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A bipartisan pair of senators reintroduced the Kids Online Safety Act on Tuesday with updates that aimed to address concerns that the bill could inadvertently cause more harm to the young internet users it seeks to protect. But some activists who raised those issues say the changes are still insufficient.

The bill aims to make the internet a safer place for kids to access by putting the onus on social media companies to prevent and mitigate harms that might come from their services. The new version of the bill defines a set list of harms that platforms need to take reasonable steps to mitigate, including by preventing the spread of posts promoting suicide, eating disorders, substance abuse and more. It would require those companies to undergo annual independent audits of their risks to minors and require them to enable the strongest privacy settings by default for kids.

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Congress and President Joe Biden have made clear online protections for children are a key priority, and KOSA has become one of the leading bills on the subject. KOSA has racked up a long list of more than 25 co-sponsors and the earlier version of the bill passed unanimously out of the Senate commerce committee last year. The new version of the bill has gained support from groups such as Common Sense Media, the American Psychological Association, the American Academy of Pediatrics and the Eating Disorders Coalition.

At a virtual press conference on Tuesday, Sen. Richard Blumenthal, D-Conn., who introduced the bill alongside Sen. Marsha Blackburn, R-Tenn., said that Senate Majority Leader Chuck Schumer, D-N.Y., is “a hundred percent behind this bill and efforts to protect kids online.”

While Blumenthal acknowledged it’s ultimately up to Senate leadership to figure out timing, he said, “I fully hope and expect we’ll have a vote this session.”

A Schumer spokesperson did not immediately respond to a request for comment.

Late last year, dozens of civil society groups warned Congress against passing the bill, warning it could further endanger young internet users in different ways. For example, the groups worried the bill would add pressure for online platforms to “over-moderate, including from state Attorneys General seeking to make political points about what kind of information is appropriate for young people.”

Blumenthal and Blackburn made several changes to the text in response to critiques from outside groups. They sought to more carefully tailor the legislation to limit the duty of care requirements for social media platforms to a specific set of potential harms to mental health based on evidence-backed medical information.

They also added protections for support services like the National Suicide Hotline, substance abuse groups and LGBTQ youth centers to ensure they aren’t unintentionally hampered by the bill’s requirements. Blumenthal’s office said it did not believe the duty of care would have applied to those sorts of groups, but opted to clarify it regardless.

But the changes have not been enough to placate some civil society and industry groups.

Evan Greer, director of digital rights nonprofit Fight for the Future, said Blumenthal’s office never met with the group or shared the updated text in advance of the introduction despite multiple requests. Greer acknowledged the co-sponsors’ offices met with other groups, but said in an emailed statement that “it seems they intentionally excluded groups that have specific issue-area expertise in content moderation, algorithmic recommendation, etc.”

“I’ve read through it and can say unequivocally that the changes that have been made DO NOT address the concerns that we raised in our letter,” Greer wrote. “The bill still contains a duty of care that covers content recommendation, and it still allows state Attorneys General to effectively dictate what content platforms can recommend to minors.”

“The ACLU remains strongly opposed to KOSA because it would ironically expose the very children it seeks to protect to increased harm and increased surveillance,” ACLU Senior Policy Counsel Cody Venzke said in a statement. The group joined the letter warning against its passage last year.

“KOSA’s core approach still threatens the privacy, security, and free expression of both minors and adults by deputizing platforms of all stripes to police their users and censor their content under the guise of a ‘duty of care,'” Venzke added. “To accomplish this, the bill would legitimize platforms’ already pervasive data collection to identify which users are minors when it should be seeking to curb those data abuses. Moreover, parental guidance in minors’ online lives is critical, but KOSA would mandate surveillance tools without regard to minors’ home situations or safety. KOSA would be a step backwards in making the internet a safer place for children and minors.”

At the press conference, in response to a question about Fight for the Future’s critiques, Blumenthal said the duty of care had been “very purposefully narrowed” to target certain harms.

“I think we’ve met that kind of suggestion very directly and effectively,” he said. “Obviously, our door remains open. We’re willing to hear and talk to other kinds of suggestions that are made. And we have talked to many of the groups that had great criticism and a number have actually dropped their opposition, as I think you’ll hear in response to today’s session. So I think our bill is clarified and improved in a way that meets some of the criticism. We’re not going to solve all of the problems of the world with a single bill. But we are making a measurable, very significant start.”

The bill also faced criticism from several groups that receive funding from the tech industry.

NetChoice, which has sued California over its Age-Appropriate Design Code Act and whose members include Google, Meta and TikTok, said in a press release that despite lawmakers’ attempts to respond to concerns, “unfortunately, how this bill would work in practice still requires an age verification mechanism and data collection on Americans of all ages.”

“Working out how young people should use technology is a difficult question and has always been best answered by parents,” NetChoice Vice President and General Counsel Carl Szabo said in a statement. “KOSA instead creates an oversight board of DC insiders who will replace parents in deciding what’s best for children.”

“KOSA 2.0 raises more questions than it answers,” Ari Cohn, free speech counsel TechFreedom, a think tank that’s received funding from Google, said in a statement. “What constitutes reason to know that a user is under 17 is entirely unclear, and undefined by the bill. In the face of that uncertainty, platforms will clearly have to age-verify all users to avoid liability—or worse, avoid obtaining any knowledge whatsoever and leave minors without any protections at all.”

“Protecting young people online is a broadly shared goal. But it would contradict the goals of bills such as this to impose compliance obligations that undermine the privacy and safety of teens,” said Matt Schruers, president of the Computer & Communications Industry Association, whose members include Amazon, Google, Meta and Twitter. “Governments should avoid compliance requirements that would compel digital services to collect more personal information about their users — such as geolocation information and a government-issued identification — particularly when responsible companies are instituting measures to collect and store less data on customers.”

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Alphabet jumps 3% as search, advertising units show resilient growth

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Alphabet jumps 3% as search, advertising units show resilient growth

Alphabet CEO Sundar Pichai during the Google I/O developers conference in Mountain View, California, on May 10, 2023.

David Paul Morris | Bloomberg | Getty Images

Alphabet‘s stock gained 3% Friday after signaling strong growth in its search and advertising businesses amid a competitive artificial intelligence environment and uncertain macro backdrop.

GOOGL‘s pace of GenAI product roll-out is accelerating with multiple encouraging signals,” wrote Morgan Stanley‘s Brian Nowak. “Macro uncertainty still exists but we remain [overweight] given GOOGL’s still strong relative position and improving pace of GenAI enabled product roll-out.”

The search giant posted earnings of $2.81 per share on $90.23 billion in revenues. That topped the $89.12 billion in sales and $2.01 in EPS expected by LSEG analysts. Revenues grew 12% year-over-year and ahead of the 10% anticipated by Wall Street.

Net income rose 46% to $34.54 billion, or $2.81 per share. That’s up from $23.66 billion, or $1.89 per share, in the year-ago period. Alphabet said the figure included $8 billion in unrealized gains on its nonmarketable equity securities connected to its investment in a private company.

Adjusted earnings, excluding that gain, were $2.27 per share, according to LSEG, and topped analyst expectations.

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Alphabet shares have pulled back about 16% this year as it battles volatility spurred by mounting trade war fears and worries that President Donald Trump‘s tariffs could crush the global economy. That would make it more difficult for Alphabet to potentially acquire infrastructure for data centers powering AI models as it faces off against competitors such as OpenAI and Anthropic to develop largely language models.

During Thursday’s call with investors, Alphabet suggested that it’s too soon to tally the total impact of tariffs. However, Google’s business chief Philipp Schindler said that ending the de minimis trade exemption in May, which created a loophole benefitting many Chinese e-commerce retailers, could create a “slight headwind” for the company’s ads business, specifically in the Asia-Pacific region. The loophole allows shipments under $800 to come into the U.S. duty-free.

Despite this backdrop, Alphabet showed steady growth in its advertising and search business, reporting $66.89 billion in revenues for its advertising unit. That reflected 8.5% growth from the year-ago period. The company reported $8.93 billion in advertising revenue for its YouTube business, shy of an $8.97 billion estimate from StreetAccount.

Alphabet’s “Search and other” unit rose 9.8% to $50.7 billion, up from $46.16 billion last year. The company said that its AI Overviews tool used in its Google search results page has accumulated 1.5 billion monthly users from a billion in October.

Bank of America analyst Justin Post said that Wall Street is underestimating the upside potential and “monetization ramp” from this tool and cloud demand fueled by AI.

“The strong 1Q search performance, along with constructive comments on Gemini [large language model] performance and [AI Overviews] adoption could help alleviate some investor concerns on AI competition,” Post wrote in a note.

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CNBC’s Jennifer Elias contributed to this report.

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Amazon sellers raise prices after Trump’s China tariff: ‘It’s unsustainable’

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Amazon sellers raise prices after Trump's China tariff: 'It's unsustainable'

An Amazon employee works to fulfill same-day orders during Cyber Monday, one of the company’s busiest days at an Amazon fulfillment center on December 2, 2024 in Orlando, Florida. 

Miguel J. Rodriguez Carrillo | Getty Images

For 10 years, Aaron Cordovez has been selling kitchen appliances on Amazon. Now he’s in a bind, because most of his products are manufactured in China.

Cordovez, co-founder of Zulay Kitchen, said his company is moving “as fast as we can” to move production to India, Mexico and other markets, where tariffs are increasing under President Donald Trump, but are mild compared with the levies imposed on goods from China. That process will likely take at least a year or two to complete, he said.

“We’re making our inventory last as long as we can,” Cordovez said in an email.

Zulay is also temporarily raising the price of some of its milk frothers, smores roasting sticks and other products. The company’s popular kitchen strainer now costs $12.99, up from $9.99 before Trump announced his sweeping tariff proposal earlier this month.

Amazon merchants are hiking prices for everything from diaper bags and refrigerator magnets to charm necklaces and other top-selling items as they confront higher import costs. E-commerce software company SmartScout tracked 930 products on Amazon that have seen increased prices since April 9, with an average jump of 29%.

The price hikes affect a range of categories, including clothing, jewelry, household items, office supplies, electronics and toys.

The trade war with China has threatened to upend sellers on Amazon’s third-party marketplace, which accounts for about 60% of the company’s online sales. Many merchants are based in China or rely on the world’s second-largest economy to source and assemble their products.

Sellers are now faced with the conundrum of raising prices or eating the extra costs associated with Trump’s new tariffs. It’s an existential threat for many sellers, who subsist on razor-thin margins and have, for the last several years, dealt with rising costs on Amazon tied to storage, fulfillment, shipping and advertising fees along with pricing pressure from increased competition.

CEO Andy Jassy told CNBC earlier this month that the company was “going to try and do everything we can” to keep prices low for shoppers, including renegotiating terms with some of its suppliers. But he acknowledged some third-party sellers will “need to pass that cost” of tariffs on to consumers.

Amazon’s stock price is down 15% so far this year, sliding along with the broader market. The company reports first-quarter earnings next week.

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Goods imported from China now face import duties of 145%, though Trump said Wednesday his administration is “actively” talking with China about a potential deal to lower tariffs. Chinese officials on Thursday denied that trade talks are taking place.

About 25% of the price increases observed by SmartScout were initiated by sellers based in China, said Scott Needham, the company’s CEO. Last week, stainless steel jewelry maker Ursteel hiked prices on four of its products by $6.50, while apparel brand Chouyatou raised the price of some of its dresses by $2. Both businesses are based in China’s Zhejiang province.

Anker, a Chinese electronics brand and one of Amazon’s largest sellers, has raised prices on one-fifth of its products sold in the U.S., including a portable power bank, which went up to $135 from $110, SmartScout data shows.

Representatives from Anker, Ursteel and Chouyatou didn’t respond to requests for comment.

Zulay, headquartered in Florida, is one of many U.S.-based sellers raising prices. The company is also cutting costs. Cordovez said he’s been forced to lay off 19% of his workforce and slash online ad spending by 85%.

Desert Cactus, based in Illinois, is also taking action. Joe Stefani, the company’s president, has been looking to move production of some of his brand’s college-themed merchandise out of China and into Mexico, India and Vietnam. About half of Desert Cactus’ goods come from China, while the rest are made in the U.S., Stefani said.

An Amazon worker moves a cart filled with packages at an Amazon delivery station in Alpharetta, Georgia, on Nov. 28, 2022.

Justin Sullivan | Getty Images

One of the company’s top products is a customizable license plate frame that’s manufactured in China. At the start of Trump’s first term in 2016, Stefani’s company paid import and shipping fees of 4% on the license plates. That rate has since skyrocketed to 170%, he said.

“The tariffs can’t stay this high,” Stefani said. “There’s so many people that just aren’t going to make it.”

Stefani said he expects Desert Cactus will end up raising prices on some products, though he’s worried shoppers might be put off by sticker shock.

“Will someone be willing to pay $50 for a hat on Amazon?” Stefani said. “You know it’s going to be expensive at the ballpark, but on Amazon we don’t know.”

Dave Dama, co-founder of health and beauty business Pure Daily Care, said the price to manufacture one of his skin-care products in China jumped to $25 from $10. Most Amazon sellers will have no choice but to raise prices, he said.

“If you were selling something for $40 and making a $7 or $8 profit at the end of the day, with these tariffs, those days are gone,” Dama said. “You can’t do that anymore. It’s unsustainable.”

Pure Daily Care plans to stagger price increases over several weeks, and only on products “we absolutely need to,” to keep Amazon’s algorithms from ranking it lower in search results or losing the valuable buy box, he said. The buy box determines which listing pops up first when a shopper clicks on a particular product, and the one that gets purchased when they tap “Add to Cart.”

An Amazon spokesperson said the company’s pricing policies continue to apply.

“As always, sellers set their own prices, and we regularly monitor how we highlight great prices as Featured Offers to provide customers with low prices across a wide selection,” the spokesperson said in a statement.

Dama said his company has enough inventory for some products to last up to six months, which it aims to “stretch as long as possible” in the hope that China and the U.S. can reach a trade deal. The company is also forgoing some sales promotions and discounts, while pausing spend on some display and video ads.

Regarding his inventory, Dama said, “We can try to stretch that seven, eight, nine months, which buys us a lot more time for this thing to work out, hopefully.”

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Pony.ai teams up with Tencent for robotaxi services on WeChat, other apps

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Pony.ai teams up with Tencent for robotaxi services on WeChat, other apps

A Pony.ai autonomous car.

Pony.ai

Chinese start-up Pony.ai said Friday it will develop autonomous driving technology in partnership with Tencent Cloud and deploy robotaxi services on tech giant Tencent’s WeChat and other applications.

The Nasdaq-listed company which specializes in autonomous vehicle technology, particularly robotaxis and robotrucks, said in a press release that the deal will include cooperation in areas such as cloud services, map data, information security and intelligent cockpit ecosystems.

The arrangement will also see the two companies integrate Pony.ai’s robotaxi ride-hailing services within Tencent’s popular WeChat app as well as other applications like Tencent Maps. 

Both companies had been in talks “for quite some time,” Pony.ai CEO James Peng told CNBC on the sidelines of the Shanghai Auto Show on Friday. He cited Tencent’s huge user base and its cloud offerings as factors supporting the “win-win” collaboration as the start-up continues to scale up.

Following the partnership, Peng said that “hopefully in the near future,” users would be able to call Pony.ai robotaxi rides straight through the WeChat app.

WeChat is known as the world’s most popular ‘super app,’ housing everything from messaging to payment transactions to food delivery services, with a monthly user base of over 1 billion people.

“Pony.ai possesses industry-leading autonomous driving technology accumulations, while Tencent excels in cloud services, mapping, and cockpit ecosystem technologies,” Vice President of Tencent Group and President of Tencent Smart Mobility Zhong Xiangping was quoted as saying in the Friday release. 

“This strategic partnership between the two parties is not only about complementing each other’s technologies and resources but also marks a new starting point for collaborative innovation,” he added. 

Ordering a robotaxi ride on WeChat may soon be possible, says Pony.ai CEO

The release said that the partnership would also see both companies collaborate on the development, testing, and operation of Robotaxis, particularly in L4-level autonomous driving.

According to SAE International, L4 is a type of autonomous driving that allows drivers to take their eyes off the road in designated areas. For comparison, L3 is considered a hands-off system, but drivers must actively monitor the vehicle and be ready to take over the wheel.

The Tencent Cloud agreement comes a day after it was reported that Pony.ai unveiled its L4, seventh-generation robotaxi solution at the Shanghai Auto Show on Wednesday. The company’s shares surged about 40% in the U.S. on Thursday. 

The start-up continues to establish itself as a prominent player in China’s autonomous driving industry. The company obtained China’s first permit to charge fares for fully driverless taxis in core parts of a business district of Shenzhen, where Tencent is headquartered. 

However, the firm may be implicated in increasing trade tensions between China and the U.S. as the latter is a market Pony.ai considers “hugely important” to its expansion plans.

James Peng, co-founder and chief executive of Pony.ai this week reportedly told the Financial Times that the company is considering a secondary listing outside the U.S. amid mounting concerns that Washington will push for the delisting of Chinese companies off the New York Stock Exchange. 

If this were to happen, it would come less than six months after the company’s initial public offering in the U.S. Notwithstanding, Peng told FT that a lot of factors need to be considered.

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