Silicon Valley Tech News Roundup of the Week – June 6th

Trump banned from Facebook and Instagram for two years

Facebook banned former President Donald Trump from his Facebook and Instagram accounts for the next two years.

Nick Clegg, Facebook’s vice-president of global affairs, released a statement:
“Given the gravity of the circumstances that led to Mr. Trump’s suspension, we believe his actions constituted a severe violation of our rules which merit the highest penalty available under the new enforcement protocols… At the end of this period, we will look to experts to assess whether the risk to public safety has receded… If we determine that there is still a serious risk to public safety, we will extend the restriction for a set period of time and continue to re-evaluate until that risk has receded.”

The decision comes after Facebook’s Oversight Board was unhappy with the open-ended penalty. Former President Donald Trump was banned on January 6th of this year, after posts praising the rioters storming the Capitol.

Trump responded to the decision with a statement:
“Facebook’s ruling is an insult to the record-setting 75m people, plus many others, who voted for us…”
Donald Trump and his team have the first in-person rally planned for July in Dallas, Texas.

Facebook also decided to stop protecting politicians who post abusive or misleading content. So far, the posts were allowed to stay on social media platforms because the content was considered newsworthy.

El Salvador – the first country to accept bitcoin as legal tender

In a video played at Bitcoin 2021 conference in Miami, El Salvador’s President Nayib Bukele announced his plans to introduce legislation that would see bitcoin accepted as a legal tender. This move would make El Salvador the first sovereign nation to do so.

President Bukele also announced El Salvador partnered with Strike, a digital wallet company, to help his country create an infrastructure that will use bitcoin technology.
As of yet, the details on the implementation of the project are unclear. But CNBC’s sources learned El Salvador gathered a panel of bitcoin experts to create a new bitcoin financial eco-system.

Jack Mallers, the founder of payments platform Strike, said at the Bitcoin 2021 event:
“What’s transformative here is that bitcoin is both the greatest reserve asset ever created and a superior monetary network. Holding bitcoin provides a way to protect developing economies from potential shocks of fiat currency inflation.”

Currently, in El Salvador, about 70% of people do not have bank accounts or credit cards. Furthermore, 20% of El Salvador’s gross domestic product is remittances (the money migrants send home to support their families.)

G7 countries announce plans to raise taxes for corporations

At the G7 meeting in London, the finance ministers of the US, the UK, France, Germany, Italy, Japan, Canada, and the EU, announced a decision to charge more tax from multinational companies.

For years, multinational companies operating across the continents took advantage of “tax havens”. Big corporations like Amazon, Google, and Facebook set up branches in countries that have low corporate tax rates. This maneuver enables corporations to declare profits where they pay the lowest tax even though their profit comes from other countries.

With the latest G7 decision, corporations will have to pay taxes if they operate with a minimum of 10% profit margin and 20% tax for any profits over that figure. Likewise, a 15% corporate tax minimum would prevent countries from competing and lowering their taxes to become new “tax havens”.

The G7 decision will be a matter of discussion at the next G20 meeting planned for July. It is unknown if countries like Russia and China will agree to participate. Likewise, each country will have to change its tax laws.

Zoom on track to earn $4 billion in revenue for the year

With Zoom Video Communications Inc.’s fiscal first-quarter net income report published last Tuesday, the company managed to exceed Wall Street estimates for the quarter.

Zoom, the videoconferencing company, reported a net income of $227.4 million (74 cents a share) for the fiscal first-quarter. In the year-ago period, net income was $27 million (9 cents a share). Zoom’s revenue went from $328.2 million in the year-ago quarter to $956.2 million. It bears mentioning fiscal first-quarter results take into account business completed by the end of April. Because of this, the report published on Tuesday does not provide a complete Covid-19 comparison. The implementation of shelter-in-place orders, work-from-home, and travel bans started in mid-March.

Eric Yuan, Zoom founder and CEO said in a statement:
“We kicked off the fiscal year with a very strong first quarter, posting 191% total year-over-year revenue growth combined with strong profitability and cash flow… with this solid start, we are pleased to raise our total guidance range.”

The forecast for the company adjusted the earnings from $4.56 to $4.61 a share on revenue of $3.98 billion to $3.99 billion for the year.