The appointment of Lina Khan as the chair of the US Federal Trade Commission (FTC) appears to have ushered in a new wave of antitrust inquiries targeting US tech giants. The Independent reports that the Commission has re-filed its complaint against Facebook, arguing that the company should be broken up and forced to sell Instagram and WhatsApp.

The revised complaint argues that Facebook has a monopoly over social networking in the US and argues that Facebook has looked to make it difficult for other companies to compete.

The complaint is partly redacted, and the FTC’s filing asks that it is sealed for 10 days.

The new case comes amid mounting scrutiny over the size and power of Facebook’s empire, and the way that it has bought up competitors as they have grown.

The case makes reference to an email from Mark Zuckerberg, sent in 2008, in which he said “it is better to buy than compete”. The FTC’s lawyers argue that Facebook has acted in accordance with that strategy, tracking its rivals and buying them when they become big enough to be threats.

Those purchases have included Instagram and WhatsApp, both of which today make up a large part of the Facebook company. Mark Zuckerberg has been active in looking to integrate those three apps, in the name of ease of use – though critics have pointed out that such technological developments would make it harder for regulators to break up the three apps.

The case accuses Facebook of operating a monopoly for “personal social networking services” in the US, because it controls both Facebook and Instagram. It notes that the closest competitor is Snapchat, but that has far fewer users than either of the two Facebook social networking apps.

The lawsuit also accuses Facebook of continuing to operate in such a way and that it uses the companies it has bought to create a “protective ‘moat’ around its personal social networking monopoly”. It will continue to buy or “kneecap” companies if it is not stopped, the FTC says.

In its conclusion, it asks that Facebook be asked to sell its businesses, including Instagram and WhatsApp and potentially others, to ensure they are able to properly compete. It also asks that Facebook be restricted from making similar purchases in the future, including by rules that would force the company to seek approval if it wants to make similar deals.

Khan’s appointment in June has been driving uneasy feelings through the tech industry, as she has been, prior to her appointment, a big critic of the tech giants.

Facebook and Amazon had requested that Khan recuse herself from FTC’s antitrust investigations into their companies, on the argument that her past criticisms of them meant she “wouldn’t be a neutral or an impartial evaluator” of antitrust issues.

Khan believes that antitrust enforcement in the US has been lax for years, allowing the big tech to indulge in anticompetitive and monopolistic practices unchallenged. These recent moves targeting the big tech shows her determination to change the status quo in Silicon Valley.

There is a huge paralysis in the world of Chinese technology: the government is unleashing high voltage searchlights on the operations of the companies. Just last month alone, the assaults wiped more than $1 trillion on the market caps of these companies: “Alibaba shares hit a record low on Thursday in Hong Kong, as the Chinese tech industry grapples with another wave of regulation in an increasingly broad crackdown from the government. This time, the drop came after the government said it was looking at expanding rights for drivers for online giants and increasing oversight of live streaming. The impact of the crackdowns wiped $1 trillion off the Chinese tech industry last month.”

The selloff has prompted some global fund managers including Cathie Wood to dump their holdings in Chinese stocks over the past few months. In fact, some investors are questioning allocations toward Chinese assets altogether.

The new moves are incremental but investors are not at a point where they “will cease to price in any more additional policies,” said Shine Gao, fund manager at Taicheng Capital Management Co. “Even if the worst is over for big tech firms in terms of new regulations, we should expect that their growth won’t be what it was.”

The Hang Seng Index fell as much as 2.3% Thursday while the Hang Seng Tech Index, which counts many Chinese tech giants as its members, dropped to the lowest since its July 2020 inception.

Tencent reversed earlier gains of as much as 3.4% to trade down nearly 3% in Hong Kong as its warnings for more regulatory curbs on the industry overshadowed second quarter earnings that beat estimates.

Among other tech names, food-delivery giant Meituan tanked as much as 7.2%, following a similar drop in ride-hailing company DiDi Global Inc. in the U.S. Video streaming giant Kuaishou Technology slid as much as 4.7%.

People, everything China does is big either on growing or destroying. 

But note one thing: these paralyses would not be the end. Yes, these companies would work hard to find ways to grow so that they can keep trading in foreign stock markets where they currently trade. Alibaba has been wounded in China due to the clampdown, and the US investors are certainly not happy.  So Alibaba needs to find ways to mitigate this domino. Simply, I expect it to look for more markets and territories to enter.

Africa seems to be a good destination. Do not be surprised if Alibaba decides to acquire Jumia in the next coming months to pacify investors in the US that it is looking beyond China for its future. I also see opportunities for leading promising startups in the continent. Chinese firms will need to pick many pieces from many countries, and then combine them for a continental impact.

Yet, personally, the long-term view for me is that China wants its companies to focus on the hard technology nexus to position the nation to compete for the opportunities of the future. Apps, games, ecommerce, etc are ephemeral, the government will make life hard for both entrepreneurs and investors in these domains. If the nation succeeds, everyone will go into making chips, quantum computing and those hard and boring things. That is one way to compete against Russia and the United States.

This clampdown is just beginning!

A thought that frequently persists with me when I create a new post on Linkedin… Where are my viewers really located?

85%+ of my connections are based in Nigeria and its reasonable to expect most of my viewers would be there. I’ve had formative years in Trinidad, and of course by birth I am Irish with ancestry all the way back to Fir Bholg and beyond.

This is a deep triangle of ‘being’ that I take with me everywhere else.

My market for most of the last twenty years has been Nigeria with a collateral exposure to a lot of West Africa. Much of the content I create here on LinkedIn is market centric, a sensible position to take as the platform is a tool for business and career promotion.

As part of my interest in auditing how effective I am on the platform, of course I am curious to find out where my viewers are based.

Is the location of the relevant ‘Tier 1 Network Peer’ an issue?

Tier 1 Networks are huge interconnected data-centres that connect with each other right across the world. The simplest way to describe them is to consider them internet mirrors. That is storage locations of every website and piece of online content in the world at any time. They constantly update each other over the connections they have with each other.

This means that when an end user makes a demand for access to particular online content, the data request only needs to follow the path through sub provider(s) reaching the primary provider in the commercial chain, and not all the way to some other Tier 1 Network much further away, where the content author or website admin created the content or update.

To be a Tier 1 Network they have to meet two key criteria –

1. Reach every other Tier 1 network on the Internet solely via settlement-free interconnection
2. Provide ‘IPv6’ routing/connectivity across each ‘peer’ connection.

There are roughly twenty Tier 1 networks in the world. Countries that have one or more Tier 1 Networks include France, Germany, Hong Kong,  Japan, India, Italy, Spain, Sweden, UK and US.

It may be, then that my Irish, Nigerian, and Trinidadian viewers are being misidentified with the location their connection is getting Tier 1 Network service from.

This however, does not explain why I am told when I have visitors in either Johannesburg or Cape Town in South Africa.

Bitco site in South Africa claims Axxess, Bitco, Cool Ideas, Frogfoot, and  Seacom, are Tier1 networks, but I can’t find any independent verification of this. It is more than likely that, at best,  while these providers ‘may’ have settlement free connections with each other, they are each most likely paying transit fees for peering with a limited number of global Tier 1 Networks outside Africa.

Wikepedia article on Telecoms in South Africa focuses on the usual suspects of  Vodacom, MTN, Cell C,  and Telkom but doesn’t say how they get their internet. It also only mentions Axxess and Seacom in the last paragraph while referring to Seacom as a submarine cable only.

Separately, AFRINIC, based at Mauritius, which is the controller of IP allocation for the continent, has not succeeded in implementation of IPv6 yet, and for the most part is on IPv4. Until this is resolved it’s additionally difficult to see how any provider in Africa can be deemed Tier 1.

I’ve scoured the internet for any explanation of why LinkedIn cannot give me accurate stats on my my Irish, Nigerian, and Trinidadian viewers but can specify South African ones. Clearly services in South Africa are able to meet some sort of criteria LinkedIn is recognising, which services in Ireland, Trinidad and Nigeria are not.

It is a curious development in the light of my most recent Tekedia Institute article exploring the skill of search engine use, but I have drawn a blank.

It however is an opportunity for me to throw down the gauntlet to contributors who in Ndubusi Ekekwe’s push of my article on LinkedIn, described themselves as ‘Googlers Par Excellence’

I’ve little interest in the viewing exploits of those in Alberta, Canada, but am hugely interested in qualitative divergence between Lagos and Abuja.

It seems absurd to me that LinkedIn cannot offer comparative internal stats on the biggest economy in the biggest continent in the world.

Until it does, the periodic spam trying to entice me back as a premium user will fall on my selective eyes. It may be in view, but it will not meet my vision.

References and Acknowledgements (not in the main text body) :

en.wikipedia.org/wiki/Tier_1_network

en.wikipedia.org/wiki/Tier_2_network

www.bitco.co.za/5-of-the-best-south-african-telecom-fibre-companies-why/

www.internetgovernance.org/2021/08/16/the-narrative-crisis-at-afrinic-apple-breaks-privacy-gifct-participation/

en.wikipedia.org/wiki/Telecommunications_in_South_Africa

The case the government made against the investing apps like Bamboo, Trove, Chaka, Risevest, pushing the federal court to freeze the bank accounts of the startups is now public. Here are the key things:

• The government noted that the entities are majorly owned by individuals and firms based in the United States of America.
• The government thinks the firms are operating as  asset management companies without the necessary licenses, violating a Central Bank of Nigeria (CBN) directive issued in its circular referenced TED/FEM/FPC/GEN/01/012 and dated July 1, 2015.
• The government is unequivocal that the operations of these firms are contributing to the weakening of Naira: ‘He said there was the need to block 15 accounts of the firms for 180 days to stop the firms from moving their funds out of Nigeria. “We need to write the embassy, we need to go to the Foreign Affairs, the minister will serve the U.S. to seek assistance so that we can block these linkages.”’
•  Dealing in cryptocurrency trading, a contravention of the CBN policy.

The core issue here is that the Central Bank of Nigeria (CBN) is not happy that these firms source forex in Nigeria and then use them to buy financial products like bonds, stocks, etc in US and other global markets. Largely, they are importing things into Nigeria with the undesirable impact of pushing Nigeria’s balance of payment into an unfavourable column. 

Read here on how the money moved around from Flutterwave, Paystack, Monify, Paystack, BuyCoins, etc.

The 6 boards of these companies should come together and engage CBN immediately. They should push for a small fine and warning so that they do not go under. Also, CBN should modulate and find a workable framework like appointing a commercial bank custodian for the startups. If these 6 firms go under, Nigeria loses. So, here, I expect the apex bank to act as a regulator and a growth enabler at the same time.

Meanwhile, I am waiting to read from the Securities and Exchange Commission (SEC) which baptized some of these startups with a “license” to do their thing. It needs to help them.

Yet, everything happening here is a pure lack of how software is eating and saving the world by our  government. Yes, what these companies are being accused of are what treasury departments of big banks do daily for the 1%. So, if the apex bank is worried about Nigerians investing in foreign financial products, it should also close treasury departments of banks which help the big guys onload on New York and London stocks.

That these apps have provided a way for the small people to get into the games which the rich have been practicing since Lord Lugard woke up with a chosen mistress, and concatenated this nation should not be criminalized.

Nigeria needs to engage and avoid this culture of BAN and SUSPEND. If there is anything these companies are required to do, CBN should help them. Yet, our firms must ensure they understand the laws of the land and go out to ensure they comply.

Nigeria’s Court Freezes Bank Accounts of Chaka, Bamboo, RiseVest, Trove, etc on CBN Request

Tekedia Capital congratulates our portfolio TradeGrid for beginning a new patent in the United States Patent & Trademark Office. Let’s build the digital operating system for new energy and the downstream sector of oil & gas. All the way to the big bell ringing guys.

Tekedia Capital >> building the next Africa through innovation. Join our syndicate and own a piece of Africa’s great technology startups.

Tekedia Capital offers a specialty investment vehicle (or investment syndicate) which makes it possible for citizens, groups and organizations to co-invest in innovative startups and young companies in Africa and around the world. Capital from these investing entities are pooled together and then invested in a specific company or companies.