Tech Brew Ride Home - Mon. 12/18 – Adobe And Figma Call Off Their Merger

Episode Date: December 18, 2023

Big news Monday. Adobe and Figma have called off their wedding. Apple might stop selling its top-of-the-line Apple Watches, in the US, this week. I’ll tell you why. The EU has formally opened an investigation into X. And why are all of the Hollywood studios suddenly willing to sell their content to Netflix again? Sponsors: Shipstation.com, code ride Links: Adobe, Figma shelve $20 bln deal after hitting regulatory roadblocks (Reuters) Apple to halt Apple Watch Series 9 and Apple Watch Ultra 2 sales in the US this week (9to5Mac) EU opens formal DSA investigation into X in wake of Israel-Hamas war (The Verge) Adam Mosseri spells out Threads’ plans for the fediverse (The Verge) He’s Wanted for Wirecard’s Missing $2 Billion. He’s Now Suspected of Being a Russian Spy. (WSJ) In Search of Cash, Studios Send Old Shows Back to Netflix (NYTimes) Learn more about your ad choices. Visit megaphone.fm/adchoices

On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the TechMeme right home for Monday, December 18th, 2020. I'm Brian McCullough. Today, big news Monday.

Adobe and Figma have called off their wedding. Apple might stop selling its top-of-the-line Apple Watches in the U.S. this week. I'll tell you why. The EU has formally opened an investigation into X, and why are all of the Hollywood studios suddenly willing to sell their content to Netflix again? Here's what you miss today in the world of tech. We sort of had an inkling this was coming, but this morning, Adobe and Figma announced they have terminated their $20 billion merger, announced back in September of

2022 after seeing, quote, no clear path to UK or EU regulatory approval. Quoting Reuters, shares of the Photoshop and Illustrator Maker, which will pay a termination fee of $1 billion to Figma, rose about 1.7% pre-market on Monday. Britain's competition watchdog earlier said on Monday that Adobe would not propose remedies to resolve regulatory concerns regarding the buyout. Adobe had argued it does not compete with Figma in any meaningful way. It had said in November, its only product relevant to the antitrust's question was the Adobe XD design tool, which lost $25 million as a standalone app over the last three years and has only five full-time employees. Adobe and Figma strongly disagree with the recent regulatory

findings, but we believe it is in our respective best interests. To move forward independently, Adobe CEO Shantanu Narayan said in a statement on Monday, end quote. After an extensive investigation, the UK regulator provisionally concluded last month that Adobe's acquisition of Figma could hinder competition in the product design software market, dampen innovation, and diminish Figma's challenge to Adobe's major products like Photoshop and Illustrator. The acquisition is perceived as Adobe's significant wager on the increasing trend of creative tasks being undertaken by small enterprises and general users online, a domain rapidly dominated by Figma. Although Adobe has launched more affordable options for this segment,

the majority of its products remain high end, targeted primarily at professional users. At the time of this recording, no official confirmation of this has come from Apple, but 9-5 Mac is reporting that Apple plans to halt sales of the Apple Watch Series 9 and Ultra 2 in the United States starting this week to, quote, preemptively comply with an ITC patent ruling, now under U.S. review, quote, in a statement to 9 to 5 Mac, Apple has announced that it will soon halt sales of its flagship Apple Watch models in the United States. The Apple Watch Series 9 and Apple Watch Ultra 2 will no longer be available to purchase from Apple starting later this week. The move comes following an ITC ruling as part of a long-running patent

dispute between Apple and medical technology company Massimo around the Apple Watch's blood-oxygen sensor technology. The Apple Watch Ultra 2 and Apple Watch Series 9 will no longer be available to order from Apple's website in the U.S. after 3 p.m. Eastern on Thursday, December 21st. In-store inventory will no longer be available from Apple retail locations after December 24th, end quote. So I guess I totally miss this, but yes, in October, the International Trade Commission, or ITC, apparently confirmed a judge's decision from January leading the case to enter a 60-day presidential review period under the Biden administration. As of now, President Biden has not vetoed this ruling. This review period is set to conclude on December 25th.

Apple, apparently in anticipation, has begun taking measures to align with the ITC's decision. The company indicated that the ITC's embargo affects only the Apple Watch Series 9 and Apple Watch Ultra 2 models, which feature blood oxygen monitoring. The more basic Apple Watch SE lacking this sensor remains unaffected and available for purchase. While the ITC's ruling bars Apple from selling the specified models of these watches themselves, they can still be purchased from third-party retailers like Amazon and Best Buy. However, post-December 25th, the order will also prevent imports of the Apple Watch Series 9 and Ultra 2 into the United States. This will extend to barring sales to resellers, potentially impacting their availability at other retail outlets in the future.

It's important to note that any Apple Watch model equipped with a blood-oxygen sensor already sold to consumers remains unaffected by this ruling. The blood-oxygen feature was first introduced in the Apple Watch Series 6 in 2020. Thus, existing Apple Watches with this capability will continue to function as usual. The ITC's prohibition is solely on new sales of the affected models. Guy and figured this one was coming to. The European Commission this morning also announced an official DSA investigation into X, focusing on illegal content, disinformation, and, quote, deceptive design in its UI, quoting the verge.

X, the platform formerly known as Twitter, may have broken the European Union's Tough New Digital Services Act rules, regulators said as they announced the opening of a formal investigation today. A key concern of the investigation is the dissemination of illegal content in the context of Hamas terrorist attacks against Israel, the European Commission says. In a press release, the Commission said it will look at X's attempts to counter the spread of illegal content on its platform and will examine X's efforts to stop, quote, information manipulation via its community note system and other policies.

It's also looking into matters beyond content moderation, including, quote, deceptive design related to the so-called blue checks, advertising transparency, and data access for researchers, end quote. The commission has initiated this investigation under the part of the DSA, targeting a range of what is known as, quote, very large online platforms or VLOPs. This grouping includes 17 platforms and two search engines, notably Facebook, Instagram, TikTok, Snapchat, LinkedIn, Amazon, Google Search, and the Apple App Store. In response to the commission's initial concerns excommunicated with EU Commissioner

Tieri Breton detailing its moderation practices, the platform highlighted its efforts to remove numerous accounts affiliated with Hamas and addressing thousands of pieces of problematic content. This led to the Commission issuing a formal request for more information, a measure also extended to meta and TikTok. The backdrop of this investigation is the Israel-Hamas conflict, during which X-faced criticism for the rampant spread of disinformation and misuse of its platform. Reports indicated a surge in out-of-context videos and images, a network of accounts spreading false and inflammatory content, and a failure to adequately enforce its own rules. Notably, NBC News challenges with X's community notes feature in managing this influx of misleading content.

This period also coincides with significant changes at X following its acquisition by Elon Musk, including reducing the trust and safety team, modifying the verification process to offer paid blue check marks, and reinstating several previously banned accounts. The European Commission and its ongoing investigation is now focused on gathering evidence and has not ruled out the possibility of interim enforcement actions against X. It's important to note that there is no legal deadline for the conclusion of such proceedings. X responded this morning by tweeting, quote, X remains committed to complying with the Digital Services Act and is cooperating with the regulatory

process. X is focused on creating a safe and inclusive environment for all users on our platform while protecting freedom of expression, and we will continue to work tirelessly toward this goal, end quote. Adam Masseri took to Threads to describe in a thread their Fediverse plans going forward, including following non-threads accounts showing replies from other platforms, and follower portability. Since it's a short thread, maybe it's worth reading the whole thing. Quote, this week we took a small but important step by allowing people in the Fediverse who don't use threads or even have an Instagram account to follow my threads account as well as

a few others. Content is starting to flow from threads to the Fediverse. We are working to make this option available to all public accounts on threads, not just a handful of testers. We're starting small to make sure we have time to work through all the challenges, as our systems historically have been not designed with this use case in mind. We also plan to make it so replies from people in the Fediverse can show up for people posting from threads to the Fediverse. It's a bad experience now that I have to leave the Threads app to see replies I'm getting from the broader community. We also plan to build support for Threads users to follow Fediverse accounts so that content can flow from the Fediverse back into threads. There is a fair amount to figure out with regards to privacy and integrity,

but we're actively working through those issues. Eventually, it should also be possible to enable creators to leave threads and take their followers with them to another app slash server. I believe that it's important that creators own their relationship with their audience. I expect all of this to take the better part of a year and to roll out in stages. That's a lot longer than I or anybody on the team wants, but it's the reality given all the other work we need to be balanced, end quote. When Benedict Evans responded in the thread saying that he wouldn't want his threads post spreading out to some dank corners of the internet where he might lose control. over how it's presented. He wanted to know if he could block Mastodon entirely, for example,

to which Miserie replied, quote, The current plan is you'll have to have a public account and explicitly opt in to your content being available on other servers. This is consistent with what other large players like WordPress are doing, but somewhat controversial within the Mastodon community. If we end defaulting people in, we'll absolutely offer an opt out, but we're not currently moving in that direction, end quote. Remember that whole wirecard case? Wirecard was a company, a fintech that was once one of the highest flying tech companies ever to come out of Germany, but it blew up after alleged fraud. Well, Western intelligence agencies now say that former Wirecard C-O-O-Yan Marseleck, who fled to Moscow after

nearly $2 billion went missing at Wirecard, was likely a Russian agent for years. quoting the Wall Street Journal. Marselech already stands accused of stealing hundreds of millions of dollars from investors following multiple international investigations, officials from intelligence, police, and judiciary agencies in several countries now say the 43-year-old native of Austria used his defunct payments company to illegally help Russian spy agencies move money to fund covert operations around the world. One of the most wanted men in the world, Marselech has also provided assistance to mercenary organizations like those of Yevne-Pregosin, the late Russian warlord, and is now involved.

in the reconfiguration of his business empire in Africa on behalf of Russian officials from his new domicile in Dubai, according to Western intelligence. Wirecard got its start processing payments for pornography websites on its way to becoming an international finance behemoth. During its heyday, the company claimed to process $140 billion of transactions a year on behalf of a quarter million businesses, making it a rival of Square and PayPal. It was briefly valued at more than any German bank. Former associates remember Marseleck as a Bon Vivant, who at one point rented a Munich mansion for $35,000 euros or $38,000 a month. He was making millions of dollars a year in salary and crisscrossing the globe and private jets. He was also obsessed with the cloak and dagger world of espionage,

often intimating that he had connections with intelligence officers, they say, claims many dismissed as bluster. British prosecutors say that from 2020 to 2023, Marseleck ran a ring of five UK-based Bulgarians, who are alleged to have spied for Russia, directing them to gather information on people with the aim of helping the Kremlin abduct them. Officials say Marseleck was used by Russian intelligence services as a middleman to put distance between them and the spy network as it targeted individuals across Europe. Despite being on Interpol's most wanted list, Marselech managed in 2021 to set up a British company in his own name using a Czech passport, one of about a dozen travel documents he owned. The consulting firm, which was based in North London

and shutdown last year may have been used to route payments for the spy ring, according to filings and officials. Western intelligence officials also say that Marcelech has visited Dubai and worked with a retired Russian intelligence officer based there who has been acquiring weapons for Moscow. They believe he now spends much of his time in the Emirate together with some of his associates, the government of the United Arab Emirates, of which Dubai is a member didn't respond to request for comment, end quote. Finally today, the worm seems to be turning in the world of streaming. Disney, Warner Brothers Discovery, and other studios are increasingly turning back the playbook, licensing content again to Netflix in return for much-needed cash, although they are holding

back their most popular movies and shows. Quoting The New York Times, for years, entertainment company executives happily licensed classic movies and television to Netflix. Both sides enjoyed the spoils. Netflix received popular content like Friends and Disney's Moana, which satisfied its ever-growing subscriber base, and it sent bags of cash back to Netflix. to the companies. But around five years ago, executives realized they were, quote, selling nuclear weapons technology to a powerful rival, as Disney's chief executive Robert Eiger put it. Studios needed

those same beloved movies and shows for the streaming services they were building from scratch, and fueling Netflix's rise was only hurting them. The content spigots were, in large part, turned off. Then the harsh realities of streaming began to emerge. Confronting sizable debt burdens and the fact that most streaming services still don't make money, studios like Disney and Warner Brothers Discovery have begun to soften their Do Not Sell to Netflix stances. The companies are still holding back their most popular content, movies from the Disney-owned Star Wars and Marvel universes and Blockbuster Original series like HBO's Game of Thrones aren't going anywhere, but dozens of other films like Dune and Prometheus and series like Young Sheldon are being sent to

the streaming behemoth in return for much-needed cash. And Netflix is once again benefiting. Ted Sarandos, one of Netflix's co-chief executives, said at an investor conference last week that the, quote, availability to license has opened up a lot more than it has in the past, arguing that the studio's earlier decision to hold back content was, quote, unnatural. They've always built the studios to license to license, he said. As David Decker, the content sales president for Warner Brothers Discovery said, quote, licensing is becoming in vogue again. It never went away, but there's more of a willingness to license things again. It generates money, and it gets content viewed and seen, end quote. In the coming months, Disney will start sending a number of shows from its catalog to Netflix, including This Is Us, How I Met Your Mother, Prison Break, and several editions of ESPN's sports documentary series 30430. White Collar, a Disney-owned show that used to be part of the same lineup as suits on the USA Network, will also join the service. Old episodes of suits have been one of Netflix's biggest hits this year. The popular 2000s-era ABC hit Lost, which left Netflix in 2018, is also returning next year. Jeremy Zimmer, the chief executive of the United

Talent Agency, said the studios about... was a, quote, financial necessity. They said, wow, in order for us to compete in streaming, it's costing us billions to create new content to drive subscriptions. Mr. Zimmer said, where are we going to find the money? Oh, we have the stuff that's been sitting here. We can sell that. It's a very logical progression, end quote. Acknowledging the motivation, Dan Cohen, the chief content licensing officer for Paramount said one of the biggest advantages to licensing for traditional media companies was that, quote, the margins tend to be high, end quote.

So this weekend was apparently the 100th anniversary of the first ever airplane flight by the Wright brothers. Shouldn't that have been a bigger deal? Like, I almost missed knowing that the anniversary was even happening. I feel like not that long ago celebrating something like it's been a century since one of the greatest technological innovations ever made by humanity would have been accompanied by documentaries, and a thousand think pieces at least. Why the crickets on this? Come on.

Flight. Something we humans thought was physically impossible. for most of our history. Not a big deal? Talk to you tomorrow.