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EnCharge AI, a company building hardware to accelerate AI processing at the edge, today emerged from stealth with $21.7 million in Series A funding led by Anzu Partners, with participation from AlleyCorp, Scout Ventures, Silicon Catalyst Angels, Schams Ventures, E14 Fund and Alumni Ventures. Speaking to TechCrunch via email, co-founder and CEO Naveen Verma said that the proceeds will be put toward hardware and software development as well as supporting new customer engagements.

“Now was the right time to raise because the technology has been extensively validated through previous R&D all the way up the compute stack,” Verma said. “[It] provides both a clear path to productization (with no new technology development) and basis for value proposition in customer applications at the forefront of AI, positioning EnCharge for market impact … Many edge applications are in an emerging phase, with the greatest opportunities for value from AI still being defined.”

Encharge AI was ideated by Verma, Echere Iroaga and Kailash Gopalakrishnan. Verma is the director of Princeton’s Keller Center for Innovation in Engineering Education while Gopalakrishnan was (until recently) an IBM fellow, having worked at the tech giant for nearly 18 years. Iroaga, for his part, previously led semiconductor company Macom’s connectivity business unit as both VP and GM.

EnCharge has its roots in federal grants that Verma received in 2017 alongside collaborators at the University of Illinois at Urbana-Champaign. An outgrowth of DARPA’s ongoing Electronics Resurgence Initiative, which aims to broadly advance computer chip tech, Verma led an $8.3-million effort to investigate new types of non-volatile memory devices.

In contrast to the “volatile” memory prevalent in today’s computers, non-volatile memory can retain data without a continuous power supply, making it theoretically more energy efficient. Flash memory and most magnetic storage devices, including hard disks and floppy disks, are examples of non-volatile memory.

DARPA also funded Verma’s research into in-memory computing for machine learning computations — “in-memory,” here, referring to running calculations in RAM to reduce the latency introduced by storage devices.

EnCharge was launched to commercialize Verma’s research with hardware built on a standard PCIe form factor. Using in-memory computing, EnCharge’s custom plug-in hardware can accelerate AI applications in servers and “network edge” machines, Verma claims, while reducing power consumption relative to standard computer processors.

In iterating the hardware, EnCharge’s team had to overcome several engineering challenges. In-memory computing tends to be sensitive to voltage fluctuations and temperature spikes. So EnCharge designed its chips using capacitors rather than transistors; capacitors, which store an electrical charge, can be manufactured with greater precision and aren’t as affected by shifts in voltage.

EnCharge also had to create software that let customers adapt their AI systems to the custom hardware. Verma says that the software, once finished, will allow EnCharge’s hardware to work with different types of neural networks (i.e. sets of AI algorithms) while remaining scalable.

“EnCharge products provide orders-of-magnitude gains in energy efficiency and performance,” Verma said. “This is enabled by a highly robust and scalable next-generation technology, which has been demonstrated in generations of test chips, scaled to advanced nodes and scaled-up in architectures. EnCharge is differentiated from both digital technologies that suffer from existing memory- and compute-efficiency bottlenecks and beyond-digital technologies that face fundamental technological barriers and limited validation across the compute stack.”

Those are lofty claims, and it’s worth noting that EnCharge hasn’t begun to mass produce its hardware yet — and doesn’t have customers lined up. (Verma says that the company is pre-revenue.) In another challenge, EnCharge is going up against well-financed competition in the already saturated AI accelerator hardware market. Axelera and GigaSpaces are both developing in-memory hardware to accelerate AI workloads. NeuroBlade last October raised $83 million for its in-memory inference chip for data centers and edge devices. Syntiant, not to be outdone, is supplying in-memory, speech-processing AI edge chips.

But the funding it has managed to secure so far suggests that investors, at least, have faith in EnCharge’s roadmap.

“As Edge AI continues to drive business automation, there is huge demand for sustainable technologies that can provide dramatic improvements in end-to-end AI inference capability along with cost and power efficiency,” Anzu Partners’ Jimmy Kan said in a press release. “EnCharge’s technology addresses these challenges and has been validated successfully in silicon, fully compatible with volume production.”

EnCharge has roughly 25 employees and is based in Santa Clara.

EnCharge AI emerges from stealth with $21.7M to develop AI accelerator hardware by Kyle Wiggers originally published on TechCrunch

Today, Tinder launched a new “Relationship Goals” feature that allows users to display their dating goals on their profile, whether they’re looking for a “long-term partner,” “long-term, but open to short-term,” “short-term, but open to long,” “short-term fun,” “new friends,” or “still figuring it out.”

Tinder’s new addition aims to help users find connections that better align with what they’re looking for. Users can go to settings to add a Relationship Goal to their profile. As shown in the image above, each option comes with an emoji and is displayed as a colorful banner on the top of your profile, above the “About Me” section. The app will also have new weekly check-in prompts to remind users that they can change their Relationship Goals selection if their opinion on dating has shifted.

Starting today, the feature is starting to roll out to users in many countries, including the U.S., and will become available to everyone on January 5, 2023.

“This feature was developed in response to a shift we’ve seen among our members. Young singles, who make up a majority of Tinder, are increasingly becoming more intentional with who they spend their time with. In fact, 72% of Tinder members said they’re looking for someone who knows what they want,” Kyle Miller, Vice President of Core Product at Tinder, said in a statement.

When testing “Relationship Goals,” Tinder found that over 50% of users opted to use the feature option on their profile, the company wrote in today’s announcement.

Match Group, which owns Tinder, launched a similar profile feature on Hinge earlier this year called “Dating Intentions,” letting users display on their profile what they want in a relationship, such as “life partner,” “long-term,” “long-term, open to short-term,” “short-term, open to long-term,” “short-term” and “figuring out my dating goals.”

Tinder now has these same options, except for “life partner,” which was replaced with “new friends” and “short-term fun,” since Tinder is often used for hookups and situationships. According to Tinder’s 2022 “Year in Swipe” report, more than half of Tinder users are 18-25 years old, with many young daters swaying towards casual dating—a.k.a. situationships.

More recently, Tinder’s sister dating app, Hinge, launched a “Relationship Type” feature that allows users to add either “monogamous,” “non-monogamous” or “figuring out my relationship type” to their profiles. It’s unknown if Tinder plans to launch a similar feature. However, this could help non-monogamous users find like-minded matches on more traditional dating apps that tend to skew towards monogamous dating.

Tinder launches ‘Relationship Goals’ to follow in sister dating app Hinge’s footsteps by Lauren Forristal originally published on TechCrunch

After vehemently fighting ‘sideloading’ alternative app stores on the iPhone, Apple is now apparently looking to allow them with iOS 17, which will come out next year, to comply with European laws. The report from Bloomberg also noted that Apple is exploring opening up its camera and NFC (Near Field Communication) stack to developers.

Apple’s walled-garden approach has so far mandated that iPhone users must only download apps from Apple’s own App Store. Android, on the other hand, allows users to install third-party app stores on their devices.

The Bloomberg report states that Apple’s sideloading project has already started under the company’s engineering VP Andreas Wendker, who reports to Craig Federighi, Apple’s senior VP of Software Engineering. The project also reportedly involves senior executives such as Jeff Robbin and Eddie Cue.

Europe’s Digital Market Act (DMA) will come into effect next year, and companies will have until 2024 to comply. Under the new rules, Big Tech must allow alternative app stores on their platforms to provide users with more choice, and it’s likely that Apple is now preparing to comply.

Apple has already committed to supporting USB-C due to the EU’s push to standardize charging ports. Now, with the DMA on the horizon, this could force the Cupertino-based company to allow sideloading too.

A win for developers?

If Apple opens to other app stores, developers won’t have to pay a 30% (or in some cases 15%) fee to the tech giant for in-app purchases. This could appease a lot of companies — including Spotify, Tinder/ Match Group, and lately, Twitter — who have criticized Apple’s fee structure.

Apple currently allows some developers to use third-party payment systems in certain markets — for example, all developers in South Korea and dating app developers in the Netherlands. However, they still have to pay Apple a hefty fee.

If the DMA forces Apple to allow third-party app stores in the EU, there is every chance that regulators elsewhere will follow suit, and Apple’s current work to enable sideloading in iOS 17 could be extended to support other jurisdictions too.

This news comes as Portugal-based Aptoide, an alternative app store for Android, is launching an iOS version for jailbreakers. The company’s co-founder and CEO Paulo Trezentos told TechCrunch that he believes Apple will indeed open to third-party app stores.

The Bloomberg report also noted that the new EU rule could strong-arm Apple into opening up more parts of its ecosystem, including the camera, NFC stack, and browser engine.

Currently, all browsers on iPhone, including Chrome and Firefox, have to use Apple’s WebKit engine. But Apple is considering removing that construct. We might have to wait for Apple’s official announcement to see how other engines could work on iOS and what features that could enable in other browsers.

Opening up the NFC stack could mean that aside from Apple Pay, other payment companies could integrate their services for tap-to-pay. Apple has already faced criticism from the EU, which said in February that a standard tech for contactless payment like NFC should be open to all providers. This could allow Apple’s competitors like Stripe and Square to build their own integrated solutions for iPhone.

Apple’s reluctance

Apple’s executives have constantly opined how bad sideloading would be for user’ security. It even introduced a developer mode in iOS 16 to prevent users from “inadvertently installing potentially harmful software on their devices.” Issues including sideloading and App Store fees have been the center of focus in Apple’s long-standing Epic fight too.

In both Netherlands and South Korea, where Apple has been forced to open its platform just a little, the company has made it arduous for developers to adopt third-party payment systems. It mandated that app makers must show elaborate warnings to users when they are about to use an alternative payment system, and in some cases, Apple has asked them to submit a separate app file for a particular market.

While it’s technically complying with local regulators’ rules, the company is creating friction so that developers reconsider switching their payment system.

Similarly, if Apple does open things up to comply with EU regulation for iOS 17, it could choose to make life difficult for both developers and consumers, meaning that only the most technologically savvy users will choose to sideload. What’s more, the company could display banners and warnings about using third-party app store, deterring would-be switchers from sticking with Apple’s App Store.

The Coalition for App Fairness — a collective fighting against Big Tech platforms such as Apple and Google for fairer distribution, with members like Basecamp, Match Group, and Spotify — said in a statement that the reports about Apple allowing sideloading “is an admission that they have a chokehold on the competition.”

“It is clear that Apple will only yield their control over the distribution of apps on iOS devices, and their exertion of gatekeeper power within the App Store, in response to pressure from policymakers. The European Union’s passage of the Digital Markets Act is forcing Apple’s hand, and strong enforcement of the law is vital to leveling the playing field for developers in the mobile application ecosystem,” it said.

The organization urged lawmakers in the U.S. to take note and pass the Open App Markets Act (OAMA) — which could force Apple and Google to allow third-party app stores, sideloading, and alternative payment systems — as quickly as possible. Epic’s Tim Sweeney threw his hat into the ring too, urging Congress to step up and follow Europe’s lead.

Apple didn’t respond to TechCrunch’s questions at the time of publishing, but will update here if or when we hear back.

Apple will reportedly allow sideloading apps with iOS 17 by Ivan Mehta originally published on TechCrunch

The U.S. National Security Agency is warning that Chinese government-backed hackers are exploiting a zero-day vulnerability in two widely used Citrix networking products to gain access to targeted networks.

The flaw, tracked as CVE-2022-27518, affects Citrix ADC, an application delivery controller, and Citrix Gateway, a remote access tool, and are both popular in enterprise networks. The critical-rated vulnerability allows an unauthenticated attacker to remotely run malicious code on vulnerable devices — no passwords needed. Citrix also says the flaw is being actively exploited by threat actors.

“We are aware of a small number of targeted attacks in the wild using this vulnerability,” Peter Lefkowitz, chief security and trust officer at Citrix, said in ablog post. “Limited exploits of this vulnerability have been reported.” Citrix hasn’t specified what industries the targeted organizations are in or how many have been compromised. A Citrix spokesperson did not immediately respond to TechCrunch’s questions.

Citrix rushed out an emergency patch for the vulnerability on Monday and is urging customers using affected builds of Citrix ADC and Citrix Gateway to install the updates immediately.

Citrix didn’t share any further details about the in-the-wild attacks. However, in a separate advisory, the NSA said that APT5, a notorious Chinese hacking group, has been actively targeting Citrix ADCs in order to break into organizations without having to first steal credentials. The agency also provided threat-hunting guidance [PDF] for security teams and asked for intelligence sharing among the public and private sectors.

APT5, which has been active since at least 2007, largely conducts cyber espionage campaigns, and has a history of targeting tech companies including those building military applications, and regional telecommunication providers. Cybersecurity firm FireEye has previously described APT5 as “a large threat group that consists of several subgroups, often with distinct tactics and infrastructure.”

Last year, APT5 exploited a zero-day vulnerability in Pulse Secure VPN — another networking product often targeted by hackers — to breach U.S. networks involved in defense research and development.

NSA says Chinese hackers are exploiting a zero-day bug in popular networking gear by Carly Page originally published on TechCrunch

Earlier this month, Reuters reported that hedge fund Muddy Waters had accused Uruguayan payments company dLocal of using client funds to pay a special dividend to its shareholders from before its June 2021 IPO.

The hedge fund said – according to Reuters – that “all (dLocal) needed to do to address this issue was provide an explanation as to how the cash flows reconcile.”

The problem of cash flow reconciliation is an increasingly large one, especially in light of the explosion of digital payments since the onset of the COVID-19 pandemic. As companies that handle customer payments expand to new markets, add new products and handle increasing transaction volume, the more complex the process becomes.

Enter Nilus, a startup which aims to help simplify that process with a no-code financial operations platform. Founded out of a basement last year by Daniel Kalish and Danielle Shaul, Nilus has raised $8.5 million in a seed funding round led by Bessemer Venture Partners.

As in the case of many startup origins, both Kalish and Shaul said they experienced the problem they’re trying to solve firsthand in their previous roles. Kalish spent over five years at PayPal, most recently serving as head of market development and GTM for Central Eastern Europe, Russia and Israel. Shaul spent over five years at Fundbox – most recently as a software architect and before that as an R&D manager that led risk and underwriting engineering efforts for both credit and fraud and building cutting edge products using ML and big data.

“The payments industry actually has a huge data problem today,” Kalish told TechCrunch in an interview. “On the surface level, it looks really easy to start collecting payments – by working with Stripe, PayPal, or banks, for example. But behind the scenes, the data is so messy and finance teams are struggling to understand what’s happening, what’s their financial position, or making sure there’s no risk involved in accepting and sending payments to their customers.”

The biggest challenge, he added, is the fact that payment financial data basically sits between multiple locations within an organization.

“You have payment data with your payment processor or with your bank or with your ERP and your finance team is often trying to match those data points either manually or by running some funky Excel or SQL scripts just so they can get the clarity they need around their financial and their activity,” Kalish said.

In building financial infrastructure over the past decade, Shaul said she saw finance teams “going back and forth” to identify incoming payments.

So the pair teamed up to build Nilus, a company they say offers a “plug and play” payments operations platform for finance teams that move significant volumes of dollars. Their goal is to help these teams understand all that underlying data behind the payment activity so they can have “a real-time view of cash, mitigate risk, and always be audit-ready,” said Kalish, who serves as Nilus’s CEO.

Kalish and Shaul say the tech Nilus has built can connect to the data “very easily” via APIs, then analyze it with its algorithms and ultimately automate reconciliation, reporting and payment workflows for finance teams.

“We see reconciliation as kind of like the building blocks on which you can build a lot of capabilities,” Shaul, the startup’s CTO, told TechCrunch. “Once you can move the money with confidence and have visibility, you can manage things, you can predict things, you can forecast – you can do so many great things on top of that.”

Nilus’ target customers are fintechs, financial service companies, marketplaces and vertical SaaS outfits – or basically any company with embedded fintech products that are already moving customer money. While it would not disclose specific customers, Nilus says it is working with companies processing “hundreds of millions of dollars.”

The startup’s headquarters and go-to-market team is based out of New York, and its technical team out of Tel Aviv. Presently, the company has 18 employees.

Also participating in the startup’s seed funding round Better Tomorrow Ventures, Symbol and the CEOs and founders of fintech companies including Unit, Alloy, Melio and Lithic.

“We’ve seen so many companies working with out-of-date financial workflows, the space is desperately in need of innovation,” said Adam Fisher, a partner at Bessemer Venture Partners, in a written statement.

Sheel Mohnot of Better Tomorrow Ventures agrees, noting that his firm was “stunned” at how many companies still used Excel for financial reconciliation.

“Financial teams are really underserved,” Shaul said. “Most reconciliation platforms out there are for banks.”

This startup just landed $8.5M led by Bessemer to help companies automate their financial workflows by Mary Ann Azevedo originally published on TechCrunch

Back in March, at Verizon’s Investor Event, the company announced +Play, a free web-based platform exclusive to Verizon customers that aggregates subscription services across entertainment, music, gaming, fitness, lifestyle and more.

Today, Verizon launched +Play in open beta, allowing Verizon wireless, 5G Home and LTE Home customers to purchase and manage accounts for over 20 services, including Netflix, Disney+, Hulu, HBO Max, ESPN+, discovery+, AMC+, NFL+, NBA League Pass, NBA TV, as well as Live Nation’s live streaming concert service Veeps, Peloton, Calm, and Duolingo, among others.

Alongside the launch, Verizon is giving +Play users a Netflix Premium subscription for 12 months, which normally costs around $240 per year. The exclusive offer is only available for a limited time, the company wrote in today’s announcement.

Verizon customers can get +Play at no additional cost. To get early access to the beta, go to plusplay.verizon.com and log into the platform with your existing Verizon account info. Once a user subscribes to a service through +Play, they can use the service directly through the providers’ app or online portal.

Like many other subscription hubs, +Play includes a Discover tab for users to find content, a Shop tab, and a Manage tab where users can have all their account payments in one central place. Also, users will get +Play notifications every time a free trial period ends or if there are price changes to any subscription.

Verizon noted that the initial beta launch is only just the beginning as the platform will evolve over time, with plans to add new services, exclusive offers and features.

“As the network America relies on and one of the largest direct-to-consumer distributors in the U.S., Verizon is the partner of choice for content and subscriptions services, and we’re positioned to move the industry forward by offering customers more choice and enabling a seamless billing and management experience,” Erin McPherson, Chief Content Officer for Verizon, said in a statement. “We’re partnering with Netflix to offer customers all of their favorite content and a special offer only available in +Play.”

Verizon is likely betting that its millions of customers will want +Play, as the rise of streaming service aggregators increases. YouTube recently launched “Primetime Channels,” allowing users to subscribe and watch content from 30+ services. Other competitors include Amazon, Roku and Apple.

“This is a huge milestone for Verizon and the industry as a whole, and we’re incredibly proud to continue to be trailblazers in the new era of content and subscription services,” McPherson added.

Verizon launches subscription service aggregator, +Play, in open beta by Lauren Forristal originally published on TechCrunch

During an economic downturn, it’s easy to focus on negative headlines about layoffs and declining business performance. But revenue teams still have targets to meet. Now is the time to get creative.

So how do you drive accountability at a time when every sale matters?

Sales managers: It’s time to get methodical and strategic if you want your reps to hit quota. While there are a multitude of different approaches out there, I’d like to talk about two of my favorite sales methodologies — MEDDPICC and design thinking — and explore why they’re particularly effective when times get tough.

Get curious about your customer with MEDDPICC

It’s difficult for a seller to be creative without truly knowing their customer first.

Proper discovery is a foundational step in the sales cycle and should never be skipped. Your sellers may want to jump right into a selling motion without taking the time to research, but it’s critical to ask the right questions and understand why prospects need solutions like yours instead of simply selling features.

Regardless of whether you’re connecting with buyers online or in person, sales has always been about building and maintaining relationships. If this is something your sellers struggle with, gaining a better understanding of your prospects may require a more structured approach.

I’m a big fan of the MEDDPICC sales methodology, which breaks down into a series of questions sellers must ask themselves during a B2B deal:

Metrics: How will your prospect measure success? What goals do they need to achieve?
Economic buyer: Are you talking to the real decision-maker within the prospect’s organization?
Decision criteria: What’s driving their decision to partner with us? Are there certain technical, budget or ROI requirements we need to meet?
Decision process: Who are the key stakeholders? What steps will they take before making a purchase decision?
Paper process: What steps or actions have to be taken before the contracts are signed?
Implicate the pain: What problem is the prospect trying to solve? What’s at risk if they don’t solve it?
Champion: Who does this problem impact the most within the prospect’s organization? Will they go to bat for your solution to fix it?
Competition: What people, vendors or initiatives are competing for the same funds and resources we are?

Getting back to the basics and conceptualizing your deals through the lens of MEDDPICC will create a more holistic approach to sales, a better understanding of your customers and a sales team that’s well researched and well prepared to win more deals. It fosters connection and conversations about the things buyers actually care about by focusing on the pain of their current issue and how your solution can solve it.

In a turbulent market, it’s time to get methodical about sales by Ram Iyer originally published on TechCrunch

Twitter’s lead privacy regulator in the European Union is being kept very busy indeed by Elon Musk’s erratic piloting of the bird site.

Following a report by Platformer, which suggests Musk is planning to force users to accept personalized advertising unless they pay for a subscription service that will include an opt-out for ads, the Irish Data Protection Commission (DPC) told us it is reviewing the matter.

This adds to a growing pile of data protection concerns piling up on its desk — let’s call these the real ‘Twitter Files’ — such as Musk providing access to Twitter systems to non-staff reporters (um, security and privacy anyone?); the status of Twitter’s main establishment in Ireland (and, therefore, the streamlined situation it currently enjoys with the DPC leading oversight of its compliance with the EU’s General Data Protection Regulation, aka the GDPR); and whether Twitter has adequate compliance staff and appropriate resources to deal with all the inbound enquiries from regulators and users (such as requests for deletion of data) since Musk took an axe to halve company headcount, to name a small portion of the regulatory chaos he’s kicked up in very short order.

Under the GDPR Twitter needs a valid legal basis to process personal data, such as tracking and profiling users to target them with ads.

Consent is one of the legal bases that can be possible under the GDPR — but you can’t force users to consent; consent must be freely given if it’s to meet the legal bar. Ergo, forcing users to pay up or else be tracked and targeted looks unlikely to pass muster with EU regulators.

Another legal bases permitted in the GDPR is contractual necessity. And it’s worth noting that this is the legal basis currently claimed by Facebook-owner Meta for the ‘personalized’ ads it forces on users of its social networking services.

However in a blow to Musk’s ambitions to follow Zuck and force microtargeted ads into Europeans eyeballs whether they like it or not (or else, in Musk’s case, force Europeans to pay him not to profile them for ad targeting), the European Data Protection Board recently issued a decision on a long running complaint against Meta’s controversial choice of legal basis — which, per press reports, appears to rule out using a claim of performance of a contract to run behavioral advertising.

There is also legitimate interest (LI) — another legal basis that exists in the GDPR. But, again, it’s a sad trombone for Musk on this front as TikTok was forced to abort a planned switch of legal basis for its personalized ads, from consent to LI, this summer — after warnings from Italy’s DPA that this would not be legit.

The DPC also stepped in to ‘engage’ with TikTok on the matter — in its capacity as TikTok’s lead supervisor for GDPR. But it’s not just the GDPR that’s likely to apply here if Twitter similarly tries to force tracking ads on users in Europe: The EU’s ePrivacy Directive, which governs online tracking, also likely comes into play — and, as Italy’s DPA warned TikTok a few months ago, you can’t do tracking without asking for consent. Ergo LI won’t fly for Twitter tracking ads.

Additionally, and unhappily for Musk — who is famously not a fan of regulators — the ePrivacy Directive does not have a one-stop-shop mechanism streamlining regulatory oversight (and oftentimes shrinking risk) via a lead DPA, as is the case with the GDPR. So if he tries to force tracking ads on EU users he’s opening the company up to enforcement by privacy watchdogs across the bloc, from Italy to France, and on through as many of the 27 EU Member States that have DPAs with an appetite for enforcement.

France’s privacy watchdog, the CNIL, has been very active on enforcing ePrivacy against tech giants in recent years — fining Google $120M two years ago for dropping tracking cookies without consent, for instance, and hitting the adtech giant a second time with a further $170M penalty this January over cookie consent dark patterns. It has also spanked Amazon and Facebook with multimillion dollar penalties for ePrivacy breaches over the same time frame. So there’s little reason to think the French would turn a blind eye to a swashbuckling Muskian forced-tracking-ads adventure.

It’s worth noting there are examples in some EU Member States (notably Germany) of certain news media websites putting up paywalls that offer users a choice between subscribing to view their content (i.e. journalism) or getting free access to it but with the stipulation that they agree to be tracked as the ‘price’ for this freebie.

Their approach remains controversial with data protection law experts and may not survive legal challenges. But, in the meanwhile, it doesn’t necessarily offer much succour to Musk’s ambitions to force ads on unwilling Europeans, either, since there is a clear difference between pay-or-be-tracked-gating of journalism (i.e. profession content that the paywalling company is paying to produce) vs pay-or-be-tracked-gating of user generated content which Musk is getting for free for some crazy reason, even as he yells at Twitter users to pay him ~$8pm or else.

So a pay-me-or-else paywall in the microblogging platform case doesn’t look like it would be smooth sailing either.

So what penalties might Musk face if he goes ahead and tries to force ads on European users?

Under the GDPR, penalties can scale up to 4% of global annual turnover — so, on paper, the cost of breaking the law can certainly get expensive (though Twitter has escaped major sanction to date). But GDPR penalties against tech giants have been getting bigger in recent years (even if the bill may take years to arrive). And flagrant/wilful breaches typically invite bigger fines than one-off incidents like a security slip up.

ePrivacy also allows EU regulators to levy dissuasive sanctions for breaches — and these can, demonstrably, exceed a hundred million dollars apiece (i.e. from a single regulator), so costs could stack up quickly here too if multiple watchdogs wade in.

ePrivacy enforcement is also not slowed down by a one-stop-shop mechanism funnelling cross-border complaints through a single lead regulator (as happens with the GDPR). So fines could arrive in fairly short order if Musk pushes ahead with forced tracking despite the lack of a legal path for such processing.

Both privacy laws also enable EU regulators to issue corrective orders against infringing practices. And failure to comply with such orders invites — you guessed it! — further sanction. So if Musk refuses to correct course he is walking into an ongoing world of costly regulatory pain in Europe.

He has more regulatory trouble brewing in the region, too.

Looming on the horizon is application of the EU’s new Digital Services Act (DSA), the bloc’s rebooted Internet rulebook, which concerns itself with content governance issues, so how platforms tackle problems like terrorism, hate speech, disinformation etc. Here again Musk’s ‘free the bird’ approach has quickly thrown regulatory expectations into a spin that has led (already) to closer scrutiny by EU lawmakers than would likely have occurred without the Tesla CEO at the helm of Twitter.

The European Commission itself will oversee larger platforms’ compliance with the DSA, rather than national authorities. And just last month it warned Twitter over the need to have adequate resourcing for compliance in place — saying it would carry out a stress test of its approach at its Dublin HQ early next year. So it’s already putting Twitter on DSA watch.

It remains to be seen whether or not the Commission will classify Twitter as a so-called VLOP — meaning it would take on the burden of regulating Musk’s erratic rule itself. But he is essentially inviting that increased level of EU scrutiny (and regulatory risk) by playing so fast and loose with existing governance and compliance structures. Ergo, Twitter’s DSA compliance being regulated by the Commission looks rather more possible than it probably should, based on an assessment of the platform’s size alone. And that’s all down to Musk’s hard work ripping up existing governance structures and driving out compliance expertise.

Penalties under the DSA can scale up to 6% of global annual turnover. The regulation also contains powers for regulators to ban infringing services if they repeatedly fail to correct governance — so if Musk keeps on trolling the region’s regulators a complete loss of Twitter’s EU revenue cannot be entirely ruled out… Buckle up!

Reports of Musk forcing tracking ads on Twitter put him on a costly collision course with EU privacy laws by Natasha Lomas originally published on TechCrunch