US court passes controversial social media law; SoftBank’s Vision funds lost 3.5 billion yen

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In today’s ExchangeWire topical summary: A US appeals court has passed controversial HB 20 regarding social media content moderation; SoftBank reports record losses of ¥3.5 billion from its two Vision funds; and Apple loses its status as the world’s most valuable company.

US court passes controversial social media moderation law

HB 20, a controversial Texas social media moderation law, has been passed by a US appeals court, despite calls against the bill from the tech industry. The law was initially rejected in 2021, following appeals from NetChoice and the Computer and Communications Industry Association (CCIA), but the US Fifth Circuit Court of Appeals ruled in favor of the prosecutor General of Texas, Ken Paxton, Wednesday, May 11.

Under HB 20, Paxton’s office and Texas residents can now take legal action against social networks that use “the user’s or another person’s point of view” to moderate, among other offenses. HB 20 applies to websites that have more than 50 million monthly active users and rely primarily on user-generated content, such as tech giants Facebook and Twitter.

Critics of the law have warned that HB 20 violates the First Amendment rights of private businesses. Following the law’s passage, the Knight First Amendment Institute noted that “much of user content expresses a point of view”, and therefore enforcing HB 20 could prevent sites like Twitter , Facebook, Reddit, Tinder and Yelp to enforce their community standards, including banning hate speech.

“Texas law violates the First Amendment because it forces social media companies to post speech they don’t want to post. Worse, the First Amendment theory put forward by Texas in this case would give the government broad power to censor and distort public discourse,” said Scott Wilkens, senior counsel for the Knight First Amendment Institute.

“We are evaluating our options and plan to appeal the order immediately,” commented Carl Szabo, vice president and general counsel of NetChoice.

SoftBank’s Vision funds suffer historic losses of 3.5 billion yen

SoftBank reported that its Vision Funds conceded a full-year loss of 3.5bn yen (£21.9bn)as the company continues to grapple with Beijing’s continued crackdown on the tech industry and rising interest rates.

The historic losses plunged the multinational conglomerate into a record quarterly loss of 2.1trillion yen (£13.1bn).

“The investment environment remains challenging, dominated by rapidly rising inflation, increasingly complex geopolitical risk and a global energy shock,” SoftBank said in response to the losses.

A $100bn (£81.1bn) investment vehicle launched 5 years ago, SoftBank’s first Vision Fund was intended to be the first of a host of funds launched and managed by the company . The Vision Fund’s image was somewhat shaken, however, when a number of its notable bets failed, including office-sharing company WeWork.

SoftBank’s second Vision Fund was announced in 2019, but failed to attract financial support.

SoftBank’s losses, while staggering, aren’t unique: The past few months have been equally tough for many tech giants, including Chinese ride-hailing company Didi Chuxing, whose shares have fallen roughly half. of their value. South Korean e-commerce platform Coupang also saw its shares tumble around 40% amid rising interest rates and Beijing’s tighter grip on the tech sector.

Selling tech is costing Apple its most valuable corporate position

Multinational technology giant Apple has lost its status as the world’s most valuable company. The position was scooped up by Aramco, a Saudi oil and gas producer, from whom Apple poached the top spot nearly two years ago.

Apple shares have been on a steady decline since early 2022, when the iPhone maker’s tech stock selloff rattled investors. Apple shares fell 5% on the New York Stock Exchange on Wednesday May 11, leaving the tech giant’s market valuation at US$2.3bn (£1.867bn) at the end of the trading day. negotiation. Overall, the company has seen its shares decline 20% year-to-date as investors retreated from the risky tech sector.

Aramco, on the other hand, saw its shares soar as the rising cost of natural gas and crude oil boosted investor confidence in energy producers.

Apple’s downfall comes just over a week after the European Commission launched an investigation into whether the company breached competition law. The company has been accused of hindering competing businesses by limiting access to its ‘tap and go’ technology, behavior which the Commission considers to have a ‘exclusionary effect’ on competitors, resulting in ‘less innovation and less choice” for iPhone users.

If the European Commission’s charges are upheld, Apple could be fined $36.6bn (£29.2bn), or 10% of the company’s global revenue in 2021.

Also in the news:

– Seedtag & Nielsen Research find contextual targeting boosts consumer interest in advertising by 32%

– Hivestack Launches Research Division – Focuses on Programmatic Digital Outdoor Advertising for Retail in the Metaverse

– Gen Z users are three times more likely to use YouTube than TikTok, according to Channel Factory

– Newly released Data Privacy Barometer helps businesses understand and act on global privacy regulations

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