Tech Brew Ride Home - Wed. 7/18 - The Massive Google Fine

Episode Date: July 18, 2018

Google faces a record European fine, Nest gets a major reshuffle inside Google, Walmart guns for Netflix, Venmo transactions can be public, and can cool camera tech destined for smartphones actually improve autonomous vehicles? 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 Ride Home for Wednesday, July 18th, 2018. I'm Brian McCullough. Today, Google faces a record European fine. Inside Google, Nest gets a major reshuffle. Walmart guns for Netflix, Venmo transactions can be public, and can cool camera tech destined for smartphones actually improve autonomous vehicles?

Here's what you miss today in the world of tech. Google has been hit with a record fine from the European Commission for breaking antitrust laws regarding its Android mobile devices. The fine is for $4.3 billion, which amounts to $5.06 billion. The European Commission says that Google has been abusing its Android market dominance in two main ways. First, Google bundles its search engine and Chrome apps into the Android operating system. device makers must include Google search and Chrome on their devices, or they can't use the preferred Android app store. Second, the commission alleges that Google has actively blocked phone makers from making forked versions of Android, and it, quote, made payments to certain large manufacturers and mobile network operators to keep Google the default search on devices.

EU competition chief Margrief Vestager said, quote, Google has used Android as a vehicle to cement the dominance of its search engine. These practices have denied rivals the chance to innovate and compete on the merits, end quote. The fine would represent 40% of Google's net profits last year in 2017, which were $12.62 billion. Previously, the largest fine levied by the European Commission was also handed down to Google, 2.42 billion euros for allegedly manipulating search results. Google, by the way, is still appealing that fine. Microsoft was famously fined twice by the EU for browser bundling in Windows,

fines that amounted to around a billion euro in total. Ms. Vestager says, quote, the fine is simply bigger because the effect of the infringement is bigger. It's a very serious infringement. It's a very serious illegal behavior. end quote. Google says, of course, that it will appeal the fine. Sundar Pachai, CEO of Alphabet, Google's parent company, wrote that in Google's view, Android has created more consumer options, not less.

The decision ignores the fact that Android phones compete with iOS phones, something that 89% of respondents to the commission's own market survey confirmed. It also misses just how much choice Android provides to thousands of phone makers and mobile network operators who build and sell Android devices. To millions of app developers around the world who have built their businesses with Android, and to billions of consumers who can now afford and use cutting edge Android smartphones. Today, because of Android, there are more than 24,000 devices at every price point for more than 1,300 different brands, end quote. So what happens now? The EU says that Google must adhere to its judgment within 90 days. It must,

unbundle search and Chrome from Android. In other words, phone manufacturers can still bundle Chrome and Google search if they want to, but Google can no longer force them to do so as a condition of also installing the Google Play Store. The Android operating system is offered to device manufacturers for free, but without Google Play, a phone would not have access to the most popular Android App Store. That's the leverage that the EU wants Google to eliminate. Google also doesn't allow its manufacturing. manufacturers to put any Google apps like YouTube or Google Maps on any unsanctioned versions of Android,

which the EU argues effectively forecloses the adoption of any forked or alternative versions of Android. But wait, why is Google being fined for this? Doesn't Apple do the same thing? Isn't iOS locked down with all sorts of conditions and rules? Yeah, but as the Wall Street Journal describes it, quote, the difference with Apple is that it doesn't make its mobile operating system iOS available to other manufacturers. It is only available in Apple products. The EU's case with Google only looks at the market for licenseable operating systems for mobile devices, end quote.

Though there is a ticking time clock on this, we can probably expect that the appeals process would delay actual enforcement for years. P.S., Google is facing potentially another major fine from the EU, this time related to its AdSense advertising program. That ruling, too, could come in a matter of months. More Google News. It's only been five months since Nest, who you're probably most familiar with as the maker of smart thermostats and wireless cameras, was folded back into Google after existing for a while as a separate entity in the alphabet firmament. but now Nest is being integrated firmly into Google's home unit, the better to combine all of the company's smart device efforts.

Quote, this is the natural evolution, says Rishi Shandra, Google's vice president of product management for Google Home. Chandra told CNET, quote, we thought let's connect these things and build experiences that we really couldn't do before, end quote. So imagine, because this is what Google is imagining, Better, more seamless integration between the Google Home Smart Speakers, Chromecast streaming devices, and Nests, thermostats, smoke alarms, and home security systems. But there are a couple of other interesting angles to this story, which was broken by CNET's Richard Nieva. Google told employees that, as part of this move, Marwan Fawaz, Ness's erstwhile CEO, will be leaving the company.

Fawas will reportedly remain an executive advisor, but this sort of. whole smart device unit will be reporting to Shandra, a 12-year Google veteran. As CNET's Nieva notes, quote, Fawaz's exit from Nest comes after employees began pushing for a leadership change amid complaints that he's more of an operations manager than a leader, according to multiple sources, including former Nest employees. They asked not to be identified because they weren't authorized to comment on behalf of Alphabet and Google. Even before Google announced the leadership change Tuesday, Nest employees said they had the sense the reins would be handed over to Shandra if Fawaz stepped aside.

They applauded the change. One longtime NEST employees said, quote, I'm happy to leave Nest in Rishi's hands, end quote. Fawas had replaced Ness's original founder, Tony Fidel, the former Apple executive known as the godfather of the iPod, and a key player in the design of the iPhone. Apparently, a lot of NEST employees felt that a product visionary had been replaced with a, quote, business devoid. development manager in the person of Fawas. And also, according to Nieva's reporting, shortly before Fidel left Nest, Google reportedly had, quote, serious discussions with Amazon about Amazon taking Nest off of Google's hands.

This news of a potential Nest acquisition is highly ironic, considering that the whole point of folding all of its smart device work into one unit is because Google desperately wants to catch up with Amazon's Alexa ecosystem that many feel is becoming the dominant player in the smart device market. Amazon pointedly doesn't sell the Google Home Smart Speaker on its site, and for a while it even stopped selling Google's Chromecast streaming devices as well. And Amazon recently bought the Smart Doorbell Company Ring as well as the security system company blink. So over here in the Smart Home Devices category, There's shaping up to be a heavyweight showdown between Google and Amazon.

And over in this corner, there might be yet another heavyweight contender, getting ready to enter the streaming video competition. According to the information, sources have told it that Walmart is considering launching a subscription streaming service to compete with the lights of Netflix and Amazon Prime video. And the way these sources describe it, video streaming from Walmart might largely be just a way to poke Netflix with a stick. Quote, Walmart is thinking of a service priced below $8 a month, according to one of the people. Netflix has been steadily raising the price of its service, which now costs between $8 and $14 a month,

while Amazon charges $8.99 a month for its prime video service. Walmart is also considering an ad-supported free service, end quote. The information notes that even if all it wants to do is strategically attack Netflix, by underpricing a streaming service, it would still be enormously expensive for Walmart to acquire the rights to all of the content it would need. Is Walmart willing to spend the money necessary?

The company does have plenty of money, of course. It generates $17 billion a year in cash. But as many people gleefully pointed out on Twitter, Walmart has gone toe to toe with Netflix before. In the early 2000s, Walmart had a DVD-by-mail rental service it designed to compete with Blockbuster and Netflix back before streaming was even a thing. When it couldn't make a go of this DVD rental service, it allowed none other than Netflix to absorb the existing customers.

And as Peter Kafka noted on Twitter, quote, Amazon Prime Video is not exactly going gangbusters for Amazon, and they've been at it for years. A security researcher in Berlin has released a report showing that anyone can track a Venmo user's purchase history and get a detailed profile of basically any Venmo users. This is because the problem is when you use Venmo, if you don't go in and change the default user settings, the things you do on Venmo are publicly visible by design and anyone can go into the app's public API and see everything from usernames to comments to dates. The default state when a user signs up is public. You can change that, of course, but lots and lots of people don't.

The researcher analyzed more than 200 million public Venmo transactions in her report. To be clear, this is not a report revealing anything about lax security on Venmo's platform, simply underlining the unique way Venmo sort of rides the fence between social and security. The Electronic Privacy Information Centers Christine Bannon told the Guardian, quote, Venmo is an unusual app because it combines social media with financial transactions. One of those is usually fairly public, and one is usually very private, so it's hard to gauge consumer expectations of privacy.

Venmo responded to the Guardian by saying, quote, Our users trust us with their money and personal information, and we take this responsibility and applicable privacy laws very seriously. Unlike other social networks, Venmo users can choose what they want to share on the Venmo public feed, end quote. But Han Du Thick Duck, the Berlin-based researcher who released this report on Venmo says she merely wanted to highlight the need to take personal control of your user settings on Venmo and frankly on almost any tech platform. Quote, even if you're not a Venmo user, I hope you can look at this project and wonder

about all the other platforms you have used. BuzzFeed is, of course, known for its quizzes and listicles. But for a long time, they've also had a very big, very well-respected, legitimate news organization as well that does real journalism. with a capital J. Journalism so real, they were a finalist for a Pulitzer Prize this year. It's just that everyone still thinks of those damned quizzes and listicles. True, BuzzFeed News has always had a special section on the site, and there's even a standalone BuzzFeed News app. But whether it's for their own internal pride or as part of an

effort to get people to think of BuzzFeed more as a legitimate news source, BuzzFeed has launched a completely separate website, BuzzFeedNews.com, in order to put its news in a more, shall we say, respectable context. The layout on BuzzFeedNews.com is a bit more sober, and the news content feels more serious when it's not matched in among headlines like 27 basic pieces of clothing you'll wear again and again,

and rate these Marvel men and will reveal which Marvel woman you are. Now, the news has not been segregated completely. BuzzFeed news stories will still be interspersed among the main BuzzFeed page. And BuzzFeedNews.com will still support GIFs and YouTube videos. And BuzzFeed assures that even on the news page, it's not suddenly going to get all highbrow on you. Editor-in-chief Ben Smith told TechCrunch, I don't think anybody finds it confusing that ABC does news programming and scripted shows on primetime. On the web, the conventions are less clear.

I think we're trying to be very clear. We feel our audience wants that, end quote. Apparently, the audience for BuzzFeed News is to the tune of 200 million pages a month, and one third of BuzzFeed's overall readership reads at least one news story every month. Finally today, again, I'm trying to highlight more startups when they pop onto my radar because of funding raises. Not every startup and not every startup, and not. every funding raise, of course. They're not all news because they're not all going to amount to something. What I'm looking for are stories about startups that maybe they won't become the next

big, big thing, but at the very least, they could become the next big thing in some segment of the tech landscape. And in terms of criteria for companies with next big thing potential, raising an absolute S ton of money from Masayoshi-son certainly gets my attention. Light is a company that makes a 16 lens $2,000 specialty camera called the L-16. People find the technology cool. In essence, it takes multiple photographs with one snap of the shutter and uses machine learning to combine those images into one high-quality shot. Most people assumed that the obvious play for this company

was to somehow move this technology into smartphones. But Massasson saw something different. He thought the camera tax. that Light has could be used for self-driving cars. That's why Light was able to announce $121 million in funding from investors led by SoftBanks Vision Fund. Quoting from a business insider piece announcing this news, Light CEO David Grannon says, quote, when we first met with Masa in Tokyo, they liked our technology. He kept pushing us.

He's very good at looking for, you know, what's the most transformational. way your technology can be used. He believed what we call our passive optic system, our regular cameras versus LIDARs, could actually solve a lot of the problems that LIDAR suffers today. LIDAR is the sensor technology that a lot of autonomous vehicle technologies use. And we studied the problem. We were convinced that MASA was right, that we could build a better sensing or seeing system for cars, end quote. See, lights technology senses so much visual data with each shot that it can essentially extract almost 3D data from images. That would be great in the, you know, 3D environment of the real world on real roads.

So light will still be manufacturing its L16 camera, and it's still bringing its technology to smartphones. Light cameras will actually apparently show up in an unnamed smartphone later this fall. So if everything works out, light might still be the next big thing. smartphone camera tech, but if Masasone is right, it could also be one of the key components that eventually helps make self-driving cars the next big thing as well. That's all for today. As always, I've been your host, Brian McCullough. You can follow me on Twitter at Brian MCC. And of course, I can't do all this without the help of the tech meme editors who surface the news,

sort the news into context, and keep me up to date. They can keep you up to date too if you check them out at techmeme.com. Anytime day or night, it's a 24-hour operation, people. Talk to you tomorrow.