Month: June 2019

Every year before the anniversary of the Tiananmen Square Massacre on June 4, the Chinese government begins to exert even more control over what information people can access online. This year is the 30th anniversary of the day the protests ended when the government sent troops to fire on students, activists and other people demonstrating against the Communist Party. Censorship efforts appear to have intensified, potentially affecting even social media accounts outside of China.

From the beginning, the government has tried to control information about the massacre, claiming after the event that 300 people died, though Amnesty International and other international observers said the death toll may have been much higher, potentially numbering into the thousands.

Suppression of information means that an entire generation of people know little about the events, even as the activists involved continue to suffer repercussions, including long prison sentences. In recent years, the government’s censorship apparatus has become even more powerful, with voice and image recognition and machine learning making it easier to block or remove posts at scale. As a content screening employee at Bytedance recently told Reuters, “we sometimes say the artificial intelligence is a scalpel, and the human is a machete.”

This year, one of the most notable examples of the government’s annual crackdown on information began in April, when every language version of Wikipedia was blocked in China, instead of just the Chinese-language version and individual articles about sensitive issues like the Tiananmen Square protests and Tibet.

In May, video-sharing sites Bilibili and AcFun suspended real-time comments, while Douban E Zu (the name translates to “Douban Goose Group”), a popular celebrity gossip and news forum with more than 600,000 members, halted service between May 30 and June 29. Both services claimed they needed to perform “system maintenance.”

Getting ready for the anniversary. Bilibili will suspend its bullet screens (real-time comments) till June 6. pic.twitter.com/7HInfAWxSD

— Viola Zhou 周易 (@violazhouyi) May 29, 2019

Online discourse is already strictly controlled by the Chinese government, which requires all websites to do real-name checks on users when they register an account (for example, by linking phone numbers, which are tied to government-issued IDs). Discussions on Douban E Zu often center around politics, which may have prompted heavier restrictions. Real-time comments (called “bullet screens”) on Bilibili and AcFun are harder to monitor for banned content and even though the government recently issued new guidelines for screening comments on bullet screens, censors may still be working on ways to maintain control on them.

Most recently, WeChat, the ubiquitous messaging, games and e-commerce platform, blocked users from changing their headshots, alias and What’s Up status. Then this weekend, users began reporting connection issues with their VPN services, which are used to get around mainland China’s “Great Firewall” and access forbidden sites.

It’s that time of the year again pic.twitter.com/fsKo4P6DOv

— Tianyu M. Fang (@tianyuf) June 3, 2019

The effects of the crackdown on information about Tiananmen Square also appears to have spread beyond China. Yaxue Cao, founder and editor of China Change, a U.S.- based English-language about human rights and law in China, tweeted over the weekend that many Chinese-language Twitter accounts critical of China had been suspended, even if they originated from outside of China, including some based in the U.S.

Twitter claimed on its Public Policy account that it had suspended accounts mostly for “engaging in a mix of spamming, inauthentic behavior, & ban evasion.” Addressing the suspension of accounts that “were involved in commentary about China,” Twitter’s Public Policy account claimed that contrary to speculation, “these accounts were not mass reported by the Chinese authorities—this was a routine action on our part. Sometimes our routine actions catch false positives or we make errors. We apologize. We’re working today to ensure we overturn any errors but that we remain vigilant in enforcing rules for those who violate them.”

Several of the accounts Cao mentioned, including @Sasha_Gong and @wmeng8, have since been restored, but users were frustrated by Twitter’s explanation, especially since the suspensions affected so many Chinese dissident accounts, and called on the company to investigate potential causes.

Twitter says accident, but v. little explanation as to why this seemed to mainly affect one particular group of users. Maybe Chinese dissident Twitter lousy with bot followers, or other spammy behaviour, but without explanation just asking for conspiracy. https://t.co/27b4GhaKZb

— ????? ????????? (@jgriffiths) June 2, 2019

A look back at years of Tiananmen Square censorship

An earlier example of Chinese government attempts to suppress information about Tiananmen Square each year took place in 2010, when Foursquare was blocked, possibly as a response to users checking in to Tiananmen Square to commemorate the anniversary.

The Chinese government also reduced access to sites that were once at least somewhat accessible is Tumblr, which in 2016 joined the ranks of other social media sites blocked in China. GreatFire.org’s historical data shows that Tumblr became more difficult to access in June 2014 and 2015, but in 2016 that appeared to become permanent, with GreatFire.org’s tests showing the site 100 percent blocked since then (perhaps because of the Chinese government’s ban on online porn).

For foreign companies that want to be allowed to do business in China, that means capitulating to its censorship laws even at the risk of angering their users in other countries. In 2014, LinkedIn, one of the few U.S.-based social media sites still allowed in China, said it would not only prevent users in China from seeing content prohibited by the government, but also block users in other countries from seeing banned content that originated in China. The decision was criticized after members noticed that posts relating to the Tiananmen Square anniversary had been blanked out, reported the Guardian.

More recently, LinkedIn backed down after blocking the account of activist Zhou Fengsuo in China. Zhou, who was one of the student leaders of the Tiananmen Square protests, told the South China Morning Post in January that he believed the censorship had more to do with government monitoring of his activism on other social media platforms, like WeChat, than his LinkedIn content. After restoring Zhou’s LinkedIn profile, the company claimed it had been “blocked in error.”

Another case of Chinese government censorship affecting even users in other country took place in 2017, when microblogging service Weibo banned overseas users from uploading images and videos during the week of the anniversary. As in the case of Bilibili and Douban E Zu this year, Weibo claimed that the action was related to a systems upgrade.

Twitter has just announced it has picked up London-based Fabula AI. The deep learning startup has been developing technology to try to identify online disinformation by looking at patterns in how fake stuff vs genuine news spreads online — making it an obvious fit for the rumor-riled social network.

Social media giants remain under increasing political pressure to get a handle on online disinformation to ensure that manipulative messages don’t, for example, get a free pass to fiddle with democratic processes.

Twitter says the acquisition of Fabula will help it build out its internal machine learning capabilities — writing that the UK startup’s “world-class team of machine learning researchers” will feed an internal research group it’s building out, led by Sandeep Pandey, its head of ML/AI engineering.

This research group will focus on “a few key strategic areas such as natural language processing, reinforcement learning, ML ethics, recommendation systems, and graph deep learning” — now with Fabula co-founder and chief scientist, Michael Bronstein, as a leading light within it.

Bronstein is chair in machine learning & pattern recognition at Imperial College, London — a position he will remain while leading graph deep learning research at Twitter.

Fabula’s chief technologist, Federico Monti — another co-founder, who began the collaboration that underpin’s the patented technology with Bronstein while at the University of Lugano, Switzerland — is also joining Twitter.

“We are really excited to join the ML research team at Twitter, and work together to grow their team and capabilities. Specifically, we are looking forward to applying our graph deep learning techniques to improving the health of the conversation across the service,” said Bronstein in a statement.

“This strategic investment in graph deep learning research, technology and talent will be a key driver as we work to help people feel safe on Twitter and help them see relevant information,” Twitter added. “Specifically, by studying and understanding the Twitter graph, comprised of the millions of Tweets, Retweets and Likes shared on Twitter every day, we will be able to improve the health of the conversation, as well as products including the timeline, recommendations, the explore tab and the onboarding experience.”

Terms of the acquisition have not been disclosed.

We covered Fabula’s technology and business plan back in February when it announced its “new class” of machine learning algorithms for detecting what it colloquially badged ‘fake news’.

Its approach to the problem of online disinformation looks at how it spreads on social networks — and therefore who is spreading it — rather than focusing on the content itself, as some other approaches do.

Fabula has patented algorithms that use the emergent field of “Geometric Deep Learning” to detect online disinformation — where the datasets in question are so large and complex that traditional machine learning techniques struggle to find purchase. Which does really sound like a patent designed with big tech in mind.

Fabula likens how ‘fake news’ spreads on social media vs real news as akin to “a very simplified model of how a disease spreads on the network”.

One advantage of the approach is it looks to be language agnostic (at least barring any cultural differences which might also impact how fake news spread).

Back in February the startup told us it was aiming to build an open, decentralised “truth-risk scoring platform” — akin to a credit referencing agency, just focused on content not cash.

It’s not clear from Twitter’s blog post whether the core technologies it will be acquiring with Fabula will now stay locked up within its internal research department — or be shared more widely, to help other platforms grappling with online disinformation challenges.

The startup had intended to offer an API for platforms and publishers later this year.

But of course building a platform is a major undertaking. And, in the meanwhile, Twitter — with its pressing need to better understand the stuff its network spreads — came calling.

A source close to the matter told us that Fabula’s founders decided that selling to Twitter instead of pushing for momentum behind a vision of a decentralized, open platform because the exit offered them more opportunity to have “real and deep impact, at scale”.

Though it is also still not certain what Twitter will end up doing with the technology it’s acquiring. And it at least remains possible that Twitter could choose to make it made open across platforms.

“That’ll be for the team to figure out with Twitter down the line,” our source added.

A spokesman for Twitter did not respond directly when we asked about its plans for the patented technology but he told us: “There’s more to come on how we will integrate Fabula’s technology where it makes sense to strengthen our systems and operations in the coming months.  It will likely take us some time to be able to integrate their graph deep learning algorithms into our ML platform. We’re bringing Fabula in for the team, tech and mission, which are all aligned with our top priority: Health.”

Fluree, a North Carolina startup that wants to bring the immutability of blockchain to the database, announced a $4.7 million seed round today led by ​4490 Ventures​ with participation from Revolution’s Rise of the Rest Seed Fund​.

As CEO and co-founder Brian Platz explains, the database combines blockchain and graph database technologies to offer a new way of thinking about storing and querying data. “The real benefits it provides is immense integrity around the data, so you can prove it has never been tampered with, who put it in there, etc., something you can’t do with current databases or other data management technologies.”

He added, “It has the ability to make the data immensely collaborative by allowing multiple parties to actually interact with it and improve security,  and it really allows you, especially with how we’ve organized our database, to get better leverage out of the data.”

If you’re thinking such a database would be slow because of the nature of decentralized data, Platz says that it really depends how you choose to tune your blockchain. He sees blockchain technology on a spectrum with choices and tradeoffs between speed and decentralization.

“If you want 100% decentralization, something like Bitcoin, it’s going to be slow. You can’t have your cake and eat it too. If you need to, you can decrease the amount of centralization. So there’s a spectrum there, and we focus on giving people the knob to adjust that based on what they’re trying to do,” Platz explained.

Fluree has a free community edition and a paid enterprise version with some increased controls. The company currently has 17 employees based in Winston Salem, North Carolina, a number it will expand in the coming year with new funding.

Ring’s new outdoor lighting products are impressive. It’s rare, even in 2019, for something to work out of the box, but that’s what happened when I installed Ring’s outdoor lighting products. They just worked.

You know the drill. You get a gadget and go to install it. Somewhere during the installation, it fails or hiccups. The thing doesn’t connect to Wifi, or it fails during an update, or something. Eventually, you’ll get it working after a few minor issues are solved.

Ring’s outdoor lighting products installed without issue. I took them out of the box, threw aside the instructions, and installed them in a logical manner. And 20 minutes later, I had five new lights configured to my home’s network and installed around my house. Brilliant.

This isn’t Ring’s first lighting product. TechCrunch tested Ring’s video spotlight last year and found it just as impressive with an easy installation and straight-forward feature set. Unlike that product, these new lights lack the camera, which make them significantly less expensive.

The new lighting products are clearly the result of Ring’s purchase of Mr. Beams. The company purchased the lighting company in January 2018 before Amazon purchased Ring in February 2018. Like Mr. Beams lights, Ring’s new lights are just a light and a motion sensor. The lighting products are a natural extension of Ring’s offering and best yet they’re relatively inexpensive.

These lighting products lack cameras found in the rest of Ring’s products but still have motion sensors that work in conjunction with Ring’s cameras. If, say, the $25 step light senses motion, it kicks on the light but can also trigger a Ring camera to start recording. Likewise, if a Ring camera notices movement, it will begin recording but also trigger a series of lights to turn on.

The products are priced competitively considering their set of features. A small steplight is $25, a pathway light is $29, a big spotlight is $40, and a floodlight is $50. A $50 bridge is required to connect the lights to a local network. Or, if you want to connect existing low-voltage landscape lighting to the system, Ring sells a $100 transformer.

There are similar products on the market. Ring’s offering is not unique, but its integration and ease of installation set it apart. The new outdoor lighting products is a significant addition to Ring’s ecosystem, which now includes security lighting, indoor and outdoor cameras, security systems, and, of course, a video doorbell.

The ongoing evolution of the startup factory known as Rocket Internet continues apace. Today, the group of regional e-commerce fashion sites incubated in the Berlin outfit that eventually got spun out under the Global Fashion Group umbrella — Zalora, Dafifi, The Iconic and La Moda — announced that it is planning a public listing on the Frankfurt stock exchange. It is expecting to raise €300 million ($336 million) by selling newly issued shares in its IPO.

Part of the hope is that the funding and IPO will help the group continue building out its presence in emerging markets — when it was in growth mode, one of Rocket’s key strategies was building e-commerce “clones” in developing markets to tap into early growth ahead of large global brands like Amazon expanding and competing against it.

Emerging markets are still growing at a time when growth in more developed markets in regions like the US and Western Europe has levelled off. GFG estimates that the total value of fashion and lifestyle in its operating regions totalled €320 billion in 2018.

“We are excited about this next step for GFG,” Christoph Barchewitz and Patrick Schmidt, the co-CEOs, said in a joint statement. “It is still very early days for fashion and lifestyle e-commerce in our markets. Today, most of our markets have less e-commerce adoption than Europe had 10 years ago. As consumer behaviour migrates towards e-commerce, GFG’s well-known consumer platforms, local teams, and fashion-specific operational infrastructure put us at the forefront of this growth opportunity. An IPO will allow us to keep investing in our end-to-end customer proposition, further strengthening our position as the leading fashion and lifestyle destination in growth markets.”

We’ve asked for an estimated valuation of the GFG, and we’ll update this post as we learn more. Historically, the group has had some ups and downs. One round of funding in 2016 came at a $1.1 billion valuation — but that was down on a valuation of $3.5 billion a year before. Several of the most unprofitable operations have also been closed or downsized over the years.

In the meantime, GFG is disclosing some numbers ahead of the listing:

● It notes that its active customer base is now 11.2 million, up from 8.9 million in 2016.
● NMV grew from €1,076 million to €1,453 million between 2016 and 2018.
● Revenues were €1,156 million in 2018, up from €887 million in 2016.
● GFG is still operating at a net loss but individual operations are now break-even on an Adjusted EBITDA basis. These include its Latin American operations and Australia.
● For the year 2018, Adjusted EBITDA margin (post the adoption of IFRS 16) was (4.3)%.
● Following a strong first quarter, GFG expects NMV to grow by 20-23% (on an organic basis)
to reach €1.7bn to €1.8bn in 2019.
● Further, the Company expects to generate more than €1.3 billion in revenue and to make additional progress towards EBITDA break-even in 2019.

DTC (direct to consumer) has become one of the most important trends in online commerce in the last several years, with a number of brands bypassing traditional retailers and leveraging their own websites, social media and other channels to find and sell to customers.

The companies that make up the GFG have been built in part on that trend: consumers have become more open to hearing about and trusting new brands in recent years, and that has helped GFG’s companies establish themselves in the market, collectively selling more than 40 of their own fashion and lifestyle brands (and reaching economies of scale by selling them across their various markets) alongside 10,000 global, local and own fashion brands to a market of over 1 billion consumers.

 

A security researcher has disclosed a new flaw that undermines a core macOS security feature designed to prevent apps — or malware — from accessing a user’s private data, webcam or microphone without their explicit permission.

The privacy protections, recently expanded in macOS Mojave, were meant to make it more difficult for malicious apps to get access to a user’s private information — like their contacts, calendar, location and messages — unless the user clicks ‘allow’ on a popup box. The protections are also meant to prevent apps from switching on a Mac’s webcam and microphone without consent. Apple’s Craig Federighi touted the security features as “one of the reasons people choose Apple” at last year’s WWDC developer conference.

But the protections weren’t very good. Those ‘allow’ boxes can be subverted with a maliciously manufactured click.

It was previously possible to create artificial or “synthetic” clicks by using macOS’ in-built automation feature AppleScript, or by using mouse keys, which let users — and malware — control the mouse cursor using the numeric pad on the keyboard. After fixing these bugs in previous macOS versions, Apple’s current defense is to block all synthetic clicks, requiring the user to physically click on a button.

But Patrick Wardle, a former NSA hacker who’s now chief research officer at Digita Security, said he’s found another way to bypass these protections with relative ease.

Wardle, who revealed the zero-day flaw at his conference Objective By The Sea in Monaco on Sunday, said the bug stems from an undocumented whitelist of approved macOS apps that are allowed to create synthetic clicks to prevent them from breaking.

Typically apps are signed with a digital certificate to prove that the app is genuine and hasn’t been tampered with. If the app has been modified to include malware, the certificate usually flags an error and the operating system won’t run the app. But a bug in Apple’s code meant that that macOS was only checking if a certificate exists and wasn’t properly verifying the authenticity of the whitelisted app.

“The only thing Apple is doing is validating that the application is signed by who they think it is,” he said. Because macOS wasn’t checking to see if the application had been modified or manipulated, a manipulated version of a whitelisted app could be exploited to trigger a synthetic click.

One of those approved apps is VLC, a popular and highly customizable open-source video player that allows plugins and other extensions. Wardle said it was possible to use VLC as a delivery vehicle for a malicious plugin to create a synthetic click on a consent prompt without the user’s permission.

“For VLC, I just dropped in a new plugin, VLC loads it, and because VLC loads plugins, my malicious plugin can generate a synthetic click — which is fully allowed because the system sees its VLC but doesn’t validate that the bundle to make sure it hasn’t been tampered with,” he explained

“And so my synthetic events is able to click and access the users location, webcam, microphone,” he said.

Wardle describe the vulnerability as a “second stage” attack because the bug already requires an attacker — or malware — to have access to the computer. But it’s exactly these kinds of situations where malware on a computer tries to click through on a consent box that Apple is trying to prevent, Wardle said.

He said he informed Apple of the bug last week but the tech giant has yet to release a patch. “This isn’t a remote attack so I don’t think this puts a large number of Mac users immediately at risk,” he said.

An Apple spokesperson did not return a request for comment.

It’s not the first time Wardle has warned Apple of a bug with synthetic clicks. He reported related bugs in 2015, 2017 and 2018. He said it was “clear” that Apple doesn’t take these bugs seriously.

“In this case, literally no-one looked at this coat from a security point of view,” he said.

“We have this undocumented whitelisting feature that is paramount to all these new privacy and security features, because if you can generate synthetic events you can generically thwart them of them trivially,” he said.

“It’s important to get this right,” he said.

Analyst Canalys has updated its forecast of global smartphone shipments — saying it expects just 1.35 billion units to ship in 2019, a year-on-year decline of 3.1%.

This follows ongoing uncertainty around US-China trade talks and the presidential order signed by Trump last month barring US companies from using kit by Chinese device makers, including Huawei, on national security grounds — which led to reports that Google would withdraw supply of key Android services to Huawei.

“Due to the many uncertainties surrounding the US/China trade talks, the US Executive Order signed on 15 May and subsequent developments, Canalys has lowered its forecasts to reflect an uncertain future,” the analyst writes.

It says its forecast is based on the assumption that restrictions will be stringently applied to Huawei once a 90-day reprieve which was subsequently granted expires — the temporary licence run from May 20, 2019, through August 19, 2019 — making it difficult for the world’s second largest smartphone maker by sales to roll out new devices in the short term, especially outside China, even as it takes steps to mitigate the effect of component and service supply issues.

“Its overseas potential will be hampered for some time,” the analyst suggests. “The US and China may eventually reach a trade deal to alleviate the pressure on Huawei, but if and when this will happen is far from clear.”

“It is important to note that market uncertainty is clearly prompting vendors to accelerate certain strategies to minimize the short- and long-term impact in a challenging business environment, for example, shifting manufacturing to different countries to hedge against the risk of tariffs. But with recent US announcements on tariffs on goods from more countries, the industry will be dealing with turmoil for some time,” added Nicole Peng, Canalys VP, mobility, in a statement.

It expects other smartphone makers to seek to capitalize on short term opportunities created by the uncertainty hitting the Chinese tech giant, and predicts that South Korea’s Samsung will benefit the most — “thanks to its aggressive device strategy and its ability to quickly ramp up production”.

By 2020, it expects the market to have settled a little — with active contingency plans to be in place in major mobile supply chains and channels to “mitigate Huawei’s decline”, as well as gear up for 5G device rollouts.

Canalys takes the view that 5G and other hardware innovations will be positive drivers for consumer demand — expecting smartphone shipments to return to soft growth globally in 2020, rising 3.4% to 1.39BN, albeit with some subtle regional variations that it says will allow some to recover faster than others.

The next innovation in mobile is peeking its head for all to see today after Chinese companies Oppo and Xiaomi both showed off under-screen cameras.

Apple’s notch set the ball rolling as a new way to pack a front-facing camera without compromising on the screen size, but it is already feeling date. The industry has since given us smartphone cameras that pop out, flip up and slide out, while the hole-punch condenses the notch further still, but the next stage is going under the screen for full invisibility.

The benefits are obvious. There’s no compromise on the front screen, which is now 100 percent screen, and removing moving parts means no concern for potential damage — but can it be done well enough?

Oppo VP Brian Shen teased his company’s early effort on Weibo. The video, which was later shared by Oppo’s Twitter account, doesn’t have a lot of detail but it does show a hidden camera that takes a photo of the ceiling.

We don’t get a chance to delve into the quality of the image and it isn’t clear what device it was taken on, but already Shen claims the technology is showing promise.

“At this stage, it’s difficult for under-display cameras to match the same results as normal cameras, there’s bound to be some loss in optical quality. But, no new technology jumps to perfection right away,” he said, according to Engadget.

You’d imagine that a number of Chinese smartphone makers are hard at work bringing this design to reality. Proof of that comes from Xiaomi’s very hasty response, which saw the company posts its own under-screen camera teaser right after Oppo’s.

This one comes courtesy of Xiaomi co-founder Bin Lin, and it also originated on Weibo before it made its way to Twitter.

The Xiaoki video appears to show a prototype Mi 9 with the hidden camera compared with a regular model. As with the Oppo tease, we don’t know when this technology will reach consumers but these tactical leaks certainly show that the wheels are in motion.

Internet shopping has been blamed for boarding up high streets across the UK. So it looks politically judicious for Amazon, the original ecommerce behemoth, to now be attaching its brand name to a pilot project aimed at sparking a little commercial life in denuded UK towns and cities by parachuting online SMEs into pop-up shops around the country.

The year-long Amazon pop-up pilot program — which is couched as an exploration of “a new model to help up-and-coming online brands grow their high street presence” — will see more than 100 small online businesses selling on the UK high street for the first time via time-slots in ten pop-up shops which will each be open for between six and eight weeks.

The first pop-up opens today on St Mary’s Gate in central Manchester. Others will appear in high streets in Wales, which will get the second pop up in Cardiff; Scotland, the Midlands, Yorkshire and across the South East over the course of the pilot — before winking out of existence again.

We understand the project is being funded by Amazon and its partner organization for the program: Enterprise Nation — a local small business support network. Direct Line for Business and Square are also listed as partners for the pilot.

It is not clear how much they are spending to sustain the ten pop-ups for up to two months apiece.

Last year the UK government called for proposals for reinvigorating high streets, announcing a £675M Future High Streets Fund to help modernise high streets.

And while the pop-up pilot is not receiving any of this public funding, Amazon’s PR states that they have commissioned an external research consultant to produce “a detailed analysis of the impact of the pilot” — saying they plan to submit the findings to the government following its call for new ideas to inform the Future High Streets strategy.

“The Clicks and Mortar pop-up shops will provide customers with the opportunity to discover and buy directly from over 100 small businesses – everything from homeware and health and beauty products to food and drink and electronics,” Amazon writes. “The up-and-coming brands have all built successful online businesses and now want to explore physical retail for the first time.”

Among the online brands that will have their wares showcased on UK high streets via the pilot are a foldable kick-scooter brand for adults (Swifty Scooters); a maker of leather cases for electronics devices (Torro Cases); and a men’s skincare range (Altr for Men).

Participating small businesses will be selling directly to customers, with all payments made straight to them — Amazon confirmed it is not taking any sales commission for the pop-up shops.

Last year the UK chancellor announced a digital services tax that will be applied to tech giants operating search engines, social media platforms and online marketplaces from April 2020 — after floating the idea of a platform tax to help level the playing field with traditional retailers and support high street regeneration.

The digital services tax will put a levy of 2% on revenues of tech giants that can be attributed to UK users.

Amazon’s UK corporation paid just £4.5M in tax in 2017, with revenues from its UK retail sales reported through a separate company in Luxembourg — meaning rising growth in online shopping on Amazon.co.uk has not translated into increased tax contributions to the UK.

This has meant a double whammy for the public purse because Internet shopping competitively squeezes high street businesses that do pay into public coffers. To the point of no return in the case of many traditional bricks and mortar sellers. Hence boarded up high streets are a visual reminder of the wider societal costs of Internet-enabled profit shifting. (Albeit, it’s harder to visualize the impact of shrinking public funds on vital areas such as education.)

Also today, Amazon has announced a £1M SME Apprenticeship Fund — which it is fully funding.

It says this will help create more than 150 full-time apprenticeships in roles including digital marketing, business administration and customer service practitioner at small online businesses.

The fund is open to apprentice applications from any brand-owning SME registered in England that currently sells on Amazon and has a turnover of less than £1M. Each apprenticeship will last between 15-18 months, with apprentices receiving a mix of in-work, online and classroom training.

“Amazon will also provide specialist training on how to build a successful e-commerce business, how participating SMEs can market and advertise their products to customers and how to sell their products to a global customer base,” it writes.

It also says it will be providing free digital training at Amazon Academy events held across the UK to offer additional support to small businesses to sell online — with a special focus on boosting export sales.

Internet shopping has been blamed for boarding up high streets across the UK. So it looks politically judicious for Amazon, the original ecommerce behemoth, to now be attaching its brand name to a pilot project aimed at sparking a little commercial life in denuded UK towns and cities by parachuting online SMEs into pop-up shops around the country.

The year-long Amazon pop-up pilot program — which is couched as an exploration of “a new model to help up-and-coming online brands grow their high street presence” — will see more than 100 small online businesses selling on the UK high street for the first time via time-slots in ten pop-up shops which will each be open for between six and eight weeks.

The first pop-up opens today on St Mary’s Gate in central Manchester. Others will appear in high streets in Wales, which will get the second pop up in Cardiff; Scotland, the Midlands, Yorkshire and across the South East over the course of the pilot — before winking out of existence again.

We understand the project is being funded by Amazon and its partner organization for the program: Enterprise Nation — a local small business support network. Direct Line for Business and Square are also listed as partners for the pilot.

It is not clear how much they are spending to sustain the ten pop-ups for up to two months apiece.

Last year the UK government called for proposals for reinvigorating high streets, announcing a £675M Future High Streets Fund to help modernise high streets.

And while the pop-up pilot is not receiving any of this public funding, Amazon’s PR states that they have commissioned an external research consultant to produce “a detailed analysis of the impact of the pilot” — saying they plan to submit the findings to the government following its call for new ideas to inform the Future High Streets strategy.

“The Clicks and Mortar pop-up shops will provide customers with the opportunity to discover and buy directly from over 100 small businesses – everything from homeware and health and beauty products to food and drink and electronics,” Amazon writes. “The up-and-coming brands have all built successful online businesses and now want to explore physical retail for the first time.”

Among the online brands that will have their wares showcased on UK high streets via the pilot are a foldable kick-scooter brand for adults (Swifty Scooters); a maker of leather cases for electronics devices (Torro Cases); and a men’s skincare range (Altr for Men).

Participating small businesses will be selling directly to customers, with all payments made straight to them — Amazon confirmed it is not taking any sales commission for the pop-up shops.

Last year the UK chancellor announced a digital services tax that will be applied to tech giants operating search engines, social media platforms and online marketplaces from April 2020 — after floating the idea of a platform tax to help level the playing field with traditional retailers and support high street regeneration.

The digital services tax will put a levy of 2% on revenues of tech giants that can be attributed to UK users.

Amazon’s UK corporation paid just £4.5M in tax in 2017, with revenues from its UK retail sales reported through a separate company in Luxembourg — meaning rising growth in online shopping on Amazon.co.uk has not translated into increased tax contributions to the UK.

This has meant a double whammy for the public purse because Internet shopping competitively squeezes high street businesses that do pay into public coffers. To the point of no return in the case of many traditional bricks and mortar sellers. Hence boarded up high streets are a visual reminder of the wider societal costs of Internet-enabled profit shifting. (Albeit, it’s harder to visualize the impact of shrinking public funds on vital areas such as education.)

Also today, Amazon has announced a £1M SME Apprenticeship Fund — which it is fully funding.

It says this will help create more than 150 full-time apprenticeships in roles including digital marketing, business administration and customer service practitioner at small online businesses.

The fund is open to apprentice applications from any brand-owning SME registered in England that currently sells on Amazon and has a turnover of less than £1M. Each apprenticeship will last between 15-18 months, with apprentices receiving a mix of in-work, online and classroom training.

“Amazon will also provide specialist training on how to build a successful e-commerce business, how participating SMEs can market and advertise their products to customers and how to sell their products to a global customer base,” it writes.

It also says it will be providing free digital training at Amazon Academy events held across the UK to offer additional support to small businesses to sell online — with a special focus on boosting export sales.