Month: February 2023

The Biden administration approved more than $23 billion worth of licenses for companies to ship U.S. goods and technology to blacklisted Chinese companies in the first quarter of 2022, a Republican lawmaker said Tuesday.

The data comes amid growing pressure on the administration of Democratic President Joe Biden to further expand a broad crackdown on shipments of sensitive U.S. technology to China from Republican lawmakers, who now control the House of Representatives.

“Overwhelmingly, [the Commerce Department] continues to grant licenses that allow critical U.S. technology to be sold to our adversaries,” Republican Representative Michael McCaul, chair of the House of Representatives Foreign Affairs Committee, said at a hearing on combating the generational challenge of Chinese aggression, as he grilled U.S. officials for allowing the licenses to be approved.

“How does this align with your statement that ‘we’re doing everything within [the Commerce Department’s] power to prevent sensitive U.S. technologies from getting in the hands of [Chinese] military, intelligence services or other parties?’”

McCaul said the Commerce Department, which oversees export controls, denied only 8% of license requests to sell to companies on the U.S. trade blacklist during the January to March period last year.

Commerce Department official Alan Estevez, who oversees U.S. export policy, told the hearing that a Trump-era policy that allows China’s blacklisted telecommunications equipment maker Huawei to receive some U.S. technology below the “5G level” is “under assessment.”

Estevez also described TikTok as a “threat,” noting that a powerful committee that reviews foreign investments in the United States was dealing with how to handle the popular Chinese-owned social media app.

TikTok said in a statement the company has been working with the Committee on Foreign Investment in the United States “for over two years on a plan to address national security concerns about TikTok in the U.S.”

Democratic Congressman Gregory Meeks cautioned against reading too much into the licensing numbers, noting that the approval and denial data provides no information about the transactions.

The data comes a week after the Biden administration added new Chinese companies to the trade blacklist for aiding Russia’s military and months after announcing a sweeping new policy aimed at dramatically curbing shipments of chips and chipmaking tools to China.

Chinese tech giant Huawei Technologies Co. Ltd. was added to a trade blacklist known as the entity list by former Republican President Donald Trump in 2019, amid allegations of sanctions violations, spying capabilities, and intellectual property theft.

Suppliers of most companies added to the entity list see their requests to ship to the targeted firms denied, but the Trump administration implemented a special policy for Huawei, pledging to deny it access to some things like 5G chips but allow it to receive other items, such as 4G chips.
…

Mexico’s president announced Tuesday that electric car company Tesla has committed to building a major plant in the industrial hub of Monterrey in northern Mexico.

President Andrés Manuel Lopez Obrador said the promise came in phone calls he had Friday and Monday with Tesla head Elon Musk. It would be Tesla’s third plant outside the U.S., after one in Shanghai and one near Berlin.

Lopez Obrador had previously ruled out such a plant in the arid northern state of Nuevo Leon, where Monterrey is the capital, because he didn’t want water-hungry factories in a region that suffers water shortages. But he said Musk’s company had offered commitments to address those concerns, including using recycled water.

“There is one commitment that all the water used in the manufacture of electric automobiles will be recycled water,” Lopez Obrador said.

The president said it would be a large investment without giving a dollar amount and did not specify what the plant would produce. He said it was unclear if it would produce batteries, an industry Mexico desperately wants despite not having a current domestic supply of lithium.

Lopez Obrador said the company planned to release details on Wednesday.

“This is going to mean a considerable investment and many, many jobs,” he said. “My understanding is that it will be very big.”

Investment estimated to be $10 billion

Monterrey is highly industrialized and close to the U.S. border and had long been considered the frontrunner for any Tesla investment.

But the city suffered water shortages in 2022 that were so severe that many homes went weeks with intermittent or no water supply. The government is building a 100-kilometer pipeline to bring in water from a dam.

Lopez Obrador had previously said his government “simply won’t grant permits” for any new plants there. Apparently Musk’s proposal overrode the president’s stance.

Gabriela Siller, chief economist at Nuevo Leon-based Banco Base, said the Tesla investment — which she estimated could be worth $10 billion — represented such a large amount that it trumped any of the president’s objections.

Lopez Obrador “could not turn this down. It would have had a very big political cost for him,” said Siller.

The announcement was a disappointment for more water-rich southern states that had begun jockeying for the Tesla plant after Lopez Obrador’s comments last week.

‘WE ALL WIN!’

The governor of Nuevo Leon state, where billboards went up last year saying, “Welcome Tesla,” crowed about Tuesday’s announcement.

“Mexico won, Nuevo Leon (NL) won, WE ALL WIN!” Governor Samuel García wrote on his Twitter account.

Lopez Obrador said Mexico wouldn’t match any U.S. subsidies to win the Tesla plant, referring to U.S. incentives under the 2022 Inflation Reduction Act.

“We cannot give subsidies like that,” the president said, adding “Mr. Musk was very attentive, respectful” of Mexico’s position.

Tesla is expected to announce plans for its “Gen 3” vehicle platform on Wednesday at its annual investor day at a factory near Austin, Texas.

Musk previously has floated the idea of building a $25,000 electric vehicle, which would cost about $20,000 less than the current Model 3, now Tesla’s least-expensive car. Many automakers build lower-cost models in Mexico to save on labor costs and protect profit margins.

Musk also is expected to show off the company’s production line at the Austin plant, as well as discuss long-term expansion plans, how it will spend capital investment dollars, and other subjects.
…

Holding the bulky brick cellphone he’s credited with inventing 50 years ago, Martin Cooper thinks about the future.

Little did he know when he made the first call on a New York City street from a thick gray prototype that our world — and our information — would come to be encapsulated on a sleek glass sheath where we search, connect, like and buy.

He’s optimistic that future advances in mobile technology can transform human lives but is also worried about risks smartphones pose to privacy and young people.

“My most negative opinion is we don’t have any privacy anymore because everything about us is now recorded someplace and accessible to somebody who has enough intense desire to get it,” the 94-year-old told The Associated Press at MWC, or Mobile World Congress, the world’s biggest wireless trade show where he was getting a lifetime award this week in Barcelona.

Besides worrying about the erosion of privacy, Cooper also acknowledged the negative side effects that come with smartphones and social media, such as internet addiction and making it easy for children to access harmful content.

But Cooper, describing himself as a dreamer and an optimist, said he’s hopeful that advances in cellphone technology have the potential to revolutionize areas like education and health care.

“Between the cellphone and medical technology and the Internet, we are going to conquer disease,” he said.

It’s a long way from where he started.

Cooper made the first public call from a handheld portable telephone on a Manhattan street on April 3, 1973, using a prototype device that his team at Motorola had started designing only five months earlier.

Cooper used the Dyna-TAC phone to famously call his rival at Bell Labs, owned by AT&T. It was, literally, the world’s first brick phone, weighing 2.5 pounds and measuring 11 inches. Cooper spent the best part of the next decade working to bring a commercial version of the device to market.

The call help kick-start the cellphone revolution, but looking back on that moment 50 years later, “we had no way of knowing this was the historic moment,” Cooper said.

“The only thing that I was worried about: ‘Is this thing going to work?’ And it did,” he said Monday.

While blazing a trial for the wireless communications industry, he hoped that cellphone technology was just getting started.

Cooper said he’s “not crazy” about the shape of modern smartphones, blocks of plastic, metal and glass. He thinks phones will evolve so that they will be “distributed on your body,” perhaps as sensors “measuring your health at all times.”

Batteries could even be replaced by human energy.

“The human body is the charging station, right? You ingest food, you create energy. Why not have this receiver for your ear embedded under your skin, powered by your body?” he imagined.

Cooper also acknowledged there’s a dark side to advances — the risk to privacy and to children.

Regulators in Europe, where there are strict data privacy rules, and elsewhere are concerned about apps and digital ads that track user activity, allowing tech and digital ad companies to build up rich profiles of users.

“It’s going to get resolved, but not easily,” Cooper said. “There are people now that can justify measuring where you are, where you’re making your phone calls, who you’re calling, what you access on the Internet.”

Smartphone use by children is another area that needs limits, Cooper said. One idea is to have “various internets curated for different audiences.”

Five-year-olds should be able to use the internet to help them learn, but “we don’t want them to have access to pornography and to things that they don’t understand,” he said.

The inspiration for Cooper’s cellphone idea was not the personal communicators on Star Trek, but comic strip detective Dick Tracy’s radio wristwatch. As for his own phone use, Cooper says he checks email and does online searches for information to settle dinner table arguments.

However, “there are many things that I have not yet learned,” he said. “I still don’t know what TikTok is.”
…

Europe’s existing telecom networks aren’t up to the job of handling surging amounts of internet data traffic, a top European Union official said Monday, as he defended a consultation on whether Big Tech companies should help pay for upgrades.

The telecom industry needs to reconsider its business models as it undergoes a “radical shift” fueled by a new wave of innovation such as immersive, data-hungry technologies like the metaverse, Thierry Breton, the European Commission’s official in charge of digital policy, said at a major industry expo in Barcelona called MWC, or Mobile World Congress.

Breton’s remarks came days after he announced a consultation on whether digital giants should help contribute to the billions needed to build the 27-nation bloc’s future communications infrastructure, including next-generation 5G wireless and fiber-optic cable connections, to keep up with surging demand for digital data.

“Yes, of course, we will need to find a financing model for the huge investments needed,” Breton said in a copy of a keynote speech at the MWC conference.

Telecommunications companies complain they have had to foot the substantial costs of building and operating network infrastructure only for big digital streaming platforms like Netflix and Facebook to benefit from the surging consumer demand for online services.

“The consultation has been described by many as the battle over fair share between Big Telco and Big Tech,” Breton said. “A binary choice between those who provide networks today and those who feed them with the traffic. That is not how I see things.”

Big tech companies say consumers could suffer because they’d end up paying twice, with extra fees for their online subscriptions.

Breton denied that the consultation was an attack on Big Tech or that he was siding with telecom companies.

“I’m proposing a new approach,” he later told reporters. Topics up for discussion include how much investment is needed and whether regulations need to be changed, he said.

“We will have zero taboo,” Breton said, referring to the conference’s approach that no topic is off limits. “Do we need to adapt it? Do we need to discuss who should pay for what? This is exactly what is the consultation today.”
…

A top U.S. cybersecurity official launched a warning shot at major technology companies, accusing them of “normalizing” the release of flawed and unsafe products while allowing the blame for safety issues, security breaches and cyberattacks to fall on their customers.

Cybersecurity and Infrastructure Security Agency (CISA) Director Jen Easterly called Monday for new rules and legislation to hold technology and software companies accountable for selling products that she says are released despite known vulnerabilities.

While massive hacking campaigns by China and other adversaries, including Russia, Iran and North Korea, are a major problem, “cyber intrusions are a symptom rather than a cause,” Easterly told an audience at Carnegie Mellon University in Pittsburgh.

“The cause, simply put, is unsafe technology products,” she said. “The risk introduced to all of us by unsafe technology is frankly much more dangerous and pervasive than the [Chinese] spy balloon, but somehow we’ve allowed ourselves to accept it.”

The push for regulation and legislation is not entirely new. Both Easterly and former National Cyber Director Chris Inglis, who stepped down earlier this month, warned during their confirmation hearings more than a year and a half ago that government action could be required if private companies refused to do more.

“Enlightened self-interest, that’s apparently not working. … Market forces, that’s apparently not working,” Inglis said at the time. 

Now, with China running a “massive and sophisticated” hacking program, and threats from other countries and from cyber criminals constantly growing, “we have to make a fundamental shift,” Easterly said.

CISA is in the process of laying out a set of core principles, Easterly said. Some of the most critical are to make sure that the burden for safety is never left solely to tech and software customers, that manufacturers be transparent about problems and how to fix them, and that products be “secure by design and secure by default.”

“Technology must be purposefully designed and developed and built and tested to significantly reduce the number of exploitable flaws before they’re introduced into the market for broad use,” Easterly said. 

“Ultimately such a transition to secure-by-design and secure-by-default products will help organizations and technology providers, because it’ll mean less time fixing problems, more time focusing on innovation and growth, and importantly it’ll make life much harder for our adversaries.”

Easterly said the U.S. government is already using its purchasing power to help make the change, requiring companies that want government contracts to meet higher security requirements.

She also praised a handful of companies, including Apple, Google, Mozilla and Amazon Web Services for moving to a more secure model but called efforts by others, including Twitter and Microsoft when it comes to the use of multifactor authentication, “disappointing.” 

VOA contacted Microsoft and Twitter for their reaction to Easterly’s specific criticism. Neither had provided a response as of the time of publication.

“We’ve normalized the fact that technology products are released to market with dozens, hundreds or thousands of defects when such poor construction would be unacceptable in any other critical field,” Easterly said, adding other industries have found ways to change.

“For the first half of the 20th century, conventional wisdom held that car accidents were solely the fault of bad drivers,” she said. “Cars today are designed to be as safe as possible. … Nobody would think of purchasing a car today that didn’t have seatbelts or airbags included as standard features, and no one would accept paying extra to have these basic security features installed.” 
…

The big beasts of the telecom industry kicked off their most important annual get-together in Barcelona on Monday, promising to lead a “tsunami of innovation”, as they try to shrug off a major slump across the technology sector.

Some 80,000 delegates are expected at the four-day Mobile World Congress (MWC), which is back to near full strength following years of pandemic-related disruption.

Industrial titans like Huawei, Nokia and Samsung are set to showcase their latest innovations, flanked by smartphone makers like Oppo and Xiaomi and network operators like Orange, Verizon and China Mobile.

“We are at the doors of a new change of era driven by the intersection of Telco, Computing, Artificial Intelligence and Web3,” said Jose Maria Alvarez-Pallete, boss of Spanish operator Telefonica and current chairman of industry body GSMA, which organizes the Barcelona event.

He promised the telecoms industry would be at the forefront of the “tsunami of innovation”, adding: “Without telcos there is no digital future.”

But many of the firms are more concerned with finding a path back to profit as the global economy stutters and the wider tech sector slashes thousands of jobs.

In the first clear sign that the ills of the wider tech sector are reaching telecoms, equipment maker Ericsson announced 8,500 layoffs last week.

Overall sales of smartphones last year slumped by 11.3 percent compared with 2021, according to the IDC consultancy.

Research firm Gartner reckons sales of smartphones, tablets and computers will fall again by four percent this year.

And network operators are still struggling to make 5G pay, years after they spent billions in government auctions for the right to use the bandwidth.

‘Unsustainable situation’ 

A hugely popular idea for many at the show is to get the owners of bandwidth-hungry platforms like YouTube, Netflix and Facebook to pay network operators a “fair share”.

Christel Heydemann, boss of French operator Orange, said the five largest users — which she did not name — account for 55% of daily traffic on European networks, costing telecoms firms 15 billion euros ($16 billion) a year.

She said it was an “unsustainable situation” and welcomed a public consultation launched by EU commissioner Thierry Breton last week.

But Breton told the MWC on Monday that it was not a “binary choice” or a battle between telecoms and big tech.

He said the idea was for everyone to make sure Europe had the best possible network by 2030 and warned that telecoms firms “will have to adapt to survive”.

Critics of the “fair share” narrative point out that customers already pay the operators for use of their networks.

Netflix boss Greg Peters, who is unlikely to be enthusiastic about the fair share proposal, is expected at the MWC on Tuesday.

Huawei center stage 

The organizers are trumpeting the return of Chinese delegates as a vital boon to the event.

Chinese firms heavily sponsor the MWC and Huawei is once again getting pride of place, this time hosting the biggest dedicated pavilion in the event’s decades-long history.

The Chinese tech giant was the second biggest smartphone maker in the world in 2020 but retreated after US regulators accused it of being controlled by Beijing.

The firm is now under pressure in Europe, where Breton and other commissioners are pushing for its equipment to be removed from 5G network infrastructure.

Huawei boss Eric Xu said before the event he would use the MWC to display products that would “help carriers meet evolving demand and unleash more opportunities for new growth”.

In total, GSMA said the four-day show would host almost 750 operators and manufacturers and 2,000 exhibitors.
…

Twitter Inc has laid off at least 200 employees, or about 10% of its workforce, the New York Times reported late on Sunday, in its latest round of job cuts since Elon Musk took over the micro-blogging site last October. 

The layoffs on Saturday night impacted product managers, data scientists and engineers who worked on machine learning and site reliability, which helps keep Twitter’s various features online, the NYT report said, citing people familiar with the matter. 

Twitter did not immediately respond to a Reuters request for comment. 

The company has a headcount of about 2,300 active employees, according to Musk last month. 

The latest job cuts follow a mass layoff in early November, when Twitter laid off about 3,700 employees in a cost-cutting measure by Musk, who had acquired the company for $44 billion. 

Musk said in November that the service was experiencing a “massive drop in revenue” as advertisers pulled spending amid concerns about content moderation. 

Twitter recently started sharing revenue from advertisements with some of its content creators. 

Earlier in the day, The Information reported that the social media platform laid off dozens of employees on Saturday, aiming to offset a plunge in revenue. 
…

NASA and SpaceX postponed a planned Monday launch of a four-member crew to the International Space Station due to a ground systems issue.

The decision came less than three minutes before the spacecraft was due to lift off from NASA’s Kennedy Space Center in Cape Canaveral, Florida.

A backup launch date had been set for Tuesday, but NASA said due to expected unfavorable weather conditions the next launch attempt will be March 2. 

The four-person crew includes two Americans, one Russian and one astronaut from the United Arab Emirates.

NASA said their planned six-month mission includes a range of scientific experiments including studying how materials burn in microgravity, collecting microbial samples from outside the space station and “tissue chip research on heart, brain, and cartilage functions.”
…

Mexico is undergoing a fevered competition among states to win a potential Tesla facility in jostling reminiscent of what happens among U.S. cities and states vying to win investments from tech companies.

Mexican governors have gone to extremes, like putting up billboards, creating special car lanes or creating mock-ups of Tesla ads for their states.

And there’s no guarantee Tesla will build a full-fledged factory. Nothing is announced, and the frenzy is based mainly on Mexican officials saying Tesla boss Elon Musk will have a phone call with Mexican President Andrés Manuel López Obrador.

The northern industrial state of Nuevo Leon seemed to have an early edge in the race.

It painted the Tesla logo on a lane at the Laredo-Colombia border crossing into Texas last summer and is erecting billboards in December in the state capital, Monterrey, that read “Welcome Tesla.”

The state governor’s influencer wife, Mariana Rodriguez, was even shown in leaked photos at a get-together with Musk.

However, López Obrador appeared to exclude the semi-desert state from consideration Monday, arguing he wouldn’t allow the typically high water use of factories to risk prompting shortages there.

That set off a competitive scramble among other Mexican states. The governors’ offers ranged from crafty proposals to near-comic ones.

“Veracruz is the only state with an excess of gas,” quipped Gov. Cuitláhuac García of the Gulf Coast state, before quickly adding “gas … for industrial use, for industrial use!”

A latecomer to the race, García had to try harder: He noted Veracruz was home to Mexico’s only nuclear power plant. And he claimed Veracruz had 30% of Mexico’s water, though the National Water Commission puts the state’s share at around 11%.

The governor of the western state of Michoacan wasn’t going to be left out. Gov. Alfredo Ramírez Bedolla quickly posted a mocked-up ad for a Tesla car standing next to a huge, car-sized avocado — Michoacan’s most recognizable product — with the slogan “Michoacan — The Best Choice for Tesla.”

“We have enough water,” Ramírez Bedolla said in a television interview he did between a round of meetings with auto industry figures and international business representatives.

Michoacan also has an intractable problem of drug cartel violence. But similar violence in neighboring Guanajuato state hasn’t stopped seven major international automakers from setting up plants there.

Nuevo Leon Gov. Samuel García had to think fast to avoid being shut out entirely.

García reached out to the western state of Jalisco, whose governor, Enrique Alfaro, belongs to the same small Citizen’s Movement party. Together, the two came up with an alliance Thursday that would allow trucks from Jalisco preferential use of Nuevo Leon’s border crossing, the same one where a “Tesla” lane appeared last year.

Jalisco has a healthy foreign tech sector, but most importantly, it has more water than Nuevo Leon.

López Obrador’s focus on water might be more about politics than about droughts, said Gabriela Siller, chief economist at Nuevo Leon-based Banco Base. She said the president appeared to be trying to steer Tesla investment to a state governed by his own Morena party, like Michoacan or Veracruz.

That could be a dangerous game, Siller said.

“Tesla could say it’s not somebody’s toy to be moved around anywhere, and it could decide not to come to Mexico,” she said.

There are doubts that whatever Musk eventually does announce will be an auto assembly plant. Foreign Relations Secretary Marcelo Ebrard said his understanding is that it won’t be a plant, but rather an ecosystem of suppliers.

Musk at times has floated the idea of building a $25,000 electric vehicle that would cost about $20,000 less than the current Model 3, now Tesla’s least-expensive car. Many automakers build lower-cost models in Mexico to save on labor costs and protect profit margins.

A Tesla investment could be part of “near shoring” by U.S. companies that once manufactured in China but now are leery of logistical and political problems there. That those companies will now turn to Mexico represents the Latin American country’s biggest foreign investment hope.

“The fight among states to attract investments from this nearshoring phenomenon is going to be tough, complicated,” Michoacan’s Ramírez Bedolla said.

As Ramírez Bedolla put it, “wherever Tesla sets up, it is going to be big news in Mexico.”
…

The latest folding-screen smartphones, immersive metaverse experiences, AI-powered chatbot avatars and other eye-catching technology are set to wow visitors at the annual MWC wireless trade fair that kicks off Monday.

The four-day show, held in a vast Barcelona conference center, is the world’s biggest and most influential meeting for the mobile tech industry. The range of technology set to go on display illustrates how the show, also known as Mobile World Congress, has evolved from a forum for mobile phone standards into a showcase for new wireless tech.

Organizers are expecting as many as 80,000 visitors from as many as 200 countries and territories as the event resumes at full strength after several years of pandemic disruptions.

Here’s a look at what to expect:

Metaverse

There was a lot of buzz around the metaverse at last year’s MWC and at other recent tech fairs like last month’s CES in Las Vegas. Expect even more at this event.

Several companies are planning to show off their metaverse experiences that will allow users to connect with each other, attend events far away, or enter fantastical new online worlds.

Software company Amdocs will use virtual and augmented reality to give users a “metatour” of Dubai. Other tech and telecom companies promise metaverse demos to help with physical rehab, virtually try on clothes, or learn how to fix aircraft landing gear.

The metaverse’s popularity exploded after Facebook founder Mark Zuckerberg in late 2021 exalted it as the next big thing for the internet and his company. Lately, though, doubts have started to creep in.

“All the business models around the metaverse are a big question mark right now,” said John Strand, a veteran telecom industry consultant.

Artificial intelligence

AI has caught the tech world’s attention thanks to the dramatic advances in new tools like ChatGPT that can hold conversations and generate readable text. Expect artificial intelligence to be deployed as an “overused buzzword” at MWC, said Ben Wood, principal analyst at CCS Insight.

Companies are promising to show how they’re using AI to make home Wi-Fi networks more energy efficient or sniff out fakes.

Microsoft’s press representatives have hinted that they might have a demonstration of ChatGPT but haven’t provided any details. The company added AI chatbot technology to its Bing search engine but scrambled to make fixes after it responded with insults or wrong answers to some users who got early access.

Startups will demo their own AI-powered chat technology: D-ID will show off their eerie “digital human” avatars, while Botslovers says its service promises to “free humans from boring tasks.”

Not just smartphones

MWC hit its stride in the previous decade as the smartphone era boomed, with device makers competing for attention with glitzy product launches. Nowadays, smartphone innovation has hit a plateau and companies are increasingly debuting phones in other ways.

Attention at the show is focusing on potential uses for 5G, the next generation of ultrafast wireless technology that promises to unlock a wave of innovation beyond just smartphones, such as automated factories, driverless cars and smart cities.

“Mobile phones will still be a hot topic at MWC, but they’ve become a mature, iterative and almost boring category,” Wood said. “The only excitement will come from the slew of foldable designs and prototypes, but the real size of the market for these premium products remains unclear.”

Device launches will be dominated by lesser-known Chinese brands such as OnePlus, Xiaomi, ZTE and Honor looking to take market share from the market leaders, Apple and Samsung.

Chinese presence

Chinese technology giant Huawei will have a major presence at MWC, despite being blacklisted by the Western governments as part of a broader geopolitical battle between Washington and Beijing over technology and security.

Organizers say Huawei will have the biggest presence at the show among some 2,000 exhibitors. That’s even after the U.S. pushed allies to get their mobile phone companies to block or restrict Huawei’s networking equipment over concerns Beijing could induce the company to carry out cybersnooping or sabotage critical communications infrastructure.

Huawei, which has repeatedly denied those allegations, also has been squeezed by Western sanctions aimed at starving it of components like microchips.

Analysts say one message that Huawei could be sending with its oversized display is defiance to the West.
…

Google is blocking some Canadian users from viewing news content in what the company said is a test run of a potential response to a Canadian government’s online news bill.

Bill C-18, the Online News Act, would require digital giants such as Google and Meta, which owns Facebook, to negotiate deals that would compensate Canadian media companies for republishing their content on their platforms.

The company said it is temporarily limiting access to news content for under 4% of its Canadian users as it assesses possible responses to the bill. The change applies to its ubiquitous search engine as well as the Discover feature on Android devices, which carries news and sports stories.

All types of news content are being affected by the test, which will run for about five weeks, the company said. That includes content created by Canadian broadcasters and newspapers.

“We’re briefly testing potential product responses to Bill C-18 that impact a very small percentage of Canadian users,” Google spokesman Shay Purdy said in a written statement on Wednesday in response to questions from The Canadian Press.

The company runs thousands of tests each year to assess any potential changes to its search engine, he added.

“We’ve been fully transparent about our concern that C-18 is overly broad and, if unchanged, could impact products Canadians use and rely on every day,” Purdy said.

A spokeswoman for Canadian Heritage Minister Pablo Rodriguez said Canadians will not be intimidated and called it disappointing that Google is borrowing from Meta’s playbook. Last year, that company threatened to block news off its site in response to the bill.

“This didn’t work in Australia, and it won’t work here because Canadians won’t be intimidated. At the end of the day, all we’re asking the tech giants to do is compensate journalists when they use their work,” spokeswoman Laura Scaffidi said in a statement Wednesday.

“Canadians need to have access to quality, fact-based news at the local and national levels, and that’s why we introduced the Online News Act. Tech giants need to be more transparent and accountable to Canadians.”

Rodriguez has argued the bill, which is similar to a law that Australia passed in 2021, will “enhance fairness” in the digital news marketplace by creating a framework and bargaining process for online behemoths to pay media outlets.

But Google expressed concerns in a Parliament committee that the prospective law does not require publishers to adhere to basic journalistic standards, that it would favor large publishers over smaller outlets and that it could result in the proliferation of “cheap, low quality, clickbait content” over public interest journalism.

The company has said it would rather pay into a fund, similar to the Canada Media Fund, that would pay news publishers indirectly.

The bill passed the Canadian House of Commons in December and is set to be studied in the Senate in the coming months.
…