Archives for February 2021

Groups file court challenge of Maryland’s internet ad tax

ANNAPOLIS, Md. (AP) — Maryland’s first-in-the-nation law taxing digital advertising by Big Tech companies like Facebook and Google is being challenged in federal court as “a punitive assault” on digital advertising and should be struck down, according to a federal lawsuit filed Thursday by leading trade associations.

The lawsuit, filed in U.S. District Court in Baltimore, contends the law “is illegal in myriad ways.” It alleges the law violates the federal Internet Tax Freedom Act, which prohibits discrimination against electronic commerce, as well as other federal laws.

It seeks an injunction to block the law from taking effect. The plaintiffs say the lawsuit should put on notice other states considering a similar tax that such measures will face court challenges.

“It shouldn’t be a surprise that enacting this kind of law is really nothing but a one-way ticket to the courthouse, which is an unfortunate use of anyone’s resources,” said Michael Kimberly, the lead attorney for the plaintiffs.

Plaintiffs include the U.S. Chamber of Commerce, the Internet Association, NetChoice, and the Computer and Communications Industry Association.

The Maryland General Assembly, which is controlled by Democrats, last week overrode Republican Gov. Larry Hogan’s veto of the measure from last year.

Supporters say the new law seeks to modernize the state’s tax system and make thriving Big Tech companies pay their fair share. It would assess the tax on revenue affected companies make on digital advertisements seen in Maryland. They say the estimated $250 million in annual revenue would help pay for education.

Maryland Senate President Bill Ferguson, a Baltimore Democrat who sponsored the legislation last year, said the lawsuit wasn’t a surprise. But he said it was “disappointing to see these companies spend millions on high powered attorneys instead of paying their fair share.”

“For two decades, these companies have grown exponentially by availing themselves of the privileges of states, benefited from the aggressive uncompensated collection of personal and private information about Maryland’s residents, and been free riders to Maryland’s investments in our civic infrastructure,” Ferguson said.

The Maryland attorney general’s office declined to comment on pending litigation.

The law would tax revenue affected companies make on digital advertisements shown in Maryland. Tax rates would depend on global annual gross revenues for companies that make more than $100 million globally.

The tax rate would be 2.5% for businesses with gross annual revenue of $100 million; 5% for companies with revenue of $1 billion or more; 7.5% for companies with revenue of $5 billion or more and 10% for companies with revenue of $15 billion or more.

Kia and Hyundai recovering from days-long network outages

BOSTON (AP) — Kia Motors America says it’s restoring services crippled by a computer network outage that began Saturday and which apparently affected dealers’ ability to order vehicles and parts and knocked offline a smartphone app that owners use to remotely start and warm up vehicles.

Both Kia and affiliated automaker Hyundai Motor America, which reported a less severe IT outage it said also began Saturday, said they had no evidence the problems were caused by ransomware. Neither would provide an explanation for what caused them.

In a statement on Thursday, Kia cited “online speculation” that it was hit by ransomware, which scrambles data until a victim pays to have it decoded. “At this time, and based on the best and most current information, we can confirm that we have no evidence that Kia or any Kia data is subject to a ransomware attack,” the company said.

The cybersecurity news outlet BleepingComputer reported Wednesday that it obtained a note in which the ransomware gang Doppelpaymer was demanding $20 million from Hyundai to decode scrambled data. The report said the gang was threatening to leak online data stolen from Hyundai unless the South Korean automaker paid up.

Kia said its UVO app, which offers the “remote start” function, was coming back online Thursday. It would not confirm that the outage delayed vehicle deliveries and maintenance, although Automotive News and The Associated Press spoke to dealers who said it had.

For instance, a Phoenix woman, Amy Horowitch, tweeted to complain that the outage had held up her attempt to lease a Kia vehicle. She told the AP that two salespeople at a Phoenix dealership told her ransomware was to blame. The dealership referred questions to Kia’s corporate office.

Hyundai said a “limited number of customer-facing systems” were impacted and that its Bluelink smartphone app was not affected.

Doppelpaymer is a leading Russian-speaking ransomware gang. It emerged in mid-2019 and has attacked multiple industries and public agencies. Doppelpaymer is one of a number of ransomware syndicates that have increasingly tried to extort victims — from law firms to factories to healthcare providers — by threatening to publish sensitive data.

Ransomware has reached epidemic proportions in the past three years, costing the public and private sector tens of billions of dollars, mostly from lost business and recovery, according to Bill Siegel, CEO of Coveware, which helps victims respond to attacks.

Facebook makes a power move in Australia – and may regret it

For years, Facebook has been in a defensive crouch amid a slew of privacy scandals, antitrust lawsuits and charges that it was letting hate speech and extremism destroy democracy. Early Thursday, though, it abruptly pivoted to take the offensive in Australia, where it lowered the boom on publishers and the government with a sudden decision to block news on its platform across the entire country.

That power play — a response to an Australian law that would compel Facebook to pay publishers for using their news stories — might easily backfire, given how concerned many governments have grown about the company’s unchecked influence over society, democracy and political discourse. But it’s still a startling reminder of just how much power CEO Mark Zuckerberg can wield at the touch of a figurative button.

“Zuckerberg’s flex here shows how he can disrupt global access to the news in a heartbeat,” said Jennifer Grygiel, a social media expert and professor at Syracuse University. “No company should have this much influence over access to journalism.”

Facebook’s move means people in Australia can no longer post links to news stories on Facebook. Outside Australia, meanwhile, no one can post links to Aussie news sources such as the Sydney Morning Herald.

Facebook said the proposed law “ignores the realities” of its relationship with publishers that use its service to propel their stories across the world. Technology and media experts have also raised serious concerns. Timothy Berners-Lee, the British computer scientist known as the inventor of the World Wide Web, told an Australian Senate committee in January that the law’s precedent could ultimately wreck the internet by requiring payment for links that have always been free.

The law hasn’t gone into effect. Negotiations between the tech companies, the Australian government and the country’s media giants — most notably, Rupert Murdoch’s News Corp. — may result in changes to the final version.

What can’t be changed, though, is Facebook’s dramatic, if ham-handed, attempt to force the issue. The company provided no warning of its decision to block Australian news and applied the ban so clumsily that it blocked many innocent bystanders.

“As the law does not provide a clear guidance on the definition of news content, we have taken a broad definition in order to respect the law as drafted,” said Facebook spokeswoman Mari Melguizo, who added that the company would unblock any pages that were blocked by accident.

Facebook’s reaction was not justified even if there are issues with the law, including the fact that it stands to benefit media giants like News Corp., said Elizabeth Renieris, director of the Notre Dame-IBM Technology Ethics Lab. Facebook’s show of strength, she said, is “really going to wake up regulators around the world.”

“If it is not already clear, Facebook is not compatible with democracy,” Rep. David Cicilline, a Rhode Island Democrat who heads a House subcommittee that has urged antitrust action against the company, wrote on Twitter. “Threatening to bring an entire country to its knees to agree to Facebook’s terms is the ultimate admission of monopoly power.”

On Thursday, Democrats announced they would hold new hearings to curb online platforms and update antitrust laws.

Billions of people around the world rely on Facebook for essential information — not just news, but charity and government pages, emergency announcements and other important channels. Facebook’s news blackout swept up many of these, including humanitarian organizations like Foodbank Australia and Doctors without Borders in Australia, who found their pages temporarily disabled.

The ban affected articles from large international news organization and small community newspapers or radio stations alike. Those restrictions potentially deprived many Australians of basic information on Facebook about COVID-19 or the country’s fire season — from a company that bills itself as committed to building “connection and community.”

The tech company has faced years of criticism for allowing misinformation around politics and the coronavirus to fester on its site. Critics said they fear that stripping Australian users of legitimate news sources will only worsen that problem.

“Playing this game in Australia is going to fill peoples’ feed with misinformation,” Tama Leaver, an internet studies and social media expert at Curtin University in Australia, said during an interview Wednesday with Australian Broadcasting Corporation Radio Perth.

But a news-free Facebook might also be a more pleasant experience for many people, said Drew Margolin, a professor of communication at Cornell University. Facebook would have been better off if it had given Australians a choice to opt out of news, he suggested. If many did, the company could have used that for leverage with the government and publishers.

“What happens when they say we’re ready to turn it back on and we say please don’t?” he said.

Associated Press Writer Amanda Seitz contributed to this story.

Australian leader urges Facebook to lift its news blockade

CANBERRA, Australia (AP) — Australia’s prime minister on Friday urged Facebook to lift its ban on news access for Australian users and return to the negotiating table with media organizations, warning that other countries would follow his government’s example in making digital giants pay for journalism.

Prime Minister Scott Morrison described Facebook’s move Thursday to prevent Australians from accessing and sharing news as a threat.

The blockade has escalated a fight with the government over whether powerful tech companies should have to pay news organizations for content.

“The idea of shutting down the sorts of sites they did yesterday, as some sort of threat — well, I know how Australians react to that and I thought that was not a good move on their part,” Morrison told reporters.

“They should move quickly past that, come back to the table and we’ll sort it out,” he added.

Australian news organizations could not post stories and people who tried to share existing news stories got notifications saying they were blocked from doing so.

There was public outrage at how the Facebook blockade was bungled, cutting access — at least temporarily — to pandemic, public health and emergency services.

Newspaper headlines included: “No likes for unsocial network,” and “Faceblock.”

An article about how fake news would replace credible journalism in Australian feeds carried the headline, “’Fakebook’ shows all it cares about is profit, not people.”

Some non-Australian outlets also appeared affected, with posts disappearing from Facebook pages belonging to Britain’s Daily Telegraph and Sky News. Both share names with news outlets in Australia.

The blockade was a response to the passage of a bill by the House of Representatives on Wednesday night that would make Facebook and Google pay Australian media companies fair compensation for the journalism that the platforms link to. The legislation must be approved by the Senate to become law.

Google has responded by quickly working out licensing content deals with major Australian media companies under its own News Showcase model.

Rupert Murdoch’s News Corp. has announced a wide-ranging deal with Google covering operations in the United States and Britain as well as Australia. Major Australian media organization Seven West Media also reached a deal earlier in the week. Rival Nine Entertainment is reportedly close to its own pact, and state-owned Australian Broadcasting Corp. is in negotiations.

Morrison said he discussed the Facebook dispute with Indian Prime Minister Narendra Modi on Thursday. Morrison was also discussing Australia’s proposed law with the leaders of Britain, Canada and France.

“There is a lot of world interest in what Australia is doing,” Morrison said. “That’s why I invite, as we did with Google, Facebook to constructively engage because they know that what Australia will do here is likely to be followed by many other Western jurisdictions.”

Treasurer Josh Frydenberg, the minister responsible for the proposed News Media Bargaining Code, had a telephone conversation with Facebook chief executive Mark Zuckerberg after the blockade began on Thursday and again on Friday.

“We talked through their remaining issues & agreed our respective teams would work through them immediately. We’ll talk again over the weekend,” Frydenberg tweeted on Friday.

“I reiterated Australia remains committed to implementing the code,” Frydenberg added.

Frydenberg maintains that Facebook had been having constructive negotiations with Australian media on pay deals immediately before the surprise blockade.

News Corp Australia executive chairman Michael Miller was more equivocal about Facebook negotiations.

“Having been someone who’s dealt with Facebook over the past months, we have some weeks where we’re getting good engagement and think we’re progressing and then you get silence. I think the door is still open,” Miller told a Senate inquiry into Australian media diversity.

“While Facebook may have moved away, they don’t move out,” Miller added.

News Corp. owns most of Australia’s major newspapers and some analysts argue the U.S.-based international media empire is the driver for the conservative Australian government making Facebook and Google pay..

“This legislation is pure protectionism out of the brain of Rupert Murdoch to try to create a tax on his competitors,” Jeff Jarvis, a journalism expert from the City University of New York, told ABC recently.

Facebook said on Thursday the proposed Australian law “fundamentally misunderstands the relationship between our platform and publishers who use it.”

Morrison said his government was “happy to listen to them on the technical issues,” but remained determined to pass the law.

“It’s not OK to unfriend Australia because Australia is very friendly,” Morrison said. “We’d like to remain very friendly and it’s time for them to friend us again.”

Honda taps tech expert as chief to steer in ecological times

TOKYO (AP) — Toshihiro Mibe, a research expert tapped to be president of Japanese automaker Honda on Friday, promised to steer the company toward new growth by focusing on ecological models and safety technology.

Honda Motor Co. said Mibe replaces Takahiro Hachigo effective April 1, and subject to shareholders’ approval at a meeting in June.

“I am going to build a house that is the future of Honda on the foundation of businesses that Mr. Hachigo has worked so hard to create. And this building must have resilience, to withstand this once in a hundred years transformation,” Mibe told reporters.

Mibe stressed the automaker will be aggressive about developing and selling electric vehicles.

Mibe, who joined Honda in 1987, had been widely expected to take the top post, according to Japanese media. He was instrumental in further forging Honda’s partnership with U.S. automaker General Motors Co.

GM and Honda have had a relationship for two decades, centered around collaborating on fuel cells, batteries and autonomous driving.

The relationship was expanded to a memorandum of understanding last year on setting up a North American alliance, including working tougher in purchasing and research, as well as sharing platforms, the basic parts on which vehicles are built.

Hachigo said Mibe, a research and development expert, was a good person to lead Honda because of his experience in ecological vehicles.

Mibe will continue with the company’s belief that “the purpose of technology is to help people,” such as reducing carbon emissions and eliminating deaths from traffic accidents, according to Honda.

Tokyo-based Honda has said it is striving for the realization of carbon neutrality by 2050. Carbon neutrality refers to net zero carbon dioxide emissions, which will help curtail pollution and global warming.

Along with appointing a new president, Honda said it will also strengthen corporate governance by changing the company structure to that of three committees, overseeing nominating, audit and compensation.

The change will better separate the executive and supervisory functions, according to Honda, which makes the Accord sedan, Mirai fuel cell car and Asimo robot.

Hachigo, who has led the company since 2015, said he had kept Honda growing amid an industry undergoing transformation, such as the shift to electric vehicles and away from the gasoline engine.

He retires after Mibe formally takes over.

Hachigo noted that Honda’s production capacity nearly doubled in the last five years in China, now the world’s largest auto market.

All the world’s automakers have been slammed by the coronavirus pandemic, but Honda has held up relatively well.

Honda recently reported growth in fiscal third quarter profit and raised its annual profit forecast to 465 billion yen ($4.4 billion), up from the previous projection for a 390 billion yen ($3.7 billion) profit.

The latest forecast is also better than the 456 billion yen profit Honda earned the previous fiscal year, although Honda warned the outlook remains uncertain because the impact from COVID-29 was still unclear.

___

Yuri Kageyama is on Twitter https://twitter.com/yurikageyama

Archives for February 2021

Footer