#FactCheck - The video of Virat Kohli promoting online casino mobile app is a deep fake.

Introduction

The .com boom led to a massive surge in the expansion of digitised and automated operations in all industries and organisations, which in turn beagle a wholesome transition to the digital age for all netizens, organisations and industries. All the big techs in today’s time were startups or not even in existence back when this boom began, but just in 3-4 decades, we see that a massive faction of the global population is dependent directly or indirectly on big techs for some or the other services. As the world of tech expands, so does the big tech, and hence, in the previous decades, we have seen some acquisitions by big tech companies. The biggest acquisition by tech was last seen in 2023 when the social media giant Facebook (Now META) acquired the famous messaging platform Whatsapp for $13 Billion, but now, almost after a decade, the world is ready to witness the biggest acquisition as Adobe confirms its plans to acquire Figma the leading web-first collaborative design platform.

Adobe - Figma Acquisition  

The illustrator developer Adobe has been the pioneer in developing designing tools since 1982. The founder of the company made a switch from the paper company Xerox, and hence, the operations and products of the company have been oriented towards paper and design. But as the company is already a pioneer in developing designing and editing tools, the impact of AI cannot be underestimated. Hence, this acquisition comes at a critical juncture in impacting the AI-driven product market.  

Adobe wants to use digital experiences to transform the world. Adobe provides the tools and platforms that power the digital economy today, and over the course of its existence, its innovations have positively impacted billions of people worldwide. Adobe continues to invent and modify categories, having revolutionised photography and creative expression with Photoshop, pioneered electronic documents with PDF, and created the digital marketing category with Adobe Experience Cloud.

The goals of Figma are to facilitate visual teamwork and provide accessibility to design for all. The company, which was founded in 2012 by Dylan Field and Evan Wallace, was a pioneer in online product design. Thanks to multi-player workflows, advanced design systems, and a large, expandable developer environment, it is now enabling collaboration for anybody designing interactive mobile and online applications. Millions of fresh designers and developers, as well as a devoted student base, have been drawn to Figma.

By working together, Adobe and Figma will transform how people create and work, spur innovation on the web, improve product design, and uplift communities of creators, designers, and developers throughout the world. The combined business will have the capacity to create major value for clients, investors, and the industry, in addition to a sizable and rapidly expanding market potential.

Key Features of Acquisition

The most expensive acquisition this century has caught the attention of a lot of companies and regulatory authorities across the world. The key features of the deal are as follows: 

• Reimagining the Future of Creativity and Productivity: The designing giant Adobe and Figma coming together will unlock new potential for creativity and productivity as both of the companies create tools which are widely used; hence, they understand the customer’s requirements and expectations, thus making a path for creativity and productivity in term of new services and applications.    
• Accelerating Creativity on the Web: Adobe's Creative Cloud technologies will be delivered online more quickly thanks to Figma's web-based, multi-player features, which will increase productivity and accessibility to the creative process for more people. The current difficulty facing creators is producing an ever-increasing amount of material while working closely with an ever-increasing number of stakeholders. With its widespread use, the web is now a tool that facilitates collaborative creation in teams.
• Advancing Product Design: All parties involved in the product design process, including designers, product managers, and developers, will gain from the integration of Adobe's robust imaging, photography, illustration, video, 3D, and font technologies into the Figma platform. Because digital applications are integral to both our personal and professional lives, the product design sector is experiencing rapid expansion. 
• Inspiring and empowering the designer and developer community: The company's ongoing innovation has been fueled by the dynamic creative community at Adobe. With its vast and expanding ecosystem, Figma boasts a fervent community that creates and shares everything from templates to plug-ins to lessons. By uniting the communities of Figma and Adobe, designers and developers will be able to harness the potential of collaborative design in the future. By 2025, Figma's addressable market will reach a total of $16.5 billion. With best-in-class net dollar retention of more than 150 percent, the company is predicted to add around $200 million in net new ARR this year, topping $400 million in total ARR by the end of 2022. Figma has established a productive, rapidly expanding company with operating cash flows that are positive and gross margins of over 90%.

Conclusion

The acquisition of the decade is going to be under heavy scrutiny and checks under various laws in different countries and is expected to be given the green light soon, this merger and acquisition case study will act as a precedent for such high-value acquisitions. Nearly 10 years ago, we saw the last biggest acquisition, where Meta acquired WhatsApp for $13 Bn. As the world of tech moves forward, we will be witnessing more of such M&As in the future, but in such moments, we should be cautious about how our data is handled and transferred by the other company, always make sure you keep a check on your digital rights and responsibilities, because ultimately we are the consumers of the cyberspace.

References

• https://news.adobe.com/news/news-details/2022/Adobe-to-Acquire-Figma/default.aspx
• https://www.theregister.com/2023/10/26/regulator_delays_adobes_20bn_buy/
• https://www.reuters.com/markets/deals/adobes-deal-acquire-figma-under-threat-eu-regulators-ft-2023-06-20/'

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Introduction

Privacy has become a concern for netizens and social media companies have access to a user’s data and the ability to use the said data as they see fit. Meta’s business model, where they rely heavily on collecting and processing user data to deliver targeted advertising, has been under scrutiny. The conflict between Meta and the EU traces back to the enactment of GDPR in 2018. Meta is facing numerous fines for not following through with the regulation and mainly failing to obtain explicit consent for data processing under Chapter 2, Article 7 of the GDPR. ePrivacy Regulation, which focuses on digital communication and digital data privacy, is the next step in the EU’s arsenal to protect user privacy and will target the cookie policies and tracking tech crucial to Meta's ad-targeting mechanism. Meta’s core revenue stream is sourced from targeted advertising which requires vast amounts of data for the creation of a personalised experience and is scrutinised by the EU. 

Pay for Privacy Model and its Implications with Critical Analysis

Meta came up with a solution to deal with the privacy issue - ‘Pay or Consent,’ a model that allows users to opt out of data-driven advertising by paying a subscription fee. The platform would offer users a choice between free, ad-supported services and a paid privacy-enhanced experience which aligns with the GDPR and potentially reduces regulatory pressure on Meta. 

Meta presently needs to assess the economic feasibility of this model and come up with answers for how much a user would be willing to pay for the privacy offered and shift Meta’s monetisation from ad-driven profits to subscription revenues. This would have a direct impact on Meta’s advertisers who use Meta as a platform for detailed user data for targeted advertising, and would potentially decrease ad revenue and innovate other monetisation strategies.

For the users, increased privacy and greater control of data aligning with global privacy concerns would be a potential outcome. While users will undoubtedly appreciate the option to avoid tracking, the suggestion does beg the question that the need to pay might become a barrier. This could possibly divide users between cost-conscious and privacy-conscious segments. Setting up a reasonable price point is necessary for widespread adoption of the model.

For the regulators and the industry, a new precedent would be set in the tech industry and could influence other companies’ approaches to data privacy. Regulators might welcome this move and encourage further innovation in privacy-respecting business models. 

The affordability and fairness of the ‘pay or consent’ model could create digital inequality if privacy comes at a digital cost or even more so as a luxury. The subscription model would also need clarifications as to what data would be collected and how it would be used for non-advertising purposes. In terms of market competition, competitors might use and capitalise on Meta’s subscription model by offering free services with privacy guarantees which could further pressure Meta to refine its offerings to stay competitive. According to the EU, the model needs to provide a third way for users who have ads but are a result of non-personalisation advertising.

Meta has further expressed a willingness to explore various models to address regulatory concerns and enhance user privacy. Their recent actions in the form of pilot programs for testing the pay-for-privacy model is one example. Meta is actively engaging with EU regulators to find mutually acceptable solutions and to demonstrate its commitment to compliance while advocating for business models that sustain innovation. Meta executives have emphasised the importance of user choice and transparency in their future business strategies.

Future Impact Outlook

• The Meta-EU tussle over privacy is a manifestation of broader debates about data protection and business models in the digital age. 
• The EU's stance on Meta’s ‘pay or consent’ model and any new regulatory measures will shape the future landscape of digital privacy, leading to other jurisdictions taking cues and potentially leading to global shifts in privacy regulations. 
• Meta may need to iterate on its approach based on consumer preferences and concerns. Competitors and tech giants will closely monitor Meta’s strategies, possibly adopting similar models or innovating new solutions. And the overall approach to privacy could evolve to prioritise user control and transparency.

Conclusion

Consent is the cornerstone in matters of privacy and sidestepping it violates the rights of users. The manner in which tech companies foster a culture of consent is of paramount importance in today's digital landscape. As the exploration by Meta in the ‘pay or consent’ model takes place, it faces both opportunities and challenges in balancing user privacy with business sustainability. This situation serves as a critical test case for the tech industry, highlighting the need for innovative solutions that respect privacy while fostering growth with the specificity of dealing with data protection laws worldwide, starting with India’s Digital Personal Data Protection Act, of 2023.

Reference:

• https://ciso.economictimes.indiatimes.com/news/grc/eu-tells-meta-to-address-consumer-fears-over-pay-for-privacy/111946106 
• https://www.wired.com/story/metas-pay-for-privacy-model-is-illegal-says-eu/ 
• https://edri.org/our-work/privacy-is-not-for-sale-meta-must-stop-charging-for-peoples-right-to-privacy/ 
• https://fortune.com/2024/04/17/meta-pay-for-privacy-rejected-edpb-eu-gdpr-schrems/ 

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Introduction

In the multifaceted world of international trade and finance, cross-border transactions constitute the heart of economic relationships that span the globe. The threads that intertwine forming the fabric of global commerce are ceaselessly dynamic and exhibit an intricate pattern of complexity especially when it comes to the regulated movement of capital. It's a domain where economies connect, where businesses engage in sublime commerce, and where technology and regulation intersect at critical juncture. These guidelines will play a critical role in the regulation of capital, fortification of financial integrity, and transparency of regulatory and cross-border payments. The key highlights of this regulation include strict pre-authorization for non-bank entities, mandating specific accounts for import and export PA-CBs and a transaction ceiling of 25,00,000 Rupees.

The Vigilance of RBI 

The Reserve Bank of India (RBI), ever vigilant in its shepherding role over the nation's financial stability and integrity, has taken decisive strides to dispel the haze that once clouded this critical sector. With the issuance of a revelatory circular dated October 31, 2023, the RBI has unveiled a groundbreaking framework that redefines the terrain for these pivotal financial entities, aptly christened as Payment Aggregators – Cross Border (PA-CB). In deploying this comprehensive array of regulations, the RBI demonstrates a robust commitment to harmonizing and synchronizing the oversight of payments within the country's financial fabric, extending its meticulous regulatory weave from domestic Payment Aggregators (PAs) to the PA-CBs, a sector previously undistinguished in formal oversight.

The prescriptive measures announced by the RBI are nothing short of a regulatory beacon that cuts through the fog of uncertainty, illuminating a clear path forward for entities dedicated to facilitating cross-border payment transactions pertaining to the import and export of permissible goods and services in India through online modes. Inclusiveness is a hallmark of the RBI’s directive, encompassing a diverse cadre of financial actors, ranging from Authorized Dealer (AD) banks and conventional Payment Aggregators (PAs), to the emergent breed of PA-CBs actively engaged in processing these critical international payment transactions.

Key Aspects of Regulation

One of the most striking aspects of this new regulatory regime is the RBI's insistence on pre-authorization. All non-bank entities providing PA-CB services are impelled to apply to the apex bank for authorisation by April 30, 2024. This is far from a perfunctory gesture; it represents a profound departure from the bygone era when these entities functioned under a patchwork of provisional guidelines and ad-hoc circulars. Indeed, with this resolute move, the RBI signals its intention to embrace these entities within its direct regulatory gambit, an acknowledgement of the shifting tides and progressive intricacies characteristic of cross-border payments.

The tapestry of new rules is complex, setting forth an array of prerequisites for entities aspiring for authorization. For instance, non-bank PA-CBs are obliged to register with the Financial Intelligence Unit-India (FIU-IND) as a preliminary step before commencing the application process. Moreover, the financial benchmarks set are notably rigorous. Non-banks must boast a minimum net worth of ₹15 crores at the time of the application—a figure that escalates to a robust ₹25 crores by the fiscal deadline of March 31, 2026.

Way Forward

As if these requirements weren't indicative enough of the RBI’s penchant for detail and precision, the guidelines become yet more granular when addressing specific types of PA-CBs. Import-only PA-CBs are mandatorily obliged to maintain an Import Collection Account (ICA) with an AD Category-I scheduled commercial bank, while export-only PA-CBs are instructed to maintain an Export Collection Account (ECA), which can be maintained in Indian Rupees (INR) or any permissible foreign currency. The nuance here is palpable; payments for import transactions must be received in a meticulously managed escrow account of the PA, prior to being funneled into the ICA for smooth settlement with overseas merchants.

Conversely, export-only PA-CBs' proceeds from international sales must be swiftly credited to the relevant currency ECA. This meticulous accounting ensures that the flow of funds is both transparent and traceable, adhering to the utmost standards of financial probity.

Yet, perhaps the most emphatic of the RBI's pronouncements is the establishment of a transaction ceiling. PA-CBs have their per-transaction limit capped at ₹25,00,000 for each unit of goods or services exchanged. This calculated move is transparent in its objective to mitigate risk—a crucial aspect when one considers the potential implications of these transactions on the country’s fiscal health and the integrity of its financial systems.

It is no exaggeration to declare that with these guidelines, the RBI is effectuating a seismic shift in the regulation of cross-border payment transactions. There's a fundamental transformation taking place—a metamorphosis—from a loosely defined existence of PA-CBs to one of distinct clarity, under the direct and unswerving supervisory gaze of the regulator. The compliance burden, indeed, has become heavier, yet the return is a compass that points decisively towards secure harbours.

As we embark upon the fresh horizons that these rules bring into view, it is imperative to acknowledge that the RBI's regulatory innovations represent far more than a mere codification of dos and don'ts. They embody a visionary stride towards safeguarding and fortifying the architecture of international payments, a critical component of India's burgeoning presence on the world economic stage.

Conclusion 

The journey ahead, as we navigate these newly charted waters with the RBI's guidelines as our steadfast North Star, will no doubt be replete with challenges, adaptations and learning curves for the array of operational entities. But it is with confidence we can say, the path is set; the map is clear. The complex labyrinth of cross-border financial transactions is now demystified, and the RBI's clarion call beckons us towards a future marked by regulation, security, and above all else, reliability in the cosmopolitan tapestry of global trade. RBI’s guidelines provide a comprehensive framework for standardizing cross-border financial transactions in India. This decision is a monumental step towards maintaining cyber peace in cyberspace. 

References:

• https://www.rbi.org.in/Scripts/NotificationUser.aspx?Id=12561&Mode=0
• https://www2.deloitte.com/in/en/pages/tax/articles/tax-alert-Regulation-of-payment-aggregator-cross-border-pa-cb.html
• https://www.jsalaw.com/newsletters-and-updates/rbis-new-guidelines-to-govern-payment-aggregators-in-cross-border-transactions/ 

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