony hikes net profit forecast as weak yen boosts gaming

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The Japanese electronics and entertainment giant said net profit in the April-December period jumped five percent year-on-year
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Sony upgraded its annual net profit forecast on Thursday, saying it expects strong results in its key gaming sector as the weak yen inflates profits on products sold abroad.

The Japanese electronics and entertainment giant said net profit in the April-December period jumped five percent year-on-year to 809 billion yen ($6.3 billion).

This was partly thanks to strong sales in the game, music and imaging-and-sensors sectors in the third quarter, an important holiday shopping period, the company said.

In the 2022-23 financial year, Sony Group now expects net profits of 870 billion yen, up from the previous estimate of 840 billion yen.

Sony’s massive global entertainment business — from streaming services to blockbuster films and the PlayStation, as well as digital camera components — has benefited from the fall of the yen over the past year.

The Japanese currency has gained ground against the greenback in recent months but one dollar still buys around 128 yen, compared to around 114 yen one year ago.

Operating income in the gaming division “is expected to be higher than the November forecast mainly due to the positive impact of foreign exchange rates”, Sony said.

Sony sold 12.8 million PlayStation 5 units in the first nine months of the current financial year, already more than the 11.5 million sold in 2021-22, when production was hit by supply chain problems. 

Game sales will also have an important bearing on financial results, Hideki Yasuda of Toyo Securities told AFP.

“Sony is expected to aim for higher hardware sales in the coming fiscal year. What is key is whether software sales will also increase to keep up with higher hardware sales,” Yasuda said.

The PS5 has some major titles in the pipeline, including the “highly anticipated” game “Final Fantasy XVI”, he added.

Sony’s gaming rival Microsoft has sparked an industry battle with its acquisition of “Call of Duty” maker Activision Blizzard — a huge $69 billion purchase that has yet to be finalised while it is examined by antitrust authorities.

A year ago, weeks after Microsoft unveiled its acquisition plan, Sony announced it would buy US game studio Bungie, creator of hits like “Halo” and “Destiny”.

Sony also announced a reshuffle at the top of the company, with chief financial officer Hiroki Totoki to become president and chief operating officer while remaining CFO.

Current company president Kenichiro Yoshida will become board chairman, and will remain chief executive officer.

Behind the yen’s fall is the contrast between the monetary policies of the US and Japanese central banks.

The Federal Reserve is hiking interest rates to fight inflation while the Bank of Japan is sticking to its longstanding monetary easing programme, designed to fuel sustainable growth.

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