Tag: United States

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The US is losing crypto talent as blockchain devs seek safer havens

It’s usually third-world countries that frequently say they’re experiencing a “brain drain” — the bleeding of talent to other countries or parts of the world. But it seems now the United States is the one seeing talent fleeing to other parts of the world, at least as far as blockchain developers are concerned.

The number of blockchain developers in the U.S. has declined every year since 2017, according to a recent report by Electric Capital. While it’s arguably a bad signal for American innovation, it also points to a globally growing remote crypto ecosystem and workforce in a post-COVID world.

According to the report, the U.S.’ share of blockchain developers has fallen 2% per year in the last five years, dropping to 29% last year from 40% in 2017.

“The question is does it matter and why,” Paul Stavropoulos, CEO of credit-focused platform bridging the Web 2.0 and web3 worlds Archie Finance, told TechCrunch+. “The first and most important thing is overall growth of the ecosystem. That has been constant, which is fantastic, but it’s not good that the U.S. is losing market share.”

Compared to other regions in the world, America’s drop is “a marginal difference,” Maria Shen, partner at Electric Capital, said. Europe (excluding the United Kingdom) maintained a consistent share of around 29% during the five years from 2017 to 2022.

Right now, a lot of information being communicated to the crypto industry is through enforcement action. That scares away innovation. Austin King, CEO and co-founder, Recursive

“There’s a counterpoint where it’s not a bad thing that the U.S. is losing market share of developers, but maybe what’s important is the overall number of developers,” Stavropoulos said. “COVID has been a huge help in building remote teams; it’s no longer taboo to build a team with folks all around the world.”

Archie Finance’s engineering team is Slovenian, but it’s still a U.S.-based team, Stavropoulos noted. “It perhaps is not as important that the engineering talent stays in the U.S. as it is that the actual company’s innovation starts in the U.S. I think the scary thing is when innovation doesn’t touch the U.S. at all because of accredited investor rules or people don’t want to be jailed.”

Overall, a significant increase in the number of developers is the most important thing, Stavropoulos said.

The pie is growing

In the last seven years, the crypto industry gained over 22,000 monthly active developers, bringing the total number to 23,343 as of December, up 5% from a year earlier, the report said. About 52% of all monthly active developers began contributing in 2022, marking a big chunk of the people building today.

While the U.S. and Europe are each home to 29% of all crypto developers, regions like Asia, India, Latin America and Africa saw more crypto devs taking up the torch in 2022.

“There’s amazing untapped potential around the globe,” Stavropoulos said. “It’s also cheaper to hire extremely qualified engineers abroad.”

The US is losing crypto talent as blockchain devs seek safer havens by Jacquelyn Melinek originally published on TechCrunch

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Kobo Plus subscription plans are now available in the U.S.

Kobo is launching its Kobo Plus subscription plan in the U.S. today. The plan starts at $7.99 per month and gives users access to 1.3 million books (but not all titles) from Kobo’s library.

This new subscription will be a rival to Amazon’s Kindle Unlimited plan, which costs $9.99 per month. Amazon also offers a Prime Reading plan through its Prime subscription (which costs $119 per year) with a reduced catalog.

The Kobo Plus plan has three tiers. At $7.99 per month, you can either read unlimited books through Kobo Plus Read or listen to over 100,000 audiobooks through Kobo Plus Listen.

If you want access to both books and audiobooks, you will need to shell out $9.99 per month.  This gives you access to titles across Kobo devices and the Kobo app.

Notably, the company offers offline consumption of books through its iOS, Android, and Desktop apps.

Kobo Plus was already available in countries like the Netherlands, Belgium, Italy, France, Canada, Australia, and New Zealand with the U.S. as the latest entry to that list.

Along with the new subscription plan, the Rauketen-owned company also launched the Kobo Elipsa 2E e-reader with a 10.3-inch glare-free e-Ink touchscreen and a $399.99 price tag. The device has “weeks” long battery life, 32GB internal storage, and support for audiobooks through Bluetooth-powered earphones.

Kobo Plus subscription plans are now available in the U.S. by Ivan Mehta originally published on TechCrunch

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House Democrats debut new facial recognition bill

A group of House Democrats has unveiled a new bill that aims to put limits on the use of facial recognition technologies by law enforcement agencies across the United States.

Dubbed the Facial Recognition Act, the bill would compel law enforcement to obtain a judge-authorized warrant before using facial recognition. By adding the warrant requirement, law enforcement would first have to show a court it has probable cause that a person has committed a serious crime, rather than allowing largely unrestricted use of facial recognition under the existing legal regime.

The bill also puts other limits on what law enforcement can use facial recognition for, such as immigration enforcement or peaceful protests, or using a facial recognition match as the sole basis for establishing probable cause for someone’s arrest.

If passed, the bill would also require law enforcement to annually test and audit their facial recognition systems, and provide detailed reports of how facial recognition systems are used in prosecutions. It would also require police departments and agencies to purge databases of photos of children who were subsequently released without charge, whose charges were dismissed or were acquitted.

Facial recognition largely refers to a range of technologies that allow law enforcement, federal agencies and private and commercial customers to track people using a snapshot or photo of their faces. The use of facial recognition has grown in recent years, despite fears that the technology is flawed, disproportionately misidentifies people of color (which has led to wrongful arrests) and harms civil liberties, but is still deployed against protesters, for investigating minor crimes and used to justify arrests of individuals from a single face match.

Some cities, states and police departments have limited their use of facial recognition in recent years. San Francisco became the first city to ban the use of facial recognition by its own agencies, and Maine and Massachusetts have both passed laws curbing their powers — though all have carved out exemptions of varying degrees for law enforcement or prosecutorial purposes.

But the current patchwork of laws across the U.S. still leaves hundreds of millions of citizens without any protections at all.

“Protecting the privacy of Americans — especially against a flawed, unregulated, and at times discriminatory technology — is my chief goal with this legislation,” said Rep. Ted Lieu (D-CA, 33rd District) in a statement announcing the bill alongside colleagues Sheila Jackson Lee (D-TX, 18th District), Yvette Clarke (D-NY, 9th District) and Jimmy Gomez (D-CA, 34th District).

“Our bill is a workable solution that limits law enforcement use of [facial recognition technology] to situations where a warrant is obtained showing probable cause that an individual committed a serious violent felony,” Lieu added.

Gomez, who was one of 28 members of Congress misidentified as criminals in a mugshot database by Amazon’s facial recognition software in 2018, said that there is “no doubt that, left unchecked, the racial and gender biases which exist in FRT will endanger millions of Americans across our country and in particular, communities of color.”

The bill has so far received glowing support from privacy advocates, rights groups and law enforcement-adjacent groups and organizations alike. Woodrow Hartzog, a law professor at Boston University, praised the bill for strengthening baseline rules and protections across the U.S. “without preempting more stringent limitations elsewhere.”

Yes, Americans can opt out of airport facial recognition — here’s how

House Democrats debut new facial recognition bill by Zack Whittaker originally published on TechCrunch

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What the CHIPS and Science Act means for the future of the semiconductor industry

Simon Butler Contributor
Simon Butler was founder and CEO of Methodics Inc, acquired by Perforce in 2020. He is currently the general manager of Perforce’s Methodics Business unit.

This year is proving to be momentous for U.S. semiconductor manufacturing. During a global chip shortage and record inflation, U.S. President Biden signed into effect the CHIPS and Science Act, the greatest boon to U.S. semiconductor manufacturing in history, with $52 billion in subsidies for chip manufacturers to build fabrication plants in the U.S.

The CHIPS Act seems like a green light for domestic manufacturing. However, a presidential executive order (Improving the Nation’s Cybersecurity) published earlier in the year may be a stumbling block for semiconductor design shops eager to serve national security projects.

Rolled out several months before the CHIPS Act was signed, this executive order defines parameters that will force U.S.-based software companies to change long-established development and design processes if they want to comply with federal regulations regarding information sharing between the government and the private sector.

Let’s take a look at how these two measures relate, what they mean for semiconductor companies, and why the highs and lows of American semiconductor manufacturing boil down to one thing: Security.

With most of today’s manufacturing happening overseas, the DoD has had major challenges executing its national security-related projects.

The CHIPS Act

The CHIPS and Science Act of 2022 provides $52 billion in subsidies for chip manufacturers to build fabrication plants in the U.S. To put that into perspective, consider that currently only 12% of all semiconductor chips are made in the U.S.

This Act comes amidst a global economic downturn, with lawmakers hoping that American-made chips will solve security and supply chain issues. In short, this is something the U.S. needs to reassert its historical influence on semiconductor manufacturing.

One of the biggest considerations, and benefits, for domestic-made semiconductors is national security. Recent geopolitical instability has caused concern over potential IP leakage and theft. For the U.S. Department of Defense (DoD), it is imperative to have a secure and trusted ecosystem for the design and manufacture of semiconductors.

But with most of today’s manufacturing happening overseas, the DoD has had major challenges executing its national security-related projects.

What the CHIPS and Science Act means for the future of the semiconductor industry by Ram Iyer originally published on TechCrunch

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Mozilla urges action to unpick platform browser lock-ins

As antitrust regulators around the world dial up scrutiny of platform power, Mozilla has published a piece of research digging into the at times subtle yet always insidious ways operating systems exert influence to keep consumers locked to using their own-brand browsers rather than seeking out and switching to independent options — while simultaneously warning that competition in the browser market is vital to ensure innovation and choice for consumers and, more broadly, protect the vitality of the open web against the commercial giants trying to wall it up.

Mozilla is not a bystander in the browser arena, as it of course developers the Firefox browser and the Gecko engine that underpins it. But it’s a non-profit, free software developer, rather than a commercial player. It also remains the underdog in market share terms — with the market being dominated by Google’s Chrome browser and Apple’s Safari (especially on mobile); and by the technical infrastructure the pair develop via their respective Blink and Webkit browser engines. Just those three browser engines (Blink, Webkit, and Mozilla’s Gecko) are the only ones left in play — powering all browsers available to consumers. (Microsoft’s Edge, for example, runs on Google’s Blink).

Perhaps the most striking thing about Mozilla’s report is how unexceptional most of its conclusions are.

It’s hardly news that Google bundles Chrome with Android and Apple preloads Safari on iOS and that most mobile users won’t bother changing those defaults — especially as neither mobile platform makes it easy to switch default browser, even as their brand name familiarity exerts its own stickiness discouraging consumers from seeking out smaller, less well known alternatives.

Nor is it a news flash that Windows-maker Microsoft bundles its own Edge browser on desktops running its operating system. Although some of the sneaky tactics it uses to promote its browser to users and actively discourage the downloading of alternatives might be new if you’re not a regular Windows user. (Examples cited in the report include a “recommended browser settings” pop-up which pushes consumers to pick Edge as their default browser by deploying messaging that implies the pre-selected choice is a necessary setting for security; or the tech giant actively targeting Firefox users with an ad for Edge that appears as “suggested” content in the Windows start menu, alongside the message “Still using Firefox? Microsoft Edge is here”.)

But the visibility and extent of operating system lock-ins — combined with increasingly low diversity in browser engine technology — should act as a wake up call to regulators, galvanizing the case for intervention.

The UK’s Competition and Markets Authority signalled recently it’s intending to probe Apple and Google market power in mobile browsers, after taking a deep dive look at the mobile market, so scrutiny around browsers does look to be — finally, tardily — on the rise.

“Billions of people across the globe are dependent on operating systems from the largest technology companies. Amazon, Apple, Google, Microsoft and Meta each provide their own browser on their operating systems and each of them uses their gatekeeper position provider to preference their own browsers over independent rivals. Whether it is Microsoft pushing Firefox users to switch their default on Windows computers, Apple restricting the functionality of rival browsers on iOS smartphones or Google failing to apply default browser settings across Android, there are countless examples of independent browsers being inhibited by the operating systems on which they are dependent,” Mozilla writes in a summary of its findings. 

“This matters because American consumers and society as a whole suffer. Not only do people lose the ability to determine their own online experiences but they also receive less innovative and lower quality products. In addition, they can be forced to accept poorer privacy outcomes and even unfair contracts. By contrast, competition from independent browsers can help to drive new features, as well as innovation in areas like privacy and security.”

Firefox gets a privacy boost as Total Cookie Protection becomes the default for all users

US consumers stuck on defaults

One perhaps (more) surprising finding from the report — which is entitled Five Walled Gardens: Why Browsers are Essential to the Internet and How Operating Systems Are Holding Them Back — is that US consumers were found to be among the most affected by pre-installations and defaults across the five markets Mozilla’s researchers looked at.

For the report, Mozilla conducted a survey of more than 6,000 people in five markets (the US, UK, France, Kenya and India) to learn about attitudes and preferences to web browsers and search engines — and generally found what it describes as a “complex” picture, with many people expressing confidence in having a wide choice of browsers and saying they knew how to install a browser but a similarly large proportion not actually thinking about the browser or search engine they use and many never changing defaults or installing an alternative browser.

“The research showed that U.S. respondents were the least likely to know how to install browsers across desktop/laptop and smartphone devices. They were also among the least likely to know how to change default browser settings and the least likely to actually do so on desktop/laptops computers,” it writes in a summary of its findings. “Between one third and one quarter of U.S. respondents reported being uncomfortable or ‘very uncomfortable’ with downloading and installing or changing the default browser on their device. We know from this data that people who were less comfortable with downloading browsers and changing defaults were significantly less likely to do so.”

Mozilla Survey Study: The Installation, Use, and Personalization of Web Browsers, 2022

Table from Mozilla Survey Study: The Installation, Use, and Personalization of Web Browsers, 2022

“These findings point to the importance of operating systems offering consumers clear and easy routes for American consumers to change their software and select alternatives. However, in reality, operating system providers have the ability and incentive to preference their own browsers; we found many examples of them using dark patterns and negative design practices to undermine consumer selection of independent browsers,” Mozilla adds.

The report looks timely given rising FTC attention to dark patterns — with a recent report by the US regulator warning firms against using deceptive design tactics to, for example, trick consumers into sharing data. (Another of the egregious Microsoft examples cited in Mozilla’s report is a Windows 10 setup screen that users a “time pressure” tactic to push users to accept sweeping Microsoft data-sharing defaults at the point of set-up — with the pre-selected “express setting” that’s being recommended by Microsoft meaning users who accept it are agreeing to send Microsoft and unknown third parties (“trusted partners”) their location, location history and ad ID, as well as sending browsing data to Microsoft.)

Citing other recent research on negative online choice architecture (OCA), Mozilla highlights the case for regulation to focus on mild or subtle uses of dark patterns — which were found to be much more likely to be effective than more aggressive ones which tend to generate a powerful customer backlash.

“OCA is a neutral term; there is of course nothing inherently wrong with companies marketing their services. However, where these marketing messages are in fact deceptive design practices used by powerful platforms to undermine consumer choice and prevent switching away from their affiliated browsers, it harms competition and ultimately consumers,” Mozilla adds in the report. “Similarly, companies are and should be free to build their brands. But where branding is used by gatekeeper operations systems alongside negative OCA, or brands are built and promoted using harmful design practices, it also leads to consumer harm.”

Mobile sameness and sludge

Mobile browsers were found to be particularly sticky and prone to consumers not switching, with Mozilla noting that combined factors of pre-installation satisfaction, utility, lack of differentiation and inertia meaning consumers are “even less likely to seek out alternative mobile browsers that may better suit their needs, align with their values or offer more privacy and security”.

“The experience of mobile browsers as basic utilities and the perceived lack of differentiation among them mean that the browser that comes pre-installed on a device is at a huge advantage,” it writes in the report. “This benefits the operating system and not necessarily the consumers. Many people are hesitant to switch to a new browser because they quickly become accustomed to their pre-installed browser and do not have a strong incentive to seek out an alternative, or may be hindered from discovering one. This conditioning of consumer behavior over a long period of time means that moving away from a satisfactory pre-installed browser is an active choice that takes some amount of cognitive effort. If people are busy or if the process is too confusing, people put off making a change or decide not to make it all. For many people, it is easier to simply continue with the status quo or put off the decision for a later time.”

The report also throws up an interesting link between desktop and mobile browser use — with Mozilla saying that “nearly all” users of Firefox’s (alternative) mobile browser also using Firefox on their desktop computers.

“Our research shows that in the U.S. less than 6% of people who use a desktop browser other than Firefox report using Firefox on their smartphone,” it notes. “This suggests that the more people use Firefox or another alternative browser on their desktop computer, the more likely they may be to try that browser on their mobile device.”

That in turn implicates Microsoft’s aggressive promotion of its own browsing software to Windows users — and especially the anti-Firefox messaging it injects into its desktop OS — as contributing to reducing Firefox’s share of the mobile browser market (despite Microsoft not having a mobile platform in play these days).

However it’s clear there are a combination of factors making competing on mobile especially tough going for indie browser makers. And the report underlines how the mobile space is challenging on account of it being a more tightly controlled and/or integrated (and branded so bundled) experience than desktop OSes. 

Google, for example, uses contract restrictions with OEM partners to maximize the proportion of Android devices that come with own-brand services such as its Chrome browser preloaded, despite Android being open source. (And the tech giant has of course got into antitrust hot water over some of these restrictions — such as in the EU, where it has been forced to offer a choice screen promoting search engine rivals).

However consumer familiarity (and comfort) with Big Tech products can clearly work in lock-step with lock-ins — albeit, again, platforms may well seek to shape that outcome by actively over-selling integration benefits through suggestive messaging (and/or by creating friction for alternatives).

“Our research shows that many consumers have a perception that Chrome is the browser that works best on Android phones, and that products from the same company will perform better together (e.g. Gmail will work better in Chrome),” notes Mozilla — pointing to Google’s use of such messaging as part of its “cross-product promotion” as one example.

“It is also closely linked to web compatibility issues and the extent to which operating system providers restrict or allow interoperability of third party browsers, including accessing the same features and APIs afforded to their own browsers,” it goes on, also critically discussing Apple banning alternative browser engines from its App Store which limits differentiation for competing with Safari since rivals must also develop on Webkit (which, historically, slowed down their ability to compete and continues to restrict how much difference they can offer).

“Feature development remains at a standstill for alternative browsers on iOS because Apple — in control of both the browser engine and operating system — does not make available to rivals some of the necessary APIs and functionality, thereby limiting differentiation.”

Choice undermined

Mozilla’s report also highlights instances where even where a consumer has succeeded in selecting an alternative browser as their default, a platform may still revert to a self-serving choice — bypassing their election to resurface their browser in certain circumstances, such as when performing a ‘lookup’ after selecting text in iOS (which it notes “would historically always open web search results in Safari, regardless of which default browser is selected by the user”); or opening up a web link in the Windows search bar or icon — which opens Edge (“again regardless of the default browser setting; or using the search widget on Android — which “will always open results in a Google browser”.

“This demonstration of OCA highlights just some of the practices used by operating systems to preference their own browsers and undermine consumer choice. Lawmakers and policymakers in some countries have started to take action against deceptive patterns to protect consumers. And others have begun to address the lack of effective competition in digital markets, including through introducing regulation. However, very few have recognized the connection between these issues and the importance of browser competition, or studied the role of OCA practices as a way to implement (or thwart) consumer choice and welfare,” Mozilla argues.

“We believe that if people had a meaningful opportunity to try alternative browsers, they would find many to be compelling substitutes to the default bundled with their operating system. These opportunities have been suppressed for years through online choice architecture and commercial practices that benefit platforms and are not in the best interest of consumers, developers or the open web. It is difficult to underestimate the impact of years of self-preferencing and undermining consumer choice, including its effect on consumer behavior. It is also difficult to estimate the disruptive innovation, alternative products and features, and the independent competitors which have been lost as a result of these practices.”

Mozilla’s report does not go into specific recommendations for regulatory interventions to force platforms to “do better for consumers and developers”, as it puts it — as it says it plans to publish further work on remedies in the coming months — but it urges lawmakers to act to prevent “further harm to consumers from continued inaction and competitive stagnation”.

“As these companies have so far failed to do better, regulators, policymakers and lawmakers have spent considerable time and resources investigating digital markets. They should therefore be in a good position to recognize the importance of browser competition and to act to prevent further harm to consumers from continued inaction and competitive stagnation,” it suggests.

“We call on them to enforce the laws which already exist and the laws and regulations which will soon come into force. And where existing laws and regulations are lacking, we call for them to be introduced and their importance for the future of the internet to be highlighted. Regulators, policymakers and lawmakers in many jurisdictions can take this moment to create a new era in the internet’s story — one in which consumers and developers benefit from genuine choice, competition and innovation.”

As noted above the EU has taken antitrust enforcement action in relation to Google’s Android contract restrictions that has led to a choice screen being offered to users in the EU — at least for default search engine. However Mozilla’s report is generally dismissive of existing remedies that have featured online choice architecture and software design, arguing: “The remedies that have so far been deployed have had many limitations and have largely failed.”

Its conclusion is backed up by the lack of a meaningful shift in Google’s market share for search on mobile in Europe — where it holds a 96.6% market, which is a drop of only 0.3% since 2018 when the Commission fined the company $5BN and ordered it to case infringing consumers, as not-for-profit Google alternative, Ecosia, recently pointed out.

Google rival DuckDuckGo has also called for regulators to go much further in regulating choice screen remedies — arguing in recent years that the design and integration of such tools must enable a truly ‘one-click’ and universally accessible experience if they are to actually move the competition needle against ingrained platform power.

Google fails to overturn EU’s €4BN+ Android antitrust decision

The Web Foundation is taking on deceptive design

Mozilla urges action to unpick platform browser lock-ins by Natasha Lomas originally published on TechCrunch

Posted on

Mozilla urges action to unpick platform browser lock-ins

As antitrust regulators around the world dial up scrutiny of platform power, Mozilla has published a piece of research digging into the at times subtle yet always insidious ways operating systems exert influence to keep consumers locked to using their own-brand browsers rather than seeking out and switching to independent options — while simultaneously warning that competition in the browser market is vital to ensure innovation and choice for consumers and, more broadly, protect the vitality of the open web against the commercial giants trying to wall it up.

Mozilla is not a bystander in the browser arena, as it of course developers the Firefox browser and the Gecko engine that underpins it. But it’s a non-profit, free software developer, rather than a commercial player. It also remains the underdog in market share terms — with the market being dominated by Google’s Chrome browser and Apple’s Safari (especially on mobile); and by the technical infrastructure the pair develop via their respective Blink and Webkit browser engines. Just those three browser engines (Blink, Webkit, and Mozilla’s Gecko) are the only ones left in play — powering all browsers available to consumers. (Microsoft’s Edge, for example, runs on Google’s Blink).

Perhaps the most striking thing about Mozilla’s report is how unexceptional most of its conclusions are.

It’s hardly news that Google bundles Chrome with Android and Apple preloads Safari on iOS and that most mobile users won’t bother changing those defaults — especially as neither mobile platform makes it easy to switch default browser, even as their brand name familiarity exerts its own stickiness discouraging consumers from seeking out smaller, less well known alternatives.

Nor is it a news flash that Windows-maker Microsoft bundles its own Edge browser on desktops running its operating system. Although some of the sneaky tactics it uses to promote its browser to users and actively discourage the downloading of alternatives might be new if you’re not a regular Windows user. (Examples cited in the report include a “recommended browser settings” pop-up which pushes consumers to pick Edge as their default browser by deploying messaging that implies the pre-selected choice is a necessary setting for security; or the tech giant actively targeting Firefox users with an ad for Edge that appears as “suggested” content in the Windows start menu, alongside the message “Still using Firefox? Microsoft Edge is here”.)

But the visibility and extent of operating system lock-ins — combined with increasingly low diversity in browser engine technology — should act as a wake up call to regulators, galvanizing the case for intervention.

The UK’s Competition and Markets Authority signalled recently it’s intending to probe Apple and Google market power in mobile browsers, after taking a deep dive look at the mobile market, so scrutiny around browsers does look to be — finally, tardily — on the rise.

“Billions of people across the globe are dependent on operating systems from the largest technology companies. Amazon, Apple, Google, Microsoft and Meta each provide their own browser on their operating systems and each of them uses their gatekeeper position provider to preference their own browsers over independent rivals. Whether it is Microsoft pushing Firefox users to switch their default on Windows computers, Apple restricting the functionality of rival browsers on iOS smartphones or Google failing to apply default browser settings across Android, there are countless examples of independent browsers being inhibited by the operating systems on which they are dependent,” Mozilla writes in a summary of its findings. 

“This matters because American consumers and society as a whole suffer. Not only do people lose the ability to determine their own online experiences but they also receive less innovative and lower quality products. In addition, they can be forced to accept poorer privacy outcomes and even unfair contracts. By contrast, competition from independent browsers can help to drive new features, as well as innovation in areas like privacy and security.”

Firefox gets a privacy boost as Total Cookie Protection becomes the default for all users

US consumers stuck on defaults

One perhaps (more) surprising finding from the report — which is entitled Five Walled Gardens: Why Browsers are Essential to the Internet and How Operating Systems Are Holding Them Back — is that US consumers were found to be among the most affected by pre-installations and defaults across the five markets Mozilla’s researchers looked at.

For the report, Mozilla conducted a survey of more than 6,000 people in five markets (the US, UK, France, Kenya and India) to learn about attitudes and preferences to web browsers and search engines — and generally found what it describes as a “complex” picture, with many people expressing confidence in having a wide choice of browsers and saying they knew how to install a browser but a similarly large proportion not actually thinking about the browser or search engine they use and many never changing defaults or installing an alternative browser.

“The research showed that U.S. respondents were the least likely to know how to install browsers across desktop/laptop and smartphone devices. They were also among the least likely to know how to change default browser settings and the least likely to actually do so on desktop/laptops computers,” it writes in a summary of its findings. “Between one third and one quarter of U.S. respondents reported being uncomfortable or ‘very uncomfortable’ with downloading and installing or changing the default browser on their device. We know from this data that people who were less comfortable with downloading browsers and changing defaults were significantly less likely to do so.”

Mozilla Survey Study: The Installation, Use, and Personalization of Web Browsers, 2022

Table from Mozilla Survey Study: The Installation, Use, and Personalization of Web Browsers, 2022

“These findings point to the importance of operating systems offering consumers clear and easy routes for American consumers to change their software and select alternatives. However, in reality, operating system providers have the ability and incentive to preference their own browsers; we found many examples of them using dark patterns and negative design practices to undermine consumer selection of independent browsers,” Mozilla adds.

The report looks timely given rising FTC attention to dark patterns — with a recent report by the US regulator warning firms against using deceptive design tactics to, for example, trick consumers into sharing data. (Another of the egregious Microsoft examples cited in Mozilla’s report is a Windows 10 setup screen that users a “time pressure” tactic to push users to accept sweeping Microsoft data-sharing defaults at the point of set-up — with the pre-selected “express setting” that’s being recommended by Microsoft meaning users who accept it are agreeing to send Microsoft and unknown third parties (“trusted partners”) their location, location history and ad ID, as well as sending browsing data to Microsoft.)

Citing other recent research on negative online choice architecture (OCA), Mozilla highlights the case for regulation to focus on mild or subtle uses of dark patterns — which were found to be much more likely to be effective than more aggressive ones which tend to generate a powerful customer backlash.

“OCA is a neutral term; there is of course nothing inherently wrong with companies marketing their services. However, where these marketing messages are in fact deceptive design practices used by powerful platforms to undermine consumer choice and prevent switching away from their affiliated browsers, it harms competition and ultimately consumers,” Mozilla adds in the report. “Similarly, companies are and should be free to build their brands. But where branding is used by gatekeeper operations systems alongside negative OCA, or brands are built and promoted using harmful design practices, it also leads to consumer harm.”

Mobile sameness and sludge

Mobile browsers were found to be particularly sticky and prone to consumers not switching, with Mozilla noting that combined factors of pre-installation satisfaction, utility, lack of differentiation and inertia meaning consumers are “even less likely to seek out alternative mobile browsers that may better suit their needs, align with their values or offer more privacy and security”.

“The experience of mobile browsers as basic utilities and the perceived lack of differentiation among them mean that the browser that comes pre-installed on a device is at a huge advantage,” it writes in the report. “This benefits the operating system and not necessarily the consumers. Many people are hesitant to switch to a new browser because they quickly become accustomed to their pre-installed browser and do not have a strong incentive to seek out an alternative, or may be hindered from discovering one. This conditioning of consumer behavior over a long period of time means that moving away from a satisfactory pre-installed browser is an active choice that takes some amount of cognitive effort. If people are busy or if the process is too confusing, people put off making a change or decide not to make it all. For many people, it is easier to simply continue with the status quo or put off the decision for a later time.”

The report also throws up an interesting link between desktop and mobile browser use — with Mozilla saying that “nearly all” users of Firefox’s (alternative) mobile browser also using Firefox on their desktop computers.

“Our research shows that in the U.S. less than 6% of people who use a desktop browser other than Firefox report using Firefox on their smartphone,” it notes. “This suggests that the more people use Firefox or another alternative browser on their desktop computer, the more likely they may be to try that browser on their mobile device.”

That in turn implicates Microsoft’s aggressive promotion of its own browsing software to Windows users — and especially the anti-Firefox messaging it injects into its desktop OS — as contributing to reducing Firefox’s share of the mobile browser market (despite Microsoft not having a mobile platform in play these days).

However it’s clear there are a combination of factors making competing on mobile especially tough going for indie browser makers. And the report underlines how the mobile space is challenging on account of it being a more tightly controlled and/or integrated (and branded so bundled) experience than desktop OSes. 

Google, for example, uses contract restrictions with OEM partners to maximize the proportion of Android devices that come with own-brand services such as its Chrome browser preloaded, despite Android being open source. (And the tech giant has of course got into antitrust hot water over some of these restrictions — such as in the EU, where it has been forced to offer a choice screen promoting search engine rivals).

However consumer familiarity (and comfort) with Big Tech products can clearly work in lock-step with lock-ins — albeit, again, platforms may well seek to shape that outcome by actively over-selling integration benefits through suggestive messaging (and/or by creating friction for alternatives).

“Our research shows that many consumers have a perception that Chrome is the browser that works best on Android phones, and that products from the same company will perform better together (e.g. Gmail will work better in Chrome),” notes Mozilla — pointing to Google’s use of such messaging as part of its “cross-product promotion” as one example.

“It is also closely linked to web compatibility issues and the extent to which operating system providers restrict or allow interoperability of third party browsers, including accessing the same features and APIs afforded to their own browsers,” it goes on, also critically discussing Apple banning alternative browser engines from its App Store which limits differentiation for competing with Safari since rivals must also develop on Webkit (which, historically, slowed down their ability to compete and continues to restrict how much difference they can offer).

“Feature development remains at a standstill for alternative browsers on iOS because Apple — in control of both the browser engine and operating system — does not make available to rivals some of the necessary APIs and functionality, thereby limiting differentiation.”

Choice undermined

Mozilla’s report also highlights instances where even where a consumer has succeeded in selecting an alternative browser as their default, a platform may still revert to a self-serving choice — bypassing their election to resurface their browser in certain circumstances, such as when performing a ‘lookup’ after selecting text in iOS (which it notes “would historically always open web search results in Safari, regardless of which default browser is selected by the user”); or opening up a web link in the Windows search bar or icon — which opens Edge (“again regardless of the default browser setting; or using the search widget on Android — which “will always open results in a Google browser”.

“This demonstration of OCA highlights just some of the practices used by operating systems to preference their own browsers and undermine consumer choice. Lawmakers and policymakers in some countries have started to take action against deceptive patterns to protect consumers. And others have begun to address the lack of effective competition in digital markets, including through introducing regulation. However, very few have recognized the connection between these issues and the importance of browser competition, or studied the role of OCA practices as a way to implement (or thwart) consumer choice and welfare,” Mozilla argues.

“We believe that if people had a meaningful opportunity to try alternative browsers, they would find many to be compelling substitutes to the default bundled with their operating system. These opportunities have been suppressed for years through online choice architecture and commercial practices that benefit platforms and are not in the best interest of consumers, developers or the open web. It is difficult to underestimate the impact of years of self-preferencing and undermining consumer choice, including its effect on consumer behavior. It is also difficult to estimate the disruptive innovation, alternative products and features, and the independent competitors which have been lost as a result of these practices.”

Mozilla’s report does not go into specific recommendations for regulatory interventions to force platforms to “do better for consumers and developers”, as it puts it — as it says it plans to publish further work on remedies in the coming months — but it urges lawmakers to act to prevent “further harm to consumers from continued inaction and competitive stagnation”.

“As these companies have so far failed to do better, regulators, policymakers and lawmakers have spent considerable time and resources investigating digital markets. They should therefore be in a good position to recognize the importance of browser competition and to act to prevent further harm to consumers from continued inaction and competitive stagnation,” it suggests.

“We call on them to enforce the laws which already exist and the laws and regulations which will soon come into force. And where existing laws and regulations are lacking, we call for them to be introduced and their importance for the future of the internet to be highlighted. Regulators, policymakers and lawmakers in many jurisdictions can take this moment to create a new era in the internet’s story — one in which consumers and developers benefit from genuine choice, competition and innovation.”

As noted above the EU has taken antitrust enforcement action in relation to Google’s Android contract restrictions that has led to a choice screen being offered to users in the EU — at least for default search engine. However Mozilla’s report is generally dismissive of existing remedies that have featured online choice architecture and software design, arguing: “The remedies that have so far been deployed have had many limitations and have largely failed.”

Its conclusion is backed up by the lack of a meaningful shift in Google’s market share for search on mobile in Europe — where it holds a 96.6% market, which is a drop of only 0.3% since 2018 when the Commission fined the company $5BN and ordered it to case infringing consumers, as not-for-profit Google alternative, Ecosia, recently pointed out.

Google rival DuckDuckGo has also called for regulators to go much further in regulating choice screen remedies — arguing in recent years that the design and integration of such tools must enable a truly ‘one-click’ and universally accessible experience if they are to actually move the competition needle against ingrained platform power.

Google fails to overturn EU’s €4BN+ Android antitrust decision

The Web Foundation is taking on deceptive design

Mozilla urges action to unpick platform browser lock-ins by Natasha Lomas originally published on TechCrunch

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Mozilla urges action to unpick platform browser lock-ins

As antitrust regulators around the world dial up scrutiny of platform power, Mozilla has published a piece of research digging into the at times subtle yet always insidious ways operating systems exert influence to keep consumers locked to using their own-brand browsers rather than seeking out and switching to independent options — while simultaneously warning that competition in the browser market is vital to ensure innovation and choice for consumers and, more broadly, protect the vitality of the open web against the commercial giants trying to wall it up.

Mozilla is not a bystander in the browser arena, as it of course developers the Firefox browser and the Gecko engine that underpins it. But it’s a non-profit, free software developer, rather than a commercial player. It also remains the underdog in market share terms — with the market being dominated by Google’s Chrome browser and Apple’s Safari (especially on mobile); and by the technical infrastructure the pair develop via their respective Blink and Webkit browser engines. Just those three browser engines (Blink, Webkit, and Mozilla’s Gecko) are the only ones left in play — powering all browsers available to consumers. (Microsoft’s Edge, for example, runs on Google’s Blink).

Perhaps the most striking thing about Mozilla’s report is how unexceptional most of its conclusions are.

It’s hardly news that Google bundles Chrome with Android and Apple preloads Safari on iOS and that most mobile users won’t bother changing those defaults — especially as neither mobile platform makes it easy to switch default browser, even as their brand name familiarity exerts its own stickiness discouraging consumers from seeking out smaller, less well known alternatives.

Nor is it a news flash that Windows-maker Microsoft bundles its own Edge browser on desktops running its operating system. Although some of the sneaky tactics it uses to promote its browser to users and actively discourage the downloading of alternatives might be new if you’re not a regular Windows user. (Examples cited in the report include a “recommended browser settings” pop-up which pushes consumers to pick Edge as their default browser by deploying messaging that implies the pre-selected choice is a necessary setting for security; or the tech giant actively targeting Firefox users with an ad for Edge that appears as “suggested” content in the Windows start menu, alongside the message “Still using Firefox? Microsoft Edge is here”.)

But the visibility and extent of operating system lock-ins — combined with increasingly low diversity in browser engine technology — should act as a wake up call to regulators, galvanizing the case for intervention.

The UK’s Competition and Markets Authority signalled recently it’s intending to probe Apple and Google market power in mobile browsers, after taking a deep dive look at the mobile market, so scrutiny around browsers does look to be — finally, tardily — on the rise.

“Billions of people across the globe are dependent on operating systems from the largest technology companies. Amazon, Apple, Google, Microsoft and Meta each provide their own browser on their operating systems and each of them uses their gatekeeper position provider to preference their own browsers over independent rivals. Whether it is Microsoft pushing Firefox users to switch their default on Windows computers, Apple restricting the functionality of rival browsers on iOS smartphones or Google failing to apply default browser settings across Android, there are countless examples of independent browsers being inhibited by the operating systems on which they are dependent,” Mozilla writes in a summary of its findings. 

“This matters because American consumers and society as a whole suffer. Not only do people lose the ability to determine their own online experiences but they also receive less innovative and lower quality products. In addition, they can be forced to accept poorer privacy outcomes and even unfair contracts. By contrast, competition from independent browsers can help to drive new features, as well as innovation in areas like privacy and security.”

Firefox gets a privacy boost as Total Cookie Protection becomes the default for all users

US consumers stuck on defaults

One perhaps (more) surprising finding from the report — which is entitled Five Walled Gardens: Why Browsers are Essential to the Internet and How Operating Systems Are Holding Them Back — is that US consumers were found to be among the most affected by pre-installations and defaults across the five markets Mozilla’s researchers looked at.

For the report, Mozilla conducted a survey of more than 6,000 people in five markets (the US, UK, France, Kenya and India) to learn about attitudes and preferences to web browsers and search engines — and generally found what it describes as a “complex” picture, with many people expressing confidence in having a wide choice of browsers and saying they knew how to install a browser but a similarly large proportion not actually thinking about the browser or search engine they use and many never changing defaults or installing an alternative browser.

“The research showed that U.S. respondents were the least likely to know how to install browsers across desktop/laptop and smartphone devices. They were also among the least likely to know how to change default browser settings and the least likely to actually do so on desktop/laptops computers,” it writes in a summary of its findings. “Between one third and one quarter of U.S. respondents reported being uncomfortable or ‘very uncomfortable’ with downloading and installing or changing the default browser on their device. We know from this data that people who were less comfortable with downloading browsers and changing defaults were significantly less likely to do so.”

Mozilla Survey Study: The Installation, Use, and Personalization of Web Browsers, 2022

Table from Mozilla Survey Study: The Installation, Use, and Personalization of Web Browsers, 2022

“These findings point to the importance of operating systems offering consumers clear and easy routes for American consumers to change their software and select alternatives. However, in reality, operating system providers have the ability and incentive to preference their own browsers; we found many examples of them using dark patterns and negative design practices to undermine consumer selection of independent browsers,” Mozilla adds.

The report looks timely given rising FTC attention to dark patterns — with a recent report by the US regulator warning firms against using deceptive design tactics to, for example, trick consumers into sharing data. (Another of the egregious Microsoft examples cited in Mozilla’s report is a Windows 10 setup screen that users a “time pressure” tactic to push users to accept sweeping Microsoft data-sharing defaults at the point of set-up — with the pre-selected “express setting” that’s being recommended by Microsoft meaning users who accept it are agreeing to send Microsoft and unknown third parties (“trusted partners”) their location, location history and ad ID, as well as sending browsing data to Microsoft.)

Citing other recent research on negative online choice architecture (OCA), Mozilla highlights the case for regulation to focus on mild or subtle uses of dark patterns — which were found to be much more likely to be effective than more aggressive ones which tend to generate a powerful customer backlash.

“OCA is a neutral term; there is of course nothing inherently wrong with companies marketing their services. However, where these marketing messages are in fact deceptive design practices used by powerful platforms to undermine consumer choice and prevent switching away from their affiliated browsers, it harms competition and ultimately consumers,” Mozilla adds in the report. “Similarly, companies are and should be free to build their brands. But where branding is used by gatekeeper operations systems alongside negative OCA, or brands are built and promoted using harmful design practices, it also leads to consumer harm.”

Mobile sameness and sludge

Mobile browsers were found to be particularly sticky and prone to consumers not switching, with Mozilla noting that combined factors of pre-installation satisfaction, utility, lack of differentiation and inertia meaning consumers are “even less likely to seek out alternative mobile browsers that may better suit their needs, align with their values or offer more privacy and security”.

“The experience of mobile browsers as basic utilities and the perceived lack of differentiation among them mean that the browser that comes pre-installed on a device is at a huge advantage,” it writes in the report. “This benefits the operating system and not necessarily the consumers. Many people are hesitant to switch to a new browser because they quickly become accustomed to their pre-installed browser and do not have a strong incentive to seek out an alternative, or may be hindered from discovering one. This conditioning of consumer behavior over a long period of time means that moving away from a satisfactory pre-installed browser is an active choice that takes some amount of cognitive effort. If people are busy or if the process is too confusing, people put off making a change or decide not to make it all. For many people, it is easier to simply continue with the status quo or put off the decision for a later time.”

The report also throws up an interesting link between desktop and mobile browser use — with Mozilla saying that “nearly all” users of Firefox’s (alternative) mobile browser also using Firefox on their desktop computers.

“Our research shows that in the U.S. less than 6% of people who use a desktop browser other than Firefox report using Firefox on their smartphone,” it notes. “This suggests that the more people use Firefox or another alternative browser on their desktop computer, the more likely they may be to try that browser on their mobile device.”

That in turn implicates Microsoft’s aggressive promotion of its own browsing software to Windows users — and especially the anti-Firefox messaging it injects into its desktop OS — as contributing to reducing Firefox’s share of the mobile browser market (despite Microsoft not having a mobile platform in play these days).

However it’s clear there are a combination of factors making competing on mobile especially tough going for indie browser makers. And the report underlines how the mobile space is challenging on account of it being a more tightly controlled and/or integrated (and branded so bundled) experience than desktop OSes. 

Google, for example, uses contract restrictions with OEM partners to maximize the proportion of Android devices that come with own-brand services such as its Chrome browser preloaded, despite Android being open source. (And the tech giant has of course got into antitrust hot water over some of these restrictions — such as in the EU, where it has been forced to offer a choice screen promoting search engine rivals).

However consumer familiarity (and comfort) with Big Tech products can clearly work in lock-step with lock-ins — albeit, again, platforms may well seek to shape that outcome by actively over-selling integration benefits through suggestive messaging (and/or by creating friction for alternatives).

“Our research shows that many consumers have a perception that Chrome is the browser that works best on Android phones, and that products from the same company will perform better together (e.g. Gmail will work better in Chrome),” notes Mozilla — pointing to Google’s use of such messaging as part of its “cross-product promotion” as one example.

“It is also closely linked to web compatibility issues and the extent to which operating system providers restrict or allow interoperability of third party browsers, including accessing the same features and APIs afforded to their own browsers,” it goes on, also critically discussing Apple banning alternative browser engines from its App Store which limits differentiation for competing with Safari since rivals must also develop on Webkit (which, historically, slowed down their ability to compete and continues to restrict how much difference they can offer).

“Feature development remains at a standstill for alternative browsers on iOS because Apple — in control of both the browser engine and operating system — does not make available to rivals some of the necessary APIs and functionality, thereby limiting differentiation.”

Choice undermined

Mozilla’s report also highlights instances where even where a consumer has succeeded in selecting an alternative browser as their default, a platform may still revert to a self-serving choice — bypassing their election to resurface their browser in certain circumstances, such as when performing a ‘lookup’ after selecting text in iOS (which it notes “would historically always open web search results in Safari, regardless of which default browser is selected by the user”); or opening up a web link in the Windows search bar or icon — which opens Edge (“again regardless of the default browser setting; or using the search widget on Android — which “will always open results in a Google browser”.

“This demonstration of OCA highlights just some of the practices used by operating systems to preference their own browsers and undermine consumer choice. Lawmakers and policymakers in some countries have started to take action against deceptive patterns to protect consumers. And others have begun to address the lack of effective competition in digital markets, including through introducing regulation. However, very few have recognized the connection between these issues and the importance of browser competition, or studied the role of OCA practices as a way to implement (or thwart) consumer choice and welfare,” Mozilla argues.

“We believe that if people had a meaningful opportunity to try alternative browsers, they would find many to be compelling substitutes to the default bundled with their operating system. These opportunities have been suppressed for years through online choice architecture and commercial practices that benefit platforms and are not in the best interest of consumers, developers or the open web. It is difficult to underestimate the impact of years of self-preferencing and undermining consumer choice, including its effect on consumer behavior. It is also difficult to estimate the disruptive innovation, alternative products and features, and the independent competitors which have been lost as a result of these practices.”

Mozilla’s report does not go into specific recommendations for regulatory interventions to force platforms to “do better for consumers and developers”, as it puts it — as it says it plans to publish further work on remedies in the coming months — but it urges lawmakers to act to prevent “further harm to consumers from continued inaction and competitive stagnation”.

“As these companies have so far failed to do better, regulators, policymakers and lawmakers have spent considerable time and resources investigating digital markets. They should therefore be in a good position to recognize the importance of browser competition and to act to prevent further harm to consumers from continued inaction and competitive stagnation,” it suggests.

“We call on them to enforce the laws which already exist and the laws and regulations which will soon come into force. And where existing laws and regulations are lacking, we call for them to be introduced and their importance for the future of the internet to be highlighted. Regulators, policymakers and lawmakers in many jurisdictions can take this moment to create a new era in the internet’s story — one in which consumers and developers benefit from genuine choice, competition and innovation.”

As noted above the EU has taken antitrust enforcement action in relation to Google’s Android contract restrictions that has led to a choice screen being offered to users in the EU — at least for default search engine. However Mozilla’s report is generally dismissive of existing remedies that have featured online choice architecture and software design, arguing: “The remedies that have so far been deployed have had many limitations and have largely failed.”

Its conclusion is backed up by the lack of a meaningful shift in Google’s market share for search on mobile in Europe — where it holds a 96.6% market, which is a drop of only 0.3% since 2018 when the Commission fined the company $5BN and ordered it to case infringing consumers, as not-for-profit Google alternative, Ecosia, recently pointed out.

Google rival DuckDuckGo has also called for regulators to go much further in regulating choice screen remedies — arguing in recent years that the design and integration of such tools must enable a truly ‘one-click’ and universally accessible experience if they are to actually move the competition needle against ingrained platform power.

Google fails to overturn EU’s €4BN+ Android antitrust decision

The Web Foundation is taking on deceptive design

Mozilla urges action to unpick platform browser lock-ins by Natasha Lomas originally published on TechCrunch

Posted on

Sources say Web Summit Ventures will be a new $40M follow-on fund

Web Summit, one of the world’s largest events centered around technology startups, is to launch a brand new venture capital vehicle consisting of two new funds, TechCrunch understands. The move follows an acrimonious fall-out between Web Summit’s co-founders, who first started the now-defunct Amaranthine VC fund in 2018, in part to join the ballooning investment ecosystem which had grown up around the Web Summit events.

While it’s been previously reported that Web Summit cofounder, Paddy Cosgrave, will imminently launch his new vehicle, Web Summit Ventures (WSV), the nature and size of the fund has not, until now, been revealed.

TechCrunch understands that WSV will command $40 million in funding, split into two $20 million funds. They will be dubbed “Web Summit Ventures Seed” and “Web Summit Ventures Growth,” respectively . The Seed fund will invest at the early stage and Series A, while the Growth fund will invest at the ‘Series B and beyond’ stages. Both will be ‘follow-on’ funds and are not intended to lead funding rounds, say sources. This mirrors the previous Amaranthine strategy.

Further confirmation of the funds’ existence comes in the form of a new job posting advertising for a for an Associate for the fund.

It’s understood that WSV is intended to replace Cosgrave’s previous attempt to enter the investing game, after the Amaranthine Ventures vehicle ended up embroiled in a series of byzantine legal fights amongst its founders and partners.

As previously reported in the Irish media, documents filed in the Companies Registration Office in Dublin, Ireland, where Web Summit was originally launched, show that Cosgrave, Web Summit CEO, is listed as a director of the Web Summit Ventures Management Ltd.

It’s understood that only Cosgrave and Chris Murphy and will be partners in Web Summit Ventures. Murphy is a former Web Summit employee, who went on to work for the Amaranthine Fund for nearly three years as its Managing Director.

A well-placed source told TechCrunch that one of the main differences with the new WSV fund is that a number of tech founders will join as LPs, include some of the founders of Twitter, Tinder, N26, Checkout.com, Rappi, Algolia, Lightricks and Wise, along with a handful of GPs at some VC funds who said to be investing personally, although this has not been independently confirmed.

The story of Web Summit’s attempts to participate in the vast ecosystem of startups it was amassing begins in 2018.

The Amaranthine Fund was set up by Cosgrave, David Kelly, a Web Summit co-founder, and Patrick Murphy, a fund manager, in 2018. But while it managed to back, among others, Hopin (the online events startup, the valuation of which soared to $5.6 billion during the remote-working era of the pandemic) a series of bitter disagreements led to Cosgrave suing Kelly and Murphy in the US courts.

The $50 million Amaranthine fund has since rebranded at Tapestry after the lawsuits were filed.

But the acrimony is not just confined to the US.

Cosgrave is also suing Kelly in the Irish High Court. Kelly and Murphy deny the allegations, while Kelly is separately suing Cosgrave in the High Court over alleged minority shareholder oppression. Cosgrave denies the claims.

A spokeperson for Web Summit declined to comment on the launch of WSV, citing regulatory restrictions.

Sources say Web Summit Ventures will be a new $40M follow-on fund by Mike Butcher originally published on TechCrunch

Posted on

Sources say Web Summit Ventures will be a new $40M follow-on fund

Web Summit, one of the world’s largest events centered around technology startups, is to launch a brand new venture capital vehicle consisting of two new funds, TechCrunch understands. The move follows an acrimonious fall-out between Web Summit’s co-founders, who first started the now-defunct Amaranthine VC fund in 2018, in part to join the ballooning investment ecosystem which had grown up around the Web Summit events.

While it’s been previously reported that Web Summit cofounder, Paddy Cosgrave, will imminently launch his new vehicle, Web Summit Ventures (WSV), the nature and size of the fund has not, until now, been revealed.

TechCrunch understands that WSV will command $40 million in funding, split into two $20 million funds. They will be dubbed “Web Summit Ventures Seed” and “Web Summit Ventures Growth,” respectively . The Seed fund will invest at the early stage and Series A, while the Growth fund will invest at the ‘Series B and beyond’ stages. Both will be ‘follow-on’ funds and are not intended to lead funding rounds, say sources. This mirrors the previous Amaranthine strategy.

Further confirmation of the funds’ existence comes in the form of a new job posting advertising for a for an Associate for the fund.

It’s understood that WSV is intended to replace Cosgrave’s previous attempt to enter the investing game, after the Amaranthine Ventures vehicle ended up embroiled in a series of byzantine legal fights amongst its founders and partners.

As previously reported in the Irish media, documents filed in the Companies Registration Office in Dublin, Ireland, where Web Summit was originally launched, show that Cosgrave, Web Summit CEO, is listed as a director of the Web Summit Ventures Management Ltd.

It’s understood that only Cosgrave and Chris Murphy and will be partners in Web Summit Ventures. Murphy is a former Web Summit employee, who went on to work for the Amaranthine Fund for nearly three years as its Managing Director.

A well-placed source told TechCrunch that one of the main differences with the new WSV fund is that a number of tech founders will join as LPs, include some of the founders of Twitter, Tinder, N26, Checkout.com, Rappi, Algolia, Lightricks and Wise, along with a handful of GPs at some VC funds who said to be investing personally, although this has not been independently confirmed.

The story of Web Summit’s attempts to participate in the vast ecosystem of startups it was amassing begins in 2018.

The Amaranthine Fund was set up by Cosgrave, David Kelly, a Web Summit co-founder, and Patrick Murphy, a fund manager, in 2018. But while it managed to back, among others, Hopin (the online events startup, the valuation of which soared to $5.6 billion during the remote-working era of the pandemic) a series of bitter disagreements led to Cosgrave suing Kelly and Murphy in the US courts.

The $50 million Amaranthine fund has since rebranded at Tapestry after the lawsuits were filed.

But the acrimony is not just confined to the US.

Cosgrave is also suing Kelly in the Irish High Court. Kelly and Murphy deny the allegations, while Kelly is separately suing Cosgrave in the High Court over alleged minority shareholder oppression. Cosgrave denies the claims.

A spokeperson for Web Summit declined to comment on the launch of WSV, citing regulatory restrictions.

Sources say Web Summit Ventures will be a new $40M follow-on fund by Mike Butcher originally published on TechCrunch

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Retail tech startup Swiftly valued at $1B after bagging another $100M

Swiftly Systems entered unicorn territory after announcing today that it grabbed another round of $100 million, this time in a Series C. The new funding was led by BRV Capital Management.

If you’re feeling some déjà vu, you would be right: this is the second $100 million the retail technology company has raised in the past six months — and in a tough fundraising market, too. We covered Swiftly’s $100 million Series B back in March.

Much of the shopping technology focuses on e-commerce, but Swiftly’s technology taps into that online shopping experience to make shopping at a brick-and-mortar store just as engaging and easy. It also provides analytics and advertising, so that those stores can compete against e-commerce retailers using their operational strength without being disadvantaged by an aging or non-existing technology platform.

Earlier this year, we reported Swiftly was being used by hundreds of consumer brands in nearly 10,000 store locations, which accounted for more than $30 billion in gross merchandise volume.

To target the 200,000 brick-and-mortar food retailers in the U.S., the company went after additional capital that Sean Turner, chief technology officer at Swiftly, said via email will enable it to ensure that retailers “have the digital platforms necessary to both service their customers and gain new customers, as well as capitalize on the opportunity to gain their market share of the retail media revenues.”

“The speed and scale of the tools that are being deployed by the largest retailers requires a deep commitment and investment to democratize that technology to brick-and-mortar retailers worldwide,” Turner added. “To remain relevant, brick-and-mortar retailers need to natively boost their digital presence and lean into providing true omnichannel experiences for customers.”

The grocery industry’s shopping list: Inventory management, frictionless checkout, computer vision

Retail tech startup Swiftly valued at $1B after bagging another $100M by Christine Hall originally published on TechCrunch