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Semiconductors: Europe’s expensive plan to reach the top tier of chipmakers

Semiconductors: Europe’s expensive plan to reach the top tier of chipmakers

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The baroque splendour of Versailles, a lavish monument to European power, provided a suitably resplendent backdrop for a discussion over what is arguably the continent’s most ambitious, and costly, high-tech manufacturing project.

As Emmanuel Macron, the French president, sat down with Intel chief executive Pat Gelsinger in the 17th century palace outside Paris during a conference late last month, one topic was foremost on their agenda.

The EU is seeking to launch itself into the global premier league of semiconductor manufacturing, setting itself the daunting goal of doubling its share of the global chip market by 2030. Intel has placed itself at the heart of those ambitions, with the US company proposing to build a brand new $20bn semiconductor factory on the continent.

The project is being championed in Brussels as its most ambitious step towards a broader “strategic autonomy” agenda — a drive to reduce the continent’s vulnerability to supply chain disruptions and geopolitical risks. To EU officials, the supply shortages currently plaguing the semiconductor industry and hampering production at the EU’s critical automotive sector only underscore the need for action.

Global wafer semiconductor production capacity

So also do the risks of relying so heavily on semiconductor production in Taiwan, given fears about China’s intentions towards the island and its vulnerability to earthquakes. If economies including China, South Korea, Taiwan and the US are investing more to bulk up their semiconductor sectors, asks EU internal market commissioner Thierry Breton, “should Europe not do the same?”.

The question facing the EU as it prepares to embark on this undertaking, however, is whether it ends up squandering large amounts of public money chasing geopolitical ambitions that may not be supported by industrial and market logic. While Europe has world-beating strengths in corners of the semiconductor supply chain, it lags far behind Asia in particular when it comes to making the highest-end chips.

Changing that picture, executives warn, will take years of effort and vast quantities of public money — at a time when governments in Asia and the US are also pouring tens of billions of dollars of subsidies into the sector.

French President Emmanuel Macron (R) with Intel chief Patrick Gelsinger during an international business leaders’ meeting in Versaille last month
French President Emmanuel Macron (R) with Intel chief Patrick Gelsinger during an international business leaders’ meeting in Versaille last month © EPA-EFE

“It’s going to be very, very expensive,” says Peter Hanbury, partner with Bain & Co. who specialises in semiconductor technology. “It will take years for Europe to develop the kind of technology that politicians are talking about.”

Set against the goliaths of the chipmaking industry — notably Samsung in South Korea, Taiwan’s TSMC and Intel — Europe is a relative minnow in the industry, with a market share of less than 10 per cent. For instance, TSMC is building a factory to make 3-nanometre chips, which are expected to be up to 15 per cent faster than 5 nanometre chips and use up to 30 per cent less power. By contrast, Europe presently has few fabrication facilities, known as fabs, that produce nodes smaller than 22 nanometres. Intel’s production in Ireland is an exception, as it includes 14-nanometre chips, and the company is seeking to bring 7-nanometre technology to the site. 

The continent’s homegrown sector mostly does not attempt to compete with the big Asian and US players when it comes to manufacturing the most advanced chips, which are used in high-end computers, phones and other devices. Instead, EU market leaders such as Germany’s Infineon, NXP in the Netherlands and the French-Italian STMicroelectronics focus on supplying devices to the automotive, aerospace and industrial automation industries, among others.

Advocates of the current model argue that given the global nature of the semiconductor supply chain, Europe has been right to specialise in areas of strength rather than seeking to compete with the likes of TSMC. The Taiwanese company has spent decades building its world-beating position as the biggest chip contract manufacturer, and which is planning capital investment of $100bn over the next three years alone.

They point to China’s unsuccessful attempts to compete with the world leaders in the industry, arguing that the EU should focus on its core competencies rather than branch into frontier technologies at vast public cost.

Bar chart showing semiconductor Capex spending, by region

However, advocates of an EU semiconductor renaissance in Brussels claim this kind of thinking is hopelessly complacent, and accuse the continent’s incumbent manufacturers of having underinvested for years. The commission this week announced a “semiconductor alliance”, a public-private partnership aimed at commercialising new technologies in the area.

“There is a geostrategic imperative to rebalance the semiconductor supply chain,” says one EU official. “There will be a huge market for leading edge, 2-nanometre semiconductors, for example in self-driving cars, and Europe needs to be part of this. Given how long it takes to build these factories we need to start now.”

Security of supply

Breton, a former telecoms executive, has sought to position himself at the forefront of the effort. The French commissioner argues that the EU already has an established semiconductor “ecosystem” of high-end research and manufacturing to serve as a platform for its new aspirations.

Last month he sought to underline that point on a visit to Imec, a nanotechnology research hub in Leuven, just outside Brussels, that is used by the biggest tech companies — including TSMC, Intel and Samsung — to make prototype chips.

Surveying a 5,200-square-metre cleanroom stacked with the world’s most advanced chipmaking equipment, including from Dutch market leader ASML, Breton questioned executives on next-generation chip technologies of less than 2 nanometres. “I want to be very clear — we are today in the driver’s seat in Europe when it comes to advanced technology for semiconductors,” Breton said.

Speaking last week in an interview with the Financial Times, Breton argued the EU now has a unique window with the launch of its €800bn Next Generation EU economic recovery plan to allocate public investment from member states towards the chipmaking sector.

Thierry Breton, EU internal market commissioner and a former telecoms executive, has sought to position himself at the forefront of the effort
Thierry Breton, EU internal market commissioner and a former telecoms executive, has sought to position himself at the forefront of the effort © Marlene Awaad/Bloomberg

Making the strategy work would require commitments of public money “for the next decade or decades”, he acknowledged, arguing that the EU already had, thanks to specialists including ASML and Imec, a formidable platform to build upon. “Geopolitical tension will probably last,” he said, adding that Europe needs to “make sure we can ensure security of supply for our companies and our fellow citizens”.

The EU’s effort alongside the semiconductor alliance will involve member states combining in a new so-called Important Project of Common European Interest, which aims to smooth state aid clearance for big cross-border projects.

Bar chart showing European semiconductor sales by type and company HQ location

But despite the homegrown strengths touted by Breton, the strategy will rely heavily on buying in foreign expertise and knowhow, most likely supplied, at least initially, by US-based Intel given the limited amount of leading-edge chipmaking production in Europe.

“The question is, can Europe move to the most advanced manufacturing on its own, which is a very risky and costly path, or can we hitch a lift on Intel’s strategy,” says one Italian official. “What role do we want to play? Do we support Intel within the framework of state aid rules or create a partnership and a fully fledged European ecosystem in semiconductors?”

Design or production?

Intel’s offer has triggered a scramble by EU states to woo Gelsinger with offers of manufacturing sites, research and development support, skilled workforces and huge government subsidies.

Intel is seeking public support worth many billions of euros for its new European factory. While it has not revealed numbers, Greg Slater, a regulatory affairs executive, says the EU has a 30-40 per cent “cost disadvantage” compared with production in Asia, and that a lot of the difference is down to levels of government support.

The sums involved will need to be massive judging by the programmes elsewhere. South Korea is offering incentives to drive a nine-year, $450bn investment programme by chipmakers, while the US is talking about more than $50bn for its semiconductor industry.

In addition, Intel will need a 1,000 acre (405 hectare) site with developed infrastructure capable of hosting up to eight chip fabs. It has been examining countries including Germany, the Netherlands, France and Belgium as potential factory sites.

Intel is unlikely to start 2-nanometre production anytime soon given it has yet to master this level of technology, although its production of 10-nanometre chips is already very advanced. The company has itself been struggling to compete with Asian rivals, outsourcing some of its production of processors to TSMC. Slater said 2-nanometre production was “down the road”, depending on exactly when the first factory opens operations.

A TSMC plant in China. The company is building a factory to make 3-nanometre chips, which are expected to be up to 70 per cent faster than ones currently in production
A TSMC plant in China. The company is building a factory to make 3-nanometre chips, which are expected to be up to 70 per cent faster than ones currently in production © Xie Bai/VCG/Getty

Not all executives are convinced by Europe’s newly kindled chipmaking ambitions — and in particular by the political noise and symbolism surrounding the goal of making the most advanced 2-nanometre process node chips. They argue the European Commission has not learnt from the failure of a previous campaign, launched in 2013, to drive up Europe’s market share.

European manufacturers such as carmakers just do not need that many of the highest-end chips, says Jens Drews, an executive at GlobalFoundries, an Abu Dhabi-owned chipmaker that produces the most advanced chips in Europe at its site in Saxony, Germany.

“My estimate is that 90 per cent of European chip needs until the end of this decade will be for chips of above 10 nanometres,” says Drews. “My strong recommendation is to move away from chasing nanometres to looking at what our industrial needs are and with what technologies those needs are best addressed. The nanometre is only a single dimension and the industry is much more complex now. The sole focus on nanometres is a core weakness in the European Commission’s strategy.”

Jan-Peter Kleinhans, project director for technology and geopolitics at Stiftung Neue Verantwortung, a think-tank in Berlin, says the EU is wrong to focus on manufacturing rather than on chip design, which is the bit of the production process with the highest value added.

A semiconductor cleanroom at nanotechnology research hub Imec in Leuven, Belgium
A semiconductor cleanroom at nanotechnology research hub Imec in Leuven, Belgium © Olivier Matthys/Bloomberg

While semiconductors are a prerequisite for emerging technologies such as artificial intelligence, quantum computing and autonomous vehicles, it is mostly US or Taiwan companies that design and produce chipsets for these specific functions.

There is no European mobile system-on-a-chip of the type used in smartphones; no EU AI accelerator (the bit of the chip for machine learning) with substantial market share; and no European general purpose processor, graphic chip or data centre processor, Kleinhans points out.

“Before the EU worries where those chips are being manufactured, we should worry about who designs them — because it’s definitely not us,” he says.

Accordingly, Kleinhans questions why the EU would want to earmark billions on euros in subsidies to “become the contract manufacturer for the world,” focusing on the part of the semiconductor value chain with the highest barriers to entry, the highest need for subsidies and, he argues, the least prospect of success.

A 300 millimetre wafer used for semiconductor research
A 300 millimetre wafer used for semiconductor research © Olivier Matthys/Bloomberg

American co-ordination

Some executives agree the EU still needs to work out what it is seeking to achieve: greater resilience in supply chains; technological sovereignty and protection of national security; or competitiveness.

“What problem is it solving, having a factory in your back garden?” asks the chief executive of a leading European semiconductor company. “The worst thing that can happen is a big investment in manufacturing under the belief that it’s going to offset supply chain risk. And then you find out . . . you haven’t actually solved the problem, you have just moved it.”

Chad Bown, a trade specialist at the Peterson Institute for International Economics, agrees that the EU needs to be clearer about what problem it is actually trying to address. If the goal is bringing greater diversity to global supply chains, the process is currently occurring in a “very disorganised way, with governments around the world pumping subsidies into the sector”, he warns.

Workers at ASML, which produces the most advanced lithography machines used in the chipmaking process
Workers at ASML, which produces the most advanced lithography machines used in the chipmaking process © Jasper Juinen/Bloomberg

A key priority, he says, should instead be achieving far better co-ordination with the US when it comes to research and development, and also with its export control regime. The EU was badly stung by the Trump administration’s unilateral measures aimed at China’s semiconductor industry. The goal now should be much better alignment, Bown says, “rather than allowing the US administration to dictate what the national security threats are”.

EU officials say this is indeed front and centre of their dialogue with the Biden administration, pointing to last month’s EU-US summit in Brussels, which pledged to form a partnership in the area aimed at “the rebalancing of global supply chains in semiconductors”. They argue Europe needs to punch its weight in the global chipmaking industry, given swelling demands for processing power in an ever-widening range of devices.

Production and cleanroom facilities in Intel’s D1D/D1X plant in Hillsboro, Oregon. The US company is proposing to build a $20bn semiconductor factory on the continent
Production and cleanroom facilities in Intel’s D1D/D1X plant in Hillsboro, Oregon. The US company is proposing to build a $20bn semiconductor factory on the continent © Intel Corporation

Peter Wennink, chief executive of Netherlands-based ASML, which produces the most advanced lithography machines used in the chipmaking process, agrees that far more capacity will be needed worldwide in the coming decade, and that both the US and EU are waking up to the “neglected” state of their semiconductor sectors.

“When you look at our forecast of the industry, it will easily double within this decade, so you are talking about a trillion-dollar business,” he says. “To build that business in only three places in the world — Taiwan, Korea, China — would be a bit silly.”

Additional reporting by Kathrin Hille in Taipei

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S Korea parliament committee votes to curb Google, Apple commission dominance

S Korea parliament committee votes to curb Google, Apple commission dominance
PHOTO by REUTERS

A South Korean parliamentary committee voted early on Wednesday to recommend amending a law, a key step toward banning Google and Apple from forcibly charging software developers commissions on in-app purchases, the first such curb by a major economy.

After the vote from the legislation and judiciary committee to amend the Telecommunications Business Act, dubbed the “Anti-Google law,” the amendment will come to a final vote in parliament.

That vote could come on Wednesday https://www.reuters.com/technology/skorea-set-curb-google-apple-commission-dominance-2021-08-24, although South Korean news agency Yonhap reported that parliament would act at a later date.

A parliament official told Reuters the office had not yet received an official request not to hold the meeting on Wednesday.

Apple Inc and Alphabet Inc’s Google have both faced global criticism because they require software developers using their app stores to use proprietary payment systems that charge commissions of up to 30per cent.

In a statement on Tuesday, Apple said the bill “will put users who purchase digital goods from other sources at risk of fraud, undermine their privacy protections”, hurt user trust in App Store purchases and lead to fewer opportunities for South Korean developers.

Wilson White, senior director of public policy at Google, said “the rushed process hasn’t allowed for enough analysis of the negative impact of this legislation on Korean consumers and app developers”.

Legal experts said app store operators could work with developers and other companies to create secure payment methods other than the ones they provide.

“Google and Apple aren’t the only ones that can create a secure payment system,” said Lee Hwang, a Korea University School of Law professor specialising in competition law. “I think it’s a problem to try to inspire excessive fear by talking about safety or security about using different payment methods.”

Based on South Korean parliament records, the amendment bans app store operators with dominant market positions from forcing payment systems on content providers and “inappropriately” delaying the review of, or deleting, mobile contents from app markets.

It also allows the South Korean government to require an app market operator to “prevent damage to users and protect the rights and interests of users”, probe app market operators, and mediate disputes regarding payment, cancellations or refunds in the app market.

This month in the United States, a bipartisan group of senators introduced a bill that would rein in app stores of companies that they said exert too much market control, including Apple and Google. REUTERS

 

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US and Chinese tech juggernauts battle over ASEAN clouds

US and Chinese tech juggernauts battle over ASEAN clouds
Alibaba Cloud’s rapid growth slowed in the last quarter. (Photo by Tada Images/Shutterstock)

Amid the great U.S.-China tech divide, Southeast Asia and its fast-growing digital markets have become a main battleground for the digital behemoths of both superpowers.

There, Amazon.com, Microsoft, Google, Alibaba Group Holding and other players are investing heavily in cloud computing — services that provide processing power and data storage to all sizes of corporations and government institutions.

A massive 170,000-sq.-meter structure is going up in Tanjong Kling, about a 20-minute drive from Singapore’s city center. The 11-story building is taking on the appearance of a vast logistics center or warehouse. However, strict security teams and surveillance cameras around the site betray a much more critical piece of infrastructure. As a reporter pulled out his smartphone to take a photograph of the construction site, a security guard rushed up and warned, “This is private property. No photos allowed.”

Once completed, the “private property” facility will be filled by rows and rows of servers hosting hundreds of millions of internet users’ sensitive personal information. It will be Facebook’s first custom-built data center in Asia. The company has announced it will invest 1.4 billion Singapore dollars (US$1 billion) in the project.

It is one of many data centers that global tech giants are building in Southeast Asia. With a stable political system, an abundance of skilled tech workers and its connection to an undersea communications cable that links to the rest of the world, Singapore has become a prime spot for the big players of tech vying for slices of Southeast Asia’s swelling need for cloud services.

US and Chinese tech juggernauts battle over ASEAN clouds

According to real estate service company Cushman & Wakefield, Singapore data centers have 410 megawatts of capacity, with another 170 megawatts on the way, making the city-state a global hub for data, matching the likes of Frankfurt and Chicago.

But Singapore stands out in that it is also a strategic foothold for Chinese tech companies such as Alibaba and Tencent, who are competing for the same clients.

Amazon is the global leader among cloud service providers. Its Amazon Web Services (AWS) controlled more than 30% of the worldwide market in the second quarter of 2021, according to research company Canalys. It is currently adding infrastructure in Jakarta, Indonesia, which is expected to be operational by the end of 2021 or early 2022.

The data centers will be AWS’ second location in Southeast Asia. AWS centers have been operating in Singapore since 2010.

“AWS sees tremendous potential in Southeast Asia,” Conor McNamara, AWS’ managing director for ASEAN operations, said via email. “Across the board, we see all segments, including startups, enterprises, and small and medium-sized businesses, continuing to drive cloud adoption.”

Microsoft, the world’s second-largest cloud service provider, early this year announced it would establish data centers in Indonesia and Malaysia. It is bullish on the region’s growth potential.

“If you look at Southeast Asia, [there are] 650 million people, that makes it [almost] 50% bigger than in the European Union [446 million],” Microsoft Asia President Ahmed Mazhari said. And the region’s “mobile penetration and mobile-first approach that is unparalleled in the world.”

Mazhari also sees ambition. “We continue to see growth traction from somebody that wants to go from idea to building a unicorn, to micro SMEs, to the biggest enterprise of the world,” he said.

Alibaba, No. 4 in the global cloud service market, behind Amazon, Microsoft and Google, in June announced it would invest up to $1 billion over the next three years to nurture developers and support Asia-Pacific startups. “We are seeing a strong demand for cloud-native technologies in emerging verticals across the region, from e-commerce and logistics platforms to fintech and online entertainment,” Jeff Zhang, president of Alibaba Cloud Intelligence, said in a news release.

The company’s cloud division launched its third data center in Indonesia and plans to launch one in the Philippines this year.

Cloud services are becoming a revenue pillar. In the second quarter of this year, the global market was worth $47 billion, up 36% from the year-earlier period, according to Canalys.

AWS’ net sales grew to $14.8 billion in the same quarter, up 37% from the year-earlier period, with AWS accounting for more than half of Amazon’s consolidated operating income.

Microsoft’s Azure revenue grew 51% during the quarter ended June.

Until recently, the global market has been bifurcated.

US and Chinese tech juggernauts battle over ASEAN clouds

In China, Alibaba and Tencent have been able to dominate mainly due to restrictions imposed upon foreign tech companies. In the West, Amazon, Microsoft, Google and other players rigorously compete.

In recent years, however, Alibaba has been pushing into the West, including the United States. However, this ambition is dimming as Washington is increasingly concerned over possible security risks for companies that avail themselves to Chinese cloud services.

Amid this global dichotomy, Southeast Asia has emerged as a battleground where Chinese and Western companies “can compete with each other,” said Kevin Imboden, senior research manager of Data Center Insights, Global Research, at Cushman & Wakefield.

The cloud service providers’ intertwined customer lists in the region reflect intense competition.

Amazon and Microsoft provide cloud services to Singapore-based supper app Grab, according to both companies. Alibaba on its website boasts of having Indonesian e-commerce leader Tokopedia as a key cloud customer, and Amazon says AWS also provides services to Tokopedia.

Among the region’s unicorns, startups with valuations of $1 billion or more, Carsome, a Malaysia-based used car marketplace, and Carro, a Singapore online car sales platform, use AWS. Bukalapak, one of Indonesia’s largest e-commerce platforms and Tokopedia competitor, uses Microsoft’s Azure. Alibaba is one of Tokopedia’s largest shareholders, and Microsoft has stakes in Grab and Bukalapak.

U.S. and Chinese cloud companies “are very focused on acquiring market share,” Imboden said, even “at the expense of profit.”

According to Google, Temasek Holdings, and Bain & Co., the gross merchandise value of the region’s internet economy is expected to grow threefold, to $300 billion, by 2025 from 2020. Cloud services, which serve as the infrastructure of this burgeoning ecosystem, will surely expand, too.

However, geopolitical risks are also emerging.

According to a report by China’s Caixin news service, Chinese internet technology company ByteDance, which owns TikTok, has stopped using Alibaba’s cloud for its businesses outside China.

Last year, the Trump administration attempted to ban the popular social media app in the U.S., citing security risks. In June, U.S. President Joe Biden withdrew a series of executive orders related to the banning of TikTok but ordered a broad security review of apps connected to “foreign adversaries,” including China.

Alibaba on Aug. 3 announced cloud computing revenue of 16.05 billion yuan ($2.48 billion) for the quarter through June, up 29% from a year earlier. However, the company’s earnings release states that the cloud computing division’s “year-on-year revenue growth began to moderate since the last quarter primarily because of revenue decline from a top cloud customer in the Internet industry that has stopped using our overseas cloud services with respect to their international business due to non-product related requirements.”

Eric Schmidt, a former Google CEO and the chair of the U.S. National Security Commission on Artificial Intelligence, wonders if Alibaba can attract clients in the West. “Alibaba Cloud and so forth are good enough that you could build on the Chinese side, but you are not going to use them in the West. Similarly, American clouds are very, very good, but you can’t use them in China,” he recently told Nikkei Asia.

“As an entrepreneur, you would prefer to have one [cloud provider] but you live with two [one in China and one everywhere else].”

While well-funded unicorns and large corporations can minimize risks by dividing their cloud needs between Western and Chinese companies, many small and mid-size companies, as well as startups, lack the wherewithal to follow suit.

With American and Chinese players competing for slices of Southeast Asia, businesses in the region “need a geopolitical strategy” and might even have to “pick sides,” said Abishur Prakash, a geopolitical futurist at Toronto-based consultancy Center for Innovating the Future.

“What is your long-term strategy? What geographies do you plan to operate in? Which consumers do you want to access the most?” he asks. “Those should be the vectors that you [use to] decide whose cloud computing infrastructures to use.” NIKKEI

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Authorities warn of scammers impersonating officers from government agencies, police

Authorities warn of scammers impersonating officers from government agencies, police
An unsolicited call is the first red flag for a scam, experts say. GETTY IMAGES

Scammers have been targeting members of the public by calling them and claiming to be officers from government agencies, said the Immigration and Checkpoints Authority (ICA) on Friday (Aug 13).

In an advisory, ICA said members of the public have received calls from +65 6812 5555, similar to its SafeTravel Enquiries Helpline (6812 5555).
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“They accused the recipients of either spreading fake news related to COVID-19 or breaking COVID-19 rules, further saying that a report would be made against them or they had to pay a penalty,” said the authority. “This is a scam.”

ICA added that the calls were not made by ICA officers or officers from any other government agencies, and that it “does not call members of the public to request money in any form over the phone”.

The public is advised to ignore the calls and the caller’s instructions should they receive them.

No government agency will request for personal details or transfer of money over the phone or through automated voice machines, said ICA.

“Scammers may use caller ID spoofing technology to mask the actual phone number and display a different number. Calls that appear to be from a local number may not actually be made from Singapore,” said ICA.

“Do not provide your personal information such as name, identification number, passport details, contact details, bank account or credit card details to suspicious or unknown parties.”

The authority said it takes “a serious view of such scam calls as it undermines public trust in ICA”, adding that a police report has been made.

SCAMMERS IMPERSONATING POLICE OFFICERS

Separately on Friday, the Singapore Police Force (SPF) said there have been at least 200 reports of banking-related phishing scams where police officers were impersonated.

In a news release, SPF said scammers have been posing as police officers on messaging apps by using publicly available pictures of officers to validate their identity so that the victims would provide their banking details.

The victims received WhatsApp calls from an account with a profile picture showing police officers. During the conversation, the scammer would also provide an SPF name card as proof of identity.

“The victims would be informed that their bank accounts had been found to be involved in criminal activity and were frozen,” said SPF.

The scammer would instruct victims to provide their banking details under the pretext of facilitating the release of their bank accounts.

“Victims only realised that they had fallen prey to a scam when they received notifications informing them that money had been transferred from their bank accounts to bank accounts unfamiliar to them or when they discovered unknown transactions made using their credit or debit card,” said the police. CNA

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Three Australian publishers accuse Facebook of unfairly taking their content

Three Australian publishers accuse Facebook of unfairly taking their content
The Facebook app is seen on a phone screen August 3, 2017. REUTERS/Thomas White/File Photo

Three Australian publishers of lifestyle content say Facebook Inc used their articles on its just-launched news service after refusing to negotiate licensing deals, and that the country’s tough new internet law has failed to protect them.

Australia this year passed a law that pressured Facebook and Alphabet Inc’s Google to sign deals with some of the country’s biggest news companies by threatening government intervention.

The dispute highlights possible shortcomings in the controversial law. While most of Australia’s main media firms have signed deals, some smaller outlets say the law has not stopped their content generating clicks and advertising revenue for Facebook without compensation.

Broadsheet Media, Urban List and Concrete Playground, websites which publish entertainment news, reviews and listings, say that after the law was passed in February they approached the social media giant about payment for their content.

Facebook knocked them back, calling their content unsuitable for its Facebook News platform and recommending they apply for grants it was offering from a A$15 million (US$11 million) fund for Australian regional and digital newsrooms, the three companies told Reuters in a joint call.

“They told me that, ‘oh well, you’re not going to be included in News tab and that’s what we’re paying for’,” said Nick Shelton, founder of Broadsheet Media.

“To our surprise, we woke one morning last week and all of our content was there.”

Facebook News went live in Australia on Aug 4.

Facebook declined to comment directly on the three companies but said it created value for publishers by sending viewers to their sites.

Under the law, Facebook and Google must negotiate payment deals with outlets or a government-appointed arbitrator will do it for them, but a publisher must first prove its primary purpose is producing news and that it has been unfairly disqualified.

The three publishers said they want Facebook to come to the table to talk but if it declined they may seek government intervention.

“If at the end of the day we don’t get included in a commercial agreement, then absolutely they need a stick,” said Shelton. “We are three prime examples of publishers and media businesses which should be included as part of this framework.”

To be covered by the law, publishers must register as a news provider with the Australian Communications and Media Authority “based on criteria including the levels of ‘core news’ (essentially public interest journalism) that they produce”, the Australian Competition and Consumer Commission (ACCC), which drafted the law, said in an email.

Urban List has registered on the list. Broadsheet and Concrete Playground have yet to register, saying they want to hold out for a private deal.

Tama Leaver, a professor of internet studies at Australia’s Curtin University, said that while Facebook had not broken the law as the matter was not yet before arbitration, its apparent treatment of the three publishers was “extremely poor practice, disingenuous and further disadvantages the smaller players in the news business arena”.

In a separate dispute, the ACCC has said it would look into a claim by The Conversation, which publishes current affairs commentary by academics, that Facebook has refused to negotiate a licensing deal. The Conversation has secured a deal with Google. REUTERS

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Twitter Suspends pro Trump US Lawmaker for Covid Misinformation

Twitter Suspends pro Trump US Lawmaker for Covid Misinformation
U.S. Representative Marjorie Taylor Greene (R-GA) wears a mask reading "Censored" as she walks to the House floor during debate on the second impeachment of President Donald Trump at the U.S. Capitol in Washington, U.S. January 13, 2021. REUTERS/Jonathan Ernst

Twitter said Tuesday it had suspended the account of controversial US lawmaker Marjorie Taylor Greene, a staunch supporter of former Republican president Donald Trump, for a week over a “misleading” tweet on coronavirus vaccines.

The tweet in question, sent on Monday, said the US Food and Drug Administration should not give final approval to anti-coronavirus vaccines, with Greene saying they were “failing” and did not curb the spread of the virus.

Twitter labeled the message “misleading” and suggested that users consult information provided by US health authorities about vaccines and mask-wearing.

“The tweet you referenced was labeled in line with our Covid-19 misleading information policy,” a Twitter spokesperson said in a statement to AFP.

“The account will be in read-only mode for a week due to repeated violations of the Twitter rules.”

The platform’s rules on Covid misinformation state that a seven-day suspension comes with a fourth violation of the site’s terms of use.

If the first-term Georgia congresswoman were to break the rules again, she could face a permanent ban.

Greene accused Twitter of suspending her for “speaking the truth, and tweeting what so many people are saying.”

The lawmaker has been a staunch defender of Trump and his unsubstantiated claims that Democrats stole the 2020 presidential election.

In February, she apologized for her past support for QAnon conspiracy theories but was stripped of her two committee assignments.

Then in May, she courted controversy by repeatedly equating mask mandates with Nazis forcing Jews to wear yellow stars in wartime Germany. AFP

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New Child Safety Features for Google, YouTube

New Child Safety Features for Google, YouTube
Google is unveiling new measures aiming at protecting children and teens from being tracked or exposed to mature content. AFP

Google on Tuesday unveiled a series of online safety measures for children including a private setting for videos uploaded by teens and safeguard for ads shown to users under 18.

The new features, which come amid heightened concerns about online child exploitation and safety at a time of growing internet usage during the global pandemic, affect Google’s YouTube video platform as well its online services such as search and Google Assistant.

“As kids and teens spend more time online, parents, educators, child safety and privacy experts, and policy makers are rightly concerned about how to keep them safe,” said Google product and user experience director Mindy Brooks.

“We engage with these groups regularly, and share these concerns.”

Google’s “safe search” — which excludes sensitive or mature content — will be the default setting for users under 18, which up to now had been the case only for under-13 users.

On the massively popular YouTube platform, content from 13- to 17-year-olds will be private by default, the tech giant said.

“With private uploads, content can only be seen by the user and whomever they choose,” said a blog post by James Beser, head of product management for YouTube Kids and Family.

“We want to help younger users make informed decisions about their online footprint and digital privacy… If the user would like to make their content public, they can change the default upload visibility setting and we’ll provide reminders indicating who can see their video.”

Google will also make it easier for families to request removal of a child’s photos from image search requests.

“Of course, removing an image from search doesn’t remove it from the web, but we believe this change will help give young people more control of their images online,” Brooks said.

In another safety move, Google will turn off location history for all users under 18 globally, without an option to turn it back on. This is already in place for those under 13.

Google will also make changes in how it shows ads to minors, blocking any “age-sensitive” categories and banning targeting based on the age, gender or interests of people under 18. AFP

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