Welcome to the thirty-second edition of The Weekly Briefing!
Each week, we recap the commercial news shaping the market, from major deals to competition disputes, and look at why they matter to businesses and law firms.
This week, we look at Apple’s £2bn competition claim, Amazon’s new antitrust battle and Nvidia’s $13bn acquisition of Hugging Face.
Apple faces £2bn competition claim over privacy rules
When you use an app, your activity can be tracked to understand what you are interested in and which adverts are most likely to reach you. This information is valuable to advertisers because it allows them to target users and measure whether their advertising works.
Apple changed this system with App Tracking Transparency (ATT). Apps must now ask users for permission before tracking their activity across other companies’ apps and websites. Apple says this gives users greater control over their data.
However, Apple is now facing a £2bn competition claim in the UK. App developers allege that ATT makes it harder for third-party businesses to track users and compete in digital advertising, while Apple can benefit from its own advertising activities. Apple denies the allegations.
Amazon faces antitrust case over advertising auctions
When you search for something on Google or Amazon, the results you see are not determined by relevance alone. Businesses can pay to have their websites or products placed more prominently through advertising auctions, where companies compete for advertising space by submitting bids. On Amazon, a successful bid can place a product in a sponsored position when a customer searches for something similar.
Advertising has become a major source of revenue for both companies, but it has also attracted competition scrutiny. Amazon is facing an antitrust case over this. The FTC alleges that Amazon manipulated its advertising auctions and charged advertisers more than they should have paid. Amazon disputes the allegations.
The case comes as regulators continue to examine the power of Big Tech over digital advertising. A recent ruling in Google’s advertising case stopped short of breaking up the company, but imposed other restrictions.
While Google’s case has reached a judgment, Amazon’s is only beginning.
Nvidia goes beyond the chips powering AI
Nvidia is going beyond the chips powering the AI boom.
The company has agreed to acquire Hugging Face, an AI platform similar to GitHub, for around $13 billion. Hugging Face allows developers and researchers to share and build on AI models, datasets and tools.
Nvidia already dominates the hardware needed to develop AI. Hugging Face would give it greater access to the developers and researchers building the technology that runs on that hardware. This could allow Nvidia to strengthen its position across more of the AI ecosystem, rather than relying on its dominance in chips alone.
Hugging Face also benefits from network effects: the more developers use the platform, the more valuable it becomes. Nvidia’s ownership could therefore give it influence over an important AI development ecosystem, potentially strengthening its existing position in AI hardware.