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Does EU's charge against Facebook demonstrate ineptitude of regulators?

This news roundup was written by Mekhala Roy and Brian Holak.

What made headlines this week? Here, we run down the biggest tech news from the week of Dec. 19th.

Facebook is the latest tech giant to feel the heat from EU regulators. Following a $14.6 billion tax bill issued to Apple and biting antitrust charges against Google, the European Commission has charged Facebook with providing misleading information during its acquisition of the popular messaging service WhatsApp. The allegations center around WhatsApp’s recent, controversial privacy policy change that allows the Facebook-owned entity to share user data — including phone numbers and the last time subscribers used the service — with its parent company. The European Commission asserts that back in 2014 during the takeover probe, Facebook claimed it was impossible to reliably combine user accounts between the two companies. Facebook contests the Commission’s claims. Analysts think the allegation is representative of regulators’ overall lack of cognizance. “Regulators are, to a certain point, naïve and inept,” said Holger Mueller, principal analyst and VP at Constellation Research, Inc., “Whatsapp works on a phone number base to validate the user; as Facebook has phone numbers or users share them [with Facebook] — the connection can be made. Believing that Facebook does not have the tools is naïve.” Legislators and regulators in general are behind on technology capabilities, Mueller said, as we saw with the unlocking of the San Bernardino iPhone on the legislative side. Luckily for Facebook, the Commission has affirmed that its statement of objections will not affect their approval of the $22 billion merger, but the social media giant could face a fine of 1% of its turnover. Much ado about nothing?

Russia was in the news again this week, but for a different reason. It was discovered that a Russian cybercriminal ring has created more than 500,000 fake internet users and 250,000 fake websites to trick advertisers into paying it as much as $5 million a day for video ads that will never be seen, The New York Times reports. “This is a very advanced cyber operation on a scale no one’s seen before,” said Eddie Schwartz, COO at White Ops, the cybersecurity firm responsible for the discovery. The cyberforgers impersonated more than 6,100 news and online content publishers, siphoning more than $180 million in ad revenue so far from the digital marketing industry, according to CNN. This went on for two months without detection because the bots have gotten better at creating a “more perfect, life-like copy” of the browsers, according to White Ops CEO Michael Tiffany. White Ops went public with this information in an attempt to coordinate an industry-wide effort to stop it.

Executive departures continue in Twitter: The California-based microblogging service is losing yet another C-level executive: Adam Messinger, chief technology officer, announced his resignation Tuesday. “After 5 years I’ve decided to leave Twitter and take some time off. Grateful to @jack [CEO Jack Dorsey] for the opportunity and to my team for shipping,” Messinger tweeted. The news brought down Twitter shares by 4%. Messinger served as CTO at Twitter for almost four years. Also leaving is Josh McFarland, Twitter vice president of product. He is headed to Silicon Valley venture capital firm Greylock Partners. The two departures follow the resignations last month of Adam Bain, who served as chief operating officer, and Adam Sharp, head of news, government and elections. The company, which is going through hard times, slashed 9% of its workforce in October after failing to find an acquirer.

Verizon seeks to renegotiate deal terms: Verizon, which had agreed to buy Yahoo’s core internet business for $4.8 billion in July, is seeking a discount on the deal price “to reflect the economic damage” related to two Yahoo hacks, Fortune reported. Yahoo’s recent discovery of a billion-user hack that happened in 2013 came on the heels of its disclosure in September of a 2014 500 million-user hack. “There is no assurance that the Sale transaction will be consummated in a timely manner or at all,” Yahoo had warned investors in an SEC filing in October.

Beaming internet from space. Satellite startup OneWeb said Monday that it has secured $1 billion in funded capital from Japanese telecom and financial conglomerate SoftBank that will be used to launch 720 satellites into space in 2019. “The investment will support development to enable global access to affordable high-speed internet services for everyone, as well as using OneWeb’s leading technology for growing global markets including consumer broadband, connected cars, cellular backhaul and the internet of things,” SoftBank said in a statement. Masayoshi Son, chairman and CEO of SoftBank, said the investment is a first step toward his pledge to invest $50 billion in the U.S. The satellites will be assembled at a new production facility in Exploration Park, Fla.

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