Facebook doesn’t like research
Also in this edition: Chinese economy slows down, Rapido raises funding, Malaysian government quits.
Good morning! Elon Musk isn’t getting any love from Biden. At all. The US government is now investigating Tesla’s autopilot feature because it failed to recognise parked emergency vehicles. The autopilot, according to reports, has been responsible for 11 crashes, causing one death.
On to the day’s big stories:
RIL and Aramco deal gets closer.
Piyush Goyal’s tirade has upset a few people.
A crypto merger like you’ve never seen.
Ola to all our new readers. Welcome. We hope you enjoy the ride.
The Market Signal
Stocks: Indian benchmark indices closed at fresh record highs, led by heavyweights such as Reliance Industries and Tata Steel. The broader market, however, showed further signs of slowing momentum with both the smallcap and midcap indices closing in the red.
Say Ola To The New Urban EV
Ola, over the weekend, showcased a remarkable "live" video, which involved pre-shot drone footage of the manufacturing plant. Bhavish Aggarwal, the founder and CEO of the company, claimed that Ola had made the “best scooter ever” at a “revolutionary plant” and announced that it will cost ~INR 100,000.
Disruption time? Will Ola finally usher in the electric revolution? Currently, even after subsidies in states such as Maharashtra and Gujarat, the scooter is pricier than its fossil fuel counterparts. Besides, the market is getting crowded with at least half a dozen more vehicles expected to be launched in the next couple of months.
Upfront vs long term: The argument in favour of EVs is long-term cost efficiency. But charging in India is another pain point. Although Ola has plans for a charging network, it will take time to set up.
What’s the mood? India has not been able to sell too many electric vehicles. According to reports, 29,288 high-speed electric scooters were sold in India in the first six months of 2021. Hero Electric had the largest market share with 11,432 units. The question is, does non-metro India really care about high-speed electric scooters?
First Token Merger Makes A Splash
Here’s a first: one blockchain network is merging into another. Ethereum-based Polygon is absorbing zero-knowledge (ZK) company Hermez. The deal is an all-crypto transaction of 250 million Matic tokens ($250 million), Polygon’s cryptocurrency.
Two in one: Not only will the networks merge, but their native coins will also become a single unit in the new Polygon Hermez. This is kind of a big deal because it is also the first known instance of two cryptocurrencies combining. Hermez’s HEZ owners will be able to exchange one token for 3.5 Matic tokens.
Big Leap: Polygon already provides users with secured transactions using Ethereum. Matic is one of the top 15 cryptocurrencies in the world. What makes Hermez attractive to Polygon is ZK, a data verification technology where it doesn’t need to hand over control of information but helps increase scalability.
Facebook To Researchers: Behave Or Else...
Facebook’s complicated relationship with researchers continues. It resurfaced this month, with two instances of the social network revoking access to APIs, while also blocking personal accounts of researchers undertaking studies to understand the spread of misinformation, how political ads are targeted, among other things.
NYU Ad Observatory: Researchers at the New York University, who were studying transparency in political advertisement and the spread of Covid-19 misinformation, had their personal accounts banned. Facebook claims a browser extension called Ad Observer, which the researchers had developed, was collecting user data without consent, violating an FTC order.
AlgorithmWatch: Germany-based researchers abandoned their project studying the Instagram algorithm after receiving threats of legal action. Here too, there was a browser plug-in that was collecting data from the Instagram feeds of users.
Princeton University: Researchers from Princeton University, who had applied to get access to Facebook political ad data, have decided not to go ahead with the research due to restrictive contractual requirements
The Signal
Facebook’s settlement with the FTC after the Cambridge Analytica scandal in 2018 has given it a cover to erect walls around legitimate research citing privacy and user rights. Billions of users use Facebook and Instagram, and research is required to understand how information flows through them and how ads target users. It also helps add a layer of scrutiny and accountability for Facebook. While CEO Mark Zuckerberg has started talking about an open Internet, open data is a far cry. Already a target of US regulators, this episode will only intensify the focus on Facebook and the role it plays in the information ecosystem.
Make In India Vs Aatmanirbhar Bharat?
A mystery of the past weekend has been: why did commerce and industry minister, Piyush Goyal, blow his top at Indian industrialists, especially the Tata group?
Angry minister: Goyal had criticized industrialists that they were putting their companies’ interests ahead of the nation’s. Some say it was a reaction to the Tatas' opposition to consumer protection provisions in the proposed e-commerce rules. Nobody has a clear answer although there is much by way of speculation.
Is it a case of unintended targets? There is strong opposition from local traders to foreign players in Indian retail. Their primary targets, Amazon and Walmart, are already facing antitrust investigations. The new e-commerce rules are also said to be framed with them in mind. Large Indian companies have also been ramping up their retail play. The Tata group, as well as its emeritus chairman Ratan Tata, personally, have invested in several e-commerce businesses. Big technology firms such as Facebook and Google have invested heavily in Reliance group’s Jio Platforms which is integral to the company’s retail foray.
Aramco Has $25 Billion Plans For RIL
After prolonged anticipation, the world’s second most valuable company is likely to buy a fifth of India’s most valuable company. Saudi Arabia’s Aramco may pay up to $25 billion in stock for a 20% stake in Reliance Industries (RIL), $10 billion more than earlier estimated.
Big boys: The scale of the deal is mind-boggling. Aramco is the world’s biggest oil producer and RIL operates the world’s largest refining hub in Jamnagar. RIL’s billionaire chairman, Mukesh Ambani, had announced in 2019 that the companies were in talks. However, the global pandemic delayed the deal which was then estimated to be $15 billion. At current valuations, RIL will hold a 1% stake in the Saudi firm after the deal.
Green future: It will likely increase the flow of crude from Aramco to oil-deficit India. It already sends about 10% of its exports here. This will also be Aramco’s first major investment in a company that is pivoting from fossil fuels to green energy on a massive scale.
What Else Made The Signal?
Want a byte: The Chinese government quietly acquired a stake and board seat in Beijing ByteDance Technology, a group company of TikTok owner ByteDance Ltd.
Delivery craze: Rapido has received $52 million in funding as the demand for delivery steadily rises during the pandemic.
Crisis incoming: Facing opposition pressure, Malaysia’s Prime Minister Muhyiddin Yassin and his entire cabinet have resigned amid a raging pandemic.
Slowdown: The Chinese economy, one of the fastest to recover from the Covid-19 pandemic, appears to be slowing down.
Kabul falls: Several deaths were reported from Kabul airport on Monday, a day after the Taliban took control of Afghanistan and President Ashraf Ghani reportedly fled to Tajikistan.
Pegasus probe: The Centre has told the Supreme Court that it would set up a committee to look into allegations of snooping with Pegasus software.
FWIW
Order, order, order: Chatbots are designed to be as human as possible. DoNotPay’s chatbot is designed to be a lawyer. Key in a problem and the AI-app will provide drafts in the best possible legal language.
Running on soup: A Japanese engineer has found a way to convert leftover ramen broth into biodiesel that fuels his trucks.
Where are the balls? The pandemic has yet another casualty: tennis balls. There’s a shortage of these green balls because of manufacturing and port delays.
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