FTI Consulting News Bytes – 28th March 2022

This week’s news

Europe targets Big Tech

The Digital Markets Act, which has long dominated the tech news agenda in Europe, is finally here. Last week, Politico argued that the European Union has now opened a “new chapter” in antitrust enforcement for the digital economy, adopting the raft of new rules designed to clamp down on some of the world’s largest tech firms. In a deal brokered Thursday evening, officials from the EU Parliament, Council and Commission concluded 15 months of intense negotiations on a new rulebook for Big Tech giants operating in the European market, the Digital Markets Act. Google, Amazon, Meta, Apple, Microsoft and other global players such as accommodation outfit Booking and Chinese e-commerce player Alibaba will come under the scope of the Digital Markets Act, which introduces a series of dos and don’ts for tech firms’ behaviour across digital markets. The rules’ scope will encompass platforms — so-called gatekeepers — with a market capitalization of €75 billion or turnover in the European Economic Area equal to or above €7.5 billion. Affected platforms will also need to have 45 million active end-users and 10,000 yearly active business users.

Michael makes the Grade

The Financial Times reported that broadcasting veteran Lord Michael Grade will chair the media regulator Ofcom. Grade has run ITV and Channel 4 and has also chaired the BBC. His appointment comes after a long, tense and political process where previous candidates include Paul Dacre, the Prime Minister’s preferred choice who pulled out earlier. Grade is seen as a less contentious prospect than Dacre but known as a Conservative Lords peer with forthright views, some feel he is unfit for the position. The 79-year-old has been critical of the BBC, writing in a newspaper last year that another journalistic lapse at the public broadcaster could “bring the whole house down”. He is also regarded as sympathetic to the idea of privatising Channel 4, which remains on the government’s agenda. Peter Fincham, former director of television at ITV, said: “He’s a lover of television, but not an uncritical friend of lots of the institutions within it.” Ofcom is run day-to-day by chief executive Melanie Dawes, but the chair has an overarching role determining its strategy and broad influence over the UK media landscape. Grade is expected to steer Ofcom through an important period in which it is set to be given powers next year to supervise online platforms such as Facebook and Google.

An Epic donation

Following the wave of support from the gaming communities in the wake of the crisis in Ukraine, BBC News reported that Epic Games raised more than £37m to aid humanitarian efforts in Ukraine. The Fortnite publisher announced on 21 March it would donate all proceeds from in-game sales, including cosmetic in-game items and virtual currency bought in a shop or online, until 3 April. And Xbox is donating the fee it would usually take on items bought by players in Fortnite. A statement on the Fortnite website said it would send funds “as quickly as we can”. “We’re not waiting for the actual funds to come in from our platform and payment partners, which can take a while depending on how the transaction was processed. As transactions are reported, we’ll log them and send the funds to the humanitarian relief organisations within days.” Epic is sending money to UNICEF, Direct Relief, the UN Refugee Agency, and the UN World Food Programme.

Russia bans Google News

Elsewhere, The Guardian reported that Russia has blocked Google News, accusing it of promoting “inauthentic information” about the invasion of Ukraine. The ban came just hours after Google announced it would not allow users worldwide to monetise content that “exploits, dismisses, or condones” the war. Google’s new policy affects any website, app or YouTube channel that earns revenue from advertising managed by the search engine. It has long had a policy that bars adverts from appearing next to any content that “incites violence” and says the new policy clarifies and expands those rules The company had already taken action against Russian state-funded media in late February, and paused all adverts for Russian users earlier this month. The latest ban could cut off funding to western media supportive of Russia, even if they have no clear financial tie to the state itself.

It starts with a 16-year-old in Oxford…

Hundreds of organisations that rely on Okta to provide access to their networks may have been affected by a cyber-attack on the company, as reported by BBC News. Okta initially said the attack, in January, involved a third-party contractor, a “sub-processor”, and “the matter was investigated and contained”. But now they outline the “worst case” was 366 of its clients had been affected and their “data may have been viewed or acted upon” – its shares fell 9% on the news. The cyber-gang Lapsus$ has been identified as being behind the hack. The gang via online posts said it had not stolen “any databases from Okta” and was focused only on its customers. None of Okta’s clients has reported any issues. However, recent attacks in the same week on Microsoft and Nvidia have been traced to a 16-year-old living at his mother’s house in Oxford, Fortune report. Researchers investigating the hacks believe the teenager is the mastermind behind the hacks and, Lapsus$. After the wave of headlines over the week, Lapsus$ suggested it would be taking some time off from hacking the world’s biggest companies. It follows that amidst widespread discussion of cybersecurity warfare among nation-states and advanced misinformation campaigns, sometimes the biggest threat is a teenager in his bedroom.

Top Tweets of the Week

• Matt Burgess, Senior Writer at WIRED tweets: ‘New from me: The biggest, publicly known, cyberattack since Russia invaded Ukraine knocked thousands of people offline. The attack—against a satellite communications system—impacted 27,000 users across Europe. Many of them still aren’t back online https://t.co/6o98mCQyeR‘
• American Congressman Congressman Darrell Issa tweets that ‘I won’t stop until we get the full truth about how Big Tech, the mainstream media colluded to shut down the truth about Hunter Biden’s influence peddling and the ways Joe Biden may have benefitted from it. Enough of lies to protect the guilty.’
• Scott Galloway, professor of marketing and a podcast host, tweets: ‘The biggest innovation in #crypto isn’t the blockchain or smart contracts, it’s scarcity. Latest @PivotPod — stream the video via @salesforce https://t.co/dfv9vdUMuY https://t.co/uTHzfbf15U‘
• BBC North America Tech Reporter James Clayton tweets: ‘The Kremlin has more than 100 official Twitter accounts. This is how they are used to amplify misinformation: https://t.co/0hxg78sj7S‘

Number of the Week

$1.1 bln – The amount that Dyson said it would invest in Singapore over the next four years, in the newest phase of a S$4.9 billion global investment plan.

What’s happening this week?

• 28 March – Michael Gove speaks on skills and Levelling Up
• 30 March – Ofcom report on children and parent’s media use
• 30 March – Treasury Committee evidence session on the Spring Statement with think tanks
• 31 March – Expo 2020 Dubai ends

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