Musk’s X hit with complaint alleging platform broke Europe’s strict privacy laws

Published

5 months ago

December 14, 2023

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Elon Musk speaks onstage during The New York Times Dealbook Summit 2023 at Jazz at Lincoln Center on November 29, 2023 in New York City.

Slaven Vlasic | Getty Images

Elon Musk’s X has been hit with a complaint from privacy activist Max Schrems, which alleges the platform broke the European Union’s hard-hitting privacy rules.

Lodged on Thursday by Schrems’ campaign group Noyb with the Dutch data protection authority, the complaint purports that X unlawfully used people’s political views and religious beliefs to target them with ads.

The European Union is also accused of using X to target users based on their political views and religious beliefs.

In the complaint, Schrems alleges that X showed him an ad from the European Commission that promoted online content regulation to tackle child sexual abuse and the grooming of children online.

Schrems says the ad explicitly targets users from the Netherlands and excludes 44 “targeting segments,” such as political parties like Alternative for Germany, Vox, Sinn Fein, and the English Defense League, as well as far-right politicians Viktor Orban and Marine Le Pen.

The ad also does not target people based on their use on X of terms related to “euroscepticism and/or nationalist political views,” according to the complaint.

The filing states that the allegations are based on the ads repository of X.

X was not immediately available for comment when contacted by CNBC. In reply to a CNBC email, the Commission said that it was aware of reports of the campaign and was conducting a “thorough review.”

“Internally, we provide regularly updated guidance to ensure our social media managers are familiar with the rules and that external contractors also apply them in full,” the Commission said.

“Also, in view of an alarming increase in disinformation and hate speech on social media platforms in recent weeks, we advised Commission services already back in October to refrain from advertising at this stage on X.”

The Commission added that, under its Digital Services Act, a major content regulation law in the EU, platforms including X “must not display targeted advertisements based on the sensitive data of a user.”

Per the complaint, X is able to take users’ clicking behavior and replies to tailor content to them — a practice known as “microtargeting.” Microtargeting was used by Cambridge Analytica during the 2016 presidential election to help Donald Trump win the vote by a narrow margin, the complaint notes.

Who is Max Schrems?

Schrems is a high-profile figure in European privacy campaigning. He most notably won a legal battle against Meta parent company Facebook, defeating the company’s use of the EU-U.S. so-called safe harbor data-transferring mechanism to send Europeans’ information to the U.S.

Scrutiny of the complaint is in its early days. It has been filed with the Dutch data protection authority, which is tasked with investigating the main highlights of the complaint to assess whether there was a breach of GDPR.

X has its main European headquarters in Ireland, meaning that the Dublin data watchdog is the primary privacy regulator for the platform in Europe. Schrems is submitting the complaint to the Dutch authority, rather than Ireland, as he is a Dutch citizen.

The complaint could ultimately lead to a full-blown investigation under the European Union’s General Data Protection, a strict EU privacy regulation introduced by the bloc in 2018.

GDPR has led to massive fines for U.S. technology giants, including Amazon and Meta. Under GDPR, firms can be fined up to 4% of their global annual revenues for breaches.

X has been in a hard place lately, with brands including Apple, Disney and Microsoft, pulling ads from the platform due to controversies surrounding Musk, including sharing a post that explored a popular antisemitic conspiracy theory.

Technology

Amazon beats on top and bottom lines, driven by growth in cloud and digital ads

Published

10 hours ago

April 30, 2024

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Amazon beats on top and bottom lines, driven by growth in cloud and digital ads

Amazon reported better-than-expected earnings and revenue for the first quarter, driven by growth in advertising and cloud computing. The stock ticked higher in extended trading.

Here’s how the company did:

Earnings per share: 98 cents vs. 83 cents expected by LSEG
Revenue: $143.3 billion vs. $142.5 billion expected by LSEG

Wall Street is also looking at these key numbers:

Amazon Web Services: $25 billion vs. $24.5 billion in revenue, according to StreetAccount
Advertising: $11.8 billion vs. 11.7 billion in revenue, according to StreetAccount

Operating income soared more than 200% in the period to $15.3 billion, far outpacing revenue growth, the latest sign that the company’s cost-cutting measures and focus on efficiency is bolstering its bottom line. AWS accounted for 62% of total operating profit. Net income also more than tripled to $10.4 billion, or 98 cents a share, from $3.17 billion, or 31 cents a share, a year ago.

Sales increased 13% from $127.4 billion a year earlier.

Amazon expects a continued jump in profitability for the second quarter but at a more measured pace. The company said operating income will be $10 billion to $14 billion, up from $7.7 billion a year earlier.

Revenue in the current quarter will be $144 billion to $149 billion, Amazon said, representing growth of 7% to 11%. Analysts were expecting growth of 12% to $150.1 billion, according to LSEG.

Sales at AWS accelerated 17% in the first quarter to $25 billion, topping Wall Street’s forecast for sales growth of 12% to $24.5 billion. For the past year, growth in AWS has slowed, as businesses trimmed their cloud spend. But Amazon executives have said they’re seeing cost optimizations taper off, and they’ve indicated that demand for generative artificial intelligence can be a boon for its cloud business.

Amazon’s earnings growth has been driven in part by widespread cost-cutting, tweaks to its fulfillment operations, and the stabilizing of cloud spending. CEO Andy Jassy has become more disciplined in the company’s spending, while growing profitable services like advertising, cloud computing, Prime memberships and its third-party marketplace.

The company has laid off more than 27,000 employees since late 2022, with the cuts bleeding into 2024. During the first quarter, Amazon let go hundreds of staffers in its health and AWS businesses.

Amazon’s advertising unit saw sales surge 24%, just ahead of consensus estimates. It’s the first report since Amazon started running ads in Prime Video, a move analysts predict could generate significant revenue over time.

The company’s ad business, which grew faster than retail or cloud computing, has become an increasingly important profit driver for Amazon and has emerged as a main player in online advertising.

That market overall started growing again after a brutal 2022, when brands reeled in spending to cope with inflation and rising interest rates. Meta, Snap and Google parent Alphabet all reported first-quarter results last week and showed better-than-expected revenue growth, which was primarily driven by improvements across their ad businesses.

Revenue from third-party seller services, which includes commissions collected by Amazon, fulfillment, shipping fees and other charges, continued to surge. Sales in the unit grew 16% year over year to $34.5 billion.

Amazon remains a standout among mega-cap internet companies in that it’s yet to implement a quarterly dividend, even as cash and equivalents jumped to $73.9 billion in the quarter from $54.3 billion a year earlier. Meta announced its first dividend in February at 50 cents a share, and Alphabet followed, telling investors last week that it will start paying a dividend of 20 cents a share. Those companies also announced plans to buy back tens of billions of dollars in stock.

This story is developing. Check back for updates.

Technology

Super Micro pushes up full-year revenue forecast as it points to strong AI demand

Published

10 hours ago

April 30, 2024

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Super Micro pushes up full-year revenue forecast as it points to strong AI demand

Lisa Su, chair and CEO of Advanced Micro Devices, left, and Charles Liang, CEO of Super Micro Computer, speak at the AMD Advancing AI event in San Jose, California, on Dec. 6, 2023.

David Paul Morris | Bloomberg | Getty Images

Super Micro shares slipped 8% in extended trading on Tuesday after the server maker reported slightly less revenue than expected for its fiscal third quarter, even as it gave optimistic revenue guidance.

Here’s how the company did in comparison with LSEG consensus:

Earnings per share: $6.65 adjusted, vs. $5.78 expected
Revenue: $3.85 billion, vs. $3.95 billion expected

The company’s revenue jumped 200% year over year in the quarter, which ended on March 31, according to a statement. That compared with a 103% increase in the previous quarter. Net income came out to $402.5 million, or $6.56 per share, compared with $85.8 million, or $1.53 per share, in the year-ago quarter.

CEO Charles Liang said in the statement that Super Micro is bumping up its fiscal 2024 revenue guidance to $14.7 billion to $15.1 billion from $14.3 billion to $14.7 billion. Analysts surveyed by LSEG had expected $14.60 billion.

Notwithstanding the after-hours move, Super Micro stock is up 205% so far this year, while the S&P 500 stock index has gained 6%.

The company goes up against with legacy IT equipment providers such as Hewlett Packard Enterprise. But last year, investors were keen to bet that Super Micro could become a key provider of servers containing Nvidia graphics processing units for working with artificial intelligence models, pushing up the stock 246%. Liang said in the statement that he expects Super Micro to keep taking market share.

In March, Super Micro took the place of Whirlpool in the S&P 500.

Executives will discuss the results with analysts on a conference call starting at 5 p.m. ET.

This is breaking news. Please check back for updates.

WATCH: A quiet meme stock rally? Reddit, GameStop and Super Micro surge

Technology

Pinterest shares soar 16% on earnings beat, strong revenue growth

Published

10 hours ago

April 30, 2024

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Pinterest shares soar 16% on earnings beat, strong revenue growth

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Shares of Pinterest popped 16% in extended trading Tuesday after the company reported first-quarter results that beat analysts’ estimates and showed its fastest revenue growth since 2021.

Here’s how the company did, compared to LSEG analyst expectations:

Earnings per share: 20 cents adjusted vs. 13 cents expected
Revenue: $740 million vs. $700 million expected

Revenue for the quarter jumped 23% from $602.6 million a year earlier. Pinterest’s net loss for the first quarter narrowed to $24.8 million, or a 4 cent loss per share, from $208.6 million, or a 31 cent loss per share, a year earlier.

Pinterest reported 518 global monthly active users (MAUs) for the first quarter, up 12% year over year. Wall Street was expecting MAUs 504.9 million, according to StreetAccount. Pinterest said Generation Z is its fastest-growing, largest and most engaged demographic on the platform.

The company’s average revenue per user was $1.46 for the period, while StreetAccount was expecting $1.40 per user.

In its first-quarter release, Pinterest CEO Bill Ready said the company is driving greater returns for advertisers because of its investments in AI and shoppability.

“We’re executing with tremendous clarity and focus, shipping new products and experiences that users want, and in doing so, we’re finding our best product market fit in years,” Ready said.

Digital advertising companies like Pinterest have started growing again after a brutal 2022, when brands reined in spending to cope with high levels of inflation. Meta, Snap and Google parent Alphabet all reported first-quarter results last week that exceeded analysts’ estimates for revenue.

For its second quarter, Pinterest expects to report revenue between $835 million and $850 million, which equates to growth of 18% to 20% year over year. Analysts were expecting revenue of $827 million.

Pinterest will hold its quarterly call with investors at 4:30 p.m. ET.