WASHINGTON: Pressure is rising on Big Tech firms, signaling tougher regulation in Washington and elsewhere that could lead to the breakup of the largest platforms. But you’d hardly know by looking at their share prices.
Shares in Apple, Facebook, Amazon and Google parent Alphabet have hovered near record highs in recent weeks, lifted by pandemic-fueled surges in sales and profits that have helped the big firms extend their dominance of key economic sectors.
The Biden administration has given signs of more aggressive regulation with appointments of Big Tech critics at the Federal Trade Commission.
But that has failed to dent the momentum of the largest tech firms, despite tough talk and antitrust litigation in the United States and Europe, with US lawmakers eyeing moves to make antitrust enforcement easier.
Big Tech critics in the United States and the EU want Apple and Google to loosen the grip of their online app marketplaces; more competition in a digital advertising market dominated by Google and Facebook; and better access to Amazon’s e-commerce platform by third-party sellers.
One lawsuit tossed out by a judge but in the process of being refiled could force Facebook to spin off its Instagram and WhatsApp platforms, and some activists and lawmakers are pressing for breakups of the four tech giants.
All four have hit market valuations above $1 trillion, with Apple over $2 trillion. Alphabet shares are up some 80 percent from a year ago, with Facebook up nearly 40 percent and Apple almost 30 percent. Amazon shares are roughly on par with last year’s level after breaking records in July.
Microsoft, with a $2 trillion valuation, has largely escaped antitrust scrutiny, even as it has benefitted from the cloud computing trend.
The surging growth has stoked complaints that the strongest firms are extending their dominance and squeezing out rivals.
Yet analysts say any aggressive actions, in the legal or legislative arena, could take years to play out and face challenges.
“Breakup is going to be nearly impossible,” said analyst Daniel Newman at Futurum Research, citing the need for controversial legislative changes to antitrust laws.
Newman said a more likely outcome would be multibillion-dollar fines that the companies could easily absorb as they adjust their business models to adapt to problematic issues in a fast-moving environment.
“These companies have more resources and know-how than the regulators,” he said.
Dan Ives at Wedbush Securities said any antitrust action would likely require legislative change — unlikely with a divided Congress.
“Until investors start to see some consensus on where the regulatory and law changes go from an antitrust perspective, it’s a contained risk, and they see a green light to buy tech,” he said.
Other factors supporting Big Tech include a massive shift to cloud computing and online activities that allow the strongest players to benefit, and a crackdown in China on its large technology firms.
“The China regulatory crackdown has been so massive in scale and scope, it has driven investors from Chinese tech to US tech,” Ives said.
“Even though there is regulatory risk in the US, it pales in comparison to the crackdown we’re seeing from Beijing.”
Analysts say the big tech firms are also well-positioned to deal with tougher regulations.
Tracy Li of the investment firm Capital Group, in a recent blog post that the tech giants face major risks in regulation around privacy, content moderation and antitrust.
“Concerns related to privacy or content may actually strengthen, rather than weaken, the moats of the largest platforms,” Li said.
“These companies often boast well-established protocols and have more resources to tackle privacy and legal matters.”
Other analysts point to the swift movement by tech firms to adapt their business models in contrast to the slow efforts to regulate.
Facebook, for example, is adapting to changing conditions by moving into the “Metaverse” of virtual and augmented reality experiences, noted Ali Mogharabi at Morningstar.
Mogharabi said Facebook’s vast data collected from its 2.5 billion users gives it the ability to withstand a regulatory onslaught.
“Antitrust enforcement and further regulations pose a threat to Facebook’s intangible assets, data,” the analyst said in a July 29 note.
“However, increased restrictions on data access and usage would apply to all firms, not just Facebook.”
Independent analyst Eric Seufert said in a tweet that “regulatory changes will have a significant impact on Facebook’s business, but the sheer scale of Facebook and the growth trajectory of digital advertising ameliorate that. Facebook’s gold mine is far from depleted.”
Newman said the large tech firms have expanded during the pandemic by delivering innovative services, extending a trend that has seen the strong get stronger.
“These platforms have created better experiences for consumers, but it is extremely difficult for new entrants,” he said.
For investors, Newman added, “that means no one is creating revenue and profit growth faster.”
Big Tech rolls on as investors shrug off regulatory pressure
https://arab.news/gmwxq
Big Tech rolls on as investors shrug off regulatory pressure
- Shares in Apple, Facebook, Amazon and Google parent Alphabet have hovered near record highs in recent weeks
- Big Tech critics in the United States and the EU want Apple and Google to loosen the grip of their online app marketplaces
RedBird IMI withdraws from Telegraph deal, to sell UK newspaper
- Abu Dhabi-backed investor group to sell media outlet following government ban on foreign entities owning national newspapers
- RedBird IMI says its focus is on securing the best price for the titles, but experts fear the asset could fecth a lower price than what was originally paid
LONDON: Abu Dhabi-backed RedBird IMI on Tuesday said it would sell the Telegraph after it scrapped its acquisition of the right-leaning newspaper group because government intervention meant the deal was “no longer feasible.”
RedBird IMI effectively took control of the Telegraph and the Spectator magazine in December when it repaid a debt owed by then-owner the Barclay family to Lloyds Bank, including a 600 million pound ($753 million) loan against the titles.
But the acquisition, which already faced a lengthy regulatory inquiry, was dealt a blow last month when Britain said it would stop foreign governments owning newspapers.
“RedBird IMI has today confirmed that it intends to withdraw from its proposed acquisition of the Telegraph Media Group and proceed with a sale,” a RedBird IMI spokesperson said.
“We have held constructive conversations with the government about ensuring a smooth and orderly sale for both titles.”
RedBird IMI, led by former CNN executive Jeff Zucker, is backed by Mansour bin Zayed Al Nahyan, a member of Abu Dhabi’s ruling family and the owner of Manchester City soccer club.
The government issued a notice in December stopping RedBird IMI transferring ownership of the newspaper or changing its management and board while it investigated the deal.
Culture Secretary Lucy Frazer said on Tuesday she would now allow RedBird IMI to conduct an orderly sale of the titles after it had signalled its intention to withdraw.
“Throughout this process I have raised concerns about the potential impact of this deal on free expression and accurate presentation of news, and I took steps to ensure that media freedom was protected while there was an investigation into those concerns,” she said.
RedBird IMI said its focus was on securing the best price for the titles, which are close to the ruling Conservatives.
Parties previously interested in the assets include hedge fund boss Paul Marshall, Daily Mail owner DMGT as well as private equity buyers.
Humanity at a turning point, Saudi minister tells WEF meeting in Riyadh
- Saudi Arabia wants to lead ‘intelligence revolution,’ Abdullah Al-Swaha, communications and information technology minister, says
- Industry leaders ‘must master AI within years or face irrelevance’
RIYADH: Humanity is at a turning point, pivoting from digital to artificial intelligence, and shifting from the industrial revolution to the intelligence revolution, a senior Saudi official told the special two-day World Economic Forum meeting in Riyadh.
“The world today is not at a tipping point but at a turning point in humanity, which means weare pivoting from digital to AI and maybe later on quantum,” Abdullah Al-Swaha, minister of communications and information technology, said.
Saudi Arabia is ready to embrace that shift, he added.
“The Kingdom is excited with its partnerships with countries and international organizations to carve a path toward inclusive AI adoption,” Al-Swaha told the panel.
“We are pushing today an inclusive agenda, that is innovative, and indisputably multistakeholder to make sure that we lead and leapfrog in this era.”
The Saudi minister noted that global economic output today is worth $100 trillion, of which $32 trillion is attributed to the labor force, and $1 trillion of that ‘is being augmented, accelerated and democratized by generated AI.’
“Over the next five to seven years, it is projected to go to 40 percent. That’s 43 percent of the labor force productivity. And this is why we are pivoting toward intelligence revolution,” Al-Swaha said.
He also cautioned that if “talents and leaders” did not master AI within six or seven years, “they will become irrelevant for any industry they are in.”
‘Saudi Arabia at forefront of AI,’ says business leader at World Economic Forum
- Saudi Arabia 'really a driver of not only the economy of the region, but also the economy of the world,' says global vice chair and chair of Europe, MENA at consulting firm AlixPartners
RIYADH: Saudi Arabia’s role in technology advancement is helping to drive not only the regional but also the global economy, business leaders told Arab News at the World Economic Forum special meeting in Riyadh on Sunday.
The Kingdom has been “at the forefront” on artificial intelligence, Stefano Aversa, global vice chair and chair of Europe, the Middle and North Africa at consulting firm AlixPartners, said.
While the war in Gaza and broader Middle East tensions are expected to get top billing at the WEF Special Meeting on Global Collaboration, Growth and Energy for Development, technology’s role as a driver of change is also expected to be a major talking point.
Around 1,000 leaders from 92 countries have gathered in Riyadh for the two-day forum.
Saudi Arabia is “really a driver of not only the economy of the region, but also the economy of the world,” Aversa said.
“There are a lot of investors interested, and so it is important to stay close to some of the giga-projects here that will drive not only the growth of the Kingdom, but also the growth of some entire sectors, like energy transition.”
He said that the Kingdom’s move from “an early stage of development to more mature selective investment” is also important.
AlixPartners CEO Simon Freakley said that disruption is a looming issue for global industries ranging from automotive and aerospace to retail.
He defined disruption as “displacement of businesses, markets, and value networks as a result of economic, societal, environmental, political, regulatory, or technological changes.”
Freakley told Arab News that shipping routes, for example, faced disruption because of tensions in the Red Sea.
“Problems are caused by conflicts around the world or other challenges. What we’re finding is some of these themes go cross-industry, not just within industry.”
AlixPartners has 26 offices in 14 countries. Its fifth annual Disruption Index, based on a survey of 3,100 senior executives around the world, showed that 61 percent of CEOs worry they will be unable to keep pace with changing business cycles.
Freakley said: “This disruption work that we now do every year has become a sort of a touchstone of how we help people understand what the best companies, the best leaders, are doing.”
The consulting firm has predicted AI will become the single biggest driver of change across industries, not only as a defense against competitors, but also as a tool to enhance go-to market strategies.
“The people that are winning are the people that have the best data, and weaponize their data to actually get a competitive advantage. How people are using AI and the insight from their data to drive their growth is where we see the real opportunity,” Freakley said.
Two Russian journalists jailed on ‘extremism’ charges for alleged work for Navalny group
- Konstantin Gabov and Sergey Karelin both denied the charges for which they will be detained for a minimum of two months before any trials begin
- Russia’s crackdown is aimed at opposition figures, journalists, activists, members of the LGBTQ+ community, and other dissenters
LONDON: Two Russian journalists were arrested by their government on “extremism” charges and ordered by courts there on Saturday to remain in custody pending investigation and trial on accusations of working for a group founded by the late Russian opposition politician Alexei Navalny.
Konstantin Gabov and Sergey Karelin both denied the charges for which they will be detained for a minimum of two months before any trials begin. Each faces a minimum of two years in prison and a maximum of six years for alleged “participation in an extremist organization,” according to Russian courts.
They are just the latest journalists arrested amid a Russian government crackdown on dissent and independent media that intensified after its full-scale invasion of Ukraine more than two years ago. The Russian government passed laws criminalizing what it deems false information about the military, or statements seen as discrediting the military, effectively outlawing any criticism of the war in Ukraine or speech that deviates from the official narrative.
A journalist for the Russian edition of Forbes magazine, Sergei Mingazov, was detained on charges of spreading false information about the Russian military, his lawyer said Friday.
Gabov and Karelin are accused of preparing materials for a YouTube channel run by Navalny’s Foundation for Fighting Corruption, which has been outlawed by Russian authorities. Navalny died in an Arctic penal colony in February.
Gabov, who was detained in Moscow, is a freelance producer who has worked for multiple organizations, including Reuters, the court press service said. Reuters did not immediately comment on the ruling by the court.
Karelin, who has dual citizenship with Israel, was detained Friday night in Russia’s northern Murmansk region.
Karelin, 41, has worked for a number of outlets, including for The Associated Press. He was a cameraman for German media outlet Deutsche Welle until the Kremlin banned the outlet from operating in Russia in February 2022.
“The Associated Press is very concerned by the detention of Russian video journalist Sergey Karelin,” the AP said in a statement. “We are seeking additional information.”
Russia’s crackdown on dissent is aimed at opposition figures, journalists, activists, members of the LGBTQ+ community, and ordinary Russians critical of the Kremlin. A number of journalists have been jailed in relation to their coverage of Navalny, including Antonina Favorskaya, who remains in pre-trial detention at least until May 28 following a hearing last month.
Favorskaya was detained and accused by Russian authorities of taking part in an “extremist organization” by posting on the social media platforms of Navalny’s Foundation. She covered Navalny’s court hearings for years and filmed the last video of Navalny before he died in the penal colony.
Kira Yarmysh, Navalny’s spokeswoman, said that Favorskaya did not publish anything on the Foundation’s platforms and suggested that Russian authorities have targeted her because she was doing her job as a journalist.
Evan Gershkovich, a 32-year-old American reporter for The Wall Street Journal, is awaiting trial on espionage charges at Moscow’s notorious Lefortovo Prison. Both Gershkovich and his employer have vehemently denied the charges.
Gershkovich was detained in March 2023 while on a reporting trip and has spent over a year in jail; authorities have not detailed what, if any, evidence they have to support the espionage charges.
The US government has declared Gershkovich wrongfully detained, with officials accusing Moscow of using the journalist as a pawn for political ends.
The Russian government has also cracked down on opposition figures. One prominent activist, Vladimir Kara-Murza was sentenced to 25 years.
US State Department Arabic spokesperson resigns in opposition to Gaza policy
- Hala Rharrit is at least the third person to resign from the department over the issue
WASHINGTON: The Arabic language spokesperson of the US State Department has resigned, citing her opposition to Washington’s policy related to the war in Gaza, in at least the third resignation from the department over the issue.
Hala Rharrit was also the Dubai Regional Media Hub’s deputy director and joined the State Department almost two decades ago as a political and human rights officer, the department’s website showed.
“I resigned April 2024 after 18 years of distinguished service in opposition to the United States’ Gaza policy,” she wrote on social media website LinkedIn. A State Department spokesperson, asked about the resignation in Thursday’s press briefing, said the department has channels for its workforce to share views when it disagrees with government policies.
Nearly a month earlier, Annelle Sheline of the State Department’s human rights bureau announced her resignation, and State Department official Josh Paul resigned in October.
A senior official in the US Education Department, Tariq Habash, who is Palestinian-American, had stepped down in January.
The United States has come under mounting criticism internationally and from human rights groups over its support for Israel amid Israel’s ongoing assault in Gaza that has killed tens of thousands and caused a humanitarian crisis.
There have been reports of signs of dissent in the administration of President Joe Biden as deaths continue to grow in the war.
In November, more than 1,000 officials in the US Agency for International Development (USAID), part of the State Department, signed an open letter calling for an immediate ceasefire. Cables criticizing the administration’s policy have also been filed with the State Department’s internal “dissent channel.”
The war has also caused intense discourse and anti-war demonstrations across the United States, Israel’s most important ally.
Palestinian Islamist group Hamas attacked Israel on Oct. 7, killing 1,200 people, according to Israeli tallies. Israel has killed over 34,000 people in Hamas-governed Gaza, according to Gaza’s health ministry, leading to widespread displacement, hunger and genocide allegations that Israel denies.
