Internet pioneer Tim Berners-Lee is on a hiring spree

Inrupt, the disruptive internet start-up founded by Tom Berners-Lee, has announced it is expanding its operational team as it pursues the redistribution of power in the internet era.

After inventing the world wide web in 1991, Berners-Lee (pictured) has been on somewhat of a crusade in recent years, heavily criticising the corporate nature of an invention which was intended to empower society. Inrupt is Berners-Lee’s answer to the unsatisfactory position.

“I’ve always believed the web is for everyone,” Berners-Lee said when launching the business. “That’s why I and others fight fiercely to protect it.

“The changes we’ve managed to bring have created a better and more connected world. But for all the good we’ve achieved, the web has evolved into an engine of inequity and division; swayed by powerful forces who use it for their own agendas.”

With the creation of an open-source project known as Solid, the Inrupt team hope to give the user a choice about where data is stored, who can access this information and what applications are used. The objective is to give the user the defining voice in how data is used, and in turn, eroding the power and influence of the corporations who have benefitted so greatly from the rise of the internet.

With Inrupt providing commercial energy and an ecosystem to help develop Solid, Berners-Lee has now announced a string of new hires to help drive the company forward.

Bruce Schneier has joined as Chief of Security Architecture, while Davi Ottenheimer has been appointed as VP of Trust and Digital Ethics. Osmar Olivo and Emmet Townsend will act as the VP’s of Product and Engineering respectively, adding a significant amount of weight to the operational team.

“Joining Inrupt is one of those rare opportunities to build something that will change the everyday lives of billions of people,” said Olivo. “The world is changing, and existing technologies aren’t designed to solve these kinds of problems. Everyone else is retrofitting for a safer world, Inrupt is building one.”

While the objectives of Inrupt might be considered aggressive by some in the industry, there is certainly some interest in the work. Glasswing Ventures, an early stage venture capital firm based in Massachusetts, has invested in Inrupt, while the Greater Manchester Combined Authority is working alongside Inrupt to create an ‘Early Years’ app that digitises the paper-based assessments currently used to review a child’s development up to the age of 2.5 years.

Inrupt certainly has the cash and the PR potential to make a dent in the technology status quo, and now it seems to have the muscle with these new employees. The issue which remains is whether this project can make the transition from an academic dream through to a commercial reality.

This is where critics have focused their attention to date. Berners-Lee’s criticism of the status quo is of course very timely, GDPR and California’s privacy laws pay homage to the same issues, but the question is whether an idea which could be viewed as revolutionary gains traction in the real world. Universities are full of blue-sky thinking innovators who have an idea which can change the course of history, but the truth is few are designed to accommodate the nuances of reality. Only time will tell to which column Inrupt falls into.

Congress asks Amazon whether it is becoming a police snitch

The Subcommittee on Economic and Consumer Policy has written to Amazon asking the internet to explain partnerships between surveillance company Ring and local police departments.

Home security and surveillance products are becoming increasingly popular with the consumer, though it appears the subcommittee is asking Amazon to explain the fine print. As with most products and services launched by Silicon Valley residents, Ring seems to be accompanied with legal jargon few will understand and may well compromise privacy and data protection principles.

“The Subcommittee on Economic and Consumer Policy is writing to request documents and information about Ring’s partnerships with city governments and local police departments, along with the company’s policies governing the data it collects,” the letter states.

“The Subcommittee is examining traditional constitutional protections against surveilling Americans and the balancing of civil liberties and security interests.”

The question which the politicians seem to be asking is how compliant Ring will in handing over information to law enforcement agencies or local government authorities, as well as the fundamentals of the partnerships themselves. Once again it appears the technology industry is revelling in the grey lands of nuance and half-statements.

Ring currently has partnerships with more than 900 law enforcement and local government agencies, it is critically important that everything is above board. This isn’t just a quirky product adopted by a few individuals anymore, this is potentially a scaled-surveillance programme. The opportunity for abuse is present once again, offering validity for Congress to wade into the situation and start splashing.

Optimists might suggest Ring is being a good corporate citizen, aiding police and security forces where possible. Cynics, on the other hand, would question whether Amazon is attempting to create a private, for-profit surveillance network.

One area which the Subcommittee would like some clarification on is to do with how compliant Ring would be when offering data to government agencies. Ring has said it would not turn over data unless it is “required to do so to comply with a legally valid and binding order”, though the wording of the terms of service seem to undermine this firm stance.

Ring may access, use, preserve and/or disclose your Content to law enforcement authorities, government officials and/or third parties, if legally required to do so or if we have a good faith belief that such access, use, preservation or disclosure is reasonably necessary to: (a) comply with applicable law, regulation, legal process or reasonable governmental request.

The final point of this clause, reasonable government request, is what should be considered worrying. This is unnecessarily vague and flexible language which can be used for a wide range of justifications or explanations for wrongdoing.

More often than not, politicians on such subcommittees are usually chasing a headline, but this seems to be a case where proper investigation is warranted. Law enforcement agencies and the internet giants have shown themselves on numerous occasions not to be trustworthy with minimal oversight. And when you are talking about a topic as sensitive as data privacy, no blind trust should be afforded at all.

BT finally unveils its reimagined TV proposition

The aggregator model has taken centre-stage at BT, leveraging its existing capabilities instead of trying to beat the content industry at its own game.

Under Gavin Patterson, BT tried to do something which almost looked impossible. It attempted to disrupt the content industry by not only owning the delivery model for content, but the content itself. It attempted to muscle into an established segment and compete with companies which were built for the content world. It was expensive, complicated and messy, and it failed spectacularly.

BT has not given up on content under new leadership, but it is taking a seemingly more pragmatic and strategic approach. Aside from its own content, Now TV will also be embedded in the BT interface, meaning that customers can now watch, pause, rewind and record premium Sky Entertainment and Sky Sports content. Customers will also be able to integrate Amazon Prime Video and Netflix onto their BT bill, while each element of the bundle can be scaled-up or -down month-by-month.

It is making best use of its assets, and it looks to be a comprehensive and sensible pillar of the convergence strategy.

“Life doesn’t stand still from month to month, so we don’t believe our customers’ TV should either. Our new range of TV packs bring together the best premium services, fully loaded with a wide range of award-winning shows, the best live sports in stunning 4K and the latest must-see films – all with the flexibility to change packs every month – with  quick and easy search to find what you want to watch,” said Marc Allera, CEO of BT’s Consumer division.

BT will ‘own’ some content, it still has the UEFA Champions League broadcast rights after all, but it is picking its battles. The BT TV proposition failed in years gone because it tried to go it alone, but without the broad range of content genres, it looked like a poor attempt to compete with the likes of Sky. In reality, it didn’t need to.

The telcos have a significant advantage over many content companies around the world; they have an existing and trusted billing relationship with the customer. According to the Ovum World Information Series, EE has 30.6 million mobile subscribers and BT has 9.1 million broadband customers. These relationships can be leveraged through the partnership model to realise new profits in a low-risk manner.

BT is in a position of strength. The streaming wars are raging, and the service providers will do almost anything to gain the attention of the consumer, as well as build credibility in the brand. By bundling services into the BT, the OTTs are leveraging the trust which the customer has in the telco billing relationship and gaining eyeballs on the service itself. All they have to do is offer BT a small slice of the profits.

This is the symbiotic relationship in practice. The OTTs gain traction with customers, while BT can complete the convergence objective in a low-risk manner through the aggregator model.

That said, it is somewhat of a retreat from its previous content ambitions.

“This well long overdue move feels like a last-ditch effort to be successful in TV,” said Paolo Pescatore, founder of PP Foresight.

“Aggregation is the holy grail. BT has done a superb job of introducing some novel features and bringing together key services all in one place. This will strongly resonate with users. However, it is unlikely to pose a considerable threat to Sky who in turn will be able to bundle BT Sport into its own packages. In the future expect this new TV platform to be bundled with BT Halo which will further strengthen its premium convergent offering.”

Convergence is a strategy which should be fully embraced by the BT business. Not only has it been proven in other European markets, see Orange in France and Spain, but the depth and breadth of BT’s assets should position it as a clear market leader. With mobile, broadband, public wifi hotspots and content tied into a single bill, as well as partnerships to bolster the experience, BT is heading down the right path. If it can start to build service products on top, such as security, this could start to look like a very competent digital business.

The issue which remains is one of price. The Halo bundle is one few can compete with, but if it is not priced correctly it will not be a success. This does seem to be the issue with the BT consumer business right now, it is pricing itself out of the competition. Convergence is attractive to customers when it is convenient and makes financial sense, but right now it doesn’t seem to.

BT is slowly heading in the right direction. It might have taken years, but it is slowly creating a proposition for the consumer which few should theoretically be able to compete with. If it can merge the business into a single brand and sort out the pricing of its products, it should recapture the market leader position.

FTC starts turning the screw on Big Tech

The Federal Trade Commission (FTC) has issued Special Orders to five of the technology industry’s biggest hitters as it takes a more forensic look at acquisition regulation.

Under the Hart-Scott-Rodino Act, certain acquisitions or mergers are required to be greenlit by the regulatory authorities in the US before completion. This is supposed to be a measure to ensure an appropriate marketplace is maintained, though there are certain exceptions to the rule. It appears the FTC is making moves to combat the free-wheeling acquisition activities of Big Tech.

Under the Special Orders, Google, Amazon, Apple, Facebook and Microsoft now have to disclose all acquisitions which took place over the last decade. It appears the FTC believes the current rules on acquisition need to be reconsidered.

“Digital technology companies are a big part of the economy and our daily lives,” said FTC Chairman Joe Simons. “This initiative will enable the Commission to take a closer look at acquisitions in this important sector, and also to evaluate whether the federal agencies are getting adequate notice of transactions that might harm competition. This will help us continue to keep tech markets open and competitive, for the benefit of consumers.”

While authorities have already questioned whether some acquisitions are in the best interest of a sustainable industry, in fairness, Big Tech has done nothing wrong. Where relevant, the authorities have been notified regarding acquisitions, and they have generally been approved. If the FTC and its cousins in other regulatory authorities believe the current status quo is unappealing, they only have themselves to blame.

In general, an acquisition will always have to be reported if the following three criteria are met:

  1. The transaction would have an impact on US commerce
  2. One of the parties has annual sales or total assets of $151.7 million, and the other party has sales or assets of $15.2 million or more
  3. The value of the securities or assets of the other party held by the acquirer after the transaction is $68.2 million or more

All three of these criteria have to be met before the potential acquisition has to be approved by the regulators.

Interestingly enough, the Android acquisition by Google is rumoured to be for roughly $50 million, therefore the third criteria was not met, and the team did not need to gain regulatory approval for the deal. This is perhaps what the FTC is attempting to avoid in the future, as while we suspect there was no-one in the office at the time with enough foresight to understand the implications, the regulator might suggest it would not have approved the deal in hindsight.

One of the issues being faced currently, and this is true around the world not just in the US, is that authorities feel they have lost control of the technology industry. Companies like Google and Facebook arguably wield more influence than politicians and regulatory authorities, a position few will be comfortable with outside of Silicon Valley.

Aside from this investigation, the FTC is also exploring Amazon in an antitrust probe, while Google and Facebook are facing their own scrutiny on the grounds of competition. There have also been calls to break-up the power of the technology companies, while European nations are looking into ways to force these companies to pay fair and reasonable tax. Across the world, authorities are looking for ways to hold Big Tech more accountable and to dilute influence.

Interestingly enough, we don’t actually know what the outcome of the latest FTC foray will be. It will of course have one eye on updating acquisition rules, though as Section 6(b) of the FTC Act allows the regulator to conduct investigations that do not have a specific law enforcement purpose; it’s a blank cheque and the potential outcome could head down numerous routes.

Twitter surges back after positive financial results

Three months ago the Twitter share price fell off a cliff thanks to a worrisome earnings call, but bad performance does not necessarily mean a bad company.

The latest financial report demonstrated this. Revenues for the fourth quarter of 2019 were $1.01 billion, an 11% year-on-year increase, while Average monetizable Daily Active Users (mDAU) were 152 million for Q4, compared to 126 million in the same period of 2018.

The third quarter financials could now be viewed as a blot on the landscape as share price shot up 16% during the early hours of trading on Thursday February 6. This is still considerably down on the high of $45.85 in September, but momentum might well shift back in favour of one of Silicon Valley’s earliest successes.

“We reached a new milestone in Q4 with quarterly revenue in excess of $1 billion, reflecting steady progress on revenue product and solid performance across most major geographies, with particular strength in US advertising,” said Ned Segal, Twitter CFO.

“We continue to see tremendous opportunity to get the whole world to use Twitter and provide a more personalized experience across both organic and promoted content, delivering increasing value for both consumers and advertisers.”

Despite being one of the most successful social media companies in terms of adoption, Twitter is one of the Silicon Valley residents who has struggled to make a meaningful impact on the promised fortunes of the digital economy. Over the last 12-18 months, this painful equation has seemingly been balanced, but the Q3 results threw a spanner in the works.

Over the last 12-18 months, Twitter has been sorting out its house. It started offering more comprehensive products for advertisers to target and engage customers, as well as more insightful features on the reporting features. There were some minor glitches to these features during Q3, which impacted results, as did retiring legacy products.

Another factor to consider is what actually happened during 2018. In a sentence, not a lot. This meant AmDAU’s were down during the period, and therefore advertising revenues were also. All of these factors combined resulted in the poor performance during the third quarter, but they were all issues which could be fixed. This is the basis of the turnaround during the fourth quarter.

This is the first quarter the business has exceeded $1 billion in revenue and there could be more to come. With the Olympics in Tokyo, the UEFA European Championships and the US Presidential Election all taking place over the next twelve months, there certainly could be more active users on the platform, therefore more opportunity to advertise and, finally, more revenue for Twitter.

2020 could be a very good year for the company, especially with new video products and a much more comprehensive approach to advertisers.

Fourth quarter Year-on-year Full year Year-on-year
Total revenue $1.01 billion 11% $3.46 billion 14%
Net income $118 million (54%) $1.46 billion 22%
R&D spend $198 million 40% $682 million 23%

Tinder comes under the scope of Irish GDPR watchdog

Dating apps have forever changed the way millennials find relationships (for however long they last…) but Tinder has found itself under the scrutiny of the Irish regulator.

The dating trailblazer has found itself alongside serial privacy offender Google as the focal point of an investigation from lead-European GDPR regulator the Irish Data Protection Commission. The question is whether MTCH Technology Services, the parent-company of Tinder, complies with GDPR in terms of processing user data.

“The identified issues pertain to MTCH Technology Services Limited’s ongoing processing of users’ personal data with regard to its processing activities in relation to the Tinder platform, the transparency surrounding the ongoing processing, and the company’s compliance with its obligations with regard to data subject right’s requests,” a statement from the regulator said.

Interestingly enough, a recent investigation from the Norwegian Consumer Council (NCC) suggested several dating apps such as Grindr, OkCupid, and Tinder might be breaking GDPR. The investigation suggested nine out of ten of the most popular dating apps were transmitting data to ‘unexpected third-parties’ without seeking consent from users, potentially violating GDPR.

As these applications collect sensitive information, sexual preferences, behavioural data, and location, there could be quite the backlash. The Irish Data Protection Commission will investigate how this information is processed, whether it then transmitted onto third parties and if the developers are being transparent enough with their users.

Alongside the Tinder investigation, the Irish watchdog is also investigating a regular for the privacy enforcement community, Google.

Once again, transparency is the key word here, as it so often is when one of the Silicon Valley residents are placed under the microscope. The authority will hope to understand how Google collects and processes location data, while also seeing whether it has been effectively informing users prior to collecting consent.

Google is seemingly constantly under the scrutiny of one regulator or another due to the complex web that is its operations. No-one outside of Google genuinely understands every aspect of the business, therefore a new potential privacy scandal emerges every so often as the layers of complexity are pulled back. In this investigation, it is not entirely clear what product or service is the focal point.

What is worth bearing in mind that any new privacy investigations are most likely to focus on timelines which were initiated following the introduction of GDPR in 2018. Anything prior to this, for example the Equifax leak or Yahoo hack, would not have been subject to the same financial penalties.

For the Tinder and Google investigations, any wrongdoing could be punished with a fine up to €2 million or 4% of total annual revenues, whichever is greater. We haven’t seen many of these fines to date because of the timing of the incidents or investigations, but regulators might well be looking for a case to prove there is a bite behind the regulatory bark, a means to scare corporates into action and proactive security measures.

An excellent example of this enforcement concerns Facebook and the Cambridge Analytica scandal. The investigation into potential GDPR violations takes into account several different things; the incident itself, security procedures and features, transparency with the user and assistance with the investigation, to name a few. Facebook did not cover itself with glory and was not exactly helpful during the investigation, CEO Mark Zuckerberg refused to appear in front of a Parliamentary Committee in the UK when called upon.

As this incident occurred prior to the introduction of GDPR, the Information Commissioner’s Office in the UK was only permitted to fine the social media giant £500,000. Facebook’s annual revenue for 2013, when the incident occurred, was $7.87 billion. The maximum penalty which could have been applied under GDPR would have been $314 million.

Although the potential fines have been well-documented, until there is a case to point to most companies will push the boundary between right and wrong. Caution is generally only practised when the threat of punishment is followed through to make an example.

Cloud becomes the golden child as Google reports yet more profit

When looking at the financial results of companies like Google, the question is not whether it has made money, but how much are the bank vaults overflowing.

Financial for the full year demonstrated slightly slowing growth, but few should worry about having to search the sofa for the pennies right now. Over the course of 2019, Google brought in $161.8 million, up 18.3% year-on-year, though it was YouTube and the Google Cloud business units as opposed to the core business which collected the plaudits from the management team.

“Revenues were 2.6 billion for the fourth quarter, up 53% year-over-year, driven by significant growth at GCP and ongoing strong growth and G Suite,” said Alphabet CFO Ruth Porat. “The growth rate of GCP was meaningfully higher than that of cloud overall. GCP growth was led by our infrastructure offerings and our data and analytics platform.”

Company Quarter Revenue (most recent) Year-on-year Growth
Google Cloud $2.6 billion 53%
Microsoft Intelligent Cloud $11.9 billion 27%
Amazon Web Services $9.9 billion 23%

Despite being a business unit which brings in an impressive $10 billion annually, it is impossible not to compare the performance of Google Cloud to AWS and Microsoft Azure. Google is realistically the only rival which can keep pace with the leading pair, though it does appear it is losing pace.

That said, the fortunes of the cloud are only beginning to be realised; this is a marathon not a sprint. Moving forward, the Google team believes strength in AI and software gives it an advantage to provide seamless experiences to users across multiple devices. There is also the blunt force approach to acquiring market share moving forward; Porat highlighted the objective is to triple the size of the cloud sales team.

Over at YouTube, the team is capitalising on the increasingly consumer appetite for video, though also what appears to be a more experimental attitude to subscription. YouTube TV is growing healthily at 2 million, while the core YouTube platform has more than 20 million music and premium paid subscribers.

This is positive momentum, though it will be interesting to see what impact partnerships have on these figures. Google is partnered with Verizon, forming a content option in its bundled products, though rivals are placing a much greater emphasis on these relationships, leaning on an already established link with the consumer, albeit sacrificing some profit in the process.

Perhaps these two business units demonstrate why Google is such an attractive company to investors and potential employees. The core business can do what it does, but Google is always searching for the next big idea. Google Cloud is arguably the most successful graduate of its ‘Moonshot Labs’ initiative, while YouTube is one of the biggest acquisition bargains at $1.65 billion in 2006. It now brings in more than $15 billion annually in ads sales.

During the earnings call, CEO Sundar Pichai pointed to some of the other investments which are absorbing the $26 billion annual R&D budget. Verily and Calico are linking together AI and cloud technologies to improve clinical trials, research, and drug development. Waymo is attempting to scale driverless vehicles in the US. Loon is another Moonshot graduate, endeavouring to stand on its own currently.

Google is one of the most interesting companies around, not only because it is a money-making machine, but the R&D business could produce some gems over the next few years.

Telefónica doubles down on the smart home

Telefónica has created a global unit, known as the Chief Digital Consumer Office (CDCO), which will champion new digital products and services, paying particular attention to the smart home.

Led by Chema Alonso, the team will aim to drive forward the Aura AI digital assistant, as well as continue the creation of the ‘fourth platform’. The initiative will help take Telefónica into the digital era across several areas, but there does seem to be particular attention being paid to the smart home ecosystem.

José Montalvo will become Chief Data Officer, with a primarily focus on the development of the fourth platform project, including integrating new products and services such as Aura onto the platform. David del Val will become Director of Core Innovation, with a particular focus on edge computing. Antonio Guzmán is the Director of Digital Home, tasked with overseeing the development of the smart home and digital services ecosystem.

These are only a few of the names, but it does appear Telefónica is hoping to create a standardised smart home ecosystem for the markets which it currently operates in. This is an incredibly intelligent approach to creating value in the future, and with its global presence, Telefónica can provide competition to other players who are attempting to create a platform to control the smart home ecosystem.

This initiative builds on progress being made in the smart home following the announcement of a partnership with Microsoft at Mobile World Congress last year.

Alongside Microsoft boss Satya Nadella, Telefónica CEO Jose Maria Alvarez-Pallete launched the fourth platform initiative in attempt to own the smart home ecosystem, seemingly learning from the ‘walled garden’ business model which has been so successful for the likes of Facebook.

In this model, Telefónica leverage its relationship with the users, creating a platform for third parties to offer products and services. Telefónica will of course offer its own services, such as content, but why not create revenue by monetizing the link between the user and other companies in the digital economy.

While the smart home is still emerging as a viable segment in the digital economy, this is a very intelligent move from Telefónica . Connected objects are becoming more common, as there will need to be a focal point to manage this ecosystem, but also guarantee security. Telefónica has a trusted relationship with the consumer, a recognised digital assistant and the power of Microsoft as a partner. This is not a guarantee, but at least Telefónica is trying something new under the threat of the connectivity industry becoming commoditised.

Wearables and services are paying off for Apple

The iPhone is still the biggest contributor to the monstrous profits Apple claws in each quarter, but efforts in wearables and services are balancing out the company.

While Apple is not a company which is going to go bust at any point in the foreseeable future, the dependence on the performance of the iPhone was leaning onto the unhealthy side. With more consumers leaning towards second-hand, refurbished devices, or extending the life of products due to the eye-watering price of new iPhones, there was a threat to profitability.

For the most recent quarter, there are no worries about the profitability of Apple, however. Total revenues for the three-month period, including Christmas sales, stood at $91.8 billion, a 9% increase from the same period in 2019. Net income set a new record of $22.2 billion, while international sales accounted for 61%.

That said, efforts over the last few years to supercharge alternative revenue streams and diversify the profit channels have certainly been paying off. The iPhone is still king at Apple, but it is evolving into a different company.

Quarter Product Revenue Software and Services Revenue Ratio
Q1 2020 79,104 12,715 86.2/13.8
Q1 2019 73,435 10,875 88.2/12.8
Q1 2018 79,768 8,471 90.4/9.6

For the purpose of continuity, we have only selected Q1 for the above comparison. This is a quarter which contains the Christmas period and therefore revenues are almost incomparable to the rest of the year.

As you can see, there is a clear trend of Apple become less reliant on hardware for revenues and profits, with the Software and Services becoming more than a bolt-on bonus for investors. $12.715 billion is an amount most companies would be happy to call group revenues for the year.

Interestingly enough, even in the ‘product’ segment, the team is becoming less reliant on the iPhone to drive revenues and profits.

Quarter iPhone Mac iPad Wearables and Home
Q1 2020 55,957 (60.9%) 7,160 (7.8%) 5,977 (6.5%) 10,010 (10.9%)
Q1 2019 51,982 (61.6%) 7,416 (8.8%) 6,729 (8%) 7,308 (8.7%)
Q1 2018 61,576 (70%) 6,895 (7.9%) 5,862 (6.6%) 5,489 (6.2%)

In short, diversification of revenues is an excellent way forward for the Apple business and demonstrative of the power of the Apple brand.

Apple is a brand which certain consumer identify with, and such is the innovation and creativity of the Apple marketing department, loyalty has been almost cult-like. Cross-selling alternative products when the consumer is so heavily invested in the brand and ecosystem is a much simpler task, this will be one of the reasons Apple’s services division is becoming so successful, but it also explains the growing wearables segment.

Wearables is a family of technologies which has struggled through the years. The first smart watch, in its current form, was released in 2011, though the segment has never really gained the traction to make it an attractive business. Apple has been persisting with its own portfolio of smart watches for years, but it does now appear to have turned a corner.

“Apple Watch had a great start to fiscal 2020, setting an all-time revenue record during the quarter,” CEO Cook said during the earnings call. “It continues to have a profound impact on our customers’ lives and it continues to further its reach as over 75% of the customers purchasing Apple Watch during the quarter were new to Apple Watch.”

Apple is no-longer simply satisfying product refreshment cycles but attracting new customers into the smart watch bonanza. The more smart watch customers there are, the more normalised the product becomes, which then compounds the success, especially with more digital natives entering their 20s and collecting bigger salaries.

Apple is a company which is defined by iPhone. This will not change, such is the success of the product and the importance of the smartphone in today’s society, but diversifying the business was always viewed as critical to expanding the profitability of the firm. Apple is doing a remarkable job of capturing new revenues.

Facebook faces €5mn fine in Italy

The Italian competition authority, Autorita’ Garante della Concorrenza e del Mercato (AGCM) is intending to fine Facebook €5 million for ignoring its previous ruling.

Having already been fined €10 million in December 2018 for violating the country’s consumer code, the AGCM has followed up with another seven figure-fine for ‘non-compliance’. Facebook has seeming not made amends for the violations of yesteryear, by adequately informing the user of data collection, and will face another investigation.

The new investigation, which has been confirmed by the Regional Administrative Court of Lazio, will potentially fine Facebook an additional €5 million.

The issue which is at the crux of this saga for Facebook is ultimately one of transparency. While Facebook does not charge users for its services, the Italian competition regulator does not feel the social media giant is doing enough to make its users aware of how personal data is collected, store and analysed for commercial means.

Although Facebook removed the ‘it’s free and always will be’ tag from the website under orders from the regulator, it is now believed the social media giant failed to ‘adequately and immediately’ inform users on the data collection ambitions. Facebook also failed to publish the amending statement on the platform.

In addition to a €5 million fine, Facebook will have to publish an amending statement on the homepage of its website, the app and the personal page of each registered Italian user, should the proceedings find Facebook guilty.

While it will surprise few Facebook is finding itself in another spot of bother when it comes to transparency and honesty with its users, it is quite surprising the social media simply ignored the demands of the regulator. Although it is far from a good corporate citizen, it seems highly unusual the team simply didn’t pay attention to the Italian regulator in the first place.