The China tech crackdown
Tencent's WeChat has suspended new signups. The $100bn tutoring industry has been told to go non-profit. Didi might delist. Chinese tech indices are down 15% in the last two days. Remember when this was all about Jack Ma? Remember when WeChat was going to go global?
I'm not a China analyst, but there's a lot going on, from the CCP asserting its authority to overdue intervention into some under-regulated spaces, with a dose of turf wars as well (what do the financial regulators think of the cyberspace agency deciding who can list overseas?). This also overlaps with China's intensified push for tech sovereignty, with some people suggesting it wants to rebalance from consumer internet to semiconductors and the other primary tech it depends on foreign companies for today (your iPhone is assembled in China, but all the high-value parts are made elsewhere).
But if it's not clear what's going on inside China, it's even less clear what this means for the rest of us. Will Chinese Internet giants be forced to make serious efforts to expand internationally? Does the creative torrent of Chinese consumer tech innovation slow down? Could it affect consumer electronics supply chains? š¤·š»āāļø Link
Square builds its own bundle
Square is spending $27bn in stock (about 25% of market cap) to buy Afterpay, an Australian fintech that helps merchants do 'buy now pay later'. Square is unbundling traditional banks and credit cards, while expanding out from its start in card-taking to make a quite different bundle of its own. (Also - Square is a $112bn company. Remind me again big tech companies are stifling completion.) Link
Disney, Scarlett Johansson and channel conflict
Scarlett Johansson is suing Disney for releasing 'Black Widow to streaming at the same time as the cinema release. Her contact gives her a percentage of box office, but the streaming release would have weakened that. This is a big and general issue: the movie and TV industries pay top talent based on revenue per title, but an all-in subscription doesn't have revenue per title: the financial return on a streaming release comes in driving retention and new subscriptions that aren't directly tied to one property (even if there's a PPV element). This was the row at Warner recently, and the main answer has been to buy out the talent up front - but that means they no longer have a share in the upside. Link
The week in regulation
Three interesting stories in techreg this week. First, the French competition agency 'fined' Google ā¬500m for not negotiating 'in good faith' to pay newspapers whenever they appear in search results. Of course, if the newspapers were in good faith they wouldn't be asking for money, and if the competition regulator was in good faith it would acknowledge that this is a disguised tax and subsidy, not a competition or copyright issue at all (I wrote about that here).
Second, Luxembourg fined Amazon $746m for interpreting GDPR differently (Amazon is headquartered in Luxembourg so that's where GDPR is applied). Bizarrely, we only know because Amazon disclosed this in the 10Q, and plans to appeal. My general theory is that GDPR is so vague and so general that it could theoretically ban almost anything, and it's impossible to know whether you're in compliance, even if you have as many lawyers as Amazon.
Third, and on the opposite tack, Google is suing in Germany over a new expansion to the 'NetzDG' hate speech law, which requires platform companies to give law enforcement all available user information whenever any illegal content is suspected, without first checking if the content is actually a problem.
Links: Google in France, Amazon GDPR, Google in Germany
Intel partners with Qualcomm
Intel will make chips for Qualcomm and Amazon (for data centres), to their designs. Intel has never done so-called 'foundry' manufacturing for other companies before, making only its new chips, but this is part of the turnaround strategy: it's way behind TSMC on manufacturing process and ARM on chip architecture and needs to realign itself. Link
Netflix on games
Interesting discussion in the Netflix quarterly call on their approach to games. Putting AAA console games in the cloud and streaming them doesn't seem to work (Stadia) - creating IP and mechanics that are native to the form and to the business model might work better. Link
Instagram on child safety
Instagram is flipping accounts for anyone under 16 or 18 to default private, with narrower ad options, after a wave of concern about how easy and widespread inappropriate contact from adults might be. Link
Twitter experiments with shopping
Twitter has definitely pivoted from stasis to 'making decisions' - launching and then killing a Stories product, buying into newsletters and experimenting with payment, and now it's working on ecommerce tools. There does seem to be a rule at the moment that all social apps must add a store, but that's partly because a lot of people use Instagram etc to follow brands and influences around their taste, so there's an organic link to recommendations and buying. I'm not sure how many people use Twitter like that. Link
Ebay harassment
Update to a bizarre story: a group of eBay staff and execs who stalked and harassed a blogger who annoyed the CEO have been sent to prison. Link
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