Facebook faces lawsuits that could force sale of Instagram, WhatsApp

Facebook CEO Mark Zuckerberg speaks via video conference during a House Judiciary subcommittee hearing on antitrust on Capitol Hill in Washington, D.C, on July 29, 2020. (AP file photo)
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Updated 11 December 2020

Facebook faces lawsuits that could force sale of Instagram, WhatsApp

Facebook faces lawsuits that could force sale of Instagram, WhatsApp
  • Social media giant accused of using ‘buy or bury’ strategy to snap up rivals and keep smaller competitors at bay

WASHINGTON: Facebook Inc. could be forced to sell its prized assets WhatsApp and Instagram after the US Federal Trade Commission and nearly every US state filed lawsuits against the social media company, saying it used a “buy or bury” strategy to snap up rivals and keep smaller competitors at bay.

With the filing of the twin lawsuits on Wednesday, Facebook becomes the second big tech company to face a major legal challenge this year after the US Justice Department sued Alphabet Inc’s Google in October, accusing the $1 trillion company of using its market power to fend off rivals.

The lawsuits highlight the growing bipartisan consensus to hold Big Tech accountable for its business practices and mark a rare moment of agreement between the Trump administration and Democrats, some of whom have advocated breaking up both Google and Facebook.

The complaints on Wednesday accuse Facebook of buying up rivals, focusing specifically on its previous acquisitions of photo-sharing app Instagram for $1 billion in 2012 and messaging app WhatsApp for $19 billion in 2014.

Federal and state regulators said the acquisitions should be unwound — a move that is likely to set off a long legal challenge as the deals were cleared years earlier by the FTC.

“For nearly a decade, Facebook has used its dominance and monopoly power to crush smaller rivals, snuff out competition, all at the expense of everyday users,” said New York Attorney General Letitia James on behalf of the coalition of 46 states, Washington, DC and Guam. Alabama, Georgia, South Carolina and South Dakota did not participate in the lawsuit.

James said the company acquired rivals before they could threaten the company’s dominance.

Facebook’s general counsel Jennifer Newstead called the lawsuits “revisionist history” and said antitrust laws do not exist to punish “successful companies.” She said WhatsApp and Instagram have succeeded after Facebook invested billions of dollars in growing the apps.

“The government now wants a do-over, sending a chilling warning to American business that no sale is ever final,” Newstead said.

Newstead also raised doubts about alleged harms caused by Facebook, arguing that consumers benefited from its decision to make WhatsApp free, and rivals like YouTube, Twitter and WeChat did “just fine” without access to its developer platform.

In a post on Facebook’s internal discussion platform, Chief Executive Mark Zuckerberg told employees he did not anticipate “any impact on individual teams or roles” as a result of the lawsuits, which he said were “one step in a process which could take years to play out in its entirety.”

Comments were turned off for Zuckerberg’s post, as well as for other posts on the lawsuits shared by Newstead and Chief Privacy Officer for Product Michel Protti, according to copies viewed by Reuters. Newstead also warned employees not to post about the cases.

Facebook did not immediately respond to questions about the posts.

Zuckerberg told employees in July that Facebook would “go to the mat” to fight a legal challenge to break up the company, calling it an “existential” threat, according to audio of internal company meetings published by The Verge.

Although breakup remedies are rare, some antitrust experts said the case was unusually strong given damning statements by Zuckerberg plucked from Facebook’s own documents, like a 2008 email in which he said “it is better to buy than compete.”

Other experts such as Seth Bloom of Bloom Strategic Counsel said the FTC complaint was “significantly weaker” than the DOJ’s lawsuit against Google.

“We’re talking about acquisitions that are six or eight years old and it will be difficult for a court to order divestitures of many years ago,” Bloom said.

Investors echoed similar concerns.

“I do not know if the FTC or DOJ will be successful in breaking Facebook up. I’m assuming this will be dragged out in the courts as FB defends itself,” said Daniel Morgan, a portfolio manager at Synovus Trust in Atlanta, Georgia.

The lawsuits are the biggest antitrust cases in a generation, comparable to the lawsuit against Microsoft Corp. in 1998. The federal government eventually settled that case, but the yearslong court fight and extended scrutiny prevented the company from thwarting competitors and is credited with clearing the way for the explosive growth of the internet.

Last month, Facebook said it was buying customer service startup Kustomer, in an acquisition that the Wall Street Journal said valued Kustomer at $1 billion.

Facebook also bought Giphy, a popular website for making and sharing animated images, or GIFs, in May. That acquisition has already drawn scrutiny from the United Kingdom’s competition watchdog.


French M6 Group channels to launch on Arabic streaming service Shahid VIP

The French-language M6 International channel will offer the best programs from the group’s TV channels, with content from M6, W9, 6ter, Paris Premiere, and Teva. (Supplied)
The French-language M6 International channel will offer the best programs from the group’s TV channels, with content from M6, W9, 6ter, Paris Premiere, and Teva. (Supplied)
Updated 13 April 2021

French M6 Group channels to launch on Arabic streaming service Shahid VIP

The French-language M6 International channel will offer the best programs from the group’s TV channels, with content from M6, W9, 6ter, Paris Premiere, and Teva. (Supplied)
  • TV broadcaster bringing M6 International, TiJi, Gulli Bil Arabi to Shahid VIP
  • The French-language M6 International channel will offer the best programs from the group’s TV channels, with content from M6, W9, 6ter, Paris Premiere, and Teva

DUBAI: Shahid VIP, the premium, subscription-based Arabic streaming service of MBC’s Shahid, will see the launch of three channels from French broadcaster M6 Group.

M6 International, TiJi, and Arabic channel Gulli Bil Arabi cover lifestyle, kids, culture, cooking, fashion, reality, and news, in addition to children’s content in French and Arabic.

The French-language M6 International channel will offer the best programs from the group’s TV channels, with content from M6, W9, 6ter, Paris Premiere, and Teva.

The channel’s diversified program selection includes finance and economy show “Capital,” fashion docu-reality series “Les Reines du Shopping,” real estate reality show “Chasseurs d’Appart,” adventure reality with “Pekin Express,” current affairs program “66 Minutes,” and science show “E=M6.”

Tiji, also a French-language channel, is entirely dedicated to kids and early learning content, and includes animated shows such as “Oum le Dauphin Blanc,” “Loup,” and “Maya l’Abeille.”

The Arabic-language channel Gulli Bil Arabi is also targeted at children featuring discovery and adventure content such as “The Adventures of Nasreddin,” “Suhail,” and “Jamillah and Aladdin.”


Reuters names Alessandra Galloni as its next editor-in-chief

The hunt for the new Reuters editor came as other major media are dealing with succession in the newsroom. (File/AFP)
The hunt for the new Reuters editor came as other major media are dealing with succession in the newsroom. (File/AFP)
Updated 13 April 2021

Reuters names Alessandra Galloni as its next editor-in-chief

The hunt for the new Reuters editor came as other major media are dealing with succession in the newsroom. (File/AFP)
  • A native of Rome, Galloni, 47, will replace Stephen J. Adler, who is retiring this month after leading the newsroom for the past decade

LONDON: Reuters News has named one of its top editors, Alessandra Galloni, as its next editor-in-chief, the first woman to lead the globe-spanning news agency in its 170-year history.
A native of Rome, Galloni, 47, will replace Stephen J. Adler, who is retiring this month after leading the newsroom for the past decade. Under his leadership, Reuters has received hundreds of journalism awards, including seven Pulitzer Prizes, the industry’s highest honor.
A speaker of four languages, and with broad experience covering business and political news at Reuters and previously at the Wall Street Journal, Galloni takes the helm as the news agency faces an array of challenges. Some of these are common to all news media. Others are specific to the organization’s complexity: With a worldwide staff of some 2,450 journalists, Reuters serves a range of divergent customers and is also a unit in a much larger information-services business.
Since 2008, Reuters has been part of Thomson Reuters Corp. , a corporation with more-lucrative and faster-growing segments than news. Its chief executive, Steve Hasker, who joined Thomson Reuters last year, has focused on aggressively expanding the corporation’s three largest businesses: providing information, software and services to lawyers, corporations and the tax and accounting profession. Hasker’s strategy has helped boost Thomson Reuters stock to all-time highs.
Reuters News comprises about 10% of Thomson Reuters’ total $5.9 billion in revenues. Unlike many news organizations, Reuters is profitable. But it is also a drag on the parent company’s revenue growth and profit margin, analysts say, and the executive who runs the news business, Reuters President Michael Friedenberg, is pushing to increase sales and boost profitability. Looking forward, Thomson Reuters’ chief financial officer last month forecast that sales at its “Big Three” businesses are expected to grow 6% to 7% in 2023, while its news division and printing business “are expected to dilute organic revenue growth by about 1% to 2%.”
Gary Bisbee, an analyst at Bank of America, said he expects Reuters News “will continue to be a drag on the growth of the company,” but added that as other divisions of Thomson Reuters grow faster, that drag would diminish over time.
Thomson Reuters is hoping for a turn-around in the Reuters Events business, which it acquired in October 2019. Almost all in-person conferences last year were canceled or postponed because of the COVID-19 pandemic. But the business has pivoted to a hybrid events strategy for 2021 with both in-person and virtual conferences, and expects its revenues to improve.
While some in the industry have speculated that Thomson Reuters might want to sell the news division, three analysts said they don’t expect a sale. Douglas McCabe, a media analyst with Enders Analysis in London, said Reuters is “a tremendously powerful part of” the Thomson Reuters brand, and that “the mighty Reuters newsroom behind you and all the really specialized business assets is a great combination.”
In a statement, CEO Hasker said: “Thomson Reuters is committed to the future of Reuters News. It is an important part of the company and is valued across our customer base. The last year has proven beyond question the value of independent, global, unbiased journalism.”
This year saw the closing of a deal in which the former Financial and Risk business of Thomson Reuters — now called Refinitiv — was sold to the London Stock Exchange Group Plc in a $27 billion all-stock deal. Under the terms, Reuters News is guaranteed annual payments of at least $336 million to provide news and editorial content to Refinitiv until 2048. That stream of revenue is envied by many in the media industry.
Galloni has told colleagues that one of her critical tasks would be maintaining a good relationship with Refinitiv, as it is Reuters’ biggest customer, accounting for slightly more than half of the news agency’s $628 million in revenues last year.
The important relationship has been a source of some tension, senior editors say. As part of the contract with Refinitiv, Reuters is required to meet strict performance targets for the news coverage that Refinitiv clients receive, which Reuters has exceeded so far. Thomson Reuters, for its part, noted in its latest annual report that the exclusive deal, while lucrative, limits Reuters’ ability to sell to other customers in the growing financial-services industry. A Refinitiv spokesman declined to comment.
Gordon Crovitz, a former publisher of the Wall Street Journal, said the new editor will nevertheless have to find new sources of revenue. “Reuters is in an unusual position because the pledge from Refinitiv frees Reuters News up to be more aggressive in creating new news products to serve new markets,” he said. “I think there’s still a lot of low-hanging fruit for Reuters because of the strength of the brand and the size of the staff.”
New website
Reuters’ primary competitors include Bloomberg News, the Associated Press, French news agency AFP and visual content provider Getty Images. In addition to its events business, Reuters has been seeking other growth opportunities. Prominent among these is the upcoming launch of a revamped website that is expected to target professionals and eventually begin charging for content.
McCabe said convincing consumers to pay for content is challenging because “Reuters is a brand that a lot of people recognize but don’t intuitively go to.” But he is more optimistic that targeting professionals could succeed for Reuters. “All the evidence says to me that these are the subscription models that really work,” he said.
CEO Hasker has told colleagues that he wants to make Reuters more integral to the company’s other divisions. To that end, the newsroom recently added to its legal reporting staff.
Adler spearheaded a number of moves to modernize Reuters, which gained fame in its early days for using carrier pigeons to relay scoops. In the past decade, the newsroom created teams of investigative, data and graphics journalists, and is using artificial intelligence to speed the delivery of certain breaking financial news.
Hasker has said he is eager to continue modernizing the newsroom by getting it to embrace new technologies more aggressively. He and Friedenberg considered a wide range of journalists to succeed Adler, both inside and outside the news agency, according to people familiar with the matter.
Among them were two top Reuters editors, Gina Chua and Simon Robinson. The external candidates included David Walmsley, editor in chief of Canada’s The Globe and Mail, and Kevin Delaney, former co-chief executive and editor-in-chief of Quartz Media Inc.
Galloni, based in London, is known internally as a charismatic presence with a keen interest in business news. She has told colleagues that her priorities would include boosting the Reuters digital and events businesses.
She takes the helm after serving as a global managing editor of Reuters, overseeing journalists in 200 locations around the world. At the beginning of her career, she worked at the Reuters Italian-language news service. She received degrees from Harvard University and the London School of Economics. She returned to Reuters in 2013 following about 13 years at The Wall Street Journal, where she specialized in economics and business coverage as a reporter and editor in London, Paris and Rome.
“For 170 years, Reuters has set the standard for independent, trusted and global reporting,” Galloni said in the Reuters announcement on her appointment, which takes effect on April 19. “It is an honor to lead a world-class newsroom full of talented, dedicated and inspiring journalists.”
The hunt for the new Reuters editor came as other major media are dealing with succession in the newsroom. Both the Washington Post, where executive editor Marty Baron retired in February, and the Los Angeles Times, where Norman Pearlstine stepped down as executive editor in December, are currently seeking their replacements.


The Academy for Cultural Diplomacy: Turning soft power into smart power

The Academy for Cultural Diplomacy: Turning soft power into smart power
Updated 12 April 2021

The Academy for Cultural Diplomacy: Turning soft power into smart power

The Academy for Cultural Diplomacy: Turning soft power into smart power
  • Over the past two decades the ICD has grown to become one of Europe’s leading cultural exchange organizations, with programs extending to every continent of the world
  • The academy, quickly expanded to a major campus in Berlin in 2014, and then in 2020 opened its second campus in a castle, Schloss Bornheim, outside of the former capital of Germany, Bonn

LONDON: During a childhood trip to Israel and Palestine, Mark Donfried witnessed, for the first-time, serious violence between peoples who share their roots within one culture.

From that moment on, he decided to commit his personal and professional life to building cultural bridges with the goal of preventing further conflicts – and in 1999 he founded the Institute for Cultural Diplomacy (ICD) in New York, before moving it to Berlin.

“At the time when the ICD was founded, cultural diplomacy had fallen by the wayside and had been thrown away by most governments who did not see the benefit of using it,” Donfried told Arab News.

Over the past two decades the ICD has grown to become one of Europe’s leading cultural exchange organizations, with programs extending to every continent of the world.

Read the full report co-published with the Academy of Cultural Diplomacy on Arab News Research & Studies here

In that time, the organization has dedicated its time to running research projects and hosting forums around the world to promote the strategies of cultural diplomacy among the current and next generation of global leaders.

“With the emergence of digital revolutions and rapidly evolving social network platforms, the simple private citizens were able to now immediately publicly critique any politician, government, or corporation,” Donfried said.

“Suddenly governments and corporations started to look for new tools to build better relations with their citizens and their consumers.”

It was no wonder that, parallel to the evolution of the social media, “corporate social responsibility” departments have emerged in almost all major global companies, he said.

In 2011, Donfried decided that cultural diplomacy needed to break into mainstream academia – and so the Academy for Cultural Diplomacy was established offering first ever master programs in cultural diplomacy resulting in training thousands of students from around the world including ambassadors, members of parliament, CEOs and academics.

Read the full report co-published with the Academy of Cultural Diplomacy on Arab News Research & Studies here

The academy, quickly expanded to a major campus in Berlin in 2014, and then in 2020 opened its second campus in a castle, Schloss Bornheim, outside of the former capital of Germany, Bonn.

“Cultural diplomacy can ease and slow the deterioration of human and international relations and can serve as a kind of ‘vaccine’ to help protect individuals, nations and companies from attacks or conflicts,” he said.

“Cultural diplomacy cannot directly save lives; however, indirectly it has proven over the last decades that it does have the power to transcend international borders, tear down walls and change the way the hearts and minds of entire groups and nations think and act.”


Yemeni journalists call for release of 4 sentenced to death by Houthis

Yemeni journalists call for release of 4 sentenced to death by Houthis
Updated 11 April 2021

Yemeni journalists call for release of 4 sentenced to death by Houthis

Yemeni journalists call for release of 4 sentenced to death by Houthis
  • 10 detained in 2015 say they were tortured, convicted of ‘collaborating with the enemy’
  • Amnesty International: Trial based on ‘trumped up charges’

LONDON: Four Yemeni journalists formerly imprisoned and tortured by the Houthi militia have called for the release of four of their colleagues currently facing the death penalty.

They were among 10 journalists arrested in the capital Sanaa in 2015, and say they were subjected to torture, including being starved and placed in solitary confinement, before being put on trial in 2020.

All 10, having been detained shortly after the intervention of the Saudi-led coalition in Yemen, were convicted of “collaborating with the enemy” and “spreading false news and rumors,” but six were released and left the country.

Now living in Cairo, Abdel-Khaleq Amran, Akram Al-Walidi, Hareth Hamid and Tawfiq Al-Mansouri, alongside family members of the four facing execution, say not enough is being done to secure their colleagues’ freedom.

“We would need to write books to (fully) describe what we went through and suffered in these detention facilities. Only God knows the hardships and suffering of our families in our absence,” they said in a statement.

“And there are still four journalists, who were sentenced to death inside these dark prisons, waiting for fate to intervene to save their lives and bring them back to their children.”

Amnesty International, which said the trial was based on “trumped up charges,” added that none of the detained had been permitted a lawyer or family members to be present, and had seen appeals rejected.

The mother of one detainee told The Observer: “My son is just a civilian, he’s not a soldier, he didn’t fight anyone, he wasn’t involved in politics. He didn’t deserve something like this for seven years.”

She added: “We went everywhere, we talked to everyone but no one really helped us. I’m crying everyday, and I can’t sleep.”

Al-Mansouri’s brother Abdullah said: “We still don’t know why some of the journalists were released and others condemned to death. They were targeted to make an example for others.”

Adding that his brother had been “a healthy young man when he was first detained,” he said the Houthis had denied him medical treatment in captivity, leading to him developing diabetes and kidney issues.

Buthaina Faroq, a Yemeni activist who was forced to flee the country, said the journalists still in captivity are likely being used as leverage.

“These four colleagues are being used by the Houthis as pawns, to blackmail both the international community and the Yemeni government,” she added.

“Every single day is important for them stuck in prison. The Houthis are unpredictable, they could decide to keep them or execute them at any moment.”

According to Reporters Without Borders, the four detained journalists are among at least 20 members of the media being held by the Houthis or by Al-Qaeda in Yemen.
Throughout the conflict, the Houthis have been known to target journalists. Their leader Abdul-Malik Badreddin Al-Houthi is known to have called journalists “more dangerous than those fighting on the front lines.”

As well as torture, the Houthis are thought to deliberately imprison people in military areas likely to be targeted by coalition airstrikes.


Muslim Brotherhood-affiliated political show hosts axed in Egypt

The presenters hosted politically-fueled shows that were axed from Muslim Brotherhood-affiliated television stations Al-Sharq and Mekameleen. (Screenshot)
The presenters hosted politically-fueled shows that were axed from Muslim Brotherhood-affiliated television stations Al-Sharq and Mekameleen. (Screenshot)
Updated 11 April 2021

Muslim Brotherhood-affiliated political show hosts axed in Egypt

The presenters hosted politically-fueled shows that were axed from Muslim Brotherhood-affiliated television stations Al-Sharq and Mekameleen. (Screenshot)
  • Ankara-based Egyptian journalists, Moataz Matar and Muhammad Nasir, are known to be affiliated with the terrorist-designated Muslim Brotherhood

CAIRO: Two Muslim Brotherhood-affiliated presenters - known for their anti-Egyptian rhetoric - have said they are on "open leave" after their politically-fueled shows were axed from television stations Al-Sharq and Mekameleen.

Egyptian journalists, Moataz Matar and Muhammad Nasir, based in Ankara and known to be affiliated with the terrorist-designated Muslim Brotherhood, shared Twitter posts on Saturday that suggested the looming suspension of their shows. 

Matar announced Saturday evening that his program “With Moataz” on the Al-Sharq channel had come to an end, saying that he was going to be on open leave.

He also described the move as “one he had never desired.”

Matar added in a statement he recited on the program that the program’s halt came in order “to avoid any embarrassment that might fall on Turkey” in a reference to his continuous criticism of the Egyptian government.

Meanwhile, Nasir said on Twitter that he was also going to be on vacation during Ramadan from his show on Mekameleen channel.

It was reported earlier in March that Turkey demanded both satellite channels - which are affiliated to the Brotherhood - to halt airing political shows critical of Egypt according to sources cited by Al Arabiya TV.

The step came following statements by Turkey aimed at easing tensions with Egypt after eight years of disputes between the two countries.