Policy Wrap: EU indicates at divestiture of Google’s AdTech business, Spotify fined $5 million by Swedish regulators, US judge pauses Microsoft's acquisition plans of Activision Blizzard, and more

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ANTITRUST

EU indicates at divestiture of Google’s AdTech business due to its abuse of dominant position in online ads

In order to address concerns about anti-competitive practises, Google may need to sell a portion of its profitable AdTech business, EU authorities warned on Wednesday, threatening the corporation with its toughest regulatory penalty yet.

Two years after beginning an inquiry into actions including favouring its own advertising services, the European Commission laid out its claims in a statement of objections to Google. If found guilty, the company may be fined up to 10% of its yearly global revenue.

With the advertising industry accounting for 79% of the company's total revenue last year, the stakes are higher for Google in this most recent dispute with authorities. Its projected 2022 advertising revenue totalled $224.5 billion and came from services including Gmail, Google Play, Google Maps, YouTube ads, Google Ad Manager, AdMob, and AdSense.

According to EU antitrust commissioner Margrethe Vestager, Google may need to sell a portion of its adtech business because a behavioural remedy is unlikely to be effective in ending the anti-competitive practises.

Vestager announced that inquiries into Google's plans to stop making the advertising identification visible to third parties on Android smartphones and its development of a privacy sandbox set of tools to restrict third party cookies on its Chrome browser would continue.

With respect to rival providers of advertising technology services, advertisers, and online publishers, the Commission said that Google favours its own online display advertising technology services.

It claimed that since 2014, Google had misused its power by preferring its own ad exchange AdX in the publisher ad server DFP's ad selection auction and by favouring AdX in the way its ad buying tools, Google Ads and DV360, place bids on ad exchanges.

Hence, the commission's initial assessment was that, given that Google is "dominant in the buy-side, dominant in the sell-side" of the internet ad industry, divestiture is the only suitable corrective action.

Spotify fined $5 million by Swedish regulators regarding breach of EU data rules

The Swedish Authority for Privacy Protection (IMY) fined Spotify 58 million kronor ($5.4 million) on Tuesday for failing to adequately inform users about the purposes for which the data it collected on them was being used.

The regulator stated that users have a right to know what information a corporation has about them and how it is being used under the terms of the European Data Protection Act, or GDPR.

While IMY acknowledged that Spotify did provide data upon request, it claimed the business had not provided enough information regarding the intended use of the data. This makes it challenging for people to comprehend how their personal data is processed and to determine if that processing is legal.

The New York Stock Exchange-listed streaming behemoth revealed in April that it had surpassed 210 million paying subscribers and 500 million monthly active users.

US judge pauses Microsoft's acquisition plans of Activision Blizzard due to Federal Trade Commission’s intervention

According to a court document, a US federal judge on Tuesday temporarily barred Microsoft from consummating its $69 billion acquisition of gaming titan Activision Blizzard.

In a decision, Judge Edward Davila stated that it "is necessary to maintain the status quo" while the court takes the Federal Trade Commission (FTC)'s request for a longer-term injunction on the transaction into consideration.

The decision was made a day after the FTC requested a federal judge to halt Microsoft's mega-acquisition while it considered taking regulatory action.

The court's decision on Tuesday prevents Microsoft from moving forward with the acquisition until it determines whether to grant the regulators' request for a preliminary injunction.

A restraining order would prevent the deal from taking place before the FTC hearing, which is scheduled for August, and which intends to debate the deal's merits. After hearing Microsoft's and the FTC's arguments for and against the takeover, the California judge would need to pass judgement on the agreement.

STARTUPS & REGULATIONS

First draft of the Digital India Bill to be completed by the end of the month

According to Shri Rajeev Chandrashekhar, Minister of State for Electronics and Information Technology, the first draft of the Digital India Bill could be completed by the end of the month.

The aim is to try and establish a framework that other nations may adhere to while signalling to the world that we are the most connected nation and are creating the guardrails.

He claimed that the Digital India Bill could serve as a solid foundation for a cutting-edge, international standard cyber law. The Information Technology Act (IT), which has been in effect for 23 years, will be replaced by the Bill, which is highly anticipated by the sector.

He said that before crafting the Bill, the government had already conducted three comprehensive pre-consultations with lawyers, users, businesses, and start-ups regarding its guiding principles.

ASSOCHAM-PWC paper emphasizes digital transformation, mentions “minefield of opportunities” to be created due to UPI, OCEN, ONDC

According to a comprehensive knowledge paper released on Tuesday by ASSOCHAM and PwC, the country's banking and financial architecture has "a minefield of opportunities" as a result of the digital transformation that is being built on key building blocks like Unified Payments Interface (UPI), secure data, and open networks, such as Open Credit Enablement Network (OCEN) and Open Network for Digital Commerce (ONDC).

According to the paper titled "Embedded financial services in India”, pre-approved BNPL (Buy Now Pay Later) instrument, travel insurance at a boarding pass printing kiosk, auto-routing of cashback for micro-investment, and seamless credit to pay for hospital expenses are just a few of the embedded financial services that may be offered by neo banking business models, riding on this robust infrastructure.

Neobanks are regarded as a more practical alternative to conventional banks or money transfer businesses. Additionally, they employ cutting-edge technologies to address current cross-border payment difficulties.

According to the report, India's digital revolution has paved the way for industry-wide innovation thanks to better customer access, reach, and technology proliferation.

AI

Govt to regulate AI from perspective of user harm

Shri Rajeev Chandrashekhar, Minister of State for Electronics and Information Technology, said that the government will regulate Artificial Intelligence and all other technologies based on the potential danger they pose to people. The minister assuaged concerns that the development of AI will result in job losses by stating that such a danger would not materialise in the upcoming years, but that it might do so in the next 5-7 years.

The approach towards governance of AI and any related regulation is by looking at potential user harm. Since 2014, the government has been operating under a new paradigm in which the emphasis is to defend digital nagriks, and platforms that harm digital nagriks are not considered acceptable.

The government is taking steps to have regulations to make Bigtechs accountable, as per Shri Chandrashekhar.

EU lawmakers approves draft Artificial Intelligence regulations

With the goal of establishing international norms for the regulation of AI, the European Parliament voted to accept its own draft proposal for the AI Act, a piece of legislation that had been in the works for two years.

The bill should be passed before the end of the year following a last round of discussions to reconcile several drafts prepared by the European Parliament, Commission, and Council. It will be the first piece of legislation in the world to regulate Artificial Intelligence in practically all spheres of society, with the exception of defence.

This legislation's entire structure revolves around the idea of risk. The application of AI in certain societal areas, each of which has a unique set of potential issues, is what is being regulated, not AI itself. The four risk categories are unacceptable, high, limited, and low, each of which is subject to a separate set of legal requirements.

Systems that are regarded to represent a threat to EU principles or fundamental rights will be labelled as having "unacceptable risk" and will be prohibited.

Systems identified as "high risk" will be subject to disclosure requirements and be required to register in a specific database. Various monitoring or auditing standards will also apply to them.

AI systems with "limited risk" will be subject to the least amount of disclosure requirements.

DATA PRIVACY

Denmark plans to put a stop at collection of children's data collection by Big Techs

In an effort to stop the large-scale collection of data on minors, Denmark plans to raise the age at which tech firms like Google, Snapchat, and Meta may acquire personal information from children.

It aims to raise the current age of consent for youngsters to share personal data with tech companies from 13 to between 15 and 16 years old. Additionally, it also plans to mandate companies to require parental approval in order to use data from children younger than the aforementioned age limit.

The move comes in tandem with other countries working on similar laws such as Germany, which has set an age limit of 16 years, and other European countries, including Hungary, Lithuania, and the Netherlands invoking similar guidelines. The measure is taken to stop opaque algorithms that use incomprehensible methods to keep children and adults in front of the screen and harvest unimaginable amounts of personal information.

A bill to protect internet privacy is being drafted in the US as well, which if passed, would prohibit businesses from collecting personal data on individuals without their knowledge who are 16 years old or younger and mandate that they give young users the option to delete their data.

To prevent children from accessing inappropriate material like pornographic or violent movies, they would also try to implement age-verification mechanisms on websites and mobile apps.