Silicon Valley Tech News Roundup – July 9th
Twitter threatens legal action over Meta’s Threads – 7/8
According to a report published by Semafor (a news outlet), Twitter is threatening Meta with legal action over the launch of Threads, a new Twitter alternative.
Alex Spiro (Twitter’s attorney) sent a legal letter to Mark Zuckerberg that accused Meta of “systematic, wilful, and unlawful misappropriation of Twitter’s trade secrets and other intellectual property” to create Threads. Further, it accuses Meta of hiring over a dozen former Twitter employees who “had and continue to have access to Twitter’s trade secrets and other highly confidential information.” The letter stated: “Twitter intends to strictly enforce its intellectual property rights, and demands that Meta take immediate steps to stop using any Twitter trade secrets or other highly confidential information… Twitter reserves all rights, including, but not limited to, the right to seek both civil remedies and injunctive relief without further notice.”
Threads launched on Wednesday and managed to amass over 70 million users one day after the launch. It took Twitter over four years to obtain the same number of followers. However, the company had to grow its user base from scratch. Meanwhile, Meta had a reported two billion monthly Instagram user base to tap into.
For Twitter to prevail in court, by copyright law, the company has to prove Meta stole intellectual property like the programming code. Elon Musk tweeted about the legal letter and said: “Competition is fine, cheating is not.”
Users in the EU still cannot join Threads. Alex Mosseri (the CEO of Instagram) stated to the Verge the launch does not include the EU because of “complexities with complying with some of the laws coming into effect next year.”
China’s central bank fines Ant Group almost $1 billion – 7/7
On Friday, the People’s Bank of China fined Alibaba’s affiliate Ant Group $985 million (Alibaba has a stake of 33% in Ant Group). Jack Ma is the owner of Alibaba and Ant Group.
The People’s Bank of China, the China Securities Regulatory Commission, and the National Financial Regulatory Administration released a joint statement saying they fined Ant Group because it violated numerous regulations and laws, including consumer protection, anti-money laundering requirements, and corporate governance.
In 2020, financial regulators forced Ant Group to pull its initial public offering over regulatory concerns, and the company had to restructure its business.
The People’s Bank of China stated it rectified the majority of problems in the financial dealings of platform companies and will continue with “normalized supervision.” Experts believe this signals the end of strict measures and a crackdown on the tech industry.
Ant Group also released a statement on Friday: “We will comply with the terms of the penalty in all earnestness and sincerity and continue to further enhance our compliance governance.”
Canadian government stops advertising on Meta’s platforms – 7/6
Pablo Rodriguez (Minister of Heritage with the Canadian government) said in a press conference on Wednesday that the Canadian federal government will stop all advertising on Meta’s platforms Facebook and Instagram.
The decision comes after Meta blocked all news content for Canadian users after the Canadian parliament passed the Online News Act. The law comes into effect in six months and will force online platforms to pay news publishers for their media. Google also announced it plans to block the news once the Online News Act comes into effect.
Pablo Rodriguez stated Meta has not been engaging with the government to find a solution: “Meta are not talking to us.” He labeled the company’s decision as “unreasonable and irresponsible.” Minister Rodriguez estimated the decision to pull all government advertising from Meta’s platforms would cost the company around $7.54 million.
Prime Minister Justin Trudeau commented on the latest developments and stated Canada is a global test case for laws like Online News Act. He said: “This is what they want to do, make an example of us… Facebook decided that Canada is a small enough country that they could reject our asks… They made the wrong choice by deciding to attack Canada.”
Meta released a statement to the BBC and stated the Online News Act: “is flawed legislation that ignores the realities of how our platforms work… Publishers actively choose to post on Facebook and Instagram because it benefits them to do so.”
ChatGPT’s user base shrinks by 10% in June – 7/7
According to a report published by the Washington Post, ChatGPT’s user base shrank 10% globally in June. The number of unique visitors to the website dropped 5.7%. The app downloads declined and the time visitors spend on the website is down 8.5%. The Washington Post report is based on the analysis conducted by Similarweb (a market intelligence and web analytics company).
ChatGPT experienced an explosion of traffic and engagement after it launched in November last year. By January, it had 100 million monthly active users. It is the fastest-growing consumer application ever. The app grew steadily until March when the engagement slowed.
Similarweb posits “novelty (of AI) has worn off.” Meanwhile, some experts concluded the drop in the traffic could be down to the launch of the ChatGPT app on the iOS system in May. Others think the drop in traffic is because of summer school break and students not using the app for help with homework.