Netflix may launch in Spain later this summer

Netflix is looking to launch in Spain later this year, according to local media reports that were relayed by Variety this weekend. According to these reports, Netflix could launch in Spain as early as September. The streaming service has reportedly already negotiated rights to launch in Spain, and TV manufacturers are preparing to carry the Netflix app in Spain this year. Netflix executives announced earlier this year that they want to expand to 200 countries within two years.

Labels start making more money from streaming than downloads

Streaming is starting to overtake digital downloads as a source of revenue for independent labels, according to a new blog post from British indie music heavyweight PIAS (hat tip to Hypebot). The company, which runs a couple of indie labels itself but also provides funding and distribution services to other indies, saw higher revenues from streaming than downloads in 24 markets last year, including countries like France, the Netherlands and Spain.

The transition seems to be a little slower in bigger markets like the U.K.. Here’s how PIAS commercial operations manager James Howdle put it:

“I certainly expect streaming will overtake downloads in the next two years in the UK market. It’s hard to say how that will then compare to physical CDs, which continue to be the biggest single format for driving revenue in the territory … I think we will reach a point of equilibrium where physical sales continue to generate a significant proportion of sales while streaming becomes the dominant form of digital consumption.”

In other words: Paid music downloads may just fade away as more people get used to either paying a monthly fee for ad-free streaming or tuning into ad-supported streaming services.

Howdle has especially high hopes for YouTube’s streaming service, which is still in closed beta, as well as Apple’s yet-to-be-announced plans to launch a streaming service as part of iTunes this year. “Apple and YouTube’s entrance into the subscription streaming market this year will definitely change and accelerate the market considerably,” he wrote.

Pioneering file hosting service RapidShare is shutting down

Pioneering file hosting service RapidShare is shutting down by the end of next month, according to a notice posted on the service’s website that was first reported by Torrrentfreak. The notice reads, in part:

“We strongly recommend all customers to secure their data. After March 31st, 2015 all accounts will no longer be accessible and will be deleted automatically.”

RapidShare was one of the pioneers of so-called one-click file hosting, which essentially allowed users to upload and share files publicly for free. The site was widely used to share copyrighted content, and frequently faced off with rights holders in court.

RapidShare also tried to work with the content industry, striking a partnership with Warner Bros in 2009 with plans to redirect users looking for unlicensed content to a legal download store. To appease rights holders, and to escape the fate of Megaupload, RapidShare introduced a number of measures to discourage infringement, including strict limits on how often files could be shared and tools that helped rights holders to automate take-downs.

But partnerships with Hollywood and music labels never came through, and anti-piracy measures decimated RapidShare’s user base. In early 2013, the company laid off most of its staff, and it already looked like the end was near. Later that year, RapidShare tried one more time to reinvent itself as a competitor to Dropbox and other cloud storage vendors. In the end, that may have been too little, too late.

BT agrees to $19B takeover of EE, paving way for close DT relationship

The negotiations are over: pending regulatory approval, BT will get back into the U.K.’s mobile scene in a big way by buying EE from Deutsche Telekom and Orange for £12.5 billion ($19 billion).

This means BT will be able to sell fully-converged bundles of fixed and mobile connectivity, telephony and pay TV services. It will also leave Germany’s Deutsche Telekom as BT’s biggest individual shareholder, and DT’s chief is already talking about the big European national telecoms giants working together more closely in the future.

“The UK’s leading 4G network will now dovetail with the U.K.’s biggest fiber network, helping to create the leading converged communications provider in the U.K.,” BT CEO Gavin Patterson said in a statement. “Consumers and businesses will benefit from new products and services as well as from increased investment and innovation.”

The companies began exclusive talks in December last year after BT said it was interested in buying either EE or O2. After BT and EE went exclusive, Three UK owner Hutchison Whampoa said it was in talks to buy Telefónica’s O2.

If both those deals go through, the U.K. will be left with three network-owning mobile operators, rather than four (the other one is Vodafone). Regulators will need to take this into account, along with the various chunks of spectrum that the companies own — despite only explicitly talking about business services at the time, BT bought 4G spectrum in 2013’s big auction.

It remains to be seen whether Europe’s competition regulators will take an interest, or whether it will be down to the UK Competition and Markets Authority.

EE is the U.K.’s largest mobile carrier, comprising as it does two former carriers, T-Mobile UK and Orange. It has 24.5 million direct mobile customers, 834,000 fixed broadband customers and a bunch more people who use EE mobile services resold under different virtual operator brands. In total, it services 31 million people, or roughly half the country.

The deal will be a cash-share combination, leaving Deutsche Telekom with a 12 percent stake in BT and one non-executive board member, and France’s Orange with a four percent stake.

“The transaction is much more than just the creation of the leading integrated fixed and mobile network operator in Europe’s second largest economy,” DT CEO Tim Höttges said in the statement. “We will be the largest individual shareholder in BT and are laying the foundations for our two companies to be able to work together in the future.”

Facebook faces fight in Europe over new privacy policy

Last week Facebook rolled out a new privacy policy that allows the sharing of data between its various services, such as Instagram and the Atlas ad unit, and the tracking of users across much of the web. At the time, Hamburg’s data protection chief said he was preparing to coordinate with counterparts across Europe to see what might need to be done about this.

Now, according to IDG, EU data protection officials have formed a task force to deal with the matter, on the basis that Facebook’s new policy may well contravene European privacy laws.

The privacy policies of the big U.S. web giants, which make their money by tracking users in great detail so as to sell their profiles to advertisers, have long been a sore point in the EU. On Friday Google and the U.K.’s Information Commissioner’s Office (ICO) announced a settlement to a long-running investigation over that company’s policy – Google will give users more information about how their data collected and shared between services, and perhaps a little more control over how this happens.

This will apply across the world, not just in the U.K., but it remains to be seen whether it will mollify regulators in continental Europe who have spent the last couple years fining Google over its practices. For one thing, the U.K. settlement measures don’t seem to include an explicit opt-in for the sharing of personal data across services, as privacy officials in other EU countries had demanded.

According to IDG, the regulators are now examining several aspects of the behavior allowed by Facebook’s new policy: its off-site tracking of users across sites and apps that are connected to Facebook services, its sharing of data with third parties, its use of personal information and images for commercial purposes, and again the general lack of explicit opt-in user consent for much of this.

Facebook’s new terms aren’t quite the unified privacy policy that Google created — there’s still a data wall between WhatsApp and Facebook, for one thing — but the effects are broadly similar when it comes to mixing and matching personal data between Facebook’s units. In the cases of both Facebook and Google, those units have surprisingly extensive reach across the web and apps.

Here are a few of the key passages in Facebook’s policy:

We collect information when you visit or use third-party websites and apps that use our Services (like when they offer our Like button or Facebook Log In or use our measurement and advertising services). This includes information about the websites and apps you visit, your use of our Services on those websites and apps, as well as information the developer or publisher of the app or website provides to you or us.
Information from third-party partners.

We receive information about you and your activities on and off Facebook from third-party partners, such as information from a partner when we jointly offer services or from an advertiser about your experiences or interactions with them.

Sharing With Third-Party Partners and Customers: We work with third party companies who help us provide and improve our Services or who use advertising or related products, which makes it possible to operate our companies and provide free services to people around the world.

This is all quite similar to what Google does, and the reaction seems set to follow a similar course. In Google’s case, the regulators also banded together to coordinate assaults on a national level. With regulators in Belgium, the Netherlands and now Germany already sniffing around Facebook’s new privacy policy, the company probably has a substantial fight on its hands.

Facebook said in an emailed statement:

We recently updated our terms and policies to make them more clear and concise, to reflect new product features and to highlight how we’re expanding people’s control over advertising. We’re confident the updates comply with applicable laws. As a company with international headquarters in Dublin, we routinely review product and policy updates­ including this one with our regulator, the Irish Data Protection Commissioner, who oversees our compliance with the EU Data Protection Directive as implemented under Irish law.

PS – If you want to opt out of some of the tracking permitted through the new Facebook privacy policy, here’s the relevant settings page.

This article was updated at 7am PT to include Facebook’s statement.

Web inventor warns against zero-rating net neutrality threat

Zero-rating – where carriers charge nothing or very little for the data used by specific apps and web services – is a threat to net neutrality, web inventor Tim Berners-Lee has warned.

The practice is becoming very popular, with mobile operators in particular making special offers that exempt services such as [company]Facebook[/company] and [company]Spotify[/company] from customers’ normal data caps. This steers users to those specific services and harms their rivals, whose traffic becomes much more expensive to the user.

Berners-Lee slammed zero-rating on Tuesday in a guest post on the blog of EU digital single market commissioner Andrus Ansip, who is a staunch supporter of net neutrality and is currently trying to get EU member states to agree to the strong net neutrality rules voted through by the European Parliament last year.

However, those rules don’t call out zero-rating, also known as positive price discrimination, as a net neutrality violation. The European Commission has also so far held back from defining it as such.

Here’s what the web pioneer wrote in his pro-net-neutrality piece:

Of course, [net neutrality] is not just about blocking and throttling. It is also about stopping ‘positive discrimination’, such as when one internet operator favours one particular service over another. If we don’t explicitly outlaw this, we hand immense power to telcos and online service operators. In effect, they can become gatekeepers — able to handpick winners and the losers in the market and to favour their own sites, services and platforms over those of others. This would crowd out competition and snuff out innovative new services before they even see the light of day.

I asked Ansip’s office whether he agreed with Berners-Lee’s views, and was told that, although the guest posts don’t reflect official Commission positions, Ansip considers the post to be “an important contribution to the debate on net neutrality.”

As things stand, the Latvian presidency of the Council of the European Union – the body that represents the government of member states – is busy working out its position on the EU’s almost-concluded Telecoms Single Market Regulation, which includes the new net neutrality laws.

Under the Council’s previous Italian presidency, leaks suggested that the member states were going to dilute the net neutrality provisions by making them aspirational rather than set in stone. However, the Commission and Parliament both pushed back hard, and negotiations are ongoing.

The Council indicated in January that, although some member states were keen on banning zero-rating, opposition from other member states meant there wasn’t enough support to insert an explicit clause about this into the new regulation.

In the meantime, countries such as the Netherlands, Slovenia and Norway have pushed ahead with national bans on zero-rating. Outside Europe, Chile and Canada have done the same.

If anyone wants to hassle the Latvian presidency of the Council about the need for strong net neutrality rules, Berners-Lee supplied a handy pre-written tweet. It might also be worth reminding them that the U.S. looks set to embrace strong net neutrality – ironically, a year ago the old Commission was taunting the U.S. for dithering on net neutrality when Europe was preparing to take a firm stance.

Google to give all users clearer information about data use

Google has vowed to revise its privacy policy and account settings, in order to make it clearer to people what it does with their data and give them more control. This comes as part of a settlement with the U.K. Information Commissioner’s Office, announced on Friday, but the changes will apply globally.

The ICO and other data protection regulators across the EU have been coordinating a crackdown on Google’s practices since 2012, when the company introduced a new unified privacy policy. The unified policy allowed [company]Google[/company] to mix and match personal data across its various services – between YouTube and Search, for example. However, many people did not, and still do not, appreciate what this means in terms of user profiling.

Google has faced repeated fines over its refusal to change the policy in countries such as France, Italy and Germany, but the sums involved were chickenfeed for a company of Google’s girth. The U.K.’s ICO hasn’t fined Google in this way, but has repeatedly said that Google’s settlement proposals didn’t go far enough.

Now this long-running drama may be drawing to a close. On Friday the ICO triumphantly brandished an undertaking in which Google said it would do the following things during the next two years:

  • Make its privacy policy easier to find, and be clearer in that policy about what user information it processes and why.
  • Provide users with “information to exercise their rights” and launch a redesigned account settings version to give them more control.
  • Add two provisions from the Google terms of service to the privacy policy, regarding email data and the “shared endorsement” feature.
  • Add to the privacy policy information about “the entities that may collect anonymous identifiers on Google properties and the purposes to which they put that data.”
  • “Take several measures” to tell passive users – those using third-party services that are plugged into Google services, such as advertising – more about what’s happening with their data. Those running the third-party services will also need to “obtain the necessary consents” for this data collection.
  • “Enhance its guidance for employees regarding notice and consent requirements.”

Google also said it would continuously evaluate the privacy impact of future changes to its services and keep users informed, especially where the changes “might not be within the reasonable expectations of service users.” Particularly significant changes to the privacy policy will be “reviewed by user experience specialists and with representative user groups before the policy and associated tools are launched as appropriate.”

The changes will make sure Google is compliant with the U.K. Data Protection Act, which is based on European law. It is not yet clear whether this is the end of the matter as far as the other EU data protection authorities are concerned — I understand that the changes will apply in all countries around the world, though.

Here’s what ICO enforcement head Steve Eckersley said in a statement:

Google’s commitment today to make these necessary changes will improve the information UK consumers receive when using their online services and products.

Whilst our investigation concluded that this case hasn’t resulted in substantial damage and distress to consumers, it is still important for organisations to properly understand the impact of their actions and the requirement to comply with data protection law… This investigation has identified some important learning points not only for Google, but also for all organisations operating online, particularly when they seek to combine and use data across services.

Although the list of commitments is fairly comprehensive, some terms are vague and the proof may lie in the implementation. For example, the EU privacy watchdogs previously demanded that users get the opportunity to “choose when their data are combined, for instance with dedicated buttons in the services.” That’s not merely a matter of giving users “information to exercise their rights”, so it will be interesting to see what the redesigned account settings entail.

So far, Google has merely said:

We’re pleased that the ICO has decided to close its investigation. We have agreed improvements to our privacy policy and will continue to work constructively with the Commissioner and his team in the future.

Even if this does indicate a conclusion to the unified privacy policy saga, then Google still faces major regulatory headaches in Europe. These include the big search antitrust case – tied in with digital agenda commissioner Günther Oettinger’s apparent desire to extend a version of the “Google tax” copyright levy across Europe – and a potential second antitrust case over Android.

Still, one at a time, eh?

This article was updated at 8.15am PT to note that the changes will apply globally.

Dutch and Slovenian regulators nail carriers over net neutrality

While the European Union dithers over EU-wide net neutrality, some European countries are marching on regardless. On Friday Slovenia’s regulators nailed carriers Telekom Slovenije and Si.mobil for violating net neutrality principles, and on Tuesday Dutch regulators fined KPN and Vodafone for similar violations.

The latest ruling, by the Dutch consumer protection agency ACM, saw [company]KPN[/company] fined €250,000 ($283,000) and [company]Vodafone[/company] €200,000. KPN was caught for blocking some VoIP services on its free Wi-Fi hotspots, and Vodafone was zero-rating the [company]HBO[/company] Go app – that is, it was providing free traffic for that service in particular, a practise technically known as “positive price discrimination”.

ACM’s statement read in part:

In addition to the ban on blocking, internet providers may also not charge differing tariffs for the use of services and applications on the internet. This contributes to an open internet. An open internet is important for freely disseminating information and increasing choice on the internet.

The Slovenian ruling was also about zero-rating: [company]Telekom Slovenije[/company] has been providing free data for the music streamer [company]Deezer[/company], and [company]Si.mobil[/company] for cloud storage service [company]Hanger Mapa[/company]. Those carriers now have two months to stop breaking the rules.

The European Parliament voted for strong net neutrality rules in April 2014, but since then the legislative process has stalled, largely due to some member states demanding vague principles rather than strictly-defined terms. The European Commission is dead set against this development, so it and the Council of the European Union, which represents the states, are currently negotiating a compromise.

However, even if that legislation’s strong definitions survive, it doesn’t ban zero-rating, which some argue is not a net neutrality issue because users can still access services other than those being zero-rated, even if it means using up their data allowance.

Those who argue that it is a net neutrality issue maintain that it violates the principles because it favors particular services and apps over others. That includes regulators in the Netherlands, Slovenia, Norway (not part of the EU but part of the European Economic Area, where EU net neutrality legislation would apply), and Chile (definitely nowhere near the EU.)

Last week the Latvian Presidency of the Council indicated that proposals to include an explicit ban on zero-rating in the EU-wide net neutrality legislation would not gain enough support among the states. Some had also suggested making selective blocking a self-regulatory matter, but those proposals seem to be sunk as they would conflict with existing EU legislation and fundamental rights.

In other words, the current situation – where zero-rating is banned in some European countries but not others – looks set to continue into the foreseeable future, whether or not a broader ban on blocking and throttling comes into force.

Rakuten’s Wuaki TV wants to expand to 10 more countries

European video streaming service Wuaki TV is getting ready to expand to 10 additional countries this year. Wuaki, which was acquired by Japan’s e-commerce giant Rakuten in 2012, plans to launch in Austria and Ireland first, according to Broadband TV News, and then later expand to the Netherlands, Belgium, and Portugal as well as the Nordics.

[company]Wuaki TV[/company] is currently available in Spain, the U.K., Italy, France and Germany, which means that it could be live in a total of 15 countries by the end of 2015. The company said late last year that it was closing in on two million users, with about 400,000 registered users in the U.K. alone.

Wuaki TV is at its core a premium video-on-demand service, meaning that consumers pay to rent or buy individual titles. As such, it faces competition from Netflix and Amazon Prime Instant, whose all-you-can-eat proposition seems to be catching on quickly with consumers. Earlier this week, Netflix revealed as part of its Q4 earnings that it now has more than 18 million subscribers outside of the U.S., and that it wants to be in 200 countries within the next two years.

Hutchison Whampoa hopes to buy O2 UK for $15 billion

The pairing-off of major U.K. telecommunications players continues: On Friday, Three’s Hong Kong owner, Hutchison Whampoa, said it was now in exclusive takeover discussions with Telefónica’s O2.

The merry dance began last November, when fixed-line player BT (the company that once spun out what became O2) said it wanted to get back into the mobile game, and was considering buying either EE (joint-owned by Germany’s Deutsche Telekom and France’s Orange) or O2. Hutch waded in days later, indicating that it was also mulling a purchase of EE or O2.

In December, BT formally announced that it was in exclusive talks to pick up EE for just under $20 billion. So it’s no surprise to see Hutch now doing the same with Three – a move that would reduce the number of network-owning British carriers from four to three.

As things stand, Spain’s Telefónica would get £9.25 billion ($13.86 billion) in cash for O2, which it would no doubt use to pursue further consolidation opportunities in other markets – last year it bought KPN’s German E-Plus subsidiary, for example.

It could also look forward to “deferred upside interest sharing payments of up to a further £1 billion in the aggregate payable after the cumulative cash flow of the combined businesses of Hutchison 3G UK Limited and O2 UK has reached an agreed threshold,” according to the statement.

All this depends on due diligence, agreement on terms and regulatory approval. At the EU level, digital economy commissioner Günther Oettinger says he’s keen to see more consolidation in European telecoms, so as to create bigger regional rivals to U.S. carriers. Though this, of course, would be a larger Hong Kong-owned player.

Telefónica already got rid of its U.K. fixed-line business in 2013, selling it to BSkyB for $300 million.