Regulation

Big Tech Compliance Tracker: Facebook Appeals Giphy Restrictions; Microsoft Says Epic Games’ Apple Ban Could Impact Game Makers

Big Tech Compliance Tracker: Facebook Appeals Giphy Restrictions; Microsoft Says Epic Games’ Apple Ban Could Impact Game Makers 

Here’s the latest news from the Big Tech sector, which is coming under increasing scrutiny and challenges from regulators worldwide.

Regulation 

Facebook Appeals Giphy Restrictions 

Facebook is appealing a decision by the U.K. Competition and Markets Authority (CMA) requiring the social network to keep its operations separate from Giphy while the agency probes their recent merger, BNN Bloomberg reported.

Facebook recently bought Giphy for $400 million, but put the two companies’ integration on hold after the CMA announced plans in June to investigate whether the deal would give the social media giant too much data on its competitors' businesses. Giphy has also done business with Apple, Twitter, TikTok and others.

ECB Cautions About European Banks’ Reliance On Non-EU Cloud Providers 

The European Central Bank (ECB) is warning that Eurozone banks lack access to European-based cloud companies comparable to America’s Google Cloud, Microsoft Azure and Amazon Web Services, Crowdfund Insider reported.

The ECB recently said in a statement that “one important challenge in relation to digital finance will be to reassess the dependence of European financial service providers on non-EU providers of critical services and technical infrastructures (e.g. the ‘cloud’), while EU-based global players have struggled to emerge.”

Taxes  

UK Disavows Claims That It Plans To Jettison ‘Facebook Tax’ 

Britain’s government is denying a report that it intends to scrap a tax on international tech firms like Amazon, Google and Facebook because it’s “more trouble than it’s worth.”

The Daily Mail newspaper recently claimed that U.K. Chancellor of the Exchequer Rishi Sunak was getting ready to scrap the levy, finding that the £500 million (about $668 million) it is forecast to bring in is very little in contrast to the hit to the country’s finances brought about by COVID-19. The tax is also reportedly a barrier to trade discussions with the U.S.

But a spokesperson for the U.K. treasury told The Guardian newspaper that the agency will only jettison the levy when there’s a worldwide agreement on taxing big multinational tech firms.

“We’ve been clear it’s a temporary tax that will be removed once an appropriate global solution is in place — and we continue to work with our international partners to reach that goal,” the spokesperson said. 

Facebook’s French Subsidiary To Pay Nearly $120M In Back Taxes 

Facebook’s subsidiary in France has agreed to pay more than $118 million in taxes and fines following an audit going back a decade.

A company representative told Reuters, “We take our tax obligations seriously, pay the taxes we owe in all markets where we operate and work closely with tax authorities around the world to make sure we abide by all applicable tax laws and resolve any litigation.”

He said the Facebook unit paid roughly $10 million in French income taxes last year, up nearly 50 percent from 2018. However, France has indicated that it believes Big Techs don’t pay enough taxes in nations where they register sizable sales.

News 

Facebook: iOS 14 Could Significantly Impact Publishers  

Facebook believes that Apple’s iOS14, which is now in beta, could have a significant effect on publishers who use the firm’s ad network, according to reports.

For example, Apple will seek users’ permission before providing their IDFA identifier to app developers who can harness that information to tailor advertising.

“Ultimately, despite our best efforts, Apple’s updates may render Audience Network so ineffective on iOS 14 that it may not make sense to offer it on iOS 14,” Facebook said in a note to developers, as PYMNTS previously reported.

Facebook Stopped From Informing Apple Users Of 30 Pct App Store Charge 

Apple won’t let Facebook tell users that the tech firm takes 30 percent of purchases made in-app for a new digital-event ticket-purchasing function, The Verge reported. Apple said the move contravened an App Store regulation that prevents developers from providing users with “irrelevant” data.

Facebook said it requested that Apple forgo the charge so that event organizers could receive all sale proceeds. However, Apple reportedly turned down the request.

As PYMNTS previously noted, the dispute between the tech giants arose when Facebook announced plans to debut a new tool that will let influencers and companies offer paid digital events to offset COVID-related sales losses.

Microsoft: Apple’s Ban Of Epic Games’ Developer Impact Would Impact Game Makers 

A high-level Microsoft engineer said letting Apple ban Epic Games’ developer account will highly impact those who make games (including Microsoft) by preventing them from harnessing Epic’s Unreal Engine, CNBC reported.

General Manager Kevin Gammill of Microsoft’s gaming developer experiences unit said, “If Unreal Engine cannot support games for iOS or macOS, Microsoft would be required to choose between abandoning its customers and potential customers on the iOS and macOS platforms or choosing a different game engine when preparing to develop new game.”

The Unreal Engine offers a structure for 3D graphics to be made, and Epic provides the technology to firms that pay for it.   

Facebook Gears Up To Challenge Thailand’s Request To Ban Group 

Facebook reportedly intends to pursue legal action after Thailand’s government made it ban a group considered critical of the Thai royal family.

The social media company indicated that it was “compelled” by the country’s government to stop Thai users from visiting the Royalist Marketplace, which allows posts critical of the royal family, CNN Business reported.

"We work to protect and defend the rights of all internet users and are preparing to legally challenge this request,” a Facebook spokesperson said.

Facebook Turns Over Information To UN In Myanmar Probe 

Facebook says it shared information with United Nations investigators probing alleged genocide in Myanmar after the lead investigator claimed the social media giant was holding back evidence.

A Facebook spokesperson told Reuters that the company has provided the Independent Investigative Mechanism on Myanmar with data related to posts connected the country’s military, but which the company took down in 2018 due to alleged “hate speech.”

The country is encountering genocide allegations at the International Court of Justice regarding the Myanmar military’s 2017 clampdown on the country’s Rohingya minority, which allegedly caused 730,000 individuals to leave for nearby Bangladesh.  

“As these investigations proceed, we will continue to coordinate with them to provide relevant information as they investigate international crimes in Myanmar,” the Facebook spokesperson told Reuters.

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