Facebook’s hand-picked ‘oversight’ panel upholds Trump ban — for now

Facebook’s content decision review body, a quasi-external panel that’s been likened to a ‘Supreme Court of Facebook’ but isn’t staffed by sitting judges, can’t be truly independent of the tech giant which funds it, has no legal legitimacy or democratic accountability, and goes by the much duller official title ‘Oversight Board’ (aka the FOB) — has just made the biggest call of its short life…

Facebook’s hand-picked ‘oversight’ panel has voted against reinstating former U.S. president Donald Trump’s Facebook account.

However it has sought to row the company back from an ‘indefinite’ ban — finding fault with its decision to impose an indefinite restriction, rather than issue a more standard penalty (such as a penalty strike or permanent account closure).

In a press release announcing its decision the board writes:

Given the seriousness of the violations and the ongoing risk of violence, Facebook was justified in suspending Mr. Trump’s accounts on January 6 and extending that suspension on January 7.

However, it was not appropriate for Facebook to impose an ‘indefinite’ suspension.

It is not permissible for Facebook to keep a user off the platform for an undefined period, with no criteria for when or whether the account will be restored.”

The board wants Facebook to revision its decision on Trump’s account within six months — and “decide the appropriate penalty”. So it appears to have succeeded in… kicking the can down the road.

The FOB is due to hold a press conference to discuss its decision shortly so stay tuned for updates.

This story is developing… refresh for updates…

It’s certainly been a very quiet five months on mainstream social media since Trump had his social media ALL CAPS megaphone unceremoniously shut down in the wake of his supporters’ violent storming of the capital.

For more on the background to Trump’s deplatforming do make time for this excellent explainer by TechCrunch’s Taylor Hatmaker. But the short version is that Trump finally appeared to have torched the last of his social media rule-breaking chances after he succeeded in fomenting an actual insurrection on U.S. soil on January 6. Doing so with the help of the massive, mainstream social media platforms whose community standards don’t, as a rule, give a thumbs up to violent insurrection…

Facebook’s hand-picked ‘oversight’ panel upholds Trump ban — for now

Facebook’s content decision review body, a quasi-external panel that’s been likened to a ‘Supreme Court of Facebook’ but isn’t staffed by sitting judges, can’t be truly independent of the tech giant which funds it, has no legal legitimacy or democratic accountability, and goes by the much duller official title ‘Oversight Board’ (aka the FOB) — has just made the biggest call of its short life…

Facebook’s hand-picked ‘oversight’ panel has voted against reinstating former U.S. president Donald Trump’s Facebook account.

However it has sought to row the company back from an ‘indefinite’ ban — finding fault with its decision to impose an indefinite restriction, rather than issue a more standard penalty (such as a penalty strike or permanent account closure).

In a press release announcing its decision the board writes:

Given the seriousness of the violations and the ongoing risk of violence, Facebook was justified in suspending Mr. Trump’s accounts on January 6 and extending that suspension on January 7.

However, it was not appropriate for Facebook to impose an ‘indefinite’ suspension.

It is not permissible for Facebook to keep a user off the platform for an undefined period, with no criteria for when or whether the account will be restored.”

The board wants Facebook to revision its decision on Trump’s account within six months — and “decide the appropriate penalty”. So it appears to have succeeded in… kicking the can down the road.

The FOB is due to hold a press conference to discuss its decision shortly so stay tuned for updates.

This story is developing… refresh for updates…

It’s certainly been a very quiet five months on mainstream social media since Trump had his social media ALL CAPS megaphone unceremoniously shut down in the wake of his supporters’ violent storming of the capital.

For more on the background to Trump’s deplatforming do make time for this excellent explainer by TechCrunch’s Taylor Hatmaker. But the short version is that Trump finally appeared to have torched the last of his social media rule-breaking chances after he succeeded in fomenting an actual insurrection on U.S. soil on January 6. Doing so with the help of the massive, mainstream social media platforms whose community standards don’t, as a rule, give a thumbs up to violent insurrection…

Disqus facing $3M fine in Norway for tracking users without consent

Disqus, a commenting plugin that’s used by a number of news websites and which can share user data for ad targeting purposes, has got into hot water in Norway for tracking users without their consent.

The local data protection agency said today it has notified the U.S.-based company of an intent to fine it €2.5 million (~$3M) for failures to comply with requirements in Europe’s General Data Protection Regulation (GDPR) on accountability, lawfulness and transparency.

Disqus’ parent, Zeta Global, has been contacted for comment.

Datatilsynet said it acted following a 2019 investigation in Norway’s national press — which found that default settings buried in the Disqus’ plug-in opted sites into sharing user data on millions of users in markets including the U.S.

And while in most of Europe the company was found to have applied an opt-in to gather consent from users to be tracked — likely in order to avoid trouble with the GDPR — it appears to have been unaware that the regulation applies in Norway.

Norway is not a member of the European Union but is in the European Economic Area — which adopted the GDPR in July 2018, slightly after it came into force elsewhere in the EU. (Norway transposed the regulation into national law also in July 2018.)

The Norwegian DPA writes that Disqus’ unlawful data-sharing has “predominantly been an issue in Norway” — and says that seven websites are affected: NRK.no/ytring, P3.no, tv.2.no/broom, khrono.no, adressa.no, rights.no and document.no.

“Disqus has argued that their practices could be based on the legitimate interest balancing test as a lawful basis, despite the company being unaware that the GDPR applied to data subjects in Norway,” the DPA’s director-general, Bjørn Erik Thon, goes on.

“Based on our investigation so far, we believe that Disqus could not rely on legitimate interest as a legal basis for tracking across websites, services or devices, profiling and disclosure of personal data for marketing purposes, and that this type of tracking would require consent.”

“Our preliminary conclusion is that Disqus has processed personal data unlawfully. However, our investigation also discovered serious issues regarding transparency and accountability,” Thon added.

The DPA said the infringements are serious and have affected “several hundred thousands of individuals”, adding that the affected personal data “are highly private and may relate to minors or reveal political opinions”.

“The tracking, profiling and disclosure of data was invasive and nontransparent,” it added.

The DPA has given Disqus until May 31 to comment on the findings ahead of issuing a fine decision.

Publishers reminded of their responsibility

Datatilsynet has also fired a warning shot at local publishers who were using the Disqus platform — pointing out that website owners “are also responsible under the GDPR for which third parties they allow on their websites”.

So, in other words, even if you didn’t know about a default data-sharing setting that’s not an excuse because it’s your legal responsibility to know what any code you put on your website is doing with user data.

The DPA adds that “in the present case” it has focused the investigation on Disqus — providing publishers with an opportunity to get their houses in order ahead of any future checks it might make.

Norway’s DPA also has some admirably plain language to explain the “serious” problem of profiling people without their consent. “Hidden tracking and profiling is very invasive,” says Thon. “Without information that someone is using our personal data, we lose the opportunity to exercise our rights to access, and to object to the use of our personal data for marketing purposes.

“An aggravating circumstance is that disclosure of personal data for programmatic advertising entails a high risk that individuals will lose control over who processes their personal data.”

Zooming out, the issue of adtech industry tracking and GDPR compliance has become a major headache for DPAs across Europe — which have been repeatedly slammed for failing to enforce the law in this area since GDPR came into application in May 2018.

In the UK, for example (which transposed the GDPR before Brexit so still has an equivalent data protection framework for now), the ICO has been investigating GDPR complaints against real-time bidding’s (RTB) use of personal data to run behavioral ads for years — yet hasn’t issued a single fine or order, despite repeatedly warning the industry that it’s acting unlawfully.

The regulator is now being sued by complainants over its inaction.

Ireland’s DPC, meanwhile — which is the lead DPA for a swathe of adtech giants which site their regional HQ in the country — has a number of open GDPR investigations into adtech (including RTB). But has also failed to issue any decisions in this area almost three years after the regulation begun being applied.

Its lack of action on adtech complaints has contributed significantly to rising domestic (and European) pressure on its GDPR enforcement record more generally, including from the European Commission. (And it’s notable that the latter’s most recent legislative proposals in the digital arena include provisions that seek to avoid the risk of similar enforcement bottlenecks.)

The story on adtech and the GDPR looks a little different in Belgium, though, where the DPA appears to be inching toward a major slap-down of current adtech practices.

A preliminary report last year by its investigatory division called into question the legal standard of the consents being gathered via a flagship industry framework, designed by the IAB Europe. This so-called ‘Transparency and Consent’ framework (TCF) was found not to comply with the GDPR’s principles of transparency, fairness and accountability, or the lawfulness of processing.

A final decision is expected on that case this year — but if the DPA upholds the division’s findings it could deal a massive blow to the behavioral ad industry’s ability to track and target Europeans.

Studies suggest Internet users in Europe would overwhelmingly choose not to be tracked if they were actually offered the GDPR standard of a specific, clear, informed and free choice, without any loopholes or manipulative dark patterns.

StudySmarter books $15M for a global ‘personalized learning’ push

More money for the edtech boom: Munich-based StudySmarter, which makes digital tools to help learners of all ages swat up — styling itself as a ‘lifelong learning platform’ — has closed a $15 million Series A.

The round is led by sector-focused VC fund, Owl Ventures. New York-based Left Lane Capital is co-investing, along with Lars Fjeldsoe-Nielsen (ex WhatsApp, Uber and Dropbox; now GP at Balderton Capital), and existing early stage investor Dieter von Holtzbrinck Ventures (aka DvH Ventures).

The platform, which launched back in 2018 and has amassed a user-base of 1.5M+ learners — with a 50/50 split between higher education students and K12 learners, and with main markets so far in German speaking DACH countries in Europe — uses AI technologies like natural language processing (NLP) to automate the creation of text-based interactive custom courses and track learners’ progress (including by creating a personalized study plan that adjusts as they go along).

StudySmarter claims its data shows that 94% of learners achieve better grades as a result of using its platform.

While NLP is generally most advanced for the English language, the startup says it’s confident its NLP models can be transferred to new languages without requiring new training data — claiming its tech is “scalable in any language”. (Although it concedes its algorithms increase in accuracy for a given language as users upload more content so the software itself is undertaking a learning journey and will necessarily be at a different point on the learning curve depending on the source content.)

Here’s how StudySmarter works: Users input their study goals to get recommendations for relevant revision content that’s been made available to the platform’s community.

They can also contribute content themselves to create custom courses by uploading assets like lecture slides and revisions notes. StudySmarter’s platform can then turn this source material into interactive study aids — like flashcards and revision exercises — and the startup touts the convenience of the approach, saying it enables students to manage all their revision in one place (rather than wrangling multiple learning apps).

In short, it’s both a (revision) content marketplace and a productivity platform for learning — as it helps users create their own study (or lesson) plans, and offers them handy tools like a digital magic marker that automatically turns highlighted text into flashcards, while the resulting “smart” flashcards also apply the principle of spaced repetition learning to help make the studied content stick.

Users can choose to share content they create with other learners in the StudySmarter community (or not). The startup says a quarter (25%) of its users are creators, and that 80% of the content they create is shared. Overall, it says its platform provides access to more than 25 million pieces of shared content currently.

It’s topic agnostic, as you’d expect, so course content covers a diverse range of subjects. We’re told the most popular courses to study are: Economics, Medicine, Law, Computer Science, Engineering and school subjects such as Maths, Physics, Biology and English.

Regardless of how learners use it, the platform uses AI to nudge users towards relevant revision content and topics (and study groups) to keep extending and supporting their learning process — making adaptive, ongoing recommendations for other stuff they should check out.

The ease of creating learning materials on the StudySmarter platform results in a democratization of high-quality educational content, driven by learners themselves,” is the claim.   

As well as user generated content (UGC), StudySmarter’s platform hosts content created by verified educationists and publishers — and there’s an option for users to search only for such verified content, i.e. if they don’t want to dip into the UGC pool.

“In general, there is no single workflow,” says co-founder and CMO Maurice Khudhir. “We created StudySmarter to adapt to different learner types. Some are very active learners and prefer to create content, some only want to search and consume content from other peers/publishers.”

“Our platform focuses on the art of learning itself, rather than being bound by topics, sectors, industries or content types. This means that anyone, regardless of what they’re learning, can use StudySmarter to improve how they learn. We started in higher education as it was the closest, most relevant market to where we were at the time of launch. We more recently expanded to K12, and are currently running our first corporate learning pilot.”

Gamification is a key strategy to encourage engagement and advance learning, with the platform dishing out encouraging words and emoji, plus rewards like badges and achievements based on the individual’s progress. Think of it as akin to Duolingo-style microlearning — but where users get to choose the subject (not just the language) and can feed in source material if they wish.

StudySmarter says it’s taken inspiration from tech darlings like Netflix and Tinder — baking in recommendation algorithms to surface relevant study content for users -(a la Netflix’s ‘watch next’ suggestions), and deploying a Tinder-swipe-style learning UI on mobile so that its “smart flashcards” can to adapt to users’ responses.

“Firstly, we individualise the learning experience by recommending appropriate content to the learner, depending on their demographics, demands and study goals,” explains Khudhir. “For instance, when an economics student uploads a PDF on the topic of marginal cost, StudySmarter will recommend several user-generated courses that cover marginal cost and/or several flashcards on marginal cost as well as e-books on StudySmarter that cover this topic.

“In this way, StudySmarter is similar to Netflix — Netflix will suggest similar TV shows and films depending on what you’ve already watched and StudySmarter will recommend different learning materials depending on the types of content and topics you interact with.

“As well, depending on how the student likes to learn, we also individualise the learning journey through things such as the smart flashcard learning algorithm. This is based on spaced repetition. For example, if a student is testing themselves on microeconomics, the flashcard set will go through different questions and responses and the student can swipe through the flashcards, in a similar way to Tinder. The flashcards’ sequence will adapt after every response.

“The notifications are also personalised — so they will remind the student to learn at particular points in the day, adapted to how the student uses the app.”

There’s also a scan functionality which uses OCR (optical character recognition) technology that lets users upload (paper-based) notes, handouts or books — and a sketch feature lets them carry out further edits, if they want to add more notes and scribbles.

Once ingested into the platform, this scanned (paper-based) content can of course also be used to create digital learning materials — extending the utility of the source material by plugging it into the platform’s creation and tracking capabilities.

“A significant cohort of users access StudySmarter on tablets, and they find this learning flow very useful, especially for our school-age pupils,” he adds.

StudySmarter can also offer educators and publishers detailed learning analytics, per Khudhir — who says its overarching goal is to establish itself as “the leading marketplace for educational content”, i.e. by using the information it gleans on users’ learning goals to directly recommend (relevant) professional content — “making it an extremely effective distribution platform”, as he puts it.

In addition to students, he says the platform is being used by teachers, professors, trainers, and corporate members — ie. to create content to share with their own students, team members, course participants etc, or just to publish publicly. And he notes a bit of a usage spike from teachers in March last year as the pandemic shut down schools in Europe. 

StudySmarter co-founders, back from left to right: Christian Felgenhauer (co-founder & CEO), Till Söhlemann (co-founder); front: Maurice Khudir (co-founder & CMO), Simon Hohentanner (COO & co-founder). Image credits: StudySmarter

What about copyright? Khudir says they follow a three-layered system to minimize infringement risks — firstly by not letting users share or export any professional content hosted on the platform.

Uploaded documents like lecture notes and users’ own comments can be shared within one university course/class in a private learning group. But only UGC (like flashcards, summaries and exercises) can be shared freely with the entire StudySmarter community, if the user wants to.

“It’s important to note that no content is shared without the author’s permission,” he notes. “We also have a contact email for people to raise potential copyright infringements. Thanks to this system, we can say that we never had a single copyright issue with universities, professors or publishers.”

Another potential pitfall around UGC is quality. And, clearly, no student wants to waste their time revising from poor (or just plain wrong) revision notes.

StudySmarter says it’s limiting that risk by tracking how learners engage with shared content on the platform — in order to create quality scores for UGC — monitoring factors like how often such stuff is used for learning; how often the students who study from it answer questions correctly; and by looking the average learning time for a particular flashcard or summary, etc.

“We combine this with an active feedback system from the students to assign each piece of content a dynamic quality score. The higher the score is, the more often it is shown to new users. If the score falls below a certain threshold, the content is removed and is only visible to the original creator,” he goes on, adding: “We track the quality of shared content on the creator level so users who consistently share low-quality content can be banned from sharing more content on the platform.”

There are unlikely to be quality issues with verified educator/publisher content. But since it’s professional content, StudySmarter can’t expect to get it purely for free — so it says it “mostly” follows revenue-sharing agreements with these types of contributors.

It is also sharing data on learning trends and to help publishers reach relevant learners, as mentioned above. So the information it can provide education publishers about potential customers is probably the bigger carrot for pulling them in.

“We are very happy to say that the vast majority of our content is not created or shared on StudySmarter for any financial incentive but rather because our platform and technology simply make the creation significantly easier,” says Khudir, adding: “We have not paid a single Euro to any user on StudySmarter to create content and do not intend to do so going forward.” 

It’s still early days for monetization, which he says isn’t front of mind yet — with the team focused on building out the platform’s global reach — but he notes that the model allows for a number of b2b revenue streams, adding that they’ve been doing some early b2b monetization by working with employers and businesses to promote their graduate programs or to support recruitment drives. 

The new funding will be put towards product development and supporting the platform’s global expansion, per Khudir.

“We’ve run successful pilots in the U.K. and U.S. so they’re our primary focus to expand to by Q3 this year. In fact, following a test pilot in the U.K. in December, we became the number one education app within 24 hours (ahead of the likes of Duolingo, Quizlet, Kahoot, and Photomath), which bodes well!” he goes on. 

“Brazil, India and Indonesia are key targets for us due to a wider need for digital education. We’re also looking to launch in France, Nordics, Spain, Russia and many more countries. Due to the fact our platform is content-agnostic, and the technology that underpins it is universal, we’re able to scale effectively in multiple countries and languages. Within the next 12 months, we will be expanding to more than 12 countries and support millions of learners globally.”

StudySmarter’s subject-agnostic, feature-packed, one-stop-shop platform approach sets it apart from what Khudir refers to as “single-feature apps”, i.e. which just help you learn one thing — be that Duolingo (only languages), or apps that focus on teaching a particular skill-set (like Photomath for maths equations, or dedicated learn-to-code apps/courses (and toys)). 

But where the process of learning is concerned, there are lots of ways of going about it, and no one that suits everyone (or every subject), so there’s undoubtedly room for (and value in) a variety of approaches (which may happily operate in parallel). So it seems a safe bet that broad-brush learning platforms aren’t going to replace specialized tools — or (indeed) vice versa.

StudySmarter names the likes of Course Hero, StuDocu, Quizlet and Anki as taking a similar broad approach — while simultaneously claiming they’re not doing it in “quite the same, holistic, end-to-end, all-in-one bespoke platform for learners” way.  

Albeit, some of those edtech rivals are doing it with a lot more capital already raised. So StudySmarter is going to need to work smart and hard to localize and grab students’ attention as it guns for growth far beyond its European base.

 

Europe charges Apple with antitrust breach, citing Spotify App Store complaint

The European Commission has announced that it’s issued formal antitrust charges against Apple, saying today that its preliminary view is Apple’s app store rules distort competition in the market for music streaming services by raising the costs of competing music streaming app developers.

The Commission begun investigating competition concerns related to iOS App Store (and also Apple Pay) last summer.

“The Commission takes issue with the mandatory use of Apple’s own in-app purchase mechanism imposed on music streaming app developers to distribute their apps via Apple’s App Store,” it wrote today. “The Commission is also concerned that Apple applies certain restrictions on app developers preventing them from informing iPhone and iPad users of alternative, cheaper purchasing possibilities.”

The statement of objections focuses on two rules that Apple imposes in its agreements with music streaming app developers: Namely the mandatory requirement to use its proprietary in-app purchase system (IAP) to distribute paid digital content (with the Commission noting that it charges a 30% commission fee on all such subscriptions bought via IAP); and ‘anti-steering provisions’ which limit the ability of developers to inform users of alternative purchasing options.

“The Commission’s investigation showed that most streaming providers passed this fee [Apple’s 30% cut] on to end users by raising prices,” it wrote, adding: “While Apple allows users to use music subscriptions purchased elsewhere, its rules prevent developers from informing users about such purchasing possibilities, which are usually cheaper. The Commission is concerned that users of Apple devices pay significantly higher prices for their music subscription services or they are prevented from buying certain subscriptions directly in their apps.”

Commenting in a statement, EVP and competition chief Margrethe Vestager, added: “App stores play a central role in today’s digital economy. We can now do our shopping, access news, music or movies via apps instead of visiting websites. Our preliminary finding is that Apple is a gatekeeper to users of iPhones and iPads via the App Store. With Apple Music, Apple also competes with music streaming providers. By setting strict rules on the App store that disadvantage competing music streaming services, Apple deprives users of cheaper music streaming choices and distorts competition. This is done by charging high commission fees on each transaction in the App store for rivals and by forbidding them from informing their customers of alternative subscription options.”

Apple sent us this statement in response:

“Spotify has become the largest music subscription service in the world, and we’re proud for the role we played in that. Spotify does not pay Apple any commission on over 99% of their subscribers, and only pays a 15% commission on those remaining subscribers that they acquired through the App Store. At the core of this case is Spotify’s demand they should be able to advertise alternative deals on their iOS app, a practice that no store in the world allows. Once again, they want all the benefits of the App Store but don’t think they should have to pay anything for that. The Commission’s argument on Spotify’s behalf is the opposite of fair competition.”

Spotify’s founder, Daniel Ek, has also responded to the news of the Commission’s charges against Apple with a jubilant tweet — writing: “Today is a big day. Fairness is the key to competition… we are one step closer to creating a level playing field, which is so important for the entire ecosystem of European developers.”

Vestager is due to hold a press conference shortly — so stay tuned for updates.

This story is developing… 

A number of complaints against Apple’s practices have been lodged with the EU’s competition division in recent years — including by music streaming service Spotify; video games maker Epic Games; and messaging platform Telegram, to name a few of the complainants who have gone public (and been among the most vocal).

The main objection is over the (up to 30%) cut Apple takes on sales made through third parties’ apps — which critics rail against as an ‘Apple tax’ — as well as how it can mandate that developers do not inform users how to circumvent its in-app payment infrastructure, i.e. by signing up for subscriptions via their own website instead of through the App Store. Other complaints include that Apple does not allow third party app stores on iOS.

Apple, meanwhile, has argued that its App Store does not constitute a monopoly. iOS’ global market share of mobile devices is a little over 10% vs Google’s rival Android OS — which is running on the lion’s share of the world’s mobile hardware. But monopoly status depends on how a market is defined by regulators (and if you’re looking at the market for iOS apps then Apple has no competitors).

The iPhone maker also likes to point out that the vast majority of third party apps pay it no commission (as they don’t monetize via in-app payments). While it argues that restrictions on native apps are necessary to protect iOS users from threats to their security and privacy.

Last summer the European Commission said its App Store probe was focused on Apple’s mandatory requirement that app developers use its proprietary in-app purchase system, as well as restrictions applied on the ability of developers to inform iPhone and iPad users of alternative cheaper purchasing possibilities outside of apps.

It also said it was investigating Apple Pay: Looking at the T&Cs and other conditions Apple imposes for integrating its payment solution into others’ apps and websites on iPhones and iPads, and also on limitations it imposes on others’ access to the NFC (contactless payment) functionality on iPhones for payments in stores.

The EU’s antitrust regulator also said then that it was probing allegations of “refusals of access” to Apple Pay.

In March this year the UK also joined the Apple App Store antitrust investigation fray — announcing a formal investigation into whether it has a dominant position and if it imposes unfair or anti-competitive terms on developers using its app store.

US lawmakers have, meanwhile, also been dialling up attention on app stores, plural — and on competition in digital markets more generally — calling in both Apple and Google for questioning over how they operate their respective mobile app marketplaces in recent years.

Last month, for example, the two tech giants’ representatives were pressed on whether their app stores share data with their product development teams — with lawmakers digging into complaints against Apple especially that Cupertino frequently copies others’ apps, ‘sherlocking’ their businesses by releasing native copycats (as the practice has been nicknamed).

Back in July 2020 the House Antitrust Subcommittee took testimony from Apple CEO Tim Cook himself — and went on, in a hefty report on competition in digital markets, to accuse Apple of leveraging its control of iOS and the App Store to “create and enforce barriers to competition and discriminate against and exclude rivals while preferencing its own offerings”.

“Apple also uses its power to exploit app developers through misappropriation of competitively sensitive information and to charge app developers supra-competitive prices within the App Store,” the report went on. “Apple has maintained its dominance due to the presence of network effects, high barriers to entry, and high switching costs in the mobile operating system market.”

The report did not single Apple out — also blasting Google-owner Alphabet, Amazon and Facebook for abusing their market power. And the Justice Department went on to file suit against Google later the same month. So, over in the U.S., the stage is being set for further actions against big tech. Although what, if any, federal charges Apple could face remains to be seen.

At the same time, a number of state-level tech regulation efforts are brewing around big tech and antitrust — including a push in Arizona to relieve developers from Apple and Google’s hefty cut of app store profits.

While an antitrust bill introduced by Republican Josh Hawley earlier this month takes aim at acquisitions, proposing an outright block on big tech’s ability to carry out mergers and acquisitions. Although that bill looks unlikely to succeed, a flurry of antitrust reform bills are set to introduced as U.S. lawmakers on both sides of the aisle grapple with how to cut big tech down to a competition-friendly size.

In Europe lawmakers are already putting down draft laws with the same overarching goal.

In the EU, the Commission recently proposed an ex ante regime to prevent big tech from abusing its market power. The Digital Markets Act is set to impose conditions on intermediating platforms who are considered ‘gatekeepers’ to others’ market access.

While over in the UK, which now sits outside the bloc, the government is also drafting new laws in response to tech giants’ market power. It has said it intends to create a ‘pro-competition’ regime that will apply to platforms with so-called  ‘strategic market status’ — but instead of a set list of requirements it wants to target specific measures per platform.

TravelPerk raises $160M in equity and debt after a year of derailed business trips

The pandemic has hammered the travel sector over the past 12 months so you’d be forgiven for feeling a bit of pre-COVID-19 déjà vu at this news: Business trip booking platform TravelPerk is announcing a $160M Series D.

The round, which is a mix of equity and debt funding, is led by London-based growth equity firm Greyhound Capital. Existing investors also participated (specifically: DST, Kinnevik, Target Global, Felix Capital, Spark Capital, Heartcore, LocalGlobe and Amplo).

No valuation is being disclosed, nor is the split between equity and debt. So it’s a bit more of a convoluted ‘vote of confidence’ vs TravelPerk’s pre-pandemic raises — as you’d expect given the locked down year we’ve all had.

The Series D means the 2015-founded Barcelona-based startup has pulled in a total of $294M to-date for its user-friendly retooling of business trip booking geared toward ‘global SMEs’, following a top-up of $60M (in 2019) to its 2018 $44M Series C — which itself fast-followed a $21M Series B that same year.

TravelPerk’s approach is akin to a consumerization play for the (non-enterprise end of) business trip booking, combining what it bills as “the world’s largest bookable travel inventory” — letting users compare, book and invoice trains, cars, flights, hotels and apartments from a range of providers including Kayak, Skyscanner, Expedia, Booking.com, and Airbnb — with tools for businesses to manage and report trips.

There’s the obligatory freemium tier for the smallest teams. It also offers 24/7 traveler support, a flexible booking option and an open API for custom integrations.

There was no funding announcement for TravelPerk in 2020, as investors took a break from the pandemic-struck sector. But earlier this year it told TechCrunch it had been starting to see interest picking up again, as of fall 2020. The closing of a Series D now — albeit debt and equity — suggests VCs are getting over the worst of their travel wobbles.

(Another sign on that front is the $155M Series E raise for U.S.-based TripActions, which closed in January on a $5BN valuation, as U.S. corporate travel lifted off from 2020’s lows.)

TravelPerk’s PR talks bullishly about momentum and using the funds to accelerate ‘global growth’, even as the coronavirus continues to hit parts of Europe and the U.S. — its two main markets — despite what are relatively advanced vaccination rollouts (especially the US) vs other parts of the world.

At the time of writing, COVID-19 is taking a particularly heavy toll on India, where the health system looks to be careening out of control in the face of a massive wave of infections. Parts of Latin America are also struggling. A third of the way through 2021 the pandemic looks far from done. And that makes for a still uncertain outlook for business travel over the coming months.

The typical pre-pandemic business trip is now a Zoom call, while former conference calls may have morphed into emails or group chatter in Slack. And there’s no immediate reason for that to change, given remote-working professionals have had a year to adjust to a richer mix of digital comms tools.

In 2021 it’s hard to imagine an overwhelming return for business travel — not least as plenty of offices remain shuttered. The contagion risk vs hard-to-quantify in-person networking rewards associated with non-essential business trips will surely see work trips remaining a hard sell for a lot of companies.

Still, TravelPerk and its investors are willing to bet that work trips will rebound — in time.

The plan is to be ready to meet what it expects will be a far more ‘moveable feast’ of business travel demand in the future.

“Travel is definitely coming back,” says CEO and co-founder, Avi Meir. “We can see that already with the numbers. In the US for instance, we can see a 70-75% recovery in domestic flights compared to the baseline before COVID-19.

“In Europe it’s a little less certain right now, as vaccine rollout isn’t as fast, but you can look to other parts of the world and with some degree of certainty predict what the European recovery will eventually look like by looking at those examples.”

“We expect the overall global recovery in travel to be uneven over the next year, with different countries reopening at different times, meaning constantly changing guidelines and restrictions,” he goes on. “We’ll continue living in a stage of uncertainty probably for the next 12 months or longer.

“We’ve realised from speaking to our customers that the demand for travel is there, people are eager to do these trips, but this period of uncertainty makes it difficult for them so we’re focused on finding solutions that can address that.”

TravelPerk didn’t sit on its hands last year as global business travel cratered. Instead, it focused on investing in product development, making bets on how it needs to tool up for the new climate of increased uncertainty — including by taking a number of steps toward making its business more resilient to the ravages of COVID-19.

Last October it launched an API — saying it wanted to help the wider travel industry access up to date info on coronavirus restrictions. It also picked up a risk management startup, called Albatross, back in July, to feed its own resilience efforts.

Another more recent acquisition was geared toward scaling its business in the U.S. — where domestic travel looks to be recovering faster than Europe. In January it announced it was buying YC-backed rival NexTravel — gaining a base in Chicago.

At the same time, it inked a partnership with Southwest Airlines to plug a key gap in its U.S. offering.

Meir avoids breaking out any revenue growth projections for the U.S. or Europe for this year or next, when we ask, which suggests he’s preparing for lean growth in the short term.

What he does say is that investors were impressed TravelPerk managed to grow its customer base 2x in 2020 (it now has 3,000+ businesses using its platform, including a bunch of familiar startup names) — and that it avoided making layoffs (when other travel businesses swung the axe).

“Last year we doubled the size of our customer-base and we now have over 3,000 businesses using the platform, including the likes of Wise, Farfetch, GetYourGuide and Monzo. The travel budget under management also increased by almost 100% over the last 12 months,” he tells TechCrunch.

“The reason we had such interest from investors with this round is because we had, given the context, a really good 2020. We doubled our customer base, avoided making layoffs, and most importantly we were there for our customers when they needed us, constantly investing in the product to enable safe travel during Covid.”

The thesis TravelPerk is now working to is that “flexibility, safety and sustainability” will be more important than ever for business travellers, per Meir.

“Flexibility, because travel still has a lot of friction due to the different restrictions and travel lockdowns mean that a trip could be cancelled at really short notice,” says Meir. “Safety, so that every traveler knows not only what specific health requirements are in place at their destination, but also that they will get updates in real time if anything changes. Sustainability, because in this period businesses have been taking stock and realising that we all have to do more in terms of our environmental impact — and of course travel is a big part of this.”

“We have worked hard to respond quickly to these requirements,” he continues. “We updated our product and product roadmap to better match these new needs. Our flexible booking tool FlexiPerk [which TravelPerk happened to launch pre-pandemic, in summer 2019] guarantees refunds on cancelled trips at short notice; our risk-management API TravelSafe keeps travellers updated in real time on local health guidelines and restrictions; and GreenPerk, our sustainability tool, directly reduces carbon emissions through initiatives run by our partner Atmosfair.”

Sustainability and business travel aren’t a natural pairing, however. Certainly not for air travel — where environmental groups accuse carbon offsetting schemes of boiling down to ‘greenwashing’ when what’s really needed to achieve a reduction in CO2e emissions is for people to take fewer flights.

TravelPerk launched its GreenPerk offsetting scheme in February 2020, letting customers pay a fee per carbon tonne to cover its guesstimate of the total emissions toll their trip will generate. But it’s only been applied to 10% of its business volume so far.

With 90% not even being offset, you hardly need to be Greta Thunberg to call that the opposite of sustainable.

Still, Meir says he expects the offset percentage to “grow rapidly”. “We intend to use this funding to develop GreenPerk even further,” he says, adding: “We want to be the standard bearer for the industry in terms of sustainable business travel.”

However when asked whether TravelPerk might seek to advance sustainability by supporting digital replacement itself (such as by being able to offer its users videoconferencing as an alternative to flying) he declines to comment, saying: “We don’t have anything to share yet on how we’ll advance that goal [sustainability] right now, but we’re working on some exciting ideas!”

Coming up with creative ways to reduce the need for business travel certainly doesn’t feature in TravelPerk’s near term vision.

Meir predicts a “full comeback” for business travel — arguing that “the meetings that matter happen in person” — while conceding that the travel industry will nonetheless be very different. (Hence its goal of “building the products for that [more flexible] future”.)

“We expect to double down on growth in the U.S. and Europe and that includes making key hires across all roles, especially in our hubs in Chicago, London, and Barcelona,” he says, adding that it expects the team to grow “rapidly” in the next 12-24 months (without putting any numbers on the planned hires).

TravelPerk will also continue to eye acquisition targets, per Meir. “Following our first two acquisitions, of Albatross and NexTravel, this funding round will also help us to continue being aggressive in our growth strategy. We aim to complete more acquisitions this year,” he says on that. 

“Whilst many other providers have been in hibernation over the past year, we’ve been aggressive, continuing to update our product and growing our customer base, and we think that gives us a great foundation for growth in 2021 and beyond,” he adds.

Commenting on the Series D in a statement, Pogos Saiadian, investor at Greyhound Capital, said: “There is no doubt that from 2021 onwards the average business trip will look very different to how it did in 2019. We are confident that business travel will recover and thrive in the years ahead. We also believe that people will, more than ever before, need a platform like TravelPerk that has deep inventory, excellent ‘seven-star’ customer service, provides a great traveler experience and integrates with the broader tech-stack.

“We believe that this is a huge long-term opportunity, and as customers ourselves, we see first-hand the tremendous value that TravelPerk provides across organizations, from finance to admin and the travellers themselves. The fact the company is beating growth expectations already for this year further supports our belief that TravelPerk is a true market leader, and we are delighted to be supporting the next stage of the company’s growth with this investment.”

 

Kaia Health grabs $75M on surging interest in its virtual therapies for chronic pain and COPD

New York headquartered Kaia Health, which offers AI-assisted digital therapies via a mobile app for chronic pain related to musculoskeletal (MSK) disorders and for Chronic Obstructive Pulmonary Disease (COPD), has raised a $75 million Series C.

The round was led by an unnamed leading growth equity fund with support from existing investors, including Optum Ventures, Eurazeo, 3VC, Balderton Capital, Heartcore Capital, Symphony Ventures (golfer Rory McIlroy’s investment vehicle), and A Round Capital.

The funding fast-follows a $26M Series B closed last summer. The pandemic has accelerated the uptake of telemedicine, generally — and Kaia has, unsurprisingly, seen a particular surge of interest in its virtual treatments.

After all, DIY home working set-ups are unlikely to have done much good for the average information worker’s back in the pandemic-struck year. Kaia’s real-time feedback generating motion coach is also able to offer treatment for neck, hip, knee, shoulder, hand/wrist, and foot/ankle pain.

A digital health solution may have been the only lockdown-friendly option for treating conditions considered ‘elective care’ during COVID-19 — meaning suffers of chronic pain may have faced restrictions on accessing physical healthcare provision like in-person physiotherapy. Kaia says it grew its business book 600% in 2020.

Given the U.S. healthcare sales cycle is heavily focused on January onboarding of new medical benefits by employers — who are key customers for Kaia in the market, where it now has around 50 employer and health plan clients — it’s expecting another big onboarding bump next January. And while it hadn’t been looking to raise again so soon after the Series B, doing so was “a very easy process”, says co-founder and CEO Konstantin Mehl.

“We actually planned to start the raise in the end of this year and then the pandemic happened and of course we had a huge boost because the healthcare system was pretty much shut down for in person elected treatments and chronic diseases are considered to be elected treatments which I think is a bit of a mistake.

“The thing is that the big b2b partners they are really scared that they will have this big backlog of surgical interventions that are very expensive… Pre-pandemic I think 20% of employers in the US were even interested in offering a digital therapy and then that changed to 100% immediately. So that was a big boost,” he goes on. “The other thing is that our market got really hot. We don’t really need the money right now but we met these investors and it was a very easy process.”

Kaia says that globally its digital MSK platform is accessible to 60M patients — which it claims makes it by far the biggest player in the space in terms of covered lives. (Other startups in the space include Hinge Health and Sword Health which are both also focused on MSK; and Physera, a virtual physical therapy provider that was acquired by Omada last year.)

The plan for Kaia’s (unexpectedly rapid) funding boost is “to be much more aggressive in building out our commercial team”, Mehl tells TechCrunch. “We are very proud of being a product focused company but it also gets a bit stupid at the point where you just need to bring the product in front of the relevant customer so we are investing a lot in that and also in computer vision because it’s still our USP.”

Kaia’s digital therapies rely on using computer vision to digitize proven treatments so they can be delivered outside traditional healthcare environments, with the app helping patients perform exercises correctly by themselves.

The user only needs a smartphone or tablet with a camera for the app to do real-time, posture-tracking and provide feedback. No wearables are required. Although Kaia is researching how 3D data from depth-sensing cameras which are now being embedded in higher end mobile devices may further feed the accuracy of its body tracking models.

“We basically can have the same correction functionality in your home that you have can have with a PT [personal trainer],” says Mehl. “We want to invest a lot more in computer vision and build out that team so we can also do that more aggressively now [with the Series C funding] which is cool.”

Kaia has started to use motion-tracking in another way in its patient-facing chronic pain app — as a way to track progress. So as well as asking patients to quantify their pain (which is a subjective measure) it can have an objective biomarker alongside patients’ pain assessments by getting them to do regular tests that track their body movements.

“We started to use motion-tracking besides the correction-tracking functionality also as a biomarker. So we basically can measure your body functionality. Now we can, for example, see which body parts are less flexible and that’s how we can measure the disease progression, instead of asking you how is the pain level today,” he explains. “Pain is the number one cause for work disability and the reason is because your body functionality decreases so if we can measure that correctly then we can also escalate it to the right speciality doctor, for example.”

Kaia can also quantify the progress of COPD patients in a similar way — by tracking them performing a sit-down, stand-up test.

Care for COPD has had a particular imperative during the pandemic as people with the chronic inflammatory lung disease who catch COVID-19 have the highest mortality rate among COVID-19-infected patients, per Mehl.

At the same time, pulmonary rehabilitation centers have been shut down during the pandemic because of the risk of infection to patients. So, once again, Kaia’s app has provided an alternative for suffers of chronic conditions to continue their rehab at home.

In the US Kaia focuses on activation rate as a percentage of the employer population — and Mehl says this stands between 5%-10%, depending on how the app is communicated to potential users. “We also had a company that had 15% of their population active it one year but you always have these outliers,” he adds.

Looking ahead to the coming 12 months, he says he expects to be able to grow revenue 5x-10x as a number of bigger partnerships kick in.

In Germany, where Kaia plans to start prescribing its app (via doctors), he’s hopeful they’ll be able to get 10,000 prescriptions done over the same period, once it has approval to do so under a national reimbursement system.

Plugging Kaia into wider healthcare provision

Integrating into a wider care pathway by being able to loop in healthcare providers where appropriate has been a big recent focus for Kaia.

In February it kicked off a major integration of its patient-facing MSK therapy/pain-management app with a referral system that plugs into services offered by other healthcare providers — using an escalation algorithm and screening and triage system, which it calls Kaia Gateway — to identify patients at risk of needing more invasive or intense treatment than the digital therapies its app can provide. It’s working with a number of premium partners for this referral path (i.e. within an employer or health plan’s ecosystem).

Its partners can provide additional medical services to relevant patients, both general and specialty care solutions, including disease management programs, PT, telemedicine, care navigation, and expert medical opinion services. Partners also get access to detailed treatment history on referred patients from Kaia, including via APIs.

“Besides being just an app-based therapy we want to expand more down the treatment path,” explains Mehl. “And also work with external medical providers — doctors etc — and bring our users at the right point to the right doctor to prevent any deterioration in pain that we cannot treat in the app. I think that brings a lot of trust, also, to the app.

“Because I think what’s happening now is that there’s so many digital therapies popping up everywhere. And one thing that is happening in the beginning when you’re small, like us three years ago, we just offered this app and said we don’t really know what’s happening before or after… Now we really want to integrate.”

“We have some cool partnerships coming up in the U.S. — partner with bigger medical providers that have thousands of medical providers on their payroll,” he goes on. “And then integrate with them so we can optimize the full treatment path. Because then the patients can really feel safe and say hey they don’t keep me in the app-based therapy when they know I should actually see somebody else because it’s not the best care anymore.”

“We have this platform approach but then we saw now it really makes sense to go deeper in these two diseases,” Mehl adds. “We start with our chronic pain approach in the U.S. and say we really want to go down the treatment path. And because the main problem is if people then start to be frustrated in our app and say I need something else and then they get back to this, for example, pain killers, opioids, surgery, cycle, and then they’re back in the system where we actually wanted to help them getting out of it so that’s why we say it’s not really possible to not integrate with healthcare professionals.

“You need to integrate them. If not you cannot always offer best care and then the patients realize at one point this app is not enough — but I also don’t get directed to a medical professional who could offer a new diagnosis or a different prescription. And then your trust is lost.”

“The other point is when you think about different levels of chronification, because we’re so scalable we can catch people much earlier in their chronification journey when the disease is still reversible. And even if our app is still the best treatment it helps to get an additional medical professional involvement to validate a diagnosis — or to just talk with a patient so that they really know that they’re safe here. So just reassuring, motivation and also diagnosis, to really say okay just to be sure we should make this diagnosis just to be sure you are getting best care. So I think that’s a huge product task and operational task for us.”

Kaia is starting by doing case referrals manually in-house — by setting up a medical case review team, staffed by doctors and therapies it employs — aided by a triage system that automatically flags patients for the team to review. But Mehl hopes this process will be increasingly assisted by AI.

“We assume yellow flags from what they told us in the entry test or from their exercise feedback or therapy feedback. Or from the interactions they have with their motivational coaches,” he explains of how the case review system works now. “Then [the case review team] has a look at them and decides if they should see an external medical provider partner and at what time.”

“Over time this should get more and more automated,” he adds. “We hope that we can make this better and better with machine learning over time and show that we can optimize the treatment path much better than just having this manual oversight. And that’s a huge challenge. If you think about what you need to do to get there I think it will define our product roadmap for years… But that’s also where the most value is to increase the quality of care. If not you just have siloed solutions everywhere… and the patient suffers because the treatment path is torn apart and it doesn’t feel like one thing.

“We will always need this clinical oversight. But where we can use machine learning is to help these medical professionals to look at the right patients at the right time. Because they cannot look at everybody all the time so there needs to be some filtering. And I think that filtering — or that triage — that can be really done by machine learning.”

Would Kaia ever consider becoming a healthcare provider itself? Combining a telemedicine service with some digitally delivered treatments is something that Sweden’s Kry, for example, has done — launching online cognitive behavioral therapy (CBT) treatments in its home market back in 2018 while also offering a telehealth platform and running a full healthcare service in some markets.

Mehl suggests not, arguing that telemedicine companies are by necessity generalists, since they are catering to “the top of the funnel”, handling and filtering patients with all sorts of complaints — which he says makes them less suited to focus deeply on catering to specific disease.

While, for Kaia, it’s deeply focused on building tech to treat a few specific diseases — and so, likewise, isn’t best suited to general medical service delivery. Partnering with medical service providers is therefore the obvious choice.

“I think about the patient journey and for the telemedicine companies… they might have some treatment paths integrated but they’re never as good as completely owning one chronic disease as we can be,” he says. “Most of chronic disease patients they just want to start a treatment because they talked with so many doctors. They want to find something that helps them and then at the right moment talk to the right medical professional. So that’s a difference in how telemedicine companies are doing it.

“The other question is how much of the medical provider job of the treatment path do we want to internalize? And we really are a tech company. We’re not very keen on becoming a medical provider. And we see that there are so many amazing medical providers in the landscape here — in different countries — that during COVID-19 had to become more digital, so it’s easy to partner with them, and why would we want to learn how to run a hospital where there are all these people who did it for decades and are really good at it, and we are really good at tech.”

“It’s really cool for the patient in the end. They know they get the best of both worlds and it’s optimized and ideally these offline medical providers get data from us so they can make better decisions — so they can also have a higher quality of decision-making because they have more data than just talking with a patient for two minutes. They can see our complete dashboard and how the patient progressed over time and everything — so the quality of decision-making gets higher.”

The U.S. overtook Europe as Kaia’s biggest market in recent years so it’s inexorably been focusing a lot of energy on serving its growing number of U.S. customers. The size of the addressable market in the U.S. is also massive, with ~100M chronic pain patients in the country, or around a third of the population.

But Kaia continues to develop its proposition in a number of European markets, including Germany which was where the business started. Mehl says its team in Munich is looking at how to make a recent reimbursement law for app-based health treatments will work for it in practice. It hasn’t yet obtained the necessary reimbursement code for doctors there to start prescribing its tech to their patients but it’s taking steps to change that.

At the same time, Mehl concedes that learning how to make doctors want to prescribe its app is an “open challenge” in the market.

“Some startups started doing it but — at scale — I still think there have to be some learning to be made to really scale it up,” he says of the German app prescriptions, adding that it’s preparing to hand in its application in relation to its COPD app which it will be bringing to market in Europe with a pharma partner.

“We also closed a partnership with a pharma company for Germany, UK and France to distribute our app through the pulmonologists — which is pretty cool. So we’re launching that partnership now,” he adds. “That will be exciting to see where the prescriptions start.”

Mehl professes himself a fan of Germany’s approach to digital healthcare — saying that it makes it easy to obtain a general reimbursement code which then gives the app-maker a year to prove any cost savings and deliver the care they say they do — couching that as a compromise between the “really long” process of getting approval for a medicine and the data-driven needs of startups where founders need to be able to show traction to get investment to build and grow a business in the first place.

“Healthcare’s already tough because you have to do clinical trials and it’s already a bit slower. So a longer approval process makes it even more difficult to launch something useful and I can see the UK, France, the Nordics bringing out some similar legislation to facilitate that,” he adds.

“We expect in other European countries — and in other countries in generally, like Canada, Australia and in Asia too — that they update their regulation to cover digital therapies. And then that will be good because we will know how to get apps prescribed and we know the other way, like in the U.S., [i.e. without needing to go through a doctor first]… And so with our app being so scalable we could easily launch in these countries compared to other companies in the market that are more reliant on one specific healthcare system or on hardware or anything that limits the scalability.”

 

The UK’s plan to tackle big tech won’t be one-size fits all

The director of a new unit set up this month inside the UK’s competition watchdog — with a dedicated focus on tech giants’ impacts on digital markets — has been giving a hint of how it could operate, once it’s on a statutory footing and imbued with powers to sanction problem platforms and potentially even order some forms of structural separation.

The government announced its intention to regulate big tech in November last year — saying it would establish a “pro-competition” regime to tackle concerns associated with digital markets, such as ‘winner takes all’ network-effect dynamics.

It’s not clear when exactly that will happen — the government has only said it will do so as soon as parliamentary time allows.

The UK is devising its own approach to digital regulation now that the country is outside the European Union — where lawmakers recently proposed a major new set of pan-EU rules to apply to digital services (the Digital Services Act) and ex ante requirements for the largest tech giants (the Digital Markets Act).

EU lawmakers have also proposed draft rules for high risk applications of AI, while the UK has an Online Safety bill in the pipeline (a legislative proposal is due this year) — so there are a lot of new digital rules being written right now, and the potential for confusing and counterproductive regulatory overlap if lawmakers don’t end up on the same page.

Continued divergence of approach between the UK and the EU is, nonetheless, to be expected, even as UK lawmakers say they want to engage with the international community as they work on drafting rules to ensure a British digital rulebook aligns in spirit (if not letter) with requirements being shaped for Internet platforms elsewhere.

The UK’s Digital Markets Unit (DMU) launched earlier this month, to help support the government as it drafts legislation to put it on a statutory footing and ahead of the unit being able to function as big tech’s British overseer.

Speaking at a conference on Friday the head of the DMU, Catherine Batchelor, detailed the approach she wants the unit to take, and some of the powers it has advised the government it needs to deliver on ministers’ goal of fostering competition in tipping-prone digital markets.

Giving an overview of the issues, she said a new approach is needed to regulating digital markets owing to changed dynamics — noting that companies “who were once garage startups or started from campuses in universities [and] are now the most powerful firms across the world” — and saying tech giants have been able to accrue so much market power as a result of digital market characteristics like access to data; network effects and economies of scale associated with platform business; and the ecosystems firms have been able to build around their core businesses — leveraging those interlocking benefits of data, scale and network effects to also acquire rivals to (further) grow and consolidate a powerful position.

“You might say well what’s the danger of that? But I think we see the danger of that on a day to day basis. Firms can use this position to exploit the consumers and businesses that rely on them,” she explained. “From a business perspective that might be the price you’re paying to sell your goods and services on the marketplace or the price you’re paying to list your app in an app store or the price you’re paying to advertise your products and services.

For consumers she pointed out they may be ‘paying’ for free digital goods and services with their attention or data, highlighting concerns over whether the amount of data being provided by users is a “fair exchange” for what they’re getting in return.

On the business side, Batchelor pointed to ‘self preferencing’ as one of the problematic “exclusionary” tactics tech giants indulge in that the unit will be seeking to tackle. “The overarching impact of that is a less vibrant digital economy,” she said. “You don’t have these new tech firms coming through, able to grow in the way the ones of old were.”

The problem with trying to tackle unfair (digital) market behaviors with existing competition law is that it can’t be “proactive and preventative”, she said — hence DMU has recommended setting rules that prevent firms from engaging in such conduct in the first place.

But she also said the unit is keen to avoid the risk of over-regulating. So unlike the EU’s DMA proposal it hasn’t supported having a set list of ‘dos and don’ts’ to apply universally to all platforms which fall under scope of the regulation.

Instead she said it wants more flexibility to target requirements at specific platforms — to take account of unique characteristics and any variations in market or operation.

On the question of who would fall under scope of the incoming pro-competition regime, the unit has recommended an “evidence-based assessment” to define whether or not a firm has ‘strategic market status’ (SMS) — meaning they are “in a position which is unlikely to be transitory”, as she put it.

“Our recommendations were that to come within scope of this regime the DMU should have to assess whether a firm has substantial, entrenched market power and that that market power provides the firm with a strategic position,” she went on. “We’ll be looking at the factors which might lead to that entrenched position — so things like barriers to entry and expansion.”

“The addition of strategic position is probably the more novel or more new element,” she added. “What we are getting at with that is whether the effects of the firm’s market power are particularly widespread or significant.”

Batchelor also gave a few examples of what strategic position might boil down to. Such as the sheer size of the business (which makes its impact particularly significant or widespread); or that the firm acts as an important access point to businesses trying to reach customers (along the lines of the ‘gatekeeper’ designation EU lawmakers have used in the DMA); or its ability to leverage or extend its market power from a core operational market into neighbouring markets.

The recommendation is for the SMS test to be carried out by the regulator, which would consult and take views during the process of arriving at a designation — a period which she suggested could take as long as a year.

It has also recommended that the SMS designation — once arrived at — is fixed for a set period. (Batchelor said they’d recommended five years.)

Firms that meet the SMS test will be subject to the full sweep of the pro-competition regime. The DMU wants this to include a preventative code of conduct — specific to the firm but with general objectives set out in legislation (such as “fair trading, open choices and trust and transparency”). And the government appears to have accepted that approach.

Also speaking at the conference was Harry Lund, who works on digital policy at the Department of Digital, Media, Culture and Sport, as deputy director for digital regulation and markets, as it draws up the new competition approach.

“At the centre of this regime will be an enforceable code of conduct to provide firms with substantial and endearing market power — so ‘SMS’ status — with clear expectations over what’s acceptable and what’s not acceptable behavior,” he said, adding: “The government has also accepted the case in principle for pro-competition interventions — which would address the underlying sources of market power, noting that these are potentially very major market interventions.”

Lund added that the overarching aim for the regime will be for regulators “to proactively shape platforms’ behaviour to avoid harmful behavior before it happens”, while when harmful behavior does happen the goal is to be able to address it more quickly then currently happens under existing competition law.

“The DMU would be able to set the code itself, very much targeted at the evidence of harms and problematic conduct that was identified through the SMS designation,” Batchelor went on.

“One of the key factors that we highlighted in our advice is the ability for these codes to differ between the activities of different SMS firms. So we are not necessarily recommending there is one code that is uniform across different SMS firms and activities but that there should be the discretion to be able to target those codes depending on the particular activity that is of concern, or the particular business model of the firm for example,” she went on, flagging that as a distinguishing feature from the European Commission’s approach — and part of the DMU’s philosophy of trying to avoid “over or under regulation”.

The idea is therefore “the ability to go further when you feel that it warrants it, but equally the ability to row back and take away regulation where you feel it’s not needed for a particular firm”, she also said, adding that the unit feels that’s “very important”.

Batchelor said the DMU has suggested each code be developed alongside an SMS designation — so that a consultation on a firm’s SMS status would happen in parallel to a consultation on a draft code of conduct for the same firm.

On top of the code, the DMU has proposed pro-competition interventions — which she said are intended to address the reason why a firm has a powerful position in the first place. The aim will be for interventions to try and promote “greater contestability, greater competition” in the markets where a given firm operates, she added.

“These are vital interventions if what you want to do is not just deal with the consequences of the firm having this powerful position — but actually try and change it for the future,” she emphasized.

The unit has suggested a range of pro-competitive interventions to be able to do the job — including data-related interventions, such as personal data mobility (so consumers can seamlessly move their data from platform to platform); interoperability; access to data (by competitors or third parties); common standards; and separation remedies — “not necessarily going so far as full ownership separation”, but perhaps separation of different business divisions within a firm, for example.

“We recognize that these are very significant interventions and would not be undertaken lightly. The idea around the pro-competitive interventions is that the DMU would have to go through… and evidence-based process to firstly identify what is the particular problem that is causing a lack of competition in the market but also then to satisfy itself that the remedy it’s proposing… is a rational, proportionate and effective way of dealing with that problem,” she added.

“We would expect significant consultation to go into the development of these remedies, and, for example, to undergo testing to ensure that they were effective and they were going to have the intended outcome. So we recognize the significance of these remedies but we also recognize how powerful they could be and we think they’re a very important part of the regulator’s toolkit.”

The DMU has also proposed a bespoke merger regime for firms with SMS — including an obligation to make the Competition and Markets Authority (CMA) aware of all intended transactions and mandatory notifications for some transactions that meet particular thresholds.

“This is in contrast to the CMA’s existing regime which is a voluntary regime,” Batchelor noted, saying the intent is to make sure the watchdog is in a position to consider the market impacts of proposed transactions.

Significantly, she said the DMU has proposed using “a more caution standard of proof” in relation to mergers — which could mean it will become much, much harder for tech giants to gain regulatory approval for acquisitions in the UK (assuming the government decides to take this particular piece of the DMU’s advice).

“What we’re saying is that with this mergers, quite often there is a small likelihood of a very, very significant impact on competition, with the likelihood for significant harm, and with these tech mergers where you have these firms in such significant positions perhaps having to say that on the balance of probabilities this merger is likely to lead to a significant lessening of competition is too high a bar,” said Batchelor, adding: “We think that [having a more cautious standard of proof is] really important so we can effectively scrutinize the mergers and acquisitions that these firms are undertaking.”

On the enforcement front, she notes that it’s important the DMU is able to take action if firms breach codes of conduct or pro-competition interventions.

Though she said it has suggested a “participatory” approach to tackling compliance issues in the first instance — “working with the firm in a relatively informal way”, i.e. to try and address the problem without regulatory sanction.

If that fails she said it’s recommended the DMU has the power to order firms to change behaviors to comply with requirements. And for those tech giants that act negligently or intentionally breach requirements the DMU wants to have the power to issue “very significant” penalties — of up to 10% of a firm’s global annual turnover.

Lund said the government has a number of priorities as it works on developing and implementing the new regime — which includes instructing the DMU to look at how the code of conduct could work in practice for specific sectors of the economy — such as content creators and news publishers (“where we know from the CMA’s market study and other work that there’s a particular competition issue”).

It is also seeking to shape international debate on digital competition — such as at the G7. “The international dimension of this is really important. The UK is not operating in a vacuum so we’re looking to build consensus, foster dialogue and increase co-operation with international partners as they seek to develop their own approaches.”

He confirmed that a consultation will be launched later this year to set out the government’s vision on digital competition and its specific proposals for the regime — fed by the expert advice from the DMU (which Lund said DCMS is now working through, as well as taking advice from other sources).

The final details of the regime — including key elements such as penalties for breaches — will be set out in a legislative proposal from DCMS once it’s concluded the consultation process.

The latter is slated to take place in the first half of this year, but there’s no timeframe from government on when it will introduce legislation. But the soonest would logically be the second half of this year — so there’s no realistic prospect of legislation being introduced before 2022.

During a Q&A discussion at the conference, Lund gave an example of a potential pro-competition remedy the DMU may be able to apply — albeit at what he couched as “the more radical end of the spectrum” — as ordering changes to default settings which affect how people’s data is collected, such as requiring an active opt in from consumers to gather their data, rather than consumers having to actively opt out.

It won’t be “one-size fits all”, he emphasized, saying “the tailored nature of the pro-competition interventions is that if that’s the issue then that’s where the remedy can be targeted”.

He added that the work reconfiguring competition policy for an era of digital giants is “complex and far-reaching”, adding: “A new competition regime will be a major change to the regulatory landscape so it’s really important we get it right.”

TikTok to open a ‘Transparency’ Center in Europe to take content and security questions

TikTok will open a center in Europe where outside experts will be shown information on how it approaches content moderation and recommendation, as well as platform security and user privacy, it announced today.

The European Transparency and Accountability Centre (TAC) follows the opening of a U.S. center last year — and is similarly being billed as part of its “commitment to transparency”.

Soon after announcing its U.S. TAC, TikTok also created a content advisory council in the market — and went on to replicate the advisory body structure in Europe this March, with a different mix of experts.

It’s now fully replicating the U.S. approach with a dedicated European TAC.

To-date, TikTok said more than 70 experts and policymakers have taken part in a virtual U.S. tour, where they’ve been able to learn operational details and pose questions about its safety and security practices.

The short-form video social media site has faced growing scrutiny over its content policies and ownership structure in recent years, as its popularity has surged.

Concerns in the U.S. have largely centered on the risk of censorship and the security of user data, given the platform is owned by a Chinese tech giant and subject to Internet data laws defined by the Chinese Communist Party.

While, in Europe, lawmakers, regulators and civil society have been raising a broader mix of concerns — including around issues of child safety and data privacy.

In one notable development earlier this year, the Italian data protection regulator made an emergency intervention after the death of a local girl who had reportedly been taking part in a content challenge on the platform. TikTok agreed to recheck the age of all users on its platform in Italy as a result.

TikTok said the European TAC will start operating virtually, owing to the ongoing COVID-19 pandemic. But the plan is to open a physical center in Ireland — where it bases its regional HQ — in 2022.

EU lawmakers have recently proposed a swathe of updates to digital legislation that look set to dial up emphasis on the accountability of AI systems — including content recommendation engines.

A draft AI regulation presented by the Commission last week also proposes an outright ban on subliminal uses of AI technology to manipulate people’s behavior in a way that could be harmful to them or others. So content recommender engines that, for example, nudge users into harming themselves by suggestively promoting pro-suicide content or risky challenges may fall under the prohibition. (The draft law suggests fines of up to 6% of global annual turnover for breaching prohibitions.)

It’s certainly interesting to note TikTok also specifies that its European TAC will offer detailed insight into its recommendation technology.

“The Centre will provide an opportunity for experts, academics and policymakers to see first-hand the work TikTok teams put into making the platform a positive and secure experience for the TikTok community,” the company writes in a press release, adding that visiting experts will also get insights into how it uses technology “to keep TikTok’s community safe”; how trained content review teams make decisions about content based on its Community Guidelines; and “the way human reviewers supplement moderation efforts using technology to help catch potential violations of our policies”.

Another component of the EU’s draft AI regulation sets a requirement for human oversight of high risk applications of artificial intelligence. Although it’s not clear whether a social media platform would fall under that specific obligation, given the current set of categories in the draft regulation.

However the AI regulation is just one piece of the Commission’s platform-focused rule-making.

Late last year it also proposed broader updates to rules for digital services, under the DSA and DMA, which will place due diligence obligations on platforms — and also require larger platforms to explain any algorithmic rankings and hierarchies they generate. And TikTok is very likely to fall under that requirement.

The UK — which is now outside the bloc, post-Brexit — is also working on its own Online Safety regulation, due to present this year. So, in the coming years, there will be multiple content-focused regulatory regimes for platforms like TikTok to comply with in Europe. And opening algorithms to outside experts may be hard legal requirement, not soft PR.

Commenting on the launch of its European TAC in a statement, Cormac Keenan, TikTok’s head of trust and safety, said: With more than 100 million users across Europe, we recognise our responsibility to gain the trust of our community and the broader public. Our Transparency and Accountability Centre is the next step in our journey to help people better understand the teams, processes, and technology we have to help keep TikTok a place for joy, creativity, and fun. We know there’s lots more to do and we’re excited about proactively addressing the challenges that lie ahead. I’m looking forward to welcoming experts from around Europe and hearing their candid feedback on ways we can further improve our systems.”

 

Kry closes $312M Series D after use of its telehealth tools grows 100% yoy

Swedish digital health startup Kry, which offers a telehealth service (and software tools) to connect clinicians with patients for remote consultations, last raised just before the pandemic hit in Western Europe, netting a €140M Series C in January 2020.

Today it’s announcing an oversubscribed sequel: The Series D raise clocks in at $312M (€262M) and will be used to keep stepping on the growth gas in the region.

Investors in this latest round for the 2015-founded startup are a mix of old and new backers: The Series D is led by CPP Investments (aka, the Canadian Pension Plan Investment Board) and Fidelity Management & Research LLC, with participation from existing investors including The Ontario Teachers’ Pension Plan, as well as European-based VC firms Index Ventures, Accel, Creandum and Project A.

The need for people to socially distance during the coronavirus pandemic has given obvious uplift to the telehealth category, accelerating the rate of adoption of digital health tools that enable remote consultations by both patients and clinicians. Kry quickly stepped in to offer a free service for doctors to conduct web-based consultations last year, saying at the time that it felt a huge responsibility to help.

That agility in a time of public health crisis has clearly paid off. Kry’s year-over-year growth in 2020 was 100% — meaning that the ~1.6M digital doctors appointments it had served up a year ago now exceed 3M. Some 6,000 clinicians are also now using its telehealth platform and software tools. (It doesn’t break out registered patient numbers).

Yet co-founder and CEO, Johannes Schildt, says that, in some ways, it’s been a rather quiet 12 months for healthcare demand.

Sure the pandemic has driven specific demand, related to COVID-19 — including around testing for the disease (a service Kry offers in some of its markets) — but he says national lockdowns and coronavirus concerns have also dampened some of the usual demand for healthcare. So he’s confident that the 100% growth rate Kry has seen amid the COVID-19 public health crisis is just a taster of what’s to come — as healthcare provision shifts toward more digital delivery.

“Obviously we have been on the right side of a global pandemic. And if you look back the mega trend was obviously there long before the pandemic but the pandemic has accelerated the trend and it has served us and the industry well in terms of anchoring what we do. It’s now very well anchored across the globe — that telemedicine and digital healthcare is a crucial part of the healthcare systems moving forward,” Schildt tells TechCrunch.

“Demand has been increasing during the year, most obviously, but if you look at the broader picture of healthcare delivery — in most European markets — you actually have healthcare usage at an all time low. Because a lot of people are not as sick anymore given that you have tight restrictions. So it’s this rather strange dynamic. If you look at healthcare usage in general it’s actually at an all time low. But telemedicine is on an upward trend and we are operating on higher volumes… than we did before. And that is great, and we have been hiring a lot of great clinicians and been shipping a lot of great tools for clinicians to make the shift to digital.”

The free version of Kry’s tools for clinicians generated “big uplift” for the business, per Schildt, but he’s more excited about the wider service delivery shifts that are happening as the pandemic has accelerated uptake of digital health tools.

“For me the biggest thing has been that [telemedicine is] now very well established, it’s well anchored… There is still a different level of maturity between different European markets. Even [at the time of Kry’s Series C round last year] telemedicine was maybe not something that was a given — for us it’s always been of course; for me it’s always been crystal clear that this is the way of the future; it’s a necessity, you need to shift a lot of the healthcare delivery to digital. We just need to get there.”

The shift to digital is a necessary one, Schildt argues, in order to widen access to (inevitably) limited healthcare resources vs ever growing demand (current pandemic lockdown dampeners excepted). This is why Kry’s focus has always been on solving inefficiencies in healthcare delivery.

It seeks to do that in a variety of ways — including by offering support tools for clinicians working in public healthcare systems (for example, more than 60% of all the GPs in the UK market, where most healthcare is delivered via the taxpayer-funded NHS, is using Kry’s tools, per Schildt); as well as (in a few markets) running a full healthcare service itself where it combines telemedicine with a network of physical clinics where users can go when they need to be examined in person by a clinician. It also has partnerships with private healthcare providers in Europe.

In short, Kry is agnostic about how it helps deliver healthcare. That philosophy extends to the tech side — meaning video consultations are just one component of its telemedicine business which offers remote consultations for a range of medical issues, including infections, skin conditions, stomach problems and psychological disorders. (Obviously not every issue can be treated remotely but at the primary care level there are plenty of doctor-patient visits that don’t need to take place in person.)

Kry’s product roadmap — which is getting an investment boost with this new funding — involves expanding its patient-facing app to offer more digitally delivered treatments, such as Internet Cognitive Based Therapy (ICBT) and mental health self-assessment tools. It also plans to invest in digital healthcare tools to support chronic healthcare conditions — whether by developing more digital treatments itself (either by digitizing existing, proven treatments or coming up with novel approaches), and/or expanding its capabilities via acquisitions and strategic partnerships, according to Schildt.

Over the past five+ years, a growing number of startups have been digitizing proven treatment programs, such as for disorders like insomnia and anxiety, or musculoskeletal and chronic conditions that might otherwise require accessing a physiotherapist in person. Options for partners for Kry to work with on expanding its platform are certainly plentiful — although it’s developed the ICBT programs in house so isn’t afraid to tackle the digital treatment side itself.

“Given that we are in the fourth round of this massive change and transition in healthcare it makes a lot of sense for us to continue to invest in great tools for clinicians to deliver high quality care at great efficiency and deepening the experience from the patient side so we can continue to help even more people,” says Schildt.

“A lot of what we do we do is through video and text but that’s just one part of it. Now we’re investing a lot in our mental health plans and doing ICBT treatment plans. We’re going deeper into chronic treatments. We have great tools for clinicians to deliver high quality care at scale. Both digitally and physically because our platform supports both of it. And we have put a lot of effort during this year to link together our digital healthcare delivery with our physical healthcare delivery that we sometimes run ourselves and we sometimes do in partnerships. So the video itself is just one piece of the puzzle. And for us it’s always been about making sure we saw this from the end consumer’s perspective, from the patient’s perspective.”

“I’m a patient myself and still a lot of what we do is driven by my own frustration on how inefficient the system is structured in some areas,” he adds. “You do have a lot of great clinicians out there but there’s truly a lack of patient focus and in a lot of European markets there’s a clear access problem. And that has always been our starting point — how can we make sure that we solve this in a better way for the patients? And then obviously that involves us both building strong tools and front ends for patients so they can easily access care and manage their health, be pro-active about their health. It also involves us building great tools for clinicians that they can operate and work within — and there we’re putting way more effort as well.

“A lot of clinicians are using our tools to deliver digital care — not only clinicians that we run ourselves but ones we’re partnering with. So we do a lot of it in partnerships. And then also, given that we are a European provider, it involves us partnering with both public and private payers to make sure that the end consumer can actually access care.”

Another batch of startups in the digital healthcare delivery space talk a big game about ‘democratizing’ access to healthcare with the help of AI-fuelled triage or even diagnosis chatbots — with the idea that these tools can replace at least some of the work done by human doctors. The loudest on that front is probably Babylon Health.

Kry, by contrast, has avoided flashy AI hype, even though its tools do frequently incorporate machine learning technology, per Schildt. It also doesn’t offer a diagnosis chatbot. The reason for its different emphasis comes back to the choice of problem to focus on: Inefficiencies in healthcare delivery — with Schildt arguing that decision-making by doctors isn’t anywhere near the top of the list of service pain-points in the sector.

“We’re obviously using what would be considered AI or machine learning tools in all products that we’re building. I think sometimes personally I’m a bit annoyed at companies screaming and shouting about the technology itself and less about what problem you are solving with it,” he tells us. “On the decision-support [front], we don’t have the same sort of chatbot system that some other companies do, no. It’s obviously something that we could build really effortlessly. But I think — for me — it’s always about asking yourself what is the problem that you’re solving for? For the patient. And to be honest I don’t find it very useful.

“In many cases, especially in primary care, you have two categories. You have patients that already know why they need help, because you have a urinary tract infection; you had it before. You have an eye infection. You have a rash —  you know that it’s a rash, you need to see someone, you need to get help. Or you’re worried about your symptoms and you’re not really sure what it is — and you need comfort. And I think we’re not there yet where a chatbot would give you that sort of comfort, if this is something severe or not. You still want to talk to a human being. So I think it’s of limited use.

“Then on the decision side of it — sort of making sure that clinicians are making better decisions — we are obviously doing decision support for our clinicians. But if it’s one thing clinicians are really good at it’s actually making decisions. And if you look into the inefficiencies in healthcare the decision-making process is not the inefficiency. The matching side is an inefficiency side.”

He gives the example of how much the Swedish healthcare system spends on translators (circa €200M) as a “huge inefficiency” that could be reduced simply — by smarter matching of multilingual clinicians to patients.

“Most of our doctors are bilingual but they’re not there at the same time as the patient. So on the matching side you have a lot of inefficiency — and that’s where we have spent time on, for example. How can we sort that, how can we make sure that a patient that is seeking help with us ends up with the right level of care? If that is someone that speaks your native language so you can actually understand each other. Is this something that could be fully treated by a nurse? Or should it be directly to a psychologist?”

“With all technology it’s always about how do we use technology to solve a real problem, it’s less about the technology itself,” he adds.

Another ‘inefficiency’ that can affect healthcare provision in Europe relates to a problematic incentive to try to shrink costs (and, if it’s private healthcare, maximize an insurer’s profits) by making it harder for patients to access primary medical care — whether through complicated claims processes or by offering a bare minimum of information and support to access services (or indeed limiting appointment availability), making patients do the legwork of tracking down a relevant professional for their particular complaint and obtaining a coveted slot to see them.

It’s a maddening dynamic in a sector that should be focused on making as many people as healthy as they possibly can be in order that they avoid as much disease as possible — obviously as that outcome is better for the patients themselves. But also given the costs involved in treating really sick people (medical and societal). A wide range of chronic conditions, from type 2 diabetes to lower back pain, can be particularly costly to treat and yet may be entirely preventable with the right interventions.

Schildt sees a key role for digital healthcare tools to drive a much needed shift toward the kind of preventative healthcare that would be better all round, for both patients and for healthcare costs.

“That annoys me a lot,” he says. “That’s sometimes how healthcare systems are structured because it’s just costly for them to deliver healthcare so they try to make it as hard as possible for people to access healthcare — which is an absurdity and also one of the reasons why you now have increasing costs in healthcare systems in general, it’s exactly that. Because you have a lack of access in the first point of contact, with primary care. And what happens is you do have a spillover effect to secondary care.

“We see that in the data in all European markets. You have people ending up in emergency rooms that should have been treated in primary care but they can’t access primary care because there’s no access — you don’t know how to get in there, it’s long waiting times, it’s just triaged to different levels without getting any help and you have people with urinary tract infections ending up in emergency rooms. It’s super costly… when you have healthcare systems trying to fend people off. That’s not the right way doing it. You have to — and I think we will be able to play a crucial role in that in the coming ten years — push the whole system into being more preventative and proactive and access is a key part of that.

“We want to make it very, very simple for the patients — that they should be able to reach out to us and we will direct you to the right level of care.”

With so much still to do tackling the challenges of healthcare delivery in Europe, Kry isn’t in a hurry to expand its services geographically. Its main markets are Sweden, Norway, France, Germany and the UK, where it operates a healthcare service itself (not necessarily nationwide), though it notes that it offers a video consultation service to 30 regional markets.

“Right now we are very European focused,” says Schildt, when asked whether it has any plans for a U.S. launch. “I would never say that we would never go outside of Europe but for here and now we are extremely focused on Europe, we know those markets very, very well. We know how to manoeuvre in the European systems.

“It’s a very different payer infrastructure in Europe vs the US and then it’s also so that focus is always king and Europe is the mega market. Healthcare is 10% of the GDP in all European markets, we don’t have to go outside of Europe to build a very big business. But for the time being I think it makes a lot of sense for us to stay focused.”