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Epic Games’ Apple appeal bolstered by huge show of support • The Register

Analysis Epic Games’ legal campaign to break Apple’s near absolute control over its iOS ecosystem received reinforcement this week from 35 US states, Microsoft, the Electronic Frontier Foundation, Public Citizen, and more than 50 academics, among others.

In 2020, Epic Games flouted Apple’s iOS App Store rules by directing players of its Fortnite game to buy in-game currency and items directly from its website at a lower price rather than through Cupertino.

Apple, deprived of its required 30 per cent cut of in-app sales, responded by removing Fortnite from its iOS App Store.

Epic Games answered with antitrust lawsuits in the US, Europe, UK, and Australia, a legal campaign clearly contemplated as a way to loosen Apple’s control over its iOS platform.

On September 10, 2021, US District Judge Yvonne Gonzalez Rogers issued a ruling that pleased neither side. She found Apple’s requirement that app developers not promote alternative payment mechanisms within their apps anti-competitive but did not find that Apple had illegally monopolized the market for mobile gaming transactions.

Minimal fallout

Her decision represented the third crack in Apple’s walled garden in the space of two weeks. In early September, 2021, Apple agreed to accommodate Japan’s Fair Trade Commission by allowing reader apps to include in-app links to external account setup.

That was a few days after Apple agreed to settle an antitrust complaint brought by a group of app developers, Cameron et al v. Apple Inc. [PDF], with relatively inconsequential concessions that included allowing developers to communicate outside of apps, via email, about alternative purchase options.

Epic Games won only one of its ten claims – the court found that the anti-steering provisions within Apple’s Developer Program License Agreement (DPLA) violate California’s Unfair Competition Law. 

But the game maker hasn’t yet benefited from the decision. Last month, just before the deadline when Apple was supposed to comply with the Epic Games ruling, the iPhone maker challenged the decision in the US Ninth Circuit Court of Appeals, and that court granted Apple’s request to stay Judge Gonzalez Rogers’s order until its appeal can be heard.

Trust us, we know about antitrust – Microsoft

Earlier this month, Epic Games submitted its own brief with the appeals court. Then on Thursday, the amicus briefs in support of Epic arrived. This particular set of “friend of the court” filings come from various groups – public sector, private sector, academia, and civil society – that all want to see Epic Games prevail. Taken as a whole, they argue that Judge Gonzalez Rogers’s decision is flawed.

Microsoft, for example, believes the lower court failed to recognize the ways in which Apple’s conduct violates the law and it wants the appeals court to consider the consequences of Apple’s dominance more carefully.

“If Apple is allowed to step between any company with online services and users of iPhones, few areas of the vast mobile economy will be safe from Apple’s interference and eventual dominance,” the company’s brief [PDF] says. “Consumers and innovation will suffer – indeed, they already have. The district court’s reasoning failed to give sufficient weight to these immense competitive risks and, if broadly affirmed, could insulate Apple from meritorious antitrust scrutiny and embolden further harmful conduct.”

If Apple is allowed to step between any company with online services and users of iPhones, few areas of the vast mobile economy will be safe from Apple’s interference and eventual dominance

Microsoft’s brief chooses to compare Apple’s conduct to that of AT&T before it was broken up in 1982 after an eight-year legal battle with the US Justice Department. But it also refers to its own experience with antitrust intervention two decades ago, arguing that the court should evaluate Epic’s tying claim – requiring developers to use Apple’s in-app payments as a condition of distribution – in the same way that DC Circuit did in United States v. Microsoft Corp, “another case that involved ‘the technological integration of added functionality into software that serves as a platform for third-party applications.'” 

Many pages of the various amicus briefs are devoted to whether Apple’s conduct violates Section 1 or Section 2 of the Sherman Act, the first US antitrust law.

“The Sherman Act prohibits (a) contracts, combinations, or conspiracies in restraint of interstate commerce or foreign trade, and (b) monopolization, attempts to monopolize, or combinations or conspiracies to monopolize interstate commerce or foreign trade,” according to the US Justice Department.

Section 1 violations require a restraint of trade but not necessarily monopoly power, whereas Section 2 violations require monopolization. The district court found Apple guilty only of unfair competition under California law.

In order for Epic Games to prevail in its antitrust claim under the Section 1 of the Sherman Act, Apple’s contract – its DPLA – must be found to unreasonably restrain competition in the relevant market. 

Be reasonable

The court found that Apple’s rules had some anti-competitive effects but also some justifications, making them not entirely unreasonable. The court also determined that Apple’s unilateral DPLA contract – a contract of adhesion where one party has all the power to dictate terms – does not qualify as the sort of mutually agreed contract contemplated by Section 1 of the Sherman Act.

The 35 US states filing an amicus brief [PDF], led by Utah, argue that the district court erred by ruling out Section 1 liability. The DPLA is not a unilateral contract, the states argue, because developers make promises in return, so Apple’s conduct should be evaluated with respect to Section 1.

What’s more, they argue, exempting the DPLA from being a contract under Section 1 would make antitrust enforcement impossible. 

“Firms with sufficient market power can unilaterally impose contractual terms,” the state brief argues. “The district court’s holding creates a paralyzing paradox: once a firm acquires market power and unilaterally imposes a contract, then it is no longer subject to Section 1. Affirming this paradox would gut the Sherman Act and prevent the Amici States from enforcing antitrust violations by large firms that harm their citizens.” 

Firms with sufficient market power can unilaterally impose contractual terms

A filing by 14 law professors [PDF] similarly takes aim at the notion Apple’s coerced contract is not a contract worthy of antitrust scrutiny. They also argue that the district court’s decision to view the market as all mobile apps rather than just iOS apps is wrong.

“If [these findings] were true, Apple could not earn an extraordinarily high profit margin on iOS app transactions or charge commission rates that are excessive and unjustified,” they say in their brief. “Competition would obliterate its pricing power.”

The EFF brief [PDF] also takes issue with the district court’s decision to accept a market definition that includes all mobile apps rather than iOS apps. And it challenges the presumptive benefits of Apple’s oversight by noting “the company’s opaque, arbitrary, and byzantine enforcement of its app store policies.”

As an example, the EFF brief cites a privacy-enhancing iOS feature introduced in 2020, App Tracking Transparency, that allows users to opt out of having their identities and activities tracked across third-party apps.

“But several of the largest app developers, including Facebook and Snap, continue to harvest device-identifying data from Apple devices that could be used for cross-app tracking,” the EFF brief explains. “Apple is reportedly aware of this practice, and condones it, though it tells developers they must ‘anonymize’ the data.” 

The other amicus filings advance similar arguments, all in the hope that Epic Games’ claims and Apple’s behavior will be reevaluated. Apple meanwhile wants the Ninth Circuit to reverse the unfair competition decision and remove any obligation to support communication about external payments.

Despite winning nine out of the ten claims Epic Games made in district court, Apple faces an increasingly uncertain road. Its appeal to the Ninth Circuit has met with significant resistance and an adverse outcome will almost certainly make the mega-corporation’s situation worse. It will be interesting to see whether the iGiant can attract enough supportive friend-of-the-court briefs to counter the arguments advanced by Epic’s allies.

And even that may not lift the App Store siege. The UK Competition and Markets Authority is investigating Apple over its App Store business practices. The Netherlands Authority for Consumers and Markets (ACM) has told Apple to allow developers of dating apps on the App Store in the Netherlands to inform users about additional payment processing options, a decision Apple has appealed. The ACM subsequently fined Apple 5m euros for non-compliance. The EU also has an antitrust investigation of Apple’s App Store underway that could imperil the tech titan’s 30 per cent commission.

Apple’s success, and its resistance to concessions, may have made it too big not to nail. ®

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Aviation and Telecom Industries Reach Compromise on 5G Deployment

The Voice Of EU | In a significant development, AT&T and Verizon, the two largest mobile network operators in the United States, have agreed to delay the deployment of 5G services following requests from the aviation industry and the Biden administration. This decision marks a crucial compromise in the long-standing dispute between the two industries, which had raised concerns over the potential interference of 5G with flight signals.
The aviation industry, led by United Airlines CEO Scott Kirby, had been vocal about the risks of 5G deployment, citing concerns over the safety of flight operations. Kirby had urged AT&T and Verizon to delay their plans, warning that proceeding with the deployment would be a “catastrophic failure of government.” The US Senate Commerce Committee hearing on the issue further highlighted the need for a solution.
In response, US Transportation Secretary Pete Buttigieg and Federal Aviation Administration (FAA) head Steve Dickson sent a letter to the mobile networks, requesting a two-week delay to reassess the potential risks. Initially, AT&T and Verizon were hesitant, citing the aviation industry’s two-year preparation window. However, they eventually agreed to the short delay, pushing the deployment to January 19.
The crux of the issue lies in the potential interference between 5G signals and flight equipment, particularly radar altimeters. The C-Band spectrum used by 5G networks is close to the frequencies employed by these critical safety devices. The FAA requires accurate and reliable radar altimeters to ensure safe flight operations.

Airlines in the US have been at loggerheads with mobile networks over the deployment of 5G and its potential impact on flight safety.

Despite the concerns, both the FAA and the telecoms industry agree that 5G mobile networks and airline travel can coexist safely. In fact, they already do in nearly 40 countries where US airlines operate regularly. The key lies in reducing power levels around airports and fostering cross-industry collaboration prior to deployment.
The FAA has been working to find a solution in the United States, and the additional two-week delay will allow for further assessment and preparation. AT&T and Verizon have also agreed to not operate 5G base stations along runways for six months, similar to restrictions imposed in France.
President Joe Biden hailed the decision to delay as “a significant step in the right direction.” The European Union Aviation Safety Agency and South Korea have also reported no unsafe interference with radio waves since the deployment of 5G in their regions.
As the aviation and telecom industries continue to work together, it is clear that safe coexistence is possible. The delay in 5G deployment is a crucial step towards finding a solution that prioritizes both safety and innovation. With ongoing collaboration and technical assessments, the United States can join the growing list of countries where 5G and airlines coexist without issue.

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From Retail To Transport: How Artificial Intelligence (AI) Is Changing Every Corner Of The Economy

How A.I. Is Changing The Economy

The high profile race to enhance their search products has underscored the importance of artificial intelligence to Google and Microsoft – and the rest of the economy, too. Two of the world’s largest tech companies announced plans for AI-enhanced search this month, ratcheting up a tussle for supremacy in the artificial intelligence space. However, the debut of Google’s new chatbot, Bard, was scuppered when an error appeared, knocking $163bn (£137bn) off the parent company Alphabet’s share price. The stock’s plunge showed how crucial investors think AI could be to Google’s future.

However, the increasing prominence of AI has implications for every corner of the economy. From retail to transport, here’s how AI promises to usher in a wave of change across industries.

Farming

Monitoring weather patterns, managing pests and disease, working out the need for extra irrigation, or even which crops to grow where: many farmers believe agriculture is fertile ground for artificial intelligence.

Many food producers are using AI to collect and analyse data in their efforts to improve productivity and profitability.

AI’s capacity for combining and analysing large datasets is already supplying farmers with real-time information on how to improve the health of their crops and increase yields. Drones and in-ground sensors can play a role in observing growing crops and soil conditions across hundreds of acres of land, including checking whether they need more water, fertiliser or herbicide and whether they are being affected by disease or destroyed by animals.

Ali Capper, who grows apples and hops at her family farm on the border of Herefordshire and Worcestershire, has invested in new technology, including automated orchard sprayers, to use alongside the digital soil mapping she has employed since 2017.

Ali Capper inspects the blossom on her apple trees at Stocks Farm in Suckley, Worcestershire
Ali Capper sees AI advantages for the environment. Photograph: Kirsty Wigglesworth/AP

“Many agri-tech innovations will help us to be kinder to the farmed environment as well as more efficient and profitable,” Capper said.

In the face of labour shortages, especially acute since Brexit, farmers have long hoped that advances in robotics – “agribots” – will help to make sure crops get picked on time. A lack of workers led to £60m of food wasted in 2022 alone, according to the National Farmers’ Union.

While four-armed robots, designed for the delicate work of picking soft fruits, are being developed, robots with the dexterity of the human hand, capable of picking at speed without damaging fruit such as raspberries, may be a decade away from widespread use. Nonetheless, automation has already changed some of the most laborious jobs in farming, from drilling seeds to spraying and watering crops.

Media companies have embraced machine learning to boost subscriptions and advertising and to help make decisions about what stories to promote.

News organisations are hiring data scientists on six-figure salaries to pull together data to track customers and guide them towards particular products, while also providing workers with tools to take the grunt work out of finding and writing stories.

Lisa Gibbs, the director of news partnerships at the Associated Press, said in a London School of Economics study that her organisation could “find news faster and break news faster” with the aid of AI.

Media organisations are using data analysts to create targeted content that generates higher subscriptions and advertising revenues.

Energy

There are possible AI applications in every corner of the energy industry: from predicting and identifying faults at power plants to using weather forecasts to plan offshore windfarm projects.

With tight margins in a sector where almost 30 companies have gone bust during the energy crisis, retail energy suppliers are expected to increase the use of AI to cut down call times. Chatbots are used to ask basic questions before customers speak to a human adviser.

Ultimately, suppliers envisage AI will play a central role in future “smart grids”, allowing supply and demand to be more closely aligned, with a new generation of devices from smart meters and electric vehicles to solar panels and heat pumps able to improve efficiency. Jobs for engineers, meter readers and supply analysts are most under threat.

AI is also valuable to track carbon emissions. Boston Consulting Group has estimated that applying AI to multinational companies’ sustainability plans could be worth $1.3tn to $2.6tn through additional revenues and cost savings by 2030. Late last year, the government launched a £1.5m programme to study the use of AI to reduce the UK’s carbon emissions.

Manufacturing

Manufacturing veterans know all too well how automation can sweep through an industry. In 2019, the UK’s Office for National Statistics said almost two-thirds of metalworking machine operatives were at risk.

An intelligent production base at Great Wall Motors in south-west China.
An intelligent production base at Great Wall Motors in south-west China. Photograph: Xinhua/Rex/Shutterstock

Part of the automation drive is for efficiency. Machine learning algorithms are already being deployed on the burgeoning piles of data produced within big factories for “predictive maintenance” – replacing parts before they fail and potentially requiring fewer technicians.

But the rapid rise of generative artificial intelligence suggests it will not only be people on factory lines who will be affected. Generative AI is already being used to design products much more quickly, test them virtually as a “digital twin”, and manufacture them much more quickly. Combined with innovations such as 3D printing, this could lower development costs dramatically and would require fewer engineers in aerospace, automotive and consumer electronics.

One logical end is something like the Star Trek replicator, a bot that designs and makes whatever its user desires from a text prompt – without human involvement.

Government

Running the country means the government collects vast amounts of personal and business data, all of which could be plugged into artificial intelligence and machine learning systems to improve the efficiency of policymaking and delivery of services. Everything from bin collections, call centres and analysis of data to prioritise spending could be targeted for improvement. However, it is not without challenges and controversy – not least for how algorithms are held to account.

The former head of the civil service, Mark Sedwill, has said greater use of AI and automation will probably lead to a reduction in headcount.

Some councils are building computer models using personal data to help predict child abuse and intervene before it can happen, while Blackpool council is using AI-powered satellite images to help fix potholes.

There is concern in government that AI systems can build in human biases, risking the perpetuation of stereotypes and discrimination. Meanwhile, relying on computer models has stoked fear in the past that some public priorities are overlooked, including investment in the north of England and green projects.

More use of AI could improve efficiency but authorities will need to carefully check its effects. As the postwar US president Harry Truman said: “When you have an efficient government, you have a dictatorship.”

Transport

Transport workers have stubbornly held on to their jobs since the first driverless trains were tested on the tube – a development that was met with “Robots take over” headlines six decades ago. However, they are still regarded as most vulnerable in the long term, according to a 2021 report by PwC for the business department forecasting that proportionately the biggest job losses in the next 20 years would come in the transport sector.

Nonetheless, drivers are far from expendable, and are demanding high salaries whether operating HGVs, buses or trains – even as the first autonomous buses are trialled in Scotland and Milton Keynes. Recent dreams of imminent robotaxis have yet to become widespread reality, and Uber says its London drivers earn £34 an hour. Pilotless planes are technically possible, although few might fancy them after Boeing’s software-led 737 Max disasters.

A National Highways van on a motorway.
A National Highways van films passing vehicles to catch those holding a mobile phone or not wearing a seatbelt. The footage is analysed using AI. Photograph: National Highways/PA

Transport for London uses AI to help traffic flow and forecast disruption, while train operators have used simulators or digital twins to check train paths, platforms and timetables. The Rail Safety and Standards Board is working with academics to use machine learning from high-resolution video to tackle leaves on the line. Similar AI and video projects in Australia could teach driverless trains to recognise a green light – or whether the movement on a remote track is an encroaching human or a nearby kangaroo.

But the next iterations of AI could be profoundly political, as the current rail dispute in Great Britain underlines. Network Rail is hoping to shed more than 1,000 jobs, arguing that automation could create a more efficient and safe inspection regime by using data to predict faults.

Financial services

The financial services sector is at greater risk of job losses from AI than other sectors, according to government forecasts, but experts say this is partly a matter of catch-up.

“Other industries have already made these cuts,” said Sarah Kocianski, an independent fintech consultant.

For example, banks and wealth managers will need fewer staff to onboard new clients as they automate more of their customer background checks and will rely more heavily on AI to detect and flag potential fraud and money-laundering risks.

They will also be able to feed new guidelines from regulators into those machine learning programmes, to flag any potential breaches or shortfalls in the company’s systems, rather than relying on humans to conduct an initial review.

But these systems will still require human oversight, not only to build and programme the technology but also to conduct additional checks and sort out more complex problems.

“A critical risk is that firms succumb to the temptation to trust AI to make smarter lending or insurance decisions without understanding the reasoning process, and over-rely on the AI system without properly stress-testing its fitness for purpose,” said Karishma Brahmbhatt, a data and technology lawyer at Allen & Overy.

Alongside booming demand for tech staff to build and monitor AI programmes, firms will be competing for higher-skilled staff who can do forensic work if they suspect fraud or error, or provide bespoke support to customers. “You need more tailored people but you need fewer people,” Kocianski said.

Retail

Almost a third of retail jobs could be displaced by technology by 2030 compared with 2017 levels, as automated tills, warehouse robotics and AI-based planning tools affect the UK’s biggest employer.

A robot and delivery drone working in an automatic warehouse.
A robot and delivery drone working in an automated warehouse. Photograph: Scharfsinn/Alamy

The most obvious change to any shopper is the rise in the use of self-checkouts and self-scanning systems in supermarkets in the last five years. Change was supercharged by the pandemic when labour became more expensive and difficult to find while shoppers became wary of interactions with staff.

Analysts at the advisory firm McKinsey have predicted that the number of cashiers could almost halve between 2017 and 2030 as these technologies are rolled out. Bryan Roberts at the industry body IGD said the majority of sales in most UK supermarkets are now rung up on self-scanning or automated tills.

The rise of labour costs has also led non-food retailers to give the technology a go. The Japanese-owned clothing chain Uniqlo introduced a system linked to radio frequency identification tags a few years ago.

The next step is the checkout-free store, led by Amazon Fresh, where cameras and shelf sensors mean that shoppers’ purchases are automatically registered on an app on their phone enabling them to just walk out and pay later.

Technology doesn’t stop at the till. Retailers are experimenting with robotic or AI-powered systems to spot gaps on shelves – with Marks & Spencer trialling a system that uses fixed cameras. Others have experimented with Dalek-type machines that cruise up and down the aisles.

Electronic labels on shelves, so prices can be changed automatically from head office, alongside AI-led technology to guide buying decisions and more robotics to pick and pack products in warehouses will also affect thousands of jobs.


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Ways Small & Medium-Sized Businesses Can Hire Big Tech Talent

In response to mounting financial concerns, tech giants like Amazon, Microsoft, and Alphabet (Google’s parent company) have recently implemented significant staff cuts. This has prompted industry leaders to reevaluate their hiring practices, recognizing the limitations of Big Tech’s ability to weather challenging economic times.

While the tech industry’s overall stability is assured, the combination of a declining economy and a previous surge in hiring has resulted in substantial job losses. However, this situation also presents an opportunity for small businesses and start-ups to tap into a pool of available tech experts.

To capitalize on this unique scenario, small and medium-sized business (SMB) owners must act swiftly to gain a competitive advantage over larger companies and attract highly skilled candidates.

In this article, John Elf, Technology Contributor at ‘Voice of EU’ and Head of Marketing at Vibertron Technologies, provides insights into some simple but effective strategies for attracting talent in a candidate-heavy market.

Small and medium-sized businesses (SMBs) can leverage consulting services to attract the best talent, just like big tech companies do. Here’s how SMBs can make use of consulting services to enhance their talent acquisition efforts:

1. Talent Acquisition Strategy Development: SMBs can engage consulting firms specializing in talent acquisition and HR strategies to help them develop a comprehensive talent acquisition strategy. These consultants can assess the organization’s needs, identify talent gaps, and devise effective recruitment and sourcing strategies tailored to the SMB’s specific industry and requirements. This strategic approach ensures that the SMB is targeting the right candidates and maximizing its resources.

2. Employer Branding and Positioning: Consulting firms experienced in employer branding can assist SMBs in developing a strong employer brand that resonates with their target talent pool. They can help SMBs articulate their unique value proposition, culture, and growth opportunities, ensuring that the organization stands out as an attractive employer. These consultants can also provide guidance on how to effectively communicate the employer brand across various channels to attract the best talent.

3. Recruitment Process Optimization: Recruitment service provider can help SMBs, same as LCEs, optimize their recruitment processes, making them more efficient and effective. Consultants can review and streamline the entire hiring process, from job postings and candidate screening to interview techniques and selection methodologies. By improving the candidate experience and ensuring a smooth and timely process, SMBs can enhance their reputation as an employer of choice.

4. Candidate Sourcing and Evaluation: Consulting firms specializing in talent acquisition can assist SMBs in sourcing and evaluating candidates. They can leverage their networks and resources to identify top talent and conduct thorough assessments, including skill evaluations, cultural fit analysis, and background checks. By leveraging external expertise, SMBs can access a broader candidate pool and make well-informed hiring decisions.

5. Compensation and Benefits Consulting: Attracting and retaining top talent often requires competitive compensation and benefits packages. SMBs can engage consulting firms that specialize in compensation and benefits to ensure their offerings align with industry standards and meet the expectations of high-caliber candidates. These consultants can provide insights into market trends, salary benchmarks, and innovative benefit options, enabling SMBs to remain competitive in talent acquisition.

6. Training and Development Programs: SMBs can leverage consulting services to design and implement training and development programs. These programs not only help attract talent but also contribute to employee retention and growth.

Consultants can identify skill gaps, design customized training modules, and provide guidance on employee development initiatives, ensuring that SMBs create a culture of continuous learning and professional advancement.

By utilizing consulting services in talent acquisition, SMBs can access specialized expertise, best practices, and industry insights that are typically associated with larger companies. This approach enables SMBs to compete for top talent on a more level playing field, enhancing their ability to attract and retain the best candidates.


By John Elf

John Elf is Head of Marketing at Vibertron GYPOTech, and an Honorary Contributor at ‘Voice of EU’. A version of this article has already been published.


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