FTI Consulting News Bytes – 30 August 2024

FTI Consulting News Bytes

This week, we first turn our attention to the arrest of Telegram CEO Pavel Durov in France, who is facing allegations that he allowed criminal activity to take place on the messaging app. We then take a look at the launch of a new Barbie “brick” mobile from Finnish mobile manufacturer HMD, which has introduced the device in a bid to encourage children to spend less time online and “detox” from technology. Next, we turn our attention to the news that India’s competition watchdog has approved Disney and Reliance Industries’ intended merger of their local entertainment businesses. Finally, we look at Google’s claim that the Russian government is using exploits from spyware makers to capture information on government employees, before delving into Klarna’s plans to significantly cut its workforce in the coming years by leaning on efficiencies created through AI. 

This week’s news

France sends a message with arrest of Telegram CEO

French authorities have placed Pavel Durov, the CEO of Telegram, under formal investigation over alleged criminal activity on the messaging app, barring him from leaving France. The Financial Times reports that Durov is facing preliminary charges in an investigation into Telegram’s alleged failure to address criminality on the app, including enabling drug trafficking, money laundering, and the distribution of child sexual abuse content. Following his arrest on Monday, Durov has been freed from custody but placed under judicial supervision, and is not permitted to leave French territory. Durov, who is Russian-born, is now a French-Emirati citizen. Earlier this week, the outlet also reported that President Macron refuted claims that the arrest was politically motivated after tensions with Moscow were raised and a global debate over free speech escalated.  

Rethinking the future of mobile phones brick by brick

HMD have released a Barbie “brick” phone in partnership with Mattel with no social media access to encourage children to spend less time online, according to The Telegraph. The mobile phone, on sale for £99, is designed to offer a “digital detox” by providing only calls and text but no internet access. The phone comes equipped with digital well-being tips and replaceable covers, as well as a basic camera. Citing its own research, HMD positioned the announcement within the context of more and more young people being open to taking a break from their smartphone by switching to a more basic feature phone reminiscent of the mobile phones of the 1990s and early 2000s. HMD also pointed to the results of its international survey of 10,000 parents, which found that more than half regretted giving a smartphone to their child – suggesting it impeded family engagement, hindered children’s sleep, reduced their physical exercise and limited time socialising with their friends.

Disney-Reliance merger on track for fairytale ending

Disney and Reliance Industries have secured approval from the Competition Commission of India to proceed with a $8.5bn merger of their local entertainment businesses, the Financial Times reports. The watchdog had been concerned about the control that Disney and entities largely owned by Reliance would exert over the streaming and broadcasting rights to international cricket and the incredibly popular Indian Premier League T20 tournament. Disney and Reliance were given the green light after the companies reportedly agreed to shut down some of the regional TV channels from their portfolio of over 100 stations. The FT noted that the move “paves the way for the creation of an unrivalled Indian entertainment giant”.

A new way to spy: why code when you can copy?

According to TechCrunch, Google says it has evidence that Russian government hackers are using exploits that are “identical or strikingly similar” to those previously made by spyware makers Intellexa and NSO Group. In a blog post, Google stressed that it wasn’t sure how the Russian government acquired the exploits, but said this is an example of how exploits developed by spyware makers can end up in the hands of “dangerous threat actors.” Google said it found the hidden exploit code embedded on Mongolian government websites between November 2023 and July 2024. The article highlights that during this time, anyone who visited these sites using an iPhone or Android device could have had their phone hacked and data stolen, including passwords, in what is known as a “watering hole” attack. Google security researcher Clement Lecigne, who authored the blog post, told TechCrunch that it is not known for certain who the Russian government hackers were targeting in this campaign. “But based on where the exploit was hosted and who would normally visit these sites, we believe that Mongolian government employees were a likely target,” he said.

Klarna: AI now, more pay later?

The BBC reports that buy now, pay later firm Klarna is planning to halve its workforce in the coming years, through efficiencies driven by investment in AI.  Klarna has already cut c. 1,200 jobs in the past year, and wants to reduce its headcount further by using AI in marketing and customer service. Sebastian Siemiatkowski, co-founder and CEO of Klarna, told the BBC that the job cuts would mean Klarna could pay its remaining workers more. Suggesting that governments need to think about what to do about AI and the impact it is likely to have on jobs and society, Siemiatkowski commented “I think politicians already today should consider whether there are other alternatives of how they could support people that may be effective”, adding that it is “too simplistic” to simply say new jobs would be created in the future. The risks and benefits of AI have been widely speculated since the proliferation of the technology; in January, the International Monetary Fund said it believed AI would impact nearly 40% of all jobs, adding that it would “likely worsen overall inequality”.

Top Tweets of the Week

• Ryan Browne, Technology Correspondent at CNBC: Hm…In a new interview, Mark Zuckerberg claims that the Biden Administration “pressured” Facebook parent company Meta to “censor” content related to Covid-19. https://t.co/vL0unccqem
• Mark Gurman, Chief Correspondent at Bloomberg: Apple is also planning to make Apple Intelligence a key part of the iPhone sales pitch in stores this fall and has started training retail employees on the features.
• Ina Fried, Chief Technology Correspondent at Axios: OpenAI says ChatGPT usage has doubled since last year, to more than 200 million weekly active users https://t.co/7uZTa3GwxH

Number of the week

122 – The percentage increase of Nvidia’s revenue growth year-on-year, as announced in the company’s Q2 earnings on Wednesday.