TechCrunch+

A €390M privacy fine for Meta announced earlier this month in the European Union — for running behavioral ads on Facebook and Instagram in the region without a valid legal basis — was several billion dollars smaller than it should have been, and orders of magnitude too tiny to be a deterrent for others going big on breaking the bloc’s privacy laws, according to the not-for-profit which filed the original complaint over Facebook’s ‘forced consent’ back in May 2018.

This week the privacy rights group, noyb, has written to the European Data Protection Board (EDPB) to raise fresh hell — arguing that the Irish regulator which issued the final decision on its complaint against Meta’s ads failed to follow the Board’s instructions to investigate the financial benefits it accrued off of the unlawful data processing.

It argues the Irish Data Protection Commission (DPC) has failed to implement the EDPB’s binding decision from December — which instructed the regulator to both find the legal basis Meta had claimed for running behavioral ads unlawful and significantly increase the size of the fine the DPC had proposed in its earlier draft decision.

In the final decision which the DPC issued earlier this month, the DPC declined to act on the Board’s direction to ascertain an estimate of the financial benefit Meta gained from targeting EU users with behavioral ads in breach of EU data protection law.

And while the Irish regulator did top-up the level of fine on Meta to €390M — vs the €28M to €36M it had originally proposed for transparency failures — the revised fine neither reflects the seriousness of the systematic breach of European users’ fundamental rights, per noyb — nor does it implement the Board’s requirement that the DPC determine the unlawful financial benefits accrued by Meta from running ads that break EU privacy law.

noyb notes that, per EDPB guidelines on calculation of fines (and the text of the final decision put out by the DPC incorporating the Board’s binding decisions), the Irish regulator needed to ensure any fines “counterbalanc[e] the gains from the infringement” and also “impose a fine that exceeds that [unlawfully obtained] amount”.

“In the absence of directions, the [DPC] is unable to ascertain an estimation of the matters identified above. Accordingly, I am unable to take these matters into account for the purpose of this assessment,” is how the DPC’s Helen Dixon dryly dismissed the EDPB’s instruction — a few lines of text that essentially let Meta off the hook on what noyb calculates should have been a penalty set at the maximum possible under the EU’s General Data Protection Regulation (GDPR): 4% of annual revenue. (Or over €4BN in Meta’s case.)

noyb’s letter lays out how it has estimated the total revenue Meta generated, over the 4.5+ year infringement period, on users in the European Economic Area (EEA) — a figure it puts at circa €72.5BN. It says it’s arrived at this estimate by looking at the publicly listed company’s financial reports (and adjusting revenue figures to only reflect users in the EEA, not the European continent as a whole) — querying why the DPC’s far more numerous staff couldn’t have done the same.

“While ‘behavioural advertisement’ does not make up all the revenue of Meta’s overall advertising, it is clear that in any realistic scenario, the revenue from ‘behavioural advertisement’ in the EU overshot the maximum [possible, under GDPR] fine of €4.36BN,” noyb also argues.

In a statement, its honorary chairman, Max Schrems, adds: “By not even checking publicly available information, the DPC gifted €3.97BN to Meta.”

“It took us an hour and a spread sheet to make the calculation,” he went on. “I am sure the Irish taxpayers would not mind having that extra cash, if a DPC employee would have just opened a search engine and done some research.“

noyb’s letter also questions why the DPC apparently failed to use its statutory powers under the regulation to ask the data controller for any information required for the performance of its tasks — which could have provided it with a precise route to estimate how wealthy Meta got by unlawfully processing Europeans’ data.

“Given that SAs [supervisory authorities] can only fine based on the revenue of the last year, and the Irish DPC has taken more than 4.5 years to issue a final decision, Meta has made substantial revenue from violating the law, even if the maximum fine of 4% of the annual turnover is applied,” noyb goes on. “The estimated revenue from advertisements in the EEA of €72,53BN, would only be reduced to €68,17BN if the full 4% would be applied. This clearly makes even a maximum fine of 4% not even remotely ‘effective, proportionate and dissuasive’ in comparison to the unlawful revenue made by Meta IE [Ireland].

“Nevertheless the EDPB and the DPC are bound by Articles 83(1), (2)(k) and (5) GDPR at the same time, meaning that the maximum fine of 4% may not be overstepped but must also be used fully to comply with the conflicting requirements of the GDPR.”

So — tl;dr — even the maximum possible financial penalty under GDPR would not have been remotely dissuasive to Meta in financial terms — given how much more money it was minting by trampling all over European users’ privacy. Yet, the kicker is,Meta didn’t even get fined that (inadequate) maximum amount! Lol!

noyb’s letter presents a neatly calculated and — frankly — damning assessment of high profile enforcement flaws in the GDPR. Flaws that enable Big Tech to play the system by forum shopping for ‘friendly’ regulators who can find endless ways to chew the cud around complaints and spin claims of protocol and procedure into a full blown dance of dalliance and delay, and whose convenient decisions can, at the last, be relied upon to help minimize any damage — in a cynical mockery of due process that’s turned the EU’s flagship data protection framework into a paper tiger where Big Tech’s users’ rights are concerned.

noyb is calling on the EDPB to take “immediate action” against the DPC — to ensure its binding decision “is fully implemented in [or, well, by] Ireland”.

“Given the clear evidence that Meta IE [Ireland] has profited from the violation of Article 6(1) GDPR in vast excess of the maximum fine of 4% under Article 83(5) GDPR and the Irish DPC’s clear breach of the binding decision in this respect, we urge the EDPB and its members to take immediate action against the Irish DPC to ensure that the EDPB decision is fully implemented in Ireland,” it urges.

However this (meta – ha!) complaint by noyb — about the outcome of its 2018 complaint about Meta’s ads — most likely lands at the end of the road as far as regulators are concerned. Next stop: Class-action style litigation?

noyb’s call joins a pile of complaints (and legal actions) targeting the Irish regulator’s failure to rigorously enforce the GDPR against abusive Big Tech business models — including litigation over inaction (also vis-a-vis the behavioral ads industry) and an accusation of criminal corruption (also from noyb), to name two of the barrage of slings and arrows fired at the DPC since the GDPR came into application (on paper) and complainants started the clock on their interminable wait for enforcement.

The DPC was contacted for comment on noyb’s complaint to the EDPB — but it declined to offer a response.

We also reached out to the EDPB. A spokeswoman for the Board told us it “takes note” of noyb’s letter — but declined further comment at this time.

It remains to be seen what action — if any — the steering body will take. Its powers are limited in this context since its competence to intervene in the GDPR enforcement process relates to any objections raised to a lead supervisor’s draft decision (as happened in the Meta ads case).

After a final decision is issued the Board does not carry out a full re-evaluation of a case. So the chance of it being able to do much more here looks slim.

EU law enshrines the independence of Member States’ data protection regulators so the Board essentially has to work with whatever it’s given in a draft decision (and/or any objections raised by other DPAs). Which is why the DPC also sees mileage in challenging the portion of the Board’s binding decision that instructed it to further investigate Meta’s data processing — as it argues that’s jurisdictional overreach.

This structure effectively means a lead DPA can do considerable work to shape GDPR outcomes that impact users all over the bloc — by, for starters, minimizing what they investigate and then, even if they do open a probe, by narrowly scoping these enquiries and limiting what they factor into their preliminary decisions.

In the case of Meta, the DPC did not provide any data on the estimated financial benefit it amassed from its unlawful behavioral ads. Which — once again — looks terribly convenient for the tech giant.

While there’s not much Internet users can do about such a gaping enforcement gap — aside from hoping litigation funders step in and spin up more class-action style lawsuits to sue for damages on these major breaches — EU lawmakers themselves should be very concerned.

Concerned that a flagship piece of the EU’s digital rulebook — one that’s now also a key component at the heart of an expanding tapestry of regulations the bloc has been building up in recent years around data governance, to try to foster trust and get more data flowing in the hopes of fuelling a revolution in homegrown AI innovation — is proving to be such a jelly in the face of systematic law breaking.

Rules that can’t protect or correct aren’t going to impress anyone over the long run. And that means the paper tiger may yet have some teeth: If the GDPR enforcement failures keep stacking up, the sour taste that leaves for EU citizens tired of watching their rights trampled might risk toppling people’s trust in the whole carefully constructed ‘European project’.

Meta dodged a €4BN privacy fine over unlawful ads, argues GDPR complainant by Natasha Lomas originally published on TechCrunch

Twitter finally broke its silence over the first security incident of the Musk era: an alleged data breach that exposed the contact information of millions of users.

In late December, a poster on a popular cybercrime forum claimed to have scraped the email addresses and phone numbers of 400 million Twitter users by way of a zero-day security flaw in Twitter’s systems, previously blamed for exposing at least 5 million Twitter accounts before it was fixed in January 2022. The subsequent sale of another, smaller dataset containing the email addresses associated with more than 235 million Twitter accounts is said to be a cleaned-up version of the alleged dataset of 400 million Twitter users. Researchers warned that the email addresses, which included the details of politicians, journalists and public figures, could be used to dox pseudonymous accounts.

Twitter, or what’s left of the company, addressed the situation last week.

In an unattributed blog post, Twitter said it had conducted a “thorough investigation” and found “no evidence” that the data sold online was obtained by exploiting a vulnerability of Twitter’s systems. An absence of evidence, however, is not vindication, as it’s unclear if Twitter has the technical means, such as logs, to determine if any user data was exfiltrated. Rather, the company said that hackers had likely been circulating a collection of data pulled from past breaches and said the data did not correlate to any of the data obtained by way of exploiting the bug that was fixed in January 2022.

What Twitter is saying may very well be true, but it’s difficult to have confidence in the company’s statement. Twitter’s erratic response raises many of the same questions that regulators will want to know: Who was tasked with investigating this breach, and does Twitter have the resources to do a thorough job?

An important lesson in what not to do

Twitter’s data leak response is a lesson in how not to do cybersecurity by Carly Page originally published on TechCrunch

Britishvolt, a battery manufacturer startup, announced Tuesday that it was declaring bankruptcy, dealing a punishing blow to the United Kingdom’s automotive sector.

The company had been championed by U.K. leaders, who had hoped it would provide a laundry list of benefits: good paying jobs, advanced manufacturing know-how and homegrown battery packs to support the domestic automotive industry. But Britishvolt was beset with delays, and it never came close to its goal of opening a factory that could crank out 38 gigawatt-hours of lithium-ion batteries every year.

In some ways, Britishvolt’s story echoes that of A123 Systems, the U.S. startup that went bust over a decade ago. The upstart battery company pitched a grand vision for bringing large-scale, cutting-edge manufacturing on shore. Politicians latched onto the idea, supporting a company that could provide jobs in a politically advantageous region. They piled on praise and promised lavish subsidies if the company could deliver. But the startup put the cart before the horse, beginning work long before firm demand materialized.

A123 went bankrupt in 2012, and while its collapse was tragic, it didn’t kill the U.S. battery sector. The same might not be true of Britishvolt.

Britishvolt’s bankruptcy is the death knell for the UK’s battery industry by Tim De Chant originally published on TechCrunch

Instagram announced today it’s expanding its selection of time management tools with the launch of a new feature called “Quiet Mode.” The feature aims to reduce users’ anxiety about taking time off from the app by silencing incoming notifications, auto-replying to DMs, and setting your status to ‘In Quiet Mode’ to inform friends that you’re not active on the app at present. The company said it will prompt teen users to enable the feature if they’re using the app late at night.

The update is one of several changes rolling out today, which also include expanded parental control tools and other tools to manage recommendations.

The launches come as Instagram works to make its app less of a target for regulators and lawmakers who have been concerned with social media’s potential harms, particularly for teenage users. To date, Instagram has added several teen safety features, including those to protect teens’ privacy and reduce unwanted adult contact, limit ad targeting, restrict teens’ access to mature content, and others to help parents monitor and manage their teens’ Instagram use through parental controls.

Quiet Mode joins a handful of other screen time management tools Instagram now offers, including daily time spent controls that allow people to track their app use and send themselves alerts, those to configure”take a break” reminders after individual app sessions extend beyond a certain amount of time, and various tools to pause, snooze and unfollow pages, groups, and people to help further reduce engagement with addictive or otherwise unwanted content.

With the new Quiet Mode feature, however, the idea isn’t just to introduce a tool that pushes users to take a break. Instead, it focuses on the real-world impacts that accompany trying to step away for a bit from an app that you regularly use — and one where others expect you to be available.

For young people in particular, Instagram has grown to become a popular messaging tool — so much so that the company in years past launched two different variations on standalone communication apps, Direct and Threads. (The latter was shut down in 2021.) While breaking out messaging as its own separate experience didn’t work out for Instagram, messaging remains a key draw for the main app. For Instagram’s heaviest users, that means not answering DMs is up there with ignoring text messages — it’s something that’s considered rude, even though some teens admit that the expectation to be constantly available can be stressful.

With Quiet Mode, Instagram users can choose to take a break — to study, to sleep, or to otherwise disengage. It’s sort of like the Instagram equivalent of turning your instant messaging light off, for those who remember the AIM and ICQ era. When you exit Quiet Mode, the app will offer a summary of what you missed during your downtime to help you get caught up.

Instagram says teens will be prompted to enable the feature when they spend a “specific” amount of time on Instagram at night, but Quiet Mode will be offered to all users. (Instagram says the prompt will be triggered after a “short” amount of time, but didn’t provide details on what it considers short.)

Quiet Mode is launching first to users in the U.S., United Kingdom, Ireland, Canada, Australia, and New Zealand, and Instagram says it hopes to roll it out to more countries soon.

While Quiet Mode was the highlight of today’s news, Instagram is rolling out a handful of updates as well.

One is the newly added ability for parents to see the accounts their teen has blocked, when using Instagram’s built-in parental control tools. This could make it easier for parents to have discussions with their teens so they can talk about the change, if need be.

Instagram is also letting users better control what shows up for them on the app’s Explore page. This is something that’s algorithmically driven by user behavior, though doesn’t always reflect what a user wishes they were seeing.

In fact, there was a viral thread on Twitter about this subject just the other day, related to a complaint about too much adult-oriented content appearing on some people’s Instagram’s Explore tab (referred to in the thread as the “Discover” tab.). As many people pointed out in the replies, this tab is driven by an algorithm that shows you what you might like, based on your app usage. That means you’ll only see “adult” content if that’s what you view and interact with — meaning those complaining were just “telling on themselves,” the original poster wrote. Other people’s Explore tabs may be filled with kittens or art or tattoos or cooking or fashion, and other innocuous content, users agreed. (The thread also offered a fascinating glimpse into what people’s Explore pages look like, if you’ve ever been curious about the variety.)

Going forward, Instagram says users will be able to hide multiple pieces of unwanted content from Explore at once, which could help those whose pages resemble their behavior but not their actual interests. Plus, if you select “Not Interested” on a post in Explore, Instagram will try to avoid showing you this same type of content going forward elsewhere in the app’s recommendations — like Reels, Search and more.

A final tweak to users’ recommendations will be driven by blocked words.

If you’ve already configured Instagram to hide comments and DMs with certain words, emojis or hashtags, that block will also apply to recommended posts across the app. That means if you block a word like “fitness” or “recipes,” the company explains, it won’t show you content where those words appear in the caption or hashtag.

This seems an attempt to address the problem where searches for things like “workout tips” or “healthy recipes” easily lead users to content associated with extreme dieting and eating disorders. This topic had been the focus of a 2021 Congressional hearing about the harms to teen mental health that comes from using apps like Facebook and Instagram. As U.S. lawmakers have yet to take serious action here, Meta is again attempting to regulate itself on the matter by putting the controls in the hands of the end user, rather than holding itself accountable for algorithmic failures.

While Quiet Mode is only launching in select markets, the other updates are rolling out globally to iOS and Android, Instagram said.

Instagram’s new ‘Quiet Mode’ helps you take a break from the app by Sarah Perez originally published on TechCrunch

People are addicted to credit cards — and it’s no wonder, given the lucrative rewards that many of them offer. But for merchants, credit cards tend to be less appealing. That’s because they’re on the hook for interchange fees, or transaction fees a merchant’s bank must pay whenever a customer uses a card to make a purchase. Some interchange fees can exceed 3%.

That got Eric Shoykhet and Edward Lando thinking. The two entrepreneurs — friends since their first day as Wharton undergraduates — for years closely followed the adoption of open banking and bank account-based payments in Europe. They came to the conclusion the same thing would ultimately transpire in the U.S., and that the timing was right to launch a stateside startup — Link — to ride the wave.

“It became evident through early discussions with partner merchants that [our idea] was a game changer for them,” Shoykhet said. “That made us step on the pedal and recruit a product, engineering and sales team across San Francisco, Austin, Miami and New York City with payments knowledge from a range of backgrounds.”

Link claims to be one of the first companies in the U.S. to enable customers to make online payments using their bank accounts. Since its founding, it’s attracted interest from investors including Valar Ventures, Tiger Global, Amplo, Pareto Holdings, Quiet Capital and Shutterstock co-founder and CEO Jon Oringe. Valar led a $20 million Series A funding round in Link while Tiger led a $10 million seed round; to date, Link’s raised $30 million.

“Link effectively combines the best of cards with the benefits of ACH via open banking,” Shoykhet told TechCrunch in an email interview. “From day one, Link focused on building an enterprise-grade solution that is always available and works as expected every time so merchants can trust us with their payment processing,”

Merchants can build Link into their existing purchase flows, whether web- or app-based. (Link also offers a Shopify app.) Alternatively, merchants can accept payments via a Link-hosted checkout page using a “dynamic links” feature to generate and share payment links with customers.

Link customers pay by bank transfer, sending funds directly from their bank to a merchant’s business account. Link guarantees the funds, taking on customers’ credit risk — an AI model tries to identify potentially fraudulent or risky transactions before they’re processed.

“We offer various dashboards that allow merchants to easily monitor payment activity, generate reports and more,” Shoykhet said. “We also offer APIs for merchants that have specific needs to consume their transaction data in a certain way.”

Link is promising a lot, including reduced chargebacks, reduced churn and coverage of roughly 95% of all bank accounts in the U.S. Whether it delivers on all those fronts remains to be seen, but many merchants — who collectively paid $25 billion in fees last year — appear convinced. Shoykhet says that Link is already processing “several billion” in payment volume for brands including Misfits Market, Play By Point, Thrivos and Passport Parking.

“LinkPay is a complex product that involves interacting with multiple third-party services and managing the state of transactions. However, this complexity is hidden behind a simple software development kit, which is what matters to merchants most,” Shoykhet said.

Shoykhet acknowledges that there’s formidable competition in the payments space — not only from incumbents like Venmo, Amazon and PayPal but from buy now, pay later vendors such as Afterpay and Klarna. Recently, Discover dove into the accounts-to-accounts space, partnering with payments fintech Buy It Mobility so that its partner merchants can accept card-free payments,

One report has the digital payments market growing to a whopping $20 trillion by 2026, driven both by new and existing vendors. Other data suggests volume on ACH — the backbone of U.S.-based electronic money and finance data transfers — increased 8.7% year-over-year alone in 2021, and that transactions facilitated by open banking could hit $116 billion globally by 2026. But Shoykhet welcomes the rivalry.

“LinkPay itself has extremely limited competition in the U.S. currently. There is only one other provider offering something similar — Trustly — however, their main geographic focus is Europe,” Shoykhet said. “[That said,] we anticipate pay-by-bank and account-to-account taking share as merchants look to reduce their payments costs.”

To Shoykhet’s credit, he’s not the only one predicting a rise in account-to-account payments volume. In its 2020 Global Payments Report, FIS’ predicted that account-to-account transfers would make up 20% of global ecommerce payments by this year. And the Open Banking Implementation Entity in the U.K., which creates the software standards to connect banks and fintech companies, reported a 232% increase from March 2021 to March 2022 in “open banking”-enabled account-to-account payments; an estimated 45% of all consumer electronics payments in Europe are now bank-based.

Asked about macroeconomic headwinds, Shoykhet said that he doesn’t anticipate a major impact to Link’s business. He declined to reveal revenue, but — in a potentially encouraging sign — he said that Link plans to grow its workforce from 40 people to 60 by the end of 2023.

“We started in the pandemic, so there isn’t a measurable impact,” Shoykhet added. “An economic slowdown is likely to accelerate adoption of pay-by-bank and Link as companies look to cut costs and focus more on profitability.”

With the funds from the recently-closed Series A, Shoykhet says that Link will launch account verification, which will verify bank accounts and ownership information to bring merchants in compliance with Nacha’s new account validation rule. (Nacha is the organization that manages the development and governance of the ACH network.)

Link raises $30M to help merchants accept direct bank payments by Kyle Wiggers originally published on TechCrunch

Depending on who you ask, generative AI is either massively overhyped or undervalued. Defined as algorithm-driven tech that creates text, art and other forms of media given a prompt, it’s captured the attention of major VC backers who’ve piled hundreds of millions of dollars into firms like Jasper and Stability AI. But generative AI has yet to generate (no pun intended) correspondingly high returns, casting doubt on its near-term profit-making potential.

Emmanuel de Maistre and Hervé Nivon think the problem is the application of the tech rather than the tech itself. While startups such as Stability AI aim to tackle a broad number of use cases with their generative AI, De Maistre and Nivon advocate for a narrower, slightly more focused approach. Their startup — called Scenario — lets artists and game developers create their own image generators trained on the specific style of their games.

Scenario launches today, accessible via the web, mobile app or API.

“Using Scenario, game developers — regardless of the level of technical expertise — can create dozens or hundreds of custom generators capable of producing entirely new game assets that are perfectly style-consistent with a given style or art direction,” De Maistre told TechCrunch in an email interview. “Our solution is the only one available that allows them to train their own AI generator based on a specific art style using first-party training data. So if you’re an independent artist or developer, you can start with a handful of assets in a given style, upload them to Scenario and create a generator specific to those assets.”

De Maistre and Nivon co-founded Scenario in 2021 after spending several years in the 3D modeling and data science industries, respectively. Nivon previously was a solutions architect at Amazon Web Services (AWS) working on AI products while De Maistre sold his other startup, drone analytics firm Redbird, to the since-shuttered Airware. (Nivon was Redbird’s CTO.) Prior to AWS, Nivon was at Accenture, leading “innovation transformation” for the company’s France division.

De Maistre says that he and Nivon were inspired to launch Scenario by generative AI products like OpenAI’s DALL-E 2. The raw power of these tools was “obvious,” De Maistre believed, but the output was too inconsistent to be useful.

“I knew if we could better direct that power, give users more control and consistency, that would instantly be generative AI’s killer application,” De Maistre said. “The gaming industry is the best fit for generative AI — game developers and artists have to continually produce content while time and resources are often limited. That’s why we started Scenario last year. We wanted to provide a solution that lets anyone train their own AI models — generators — using their own data so they can generate game assets faster and more efficiently, while keeping consistency and full control over the process.”

The game industry indeed presents an opportunity for disruption where it concerns generative AI. Gaming requires a high volume of content — much of it artwork. Estimates are hard to come by, but one source pegs the cost of creating art assets for a small-scale game at a few dollars to thousands of dollars.

With Scenario, users can upload a set of visuals that define the characters, items, environments or other assets for a given video game or project. Scenario’s AI engine then learns and adapts to the visuals’ graphic style, generating new assets for games, game prototypes, game marketing materials and more from simple text-based prompts.

In letting developers and artists train their own generators, Scenario hopes to sidestep the major legal challenges emerging around generative AI. Just this week, Getty Images sued Stability AI, the creators of AI art tool Stable Diffusion, for scraping its content allegedly without permission and using it to train art-generating AI systems. Meanwhile, the U.S. Patent and Trademark Office (USPTO) recently moved to revoke copyright protection for an AI-generated comic, saying copyrightable works require clear human authorship.

De Maistre notes that Scenario’s terms and conditions require those on the company’s platform to only use data that they own — for example, data they’ve purchased or have been granted the right to use — or open source alternatives. Scenario also doesn’t claim ownership over customers’ generators or images created on the platform, leaving most trademark — and objectionable content — decisions in users’ hands.

“We advise customers to work with intellectual property (IP) professionals as appropriate to ensure IP and compliance risks are mitigated, especially for commercial projects. We are a design tool and it is the user’s responsibility to ensure compliance with applicable laws and regulations,” De Maistre said.

That Scenario’s attempting to wash its hands of legal liability won’t instill confidence in every customer. But De Maistre claims that 5,000 people have signed up for the platform and that 20,000 more are on a waitlist. Pricing will be usage-based, starting at $20 per month with plans for higher-volume customers to follow.

“Currently, our closest competitors would be generative AI art tools such as Midjourney, DALL-E 2 and Stable Diffusion,” De Maistre said. “But as sophisticated as these images are, they are still evolving to fit the controlled use cases required for the gaming industry, and many users still struggle with keeping a high consistency of the outputs … Our platform has been used to create assets for various types of games, [including] mobile, cards, tabletop role playing, VR and even 3D games.”

Suggesting investors are pleased with the early momentum, Scenario recently raised $6 million in seed funding from Play Ventures (who led the round), Anorak Ventures, Founders, Inc., The VR Fund, Oculus co-founder Brendan Iribe, Twitch founder Justin Kan and Hugging Face founders Clem Delangue and Julien Chaumont. That’s high praise considering Scenario is but one of several startups in AI-generating game asset space; rivals include Poly, Hotpot and Pixela.ai.

Scenario — which has a team of eight people — plans to put the new capital toward bringing on more full-stack engineers, data scientists, and product designers as well as a customer support team. De Maistre believes it’s the fastest way to differentiation, and — with any luck — setting Scenario well ahead of the generative AI pack.

“We believe that generative AI will be as transformational for game development as Photoshop has been for digital photography, but it cannot get there without the same commitment to consistency and ease of use,” De Maistre added in a follow-up email. “We want to open the opportunity this technology brings to the gaming industry: exponentially increased production, dramatically reduced busywork and completely unconstrained creativity from AI-partnered artists.”

Scenario lands $6M for its AI platform that generates game art assets by Kyle Wiggers originally published on TechCrunch

Getting a handle on food costs at an independent restaurant is a constant challenge for owners, and there is a long list of startups, like MarginEdge, OneOrder, TouchBistro, PreciTaste, ConverseNow, Fudo, Owner.com, that have stepped with their solutions.

Zitti’s co-founder Dante DiCicco is coming at this problem, but from a unique standpoint: as a restauranteur. He had watched his parents’ Italian restaurant locations dwindle during the economic downturn in 2007–2008 and now was seeing the global pandemic take a similar toll on restaurants.

While opening a new location for his family’s restaurant and getting all of the food suppliers situated, that’s when it hit DiCicco that this process needed technology.

Fortunately, he knew a little something about that. An executive at Snap, leading the company’s international revenue growth, he leveraged that knowledge and teamed up with Erek Benz, co-founder of real estate marketplace CREXi, to develop Zitti to put independent restaurants on an equal footing, technology-wise, with large chains.

What resulted is a payment software platform that streamlines the transaction between restaurants and food suppliers through payment, price comparison and vendor discoverability tools.

“Food pricing optimization is the future of the restaurant business,” he told TechCrunch. “Much of the emerging technology has focused on ordering and inventory management, but what is severely lacking is the actual business intelligence to help restaurants make smarter purchasing decisions. That’s a big part of our mission.”

Zitti launched in March 2022 after taking in $4 million of pre-seed funds in late 2021. DiCicco’s restaurant and his family’s restaurants were the first beta customers.

In the last two months, the company started charging for its product — $150 per month, per restaurant location — and is seeing “really good sales traction as we ramp up our sales efforts,” DiCicco said.

“Our objective to save the money on their food costs is more than that amount, and ideally many times over, so it’s been received incredibly well,” he added. “We’ve already had a significant amount of conversions from our pilot group to become customers.”

The company is now back with $3.5 million in a seed round co-led by Oceans Ventures and Serena Ventures with Crossbeam, its pre-seed investor, also participating. In total, the company has raised $7.5 million since DiCicco and Benz started working on the company in 2019.

The funding will be deployed into technology development with artificial intelligence and additional automation being added to the platform soon. One of DiCicco’s goals is to be able to show pricing changes in real time and then use AI to predict how a certain product will be priced over the next year.

Meanwhile, Zitti is currently focused on the Southern California and Chicago markets and also sees Austin as an emerging market, DiCicco said.

“The next steps of the company are expanding into new markets, but we are taking a city-by-city approach,” he added. “That will be important as we build density on both the restaurant and supplier side so that we can have more market intelligence and therefore more pricing intelligence.”

Zitti soaks up some funding sauce so restaurants can manage their food supply chain by Christine Hall originally published on TechCrunch

Just a few days after announcing a significant round of layoffs that will impact 18,000 employees, Amazon is trying to find money wherever it can as the company announced that it would end AmazonSmile.

AmazonSmile is a donation program that redirects 0.5% of the cost of all eligible products toward charities. It is a separate website that lets you browse and buy items just like on Amazon.com. But Amazon would keep track of your purchases and donate money on your behalf.

The company started sending an email to Amazon customers announcing the change. AmazonSmile will remain open until February 20, 2023.

“After almost a decade, the program has not grown to create the impact that we had originally hoped. With so many eligible organizations — more than 1 million globally — our ability to have an impact was often spread too thin,” the company wrote.

Since 2013, Amazon has donated $400 million through the AmazonSmile program. Bigger organizations likely received a bigger share of those donations while smaller ones only received a few dollars per year. But nonprofits are not going to say no to $400 million…

Charities that have participated in the AmazonSmile program will receive a one-time donation from Amazon that will be equivalent to three months of AmazonSmile donations. It’s a sort of severance package for nonprofits.

The end of the program is going to have an impact on Amazon’s bottom line in two ways. First, the company no longer has to set aside 0.5% on purchases made on AmazonSmile. Second, there were people actively working on the separate storefront, charity relationships and more. Shutting down AmazonSmile means that the company can lay off some people who were working on the program.

Amazon started informing people who are impacted by the layoffs yesterday. The timing of this announcement means that the end of the AmazonSmile program is directly tied to the company’s biggest-ever round of jobs cuts.

Amazon currently has a market capitalization of $974 billion. In its most recent earnings report, the company announced $2.5 billion in operating income. It wasn’t a record quarter, but Amazon isn’t on the verge of bankruptcy.

Amazon ends charity donation program AmazonSmile by Romain Dillet originally published on TechCrunch

Google has been dealt a significant blow in one of its key overseas markets. India’s Supreme Court on Thursday declined to block an antitrust order that requires the Android-maker to make a series of changes that could topple its financial viability.

India’s apex court rejected to block the ruling against Google by the nation’s antitrust watchdog Competition Commission of India. The court extended the deadline for enforcement of CCI’s order by one week, however.

The matter will now go back to the country’s appellate tribunal, the National Company Law Appellate Tribunal (NCLAT), where Google previously failed to secure any relief. The Supreme Court has directed NCLAT to make its decision by March 31. The challenge for Google is that unless NCLAT reaches a decision in Google’s favor by this month, the tech giant will have to make a series of changes to Android.

The Competition Commission of India late last year slapped two fines against Google, alleging the Android-maker abused the Play Store’s dominant position in the country and required Android device makers to pre-install its entire Google Mobile Suite.

The CCI has ordered Google to not require licensing of its Play Store to be linked with mandating installation of several Google apps such as Chrome and YouTube. The watchdog has also ordered Google to allow removal of all its apps from phones and give smartphone users the ability to change their search engine provider. The CCI also fined Google $162 million in its first order.

Google warned earlier this month that if the Indian antitrust watchdog’s ruling is allowed to progress it would result in devices getting expensive in the South Asian market and lead to proliferation of unchecked apps that will pose threats for individual and national security, escalating its concerns over the future of Android in the key overseas region.

“Predatory apps that expose users to financial fraud, data theft and a number of other dangers abound on the internet, both from India and other countries. While Google holds itself accountable for the apps on Play Store and scans for malware as well compliance with local laws, the same checks may not be in place for apps sideloaded from other sources,” the company said.

Google is facing mounting scrutiny from governments across the globe as policymakers begin to worry about the reach of technology giants and assess whether that is in detriment to local companies. Google lost its appealagainst a record $4.3 billion fine in EU for using the dominance of Android to thwart competition. It’s also subject to Germany’s new regulation that targets large companies.

India’s top court rejects Google plea to block Android antitrust ruling by Manish Singh originally published on TechCrunch

Music streaming platforms all claim to use both artificial intelligence and manual curation to find new songs from emerging artists. But users often have to listen to many songs just to find some likable tracks — that’s because they don’t have any control over the recommendation algorithm. Romanian developer duo Alex Ruber and Andrei Patru have developed an app called Smores that improves this process and helps you easily add new music to your library.

Smores is a free iOS app that lets users listen to a short clip from a song based on their listening history. Users can skip through the tracks using a vertical feed just like TikTok.

The app connects to your Spotify account and uses the Spotify API to find new songs for you. If you enjoy a song clip, you can tap on the like button and it will be added to a playlist called “Smores discovery” in your Spotify account. Alternatively, you can also add the song to one or many of your pre-existing playlists.

The developers told TechCrunch in an email that they set to build the app to discover new music themselves. So they launched the first version of Smores last September.

“We love discovering new music, but we were stuck in our recommendation bubbles and it took too long to sift through the sheer volume of new music coming out. At the same time, we had a hunch: that you only need to listen to the ‘right’ snippet of a song to know if you like it or not: Shazam’s popularity points to this being the case,” they said.

The duo said that they wanted to have more control over the discovery algorithm and build transparency into the app. To that end, Smores has a ton of in-built controls to change users’ recommendation feed. Users can filter out suggestions based on their top six microgenres of the month. These change as they listen to more music and like more songs on the app.

The app’s advanced settings enable you to define snippet length (from 5 seconds to 60 seconds); limit discovery based on the number of followers an artist has on Spotify; and filter out songs by BPM (beats per minute), song key, and release date.

One of the neat things about the app is that it makes sure that you’re not going to listen to the same song ever again. Plus, the developers said that they have tweaked the algorithm in such a way that it figures out the “best” part of the song to play in a snippet. They said that a lot of users tend to like the song in just five seconds of hearing it if the app plays the right preview.

Retaining users and future plans

Music discovery apps are fun to use but it’s hard to build an audience that regularly uses an app. Despite this challenge, the developers said they have managed to retain a good amount of users (7% for week eight) and they have heard positive things from regular users.

“It’s true that cadence is low for music discovery apps in general. The casual listener will actively discover new music maybe once every 3 months. Casual listeners, DJs, and playlist curators rave about how much they love the ease of use, the speed, the convenience, and the quality of our recommendations,” they said.

Currently, the team is focused on building features like Smores radio and integrating Apple Music or other streaming platforms. Down the line, they want to introduce an Android version and possibly a premium tier — though they haven’t nailed down the paid features.

More AI in music

Music fans have often complained about AI’s growing role in music discovery and distribution. And yet, companies and app developers have relied on AI more — but they use it to give more control over algorithms with buttons and filters.

Bytedance’s music app Resso — currently available only in India, Brazil, and Indonesia — banks on a vertical feed and the company’s proven AI prowess to have casual listeners find new artists. The Chinese tech giant is also aiming to launch TikTok Music globally — AI-powered music suggestions will likely play a critical role in the service.

App developers are also taking the help of AI to introduce features to music apps. LineupSupply, an app that converted festival posters into playlists, switched its name to Playlist AI. The app also introduced a new feature that lets you write a prompt like “Dance artists who were popular in 1990s” to generate a playlist.

Smores is a music discovery app with a TikTok-like feed by Ivan Mehta originally published on TechCrunch