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Church & Dwight reports fourth quarter and full year 2023 results

2023 Fourth Quarter Results

  • Net Sales growth +6.4%: Domestic +6.4%, Int’l +11.9%, SPD -9.2 %
  • Organic sales +5.3%: Domestic +5.7%, Int’l +9.0%, SPD -9.2%1
  • Gross Margin +260 bps
  • Reported EPS $0.62, Adjusted EPS $0.65, +4.8%1

2023 Full Year Results

  • Net Sales growth +9.2%; Organic Sales +5.3%1
  • Gross Margin +220 bps
  • Reported EPS $3.05, Adjusted EPS $3.17, +6.7%1
  • Cash from operations $1.03 billion

 

 

EWING, N.J. — (BUSINESS WIRE) — Church & Dwight Co., Inc. (NYSE: CHD) today announced full year net sales increased 9.2% to $5,867.9 million, ahead of the Company’s outlook of 9%. Organic sales increased 5.3% due to positive pricing of 4.4% and higher volume of 0.9%.1 Organic sales of consumer products increased 6.2%.

 

Full year EPS was $3.05, an increase of 81.5% compared to 2022 reported EPS. Full year 2023 Adjusted EPS was $3.17, an increase of 6.7% compared to 2022 Adjusted EPS.1 Full year Adjusted EPS exceeded the Company’s outlook of $3.15, driven by higher sales, higher gross margin and a lower tax rate, partially offset by higher SG&A.

 

Q4 net sales were $1,528.0 million, a $92.0 million or 6.4% increase compared to net sales in Q4 2022. This exceeded the Company’s outlook of 5% growth. Organic sales increased 5.3%1, exceeding the Company’s outlook of 4%, driven by 4.0% positive price and product mix and 1.3% higher volume. Reported EPS for Q4 was $0.62. Adjusted EPS in Q4 was $0.65 compared to $0.62 Adjusted EPS in Q4 2022.

 

Matthew Farrell, Chief Executive Officer, commented, “Our full year 2023 results illustrate the strength of our brands, innovative new products, and our focus on execution. We are exiting the year with strong momentum after posting two consecutive quarters of year-over-year volume growth. We expect volume to continue to drive growth into 2024. Our domestic brands grew consumption in 10 of 17 categories in 2023. We grew share on brands representing 60% of our sales. Global online sales accounted for 20% of total consumer sales in 2023, an increase of 26% compared to 2022.

 

“Our recent acquisitions, THERABREATH™ mouthwash and HERO™, the maker of MIGHTY PATCH™ acne care products, both experienced high consumption growth and grew market share throughout 2023. We expect these brands to deliver strong growth in 2024.

 

“Organic revenue growth for the Domestic Division grew 5.7% in 2023 driven by growth across much of the portfolio. Organic revenue growth for the International Division grew 8.5% in 2023, driven by broad-based growth in our country subsidiaries and our Global Markets Group. The International Division will continue to be a growth engine for the Company in 2024. Our Specialty Products Division declined 7.9% in 2023, largely due to declining sales of our MEGALAC dairy supplement within our Animal Nutrition business. We will be exiting this part of the Animal Nutrition business during Q1 2024.

 

“We were especially pleased by the strong gross margin expansion that we saw in 2023 with productivity, pricing, volume, and strong contributions from higher margin acquisitions more than offsetting inflation.

 

“Finally, strong sales and margin expansion along with efficient working capital management were all key drivers of our strong cash flow generation in 2023, achieving over $1 billion in cash from operations for the first time.

 

Fourth Quarter Review

Consumer Domestic net sales were $1,193.0 million, a $72.2 million or 6.4% increase driven by both household and personal care sales growth. Organic sales increased 5.7% due to price and product mix (+4.2%) and volume (+1.5%). This is the second consecutive quarter of volume growth, despite the impact of ceasing sub-optimal laundry promotions. Growth was led by HERO acne treatments, THERABREATH mouthwash, ARM & HAMMER™ Cat Litter, ARM & HAMMER™ baking soda and ARM & HAMMER™ unit dose laundry detergent.

 

Consumer International net sales were $258.8 million, a $27.5 million or 11.9% increase. Foreign currency exchange rates impacted sales favorably by (+2.7%). Organic sales increased 9.0% due to a combination of higher price and product mix (+5.1%) and higher volume (+3.9%). This is the fourth consecutive quarter of volume growth. Q4 organic sales were primarily driven by STERIMAR™, THERABREATH, ARM & HAMMER baking soda and HERO.

 

Specialty Products net sales were $76.2 million, a $7.7 million or a 9.2% decrease. Organic sales decreased 9.2% primarily due to lower volume (9.0%) driven by the dairy business, particularly MEGALAC which continues to be impacted by low-priced imports.

 

Gross margin increased 260 basis points to 44.6% due to improved pricing, volume, productivity, and the impact of the HERO acquisition, partially offset by higher manufacturing costs.

 

Marketing expense was $219.0 million, which was $29.3 million higher than prior year. Marketing expense as a percentage of net sales increased 110 basis points to 14.3%.

 

Selling, general, and administrative expense (SG&A) was $246.2 million, including $7.3 million of charges related to restricted stock that was issued for the HERO acquisition. Adjusted SG&A was $238.9 million or 15.6% of net sales, a 210 basis points increase, primarily due to higher incentive compensation from improved business performance, investment spending for future growth and minor asset write-offs related to our Specialty Products division.

 

Income from Operations was $216.1 million. Adjusted Income from Operations was $223.4 million, an increase of 2.2% inclusive of higher marketing and SG&A.

 

Other Expense was $20.9 million, a decrease of $4.6 million primarily due to higher interest income.

 

The effective tax rate decreased to 21.3% compared to 26.4% in Q4 2022. On an adjusted basis the tax rate was 20.5% compared to a rate of 21.3% in Q4 2022. The reported tax rate of 26.4% in Q4 2022 was unusually high due to the impact of the FLAWLESS™ intangible asset impairment charge.

 

Operating Cash Flow

For the full year 2023, cash from operations was $1,030.6 million, an increase of $145.4 million due to higher cash earnings and improvements in working capital. Capital expenditures for the full year were $223.5 million, a $44.7 million increase from the prior year as we invested in capacity expansion projects.

 

At December 31, 2023, cash on hand was $344.5 million, while total debt was $2.4 billion.

 

4% Dividend Increase and Share Repurchase

Consistent with the Company’s capital allocation strategy, the Company’s Board of Directors declared a 4% increase in the quarterly dividend from $0.2725 to $0.28375 per share, equivalent to an annual dividend of $1.135 per share. This raises the annual dividend payout from $267 million to approximately $276 million. The quarterly dividend will be payable March 1st, 2024, to stockholders of record at the close of business on February 15th, 2024. This is the 28th consecutive year in which the Company has increased the dividend. The Company has paid a consecutive quarterly dividend for 123 years.

 

In Q4, the Company spent $300 million to repurchase 3.3 million shares of common stock. Currently, the Company has approximately 246 million weighted average shares outstanding.

 

Mr. Farrell commented, “Our dividend increase and share repurchases reflect the Company’s desire for stockholders to benefit from our strong cash generation and reflects our confidence in continuing our strong performance. 2024 should be another year of strong cash flow. Our robust cash flow enables us to return cash to our stockholders while maintaining significant financial flexibility to aggressively pursue acquisitions and invest in our business.”

 

2024 New Products

Mr. Farrell commented, “Product innovation continues to be a big driver of our success and we are excited about our new product launches. In 2024, we expect new product launches to drive a significant increase in net sales as we lead with innovation in a number of key categories.”

 

ARM & HAMMER™ Laundry is launching Deep Clean™ Liquid and Deep Clean Unit Dose Laundry Detergent. Arm & Hammer Deep Clean will be our most premium Arm & Hammer laundry detergent, entering the mid-tier of the category using pH Power Technology to penetrate deep into fibers where dirt, odor, and stains linger, delivering a superior clean at a price consumers can afford.

 

ARM & HAMMER™ launched Power Sheets™ Laundry Detergent online in August 2023. This innovative laundry solution is effective, convenient, and eliminates plastic bottle waste. ARM & HAMMER™ is the first major brand to offer a detergent sheet in the U.S. and became the #2 detergent sheet on Amazon within 4 weeks of launch. It was the #1 top seller in the laundry category on Amazon Prime Day. Due to its online success, Power Sheets ™ will be available in select brick & mortar retailers in early 2024.

 

ARM & HAMMER™ Hardball™ Clumping Litter is being expanded nationally in early 2024, after successful in-market testing in 2023. This transformational plant-based substrate is lightweight and creates virtually indestructible clumps for no-mess scooping. We expect this new litter to help ARM & HAMMER capture a greater share of the lightweight litter category.

 

THERABREATH™, the #1 alcohol-free mouthwash brand, is entering the antiseptic segment of the category with the launch of TheraBreath™ Deep Clean Oral Rinse. Antiseptic mouthwashes account for 30% of the category. This product is formulated to kill 99.9% of germs that cause bad breath, plaque & gingivitis without the burn.

 

BATISTE™, the leader in dry shampoo, is meeting consumers’ desire for longer-lasting results with new BATISTE Sweat Activated and BATISTE Touch Activated dry shampoos. These breakthrough products are formulated with advanced technology and release a burst of fragrance whenever you sweat or touch your hair. Both new products deliver up to 24 hours of freshness.

 

HERO™ continues to drive the majority of growth in the acne category as the #1 patch brand in the U.S. In 2024, Hero will continue to launch innovative solutions in patches combined with new launches, such as Dissolve Away Daily Cleansing Balm, that will broaden our offerings of gentle and effective solutions for acne-prone skin.

 

Outlook for 2024

Mr. Farrell stated, “We exited 2023 with strong consumption growth across the majority of our categories. We are confident about 2024 and remain focused on offering high quality products to consumers at the right value.

 

“We are evolving our long-term Evergreen business model in 2024. The last revision was in 2018. Our new annual Evergreen model reflects our expectation of faster topline growth, greater margin expansion, and a higher cadence of growth investment, specifically in ecommerce and international. The revised evergreen model calls for 4% organic net sales growth (previously 3%), 25 to 50 basis points of gross margin expansion (previously 25 bps), marketing as a percentage of sales continues to approximate 11% (no change), and SG&A leverage of 0-25 bps (previously 25 bps) reflecting investments which will help sustain accelerated growth for years to come. We are maintaining our 8% industry leading annual EPS growth target.

 

“In 2024 we expect full year reported and organic sales growth to be approximately 4-5%.1 The organic sales outlook excludes Megalac from both years and the impact from foreign currency. We expect full year reported gross margin to expand approximately 50 to 75 basis points versus 2023. We expect an increase in manufacturing costs primarily due to capacity related investments, third party manufacturing cost increases, and moderate commodity inflation. We expect to more than offset our cost increases through carryover product pricing, mix, higher volume and productivity. We expect marketing as a percentage of sales to be approximately 11% and we expect to leverage SG&A while making investments in our International and ecommerce infrastructure.

 

“Our Adjusted EPS expectation for 2024 is 7-9% growth (mid-point $3.42 Adjusted EPS), inclusive of a 1% EPS drag related to exiting the MEGALAC business. Excluding the MEGALAC impact, Adjusted EPS growth expectation is 8-10%. Our tax rate is expected to increase 170 bps to approximately 23%. The higher tax rate represents a 2% drag to Adjusted EPS. This outlook reflects strong operating fundamentals including organic sales growth, volume growth, margin expansion and operating income growth.

 

“Other expense for 2024 is expected to be approximately $85 million, compared to $90 million in 2023.

 

“Cash flow from operations is expected to be approximately $1.0 billion. We expect 2024 capital expenditures of approximately $180 million as we complete the major capacity investments that were initiated in 2023. We expect capital spending to return to historical levels (2% of sales) in 2025. We will pursue accretive acquisitions that meet our strict criteria, with an emphasis on fast-moving consumable products, similar to our last 3 acquisitions (ZICAM, THERABREATH, and HERO).

 

“In past years, we have highlighted and discussed 14 power brands within our portfolio. In the future, we will focus our communication on seven brands that we expect to be the key drivers of growth. These brands, which today represent 70% of our sales and profits, primarily compete in larger categories and have the potential for global expansion. The seven brands are ARM & HAMMER™, OXICLEAN™, BATISTE™, VITAFUSION™, WATERPIK™, THERABREATH™ and HERO™.

 

“For Q1, we expect reported and organic sales growth of approximately 4%1, gross margin expansion and higher marketing spending (+100 basis points) to support our strong innovation pipeline. As a result of the shift in marketing spend to Q1, we expect Adjusted EPS of $0.85 per share, flat versus last year’s adjusted Q1 EPS.”1

 

1 Organic Sales, Adjusted SG&A, Adjusted Income from Operations, Adjusted Tax Rate and Adjusted EPS are non-GAAP measures. See Non-GAAP reconciliations included at the end of this release.

 

Church & Dwight Co., Inc. (NYSE: CHD) will host a webcast to discuss fourth quarter and year end 2023 results on Feb. 2, 2024, at 12:00 p.m. (ET). The presentation will broadcast online at investor.churchdwight.com/investors/news-events. Click on Church & Dwight Co., Inc. 2024 Analyst Day to register for the webcast.

 

Church & Dwight Co., Inc. (NYSE: CHD) founded in 1846, is the leading U.S. producer of sodium bicarbonate, popularly known as baking soda. The Company manufactures and markets a wide range of personal care, household, and specialty products under recognized brand names such as ARM & HAMMER®, TROJAN®, OXICLEAN®, SPINBRUSH®, FIRST RESPONSE®, NAIR®, ORAJEL®, XTRA®, L’IL CRITTERS® and VITAFUSION®, BATISTE®, WATERPIK®, ZICAM®, THERABREATH® and HERO®. For more information, visit the Company’s website.

 

Church & Dwight has a strong heritage of commitment to people and the planet. In the early 1900’s, we began using recycled paperboard for all packaging of household products. Today, virtually all our paperboard packaging is from certified, sustainable sources. In 1970, the ARM & HAMMER brand introduced the first nationally distributed, phosphate-free detergent. That same year, Church & Dwight was honored to be the sole corporate sponsor of the first annual Earth Day. In 2023, our continued progress earned continued public recognition, including the Newsweek Magazine’s Americas Most Responsible and America’s Greenest Companies lists, the EPA’s Green Power Partnership-Top 100 list, the 2023 Wall Street Journal Management Top 250 List, the 2022/2023 Forbes Magazine: Americas Best Midsize Employer Award and the FTSE4Good Index Series, amongst others.

 

For more information, see the Church & Dwight 2022 Sustainability Report at: https://churchdwight.com/responsibility/

This press release contains forward-looking statements, including, among others, statements relating to net sales and earnings growth; gross margin changes; trade, marketing, and SG&A spending; recessionary conditions; interest rates; inflation; sufficiency of cash flows from operations; earnings per share; cost savings programs; consumer demand and spending; the effects of competition; the effect of product mix; volume growth, including the effects of new product launches into new and existing categories; the impact of acquisitions (including earn-outs); and capital expenditures. Other forward-looking statements in this release may be identified by the use of such terms as “may,” “could,” “expect,” “intend,” “believe,” “plan,” “estimate,” “forecast,” “project,” “anticipate,” “to be,” “to make” or other comparable terms. These statements represent the intentions, plans, expectations and beliefs of the Company, and are based on assumptions that the Company believes are reasonable but may prove to be incorrect. In addition, these statements are subject to risks, uncertainties and other factors, many of which are outside the Company’s control and could cause actual results to differ materially from such forward-looking statements. Factors that could cause such differences include a decline in market growth, retailer distribution and consumer demand (as a result of, among other things, political, economic and marketplace conditions and events), including those relating to the outbreak of contagious diseases; other impacts of the COVID-19 pandemic and its impact on the Company’s operations, customers, suppliers, employees, and other constituents, and market volatility and impact on the economy (including contributions to recessionary conditions), resulting from global, nationwide or local or regional outbreaks or increases in infections, new variants, and the risk that the Company will not be able to successfully execute its response plans with respect to the pandemic or localized outbreaks and the corresponding uncertainty; the impact of new legislation such as the U.S. CARES Act, the EU Medical Device Regulation, new cosmetic and device regulations in Mexico, and the U.S. Modernization of Cosmetic Regulation Act; the impact on the global economy of the Russia/Ukraine war and increased conflict in the Middle East, including the impact of export controls and other economic sanctions; potential recessionary conditions or economic uncertainty; the impact of continued shifts in consumer behavior, including accelerating shifts to on-line shopping; unanticipated increases in raw material and energy prices, including as a result of the Russia/Ukraine war, increased conflict in the Middle East or other inflationary pressures; delays and increased costs in manufacturing and distribution; increases in transportation costs; labor shortages; the impact of price increases for our products; the impact of inflationary conditions; the impact of supply chain and labor disruptions; the impact of severe or inclement weather on raw material and transportation costs; adverse developments affecting the financial condition of major customers and suppliers; competition; changes in marketing and promotional spending; growth or declines in various product categories and the impact of customer actions in response to changes in consumer demand and the economy, including increasing shelf space or on-line share of private label and retailer-branded products or other changes in the retail environment; consumer and competitor reaction to, and customer acceptance of, new product introductions and features; the Company’s ability to maintain product quality and characteristics at a level acceptable to our customers and consumers; disruptions in the banking system and financial markets; the Company’s borrowing capacity and ability to finance its operations and potential acquisitions; higher interest rates; foreign currency exchange rate fluctuations; transition to, and shifting economic policies in the United States; potential changes in export/import and trade laws, regulations and policies of the United States and other countries, including any increased trade restrictions or tariffs; increased or changing regulation regarding the Company’s products and its suppliers in the United States and other countries where it or its suppliers operate; market volatility; issues relating to the Company’s information technology and controls; the impact of natural disasters, including those related to climate change, on the Company and its customers and suppliers, including third party information technology service providers; integrations of acquisitions or divestiture of assets; the outcome of contingencies, including litigation, pending regulatory proceedings and environmental matters; and changes in the regulatory environment in the countries where we do business.

 

For a description of additional factors that could cause actual results to differ materially from the forward-looking statements, please see Item 1A, “Risk Factors” in the Company’s annual report on Form 10-K and quarterly reports on Form 10-Q. The Company undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by the U.S. federal securities laws. You are advised, however, to consult any further disclosures the Company makes on related subjects in its filings with the United States Securities and Exchange Commission.

 

This press release also contains non-GAAP financial information. Management uses this information in its internal analysis of results and believes that this information may be informative to investors in gauging the quality of the Company’s financial performance, identifying trends in its results and providing meaningful period-to-period comparisons. The Company has included reconciliations of these non-GAAP financial measures to the most directly comparable financial measure calculated in accordance with GAAP. See the end of this press release for these reconciliations. These non-GAAP financial measures should not be considered in isolation or as a substitute for the comparable GAAP measures. In addition, these non-GAAP financial measures may not be the same as similar measures provided by other companies due to potential differences in methods of calculation and items being excluded. They should be read in connection with the Company’s financial statements presented in accordance with GAAP.

 

 

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Statements of Income (Unaudited)

Three Months Ended

Twelve Months Ended

December 31,

December 31,

December 31,

December 31,

(In millions, except per share data)

2023

2022

2023

2022

Net Sales

$

1,528.0

$

1,436.0

$

5,867.9

$

5,375.6

Cost of sales

846.7

833.5

3,279.4

3,125.6

Gross Profit

681.3

602.5

2,588.5

2,250.0

Marketing expenses

219.0

189.7

641.3

535.2

Selling, general and administrative expenses

246.2

611.2

889.8

1,117.0

Income from Operations

216.1

(198.4

)

1,057.4

597.8

Equity in earnings of affiliates

0.6

2.3

8.7

12.3

Other income (expense), net

(21.5

)

(27.8

)

(98.7

)

(86.8

)

Income before Income Taxes

195.2

(223.9

)

967.4

523.3

Income taxes

41.5

(59.2

)

211.8

109.4

Net Income

$

153.7

$

(164.7

)

$

755.6

$

413.9

Net Income per share – Basic

$

0.63

$

(0.68

)

$

3.09

$

1.70

Net Income per share – Diluted

$

0.62

$

(0.67

)

$

3.05

$

1.68

Dividends per share

$

0.27

$

0.26

$

1.09

$

1.05

Weighted average shares outstanding – Basic

244.6

243.6

244.9

242.9

Weighted average shares outstanding – Diluted

247.0

246.1

247.6

246.3

CHURCH & DWIGHT CO., INC. AND SUBSIDIARIES

Condensed Consolidated Balance Sheets (Unaudited)

(Dollars in millions)

Dec. 31, 2023

Dec. 31, 2022

Assets

Current Assets

Cash and Cash Equivalents

$

344.5

$

270.3

Accounts Receivable

526.9

422.0

Inventories

613.3

646.6

Other Current Assets

45.0

57.0

Total Current Assets

1,529.7

1,395.9

Property, Plant and Equipment (Net)

927.7

761.1

Equity Investment in Affiliates

12.0

12.7

Trade Names and Other Intangibles

3,302.3

3,431.6

Goodwill

2,431.5

2,426.8

Other Long-Term Assets

366.0

317.5

Total Assets

$

8,569.2

$

8,345.6

Liabilities and Stockholders’ Equity

Short-Term Debt

$

3.9

$

74.0

Current portion of Long-Term debt

199.9

0.0

Other Current Liabilities

1,218.2

1,109.8

Total Current Liabilities

1,422.0

1,183.8

Long-Term Debt

2,202.2

2,599.5

Other Long-Term Liabilities

1,089.6

1,072.4

Stockholders’ Equity

3,855.4

3,489.9

Total Liabilities and Stockholders’ Equity

$

8,569.2

$

8,345.6

Contacts

Rick Dierker

Chief Financial Officer

609-806-1200

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Business Culture Digital - AI & Apps Regulations & Security Sports & Gaming Technology

Computer programmer, Gary Bowser, faces up to 40 months prison time in 2022 for pirating games, ordered to pay $14.5M to Nintendo

Patricia Hernandez / The Guardian:

 

 

—  The hacker whose involvement with anti-piracy software ended in a jail sentence has emerged from prison struggling to make rent as he starts paying his fine. ‘It could be worse,’ he says.

‘The sentence was like a message to other people’ … Gary Bowser in Toronto in August 2023.Photograph: Andrew Francis Wallace/Toronto Star/Getty Images

 

 

In April 2023, a 54-year-old programmer named Gary Bowser was released from prison having served 14 months of a 40-month sentence. Good behaviour reduced his time behind bars, but now his options are limited. For a while he was crashing on a friend’s couch in Toronto. The weekly physical therapy sessions, which he needs to ease chronic pain, were costing hundreds of dollars every week, and he didn’t have a job. And soon, he would need to start sending cheques to Nintendo. Bowser owes the makers of Super Mario $14.5m (£11.5m), and he’s probably going to spend the rest of his life paying it back.

 

Since he was a child, Bowser’s life has revolved around tinkering with electronics. His dad was a mechanical engineer, and he learned from him how to wire up model trains and mod calculators. As a teenager he already had a computer business: his mother died when he was 15, his father had retired and Bowser supported him.

Gary Bowser, left, in his 20s demonstrating projects for the TI-99 home computer event at the Chicago TI fair in the early 90s. Photograph: Courtesy of Gary Bowser

Bowser would go on to run an internet cafe, where patrons played Counter-Strike and Dance Dance Revolution, and repair hardware for a living. He got briefly caught up with the law during a stint fixing games consoles at flea markets, which nearly implicated him alongside vendors who sold pirated movies. Eventually he moved to the Dominican Republic in 2010. He spoke no Spanish for years, but he loved the place anyway: you could drive from one end to the other in just 12 hours, he recalls. It was here that Bowser – who, in a case of nominative determinism that feels almost too trite to acknowledge, shares a name with Super Mario’s in-game antagonist – started becoming the face of Nintendo piracy.

 

 

In the late 00s he made contact with Team Xecuter, a group that produces dongles used to bypass anti-piracy measures on Nintendo Switch and other consoles, letting them illegally download, modify and play games. While he says he was only paid a few hundred dollars a month to update their websites, Bowser says the people he worked with weren’t very social and he helped “testers” troubleshoot devices.

 

“I started becoming a middleman in between the people doing the development work, and the people actually owning the mod chips, playing the games,” he says. “I would get feedback from the testers, and then I would send it to the developers … I can handle people, and that’s why I ended up getting more involved.”

 

In September 2020, he was arrested in a sting so unusual that the US Department of Justice released a press release boasting about the indictment, in which acting assistant attorney general Brian C Rabbitt called Bowser and his co-defendants “leaders of a notorious international criminal group that reaped illegal profits for years by pirating video game technology of US companies.”

 

“The day that it happened, I was sleeping in my bed, it was four in the morning, I’d been drinking all night,” Bowser says. “And suddenly I wake up and see three people surrounding my bed with rifles aimed at my head … they dragged me out of the place, put me in the back of a pickup truck and drove me to the Interpol office.”

 

Bowser was arrested at the height of the pandemic, which complicated everything. He was imprisoned in a series of jails, and each transfer had Covid safety precautions that required him to spend time in isolation. Despite this, Bowser still caught the coronavirus and spent two weeks so sick that, he says, a priest would come over once a day to read him a prayer.

 

Bowser was charged with fraud over his connection to Team Xecuter. While in custody, he was also hit with a civil suit from Nintendo. Between the civil and criminal cases, he was ordered to pay $14.5m.

 

In transcripts from the court, Nintendo’s lawyer Ajay Singh outlined the company’s case against piracy. “It’s the purchase of video games that sustains Nintendo, and it is the games that make the people smile … It’s for that reason that we do all we can to prevent games on Nintendo systems from being stolen,” he told the judge.

 

Pirates are usually fined in court, but Bowser’s case was meant to draw attention. “The sentence was like a message to other people that [are] still out there, that if they get caught … [they’ll] serve hard time,” he says. As he tells it, Bowser didn’t make or develop the products that sent him to prison; he “just” updated the websites that told people what they could buy, and kept them informed about what was coming next.

 

Bowser maintains that he could have fought the allegations, and that other members of the hacking group remain at large. But fighting against 13 charges would have cost time and money. It was easier, he claims, to plead guilty and only deal with a couple of the charges. As a part of that agreement, Bowser now has to send Nintendo 20-30% of any money left over after he pays for necessities such as rent.

 

 

Read More

 

 

 

— Techmeme

Categories
Business Economics Lifestyle Perspectives Regulations & Security

AM Best revises outlooks to negative for Amica Mutual Insurance Company and subsidiaries

OLDWICK, N.J. — (BUSINESS WIRE) — #insurance — AM Best has revised the outlooks to negative from stable and affirmed the Financial Strength Rating (FSR) of A+ (Superior) and the Long-Term Issuer Credit Rating (Long-Term ICR) of “aa-” (Superior) of Amica Mutual Insurance Company (Amica Mutual) and its wholly owned subsidiary, Amica Property and Casualty Insurance Company (together known as Amica Mutual Group).

 

At the same time, AM Best has revised the outlooks to negative from stable and affirmed the FSR of A+ (Superior) and the Long-Term ICR of “aa-” (Superior) of Amica Life Insurance Company (Amica Life), a wholly owned subsidiary of Amica Mutual. All companies are domiciled in Lincoln, RI.

The Credit Ratings (ratings) reflect Amica Mutual Group’s balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, favorable business profile and appropriate enterprise risk management (ERM).

 

The ratings of Amica Life reflect its balance sheet strength, which AM Best assesses as strongest, as well as its adequate operating performance, neutral business profile and appropriate ERM.

 

The negative outlooks for Amica Mutual Group reflect the decline in its balance sheet strength, specifically a deterioration in risk-adjusted capitalization in recent years. Increased loss costs in both the auto and homeowner’s line of business have driven substantial underwriting losses in 2022 and 2023, which has significantly impacted the group’s surplus position and overall liquidity. Nonetheless, the group’s liquidity profile remains supported by Federal Home Loan Bank borrowing capacity, reinsurance and portfolio cash flow. Additionally, Amica Mutual Group’s results rely heavily on net investment income and realized capital gains, which have contributed collectively to positive net earnings in most years. However, this benefit was muted in 2022 and 2023 due to the turbulent investment markets and rapid increases in interest rates, which caused underwriting losses to outpace investment earnings.

 

AM Best notes that Amica has implemented multiple strategic initiatives, which are expected to correct performance gradually. These include substantial rate increases in both the auto and homeowners’ line of business, as well as a renewed focus on profitable geographic areas and reducing dividends. While this is expected to improve the group’s operating performance in the more near term, it is not expected to replenish its loss of surplus within that same time frame. Additionally, the negative outlooks further reflect the potential for continued capital erosion as management’s strategic action plan comes to fruition.

 

The negative outlooks for Amica Life follow that of Amica Mutual and reflect the potential removal of rating enhancement provided by the property/casualty parent. Given the strong parental support that includes continuous capital contributions, ample liquidity access and the sharing of brand names and consumer base, Amica Life benefits from its relationship with its parent.

 

This press release relates to Credit Ratings that have been published on AM Best’s website. For all rating information relating to the release and pertinent disclosures, including details of the office responsible for issuing each of the individual ratings referenced in this release, please see AM Best’s Recent Rating Activity web page. For additional information regarding the use and limitations of Credit Rating opinions, please view Guide to Best’s Credit Ratings. For information on the proper use of Best’s Credit Ratings, Best’s Performance Assessments, Best’s Preliminary Credit Assessments and AM Best press releases, please view Guide to Proper Use of Best’s Ratings & Assessments.

 

AM Best is a global credit rating agency, news publisher and data analytics provider specializing in the insurance industry. Headquartered in the United States, the company does business in over 100 countries with regional offices in London, Amsterdam, Dubai, Hong Kong, Singapore and Mexico City. For more information, visit www.ambest.com.

 

Copyright © 2024 by A.M. Best Rating Services, Inc. and/or its affiliates. ALL RIGHTS RESERVED.

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Cristian Sieira
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+1 908 882 2315
cristian.sieira@ambest.com

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Associate Director, Public Relations
+1 908 882 2310
christopher.sharkey@ambest.com

Erik Miller
Director
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Al Slavin
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US Copyright Office in spotlight as it plans to release three key reports in 2024 about its  copyright law and AI positions

—  The office is reviewing how centuries-old laws should apply to artificial intelligence technology, with both content creators and tech giants arguing their cases.

 

 

Cecilia Kang / New York Times:

 

For decades, the Copyright Office has been a small and sleepy office within the Library of Congress. Each year, the agency’s 450 employees register roughly half a million copyrights, the ownership rights for creative works, based on a two-centuries-old law.

 

In recent months, however, the office has suddenly found itself in the spotlight. Lobbyists for Microsoft, Google, and the music and news industries have asked to meet with Shira Perlmutter, the register of copyrights, and her staff. Thousands of artists, musicians and tech executives have written to the agency, and hundreds have asked to speak at listening sessions hosted by the office.

“We are now finding ourselves the subject of a lot of attention from the broader general public,” said Shira Perlmutter, the director of the Copyright Office. Credit — Jared Soares for The New York Times

 

The attention stems from a first-of-its-kind review of copyright law that the Copyright Office is conducting in the age of artificial intelligence. The technology — which feeds off creative content — has upended traditional norms around copyright, which gives owners of books, movies and music the exclusive ability to distribute and copy their works.

 

The agency plans to put out three reports this year revealing its position on copyright law in relation to A.I. The reports are set to be hugely consequential, weighing heavily in courts as well as with lawmakers and regulators.

 

“We are now finding ourselves the subject of a lot of attention from the broader general public, so it is a very exciting and challenging time,” Ms. Perlmutter said.

 

The Copyright Office’s review has thrust it into the middle of a high-stakes clash between the tech and media industries over the value of intellectual property to train new A.I. models that are likely to ingest copyrighted books, news articles, songs, art and essays to generate writing or images. Since the 1790s, copyright law has protected works so an author or artist “may reap the fruits of his or her intellectual creativity,” the Copyright Office declares on its website.

 

That law is now a topic of hot debate. Authors, artists, media companies and others say the A.I. models are infringing on their copyrights. Tech companies say that they aren’t replicating the materials and that they consume data that is publicly available on the internet, practices that are fair use and within the bounds of the law. The fight has led to lawsuits, including one by The New York Times against the ChatGPT creator OpenAI and Microsoft. And copyright owners are pushing for officials to rein in the tech companies.

 

“What the Copyright Office is doing is a big deal because there are important principles of law and lots and lots of money involved,” said Rebecca Tushnet, a professor of copyright and intellectual property law at Harvard Law School. “At the end of the day, the issue is not whether these models will exist. It’s who will get paid.”

The Copyright Office, part of the Library of Congress, has in the past weighed in on how copyright would apply to technological innovations like records, the internet and streaming music.  Credit — Jared Soares for The New York Times

 

Congress created the Copyright Office in 1870 to register licenses for books, maps, essays and other creative works and store those works for the use of lawmakers at the Library of Congress. The first registration was given to the “Philadelphia Spelling Book,” a children’s language book.

When Ms. Perlmutter, a veteran copyright official and former intellectual property lawyer for Time Warner, was appointed to lead the Copyright Office in late 2020, she promised to bring the office into the modern era by focusing on big tech trends. She took inspiration from previous leaders, who dealt with technological innovations including the camera, records, Xerox machines, the internet and streaming music, all of which required the office to weigh in on how copyright would apply and advise Congress on proposed updates to the law.

 

Right away, A.I. became a hot topic. Stephen Thaler, a computer scientist, tried to register an A.I.-generated art piece for a copyright by submitting an application on the Copyright Office’s website. In 2019, the office rejected his first attempt to register the piece, a pixelated scene of train tracks running through a tunnel overgrown with brush and flowers called “A Recent Entrance to Paradise.” In February 2022, Ms. Perlmutter declined his second attempt to register the piece on the same grounds: Copyrights were given only to original works created by humans.

 

The decision — a first on an A.I.-produced work — set an important precedent. Artists and lawmakers flooded Ms. Perlmutter’s office with emails and phone calls asking her to also intervene in the way A.I. companies were using copyrighted material to train their systems.

 

In August, she opened the formal review of A.I. and copyright law. The office said it would examine whether the use of intellectual property to train A.I. models violated the law and would look more deeply into whether machine-generated works could be eligible for copyright protections. The office said it would also review how A.I. tools were creating content that used the names, images and likenesses of individuals without their consent or compensation.

 

“The attention on A.I. is intense,” Ms. Perlmutter said in an interview. “The current generative A.I. systems raise a lot of complicated copyright issues — some have called them existential — that really require us to start grappling with fundamental questions about the nature and value of human creativity.”

 

The interest in the office’s review was overwhelming. The office solicited public comments on the topic and received more than 10,000 responses on a form on its website. A typical policy review gets no more than 20 comments, the office said.

 

Tech companies argued in comments on the website that the way their models ingested creative content was innovative and legal. The venture capital firm Andreessen Horowitz, which has several investments in A.I. start-ups, warned in its comments that any slowdown for A.I. companies in consuming content “would upset at least a decade’s worth of investment-backed expectations that were premised on the current understanding of the scope of copyright protection in this country.”

 

OpenAI, Microsoft, Meta (Facebook’s parent) and Google are currently relying on a 2015 court decision in a case filed by the Authors Guild.

 

The guild sued Google in 2005 for scanning books to use in excerpts in its search engine results and to share with libraries. A court ruled that Google had not violated copyright law. It said that the scanning of entire books was permissible because Google didn’t make the full book available and that it was “transformative” use of copyrighted material. Google relied on an exemption to copyright law known as “fair use” that allows limited replication of copyrighted material for things like criticism, parody or other transformational uses.

 

Google, Meta and the A.I. start-up Anthropic all echoed arguments from that case in their comments to the Copyright Office, including that A.I. copies the information to analyze data, not repurpose it for creative works.

 

Authors, musicians and the media industry argued that by taking their content without permission or licensing payments, the A.I. companies were robbing them of their livelihoods.

 

“The absence of consent and compensation in this process is theft,” Justine Bateman, the “Family Ties” actress and author, wrote in comments to the Copyright Office.

 

News Corp, which publishes The Wall Street Journal and The New York Post, implored the office to “not lose sight of this simple truth: Protecting content creators is one of copyright law’s core missions.” (The Times also submitted a comment).

 

Ms. Perlmutter said she and a staff of about two dozen copyright lawyers were going through each comment filed to the office.

 

Still, the office may not offer clear-cut views that will satisfy either the tech companies or creative people.

 

“As technology gets more and more sophisticated, the challenges are exponentially more difficult and the risks and rewards are exponentially greater,” Ms. Perlmutter said.

 

 

 

Read more

 

 

— Techmeme

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Align appoints Vinod Paul as president of Align Managed Services

Vinod Paul to Lead Strategic Direction and Expansion of Align’s Managed Services Portfolio

NEW YORK — (BUSINESS WIRE) — #ITservices — Align, the leading global provider of technology infrastructure solutions and Managed IT Services, announces the appointment of Vinod Paul as President of Align Managed Services, effective immediately.

 

In his new role, Vinod will continue to drive the strategic direction, expansion, and profitability of Align’s managed services portfolio, including cloud solutions, cybersecurity, and tailored products designed for the financial services community. Vinod’s vision and leadership will be instrumental in shaping the company’s growth strategy, while overseeing client services, technology and thought leadership in both the financial services and Managed Services industries.

 

Vinod joined Align in 2017 and has since served as Chief Operating Officer, before being appointed as President. Under his leadership, Align has expanded its global customer base and broadened its managed services offerings in the financial services sector. In 2023, Align was named MSP of the Year by Channel Futures and was ranked 60th in the global MSP 501 list. Other accolades include Best Cloud Services Provider by Hedgeweek, CRN’s Triple Crown Award by Channel Co. and more – click here to view our full list of awards.

 

Vinod has more than 20 years of experience in the Managed Services industry, with a proven track record of delivering innovative and customer-centric solutions. Prior to Align, he held senior leadership roles at several global IT firms, including ECI, IBM Global Services, Lucent Technologies, and Tyco Submarine Systems. In 2022, he received the honor of being included in Channel Futures’ Most Influential MSP leaders of 2022 List. Vinod was also recognized as a 2023 Honoree by Help for Children (HFC). Founded with a mission to make a profound difference in the lives of children in need, HFC is a renowned charitable organization dedicated to the prevention and treatment of child abuse for youth across the globe.

 

“Vinod is a visionary leader who has transformed our managed services business and delivered exceptional results for our customers and the broader financial services industry,” said Jim Dooling, CEO and President of Align Communications.

 

“He has a deep understanding of the market dynamics, customer needs, and technology trends that impact our industry. I am confident he will continue to drive growth and innovation for our managed services division and for Align.”

 

“I am honored and excited to take on this new role and lead our talented and dedicated team of managed services professionals,” said Vinod.

 

“Align is renowned for delivering top-notch and cost-efficient IT solutions and managed services to clients within the financial services sector. I am enthusiastic about actively contributing to our continued success, enhancing value for our customers, partners, and team members alike. Our dedication is to cultivate enduring partnerships with our clients, and I am excited to collaborate with our leaders to ensure an unparalleled client experience as a leading managed services provider.”

 

About Align

Align is a premier global provider of technology infrastructure solutions. For over 36 years, leading firms worldwide have relied on Align to guide them through IT challenges, delivering complete, secure solutions for business change and growth. Align is headquartered in Dallas, Texas and has offices in New York City, London, Chicago, San Francisco, Arizona, New Jersey, Texas and Virginia.

 

To learn more about Align Managed Services, visit our website here: https://www.align.com/managed-services and follow Align on LinkedIn and at @AlignITAdvisor on Twitter.

Contacts

Media
Ashley Holbrook
Director of Marketing, Align

aholbrook@align.com

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Apple’s proposed App Store, iOS changes seek to retain some iOS control but still regard the  EU’s DMA letter

John Gruber / Daring Fireball:

 

 

—  On Saturday, Apple announced a broad, wide-ranging, and complex set of new policies establishing their intended compliance with the European Union’s Digital Markets Act, which comes into effect March 7.

 

There is a lot to remark upon and numerous remaining questions, but my favorite take was from Sebastiaan de With on Twitter/X, the day before any of this was announced.

 

After quipping “Oh god please no” to a screenshot of the phrase “Spotify also wants to roll out alternate app stores”, de With had this conversation:

de With:

The EU is once again solving absolutely no problems and making everything worse in tech. I gotta say, they are if anything highly consistent.

“Anton”:

Overly powerful, rent-seeking gatekeepers seem like a problem.

de With:

I love that I can’t tell if you are talking about the EU or Apple in this case.

My second-favorite take, from that same thread, was this from Max Rovensky:

DMA is not pro-consumer.

It’s anti-big-business.

Those tend to coincide sometimes, which makes it an easy sell for the general public, but do actually read the DMA, it’s quite interesting.

 

I’d go slightly further and describe the DMA as anti-U.S.-big-business, because as far as I can tell, nothing in the DMA adversely affects or even annoys any European tech companies. There are aspects of it that seem written specifically for Spotify, in fact.

 

But Rovensky’s framing captures the dichotomy. Anti-big-business regulation and pro-consumer results often do go hand-in-hand, but the DMA exposes the fissures. I do not think the DMA is going to change much, if anything at all, for the better for iOS users in the E.U. (Or for non-iOS users in the EU, for that matter.) And much like the GDPR’s website cookie regulations, I think if it has any practical effect, it’ll be to make things worse for users. Whether these options are better for developers seems less clear.

 

I’ve often said that Apple’s priorities are consistent: Apple’s own needs first, users second, developers third. The European Commission’s priorities put developers first, users second, and “gatekeepers” a distant third. The DMA prescribes not a win-win-win framework, but a win-win-lose one.

 

Apple is proud, stubborn, arrogant, controlling, and convinced it has the best interests of its customers in mind.

 

The European Commission is proud, stubborn, arrogant, controlling, and convinced it has the best interests of its citizens in mind.

 

Ever since this collision over the DMA seemed inevitable, starting about two years ago, I’ve been trying to imagine how it would turn out. And each time, I start by asking: Which side is smarter? My money has been on Apple. Yesterday’s announcements, I think, show why.

APPLE’S PROPOSED CHANGES

 

It’s really hard to summarize everything Apple announced yesterday, but I’ll try. Start with the main Apple Newsroom press release, “Apple Announces Changes to iOS, Safari, and the App Store in the European Union”:

“The changes we’re announcing today comply with the Digital Markets Act’s requirements in the European Union, while helping to protect EU users from the unavoidable increased privacy and security threats this regulation brings. Our priority remains creating the best, most secure possible experience for our users in the EU and around the world,” said Phil Schiller, Apple Fellow. “Developers can now learn about the new tools and terms available for alternative app distribution and alternative payment processing, new capabilities for alternative browser engines and contactless payments, and more. Importantly, developers can choose to remain on the same business terms in place today if they prefer.”

 

Schiller is the only Apple executive quoted in the press release, and to my ear, his writing hand is all over the entire announcement. Apple was quite clear before the DMA was put into law that they considered mandatory sideloading on iOS a bad idea for users, and their announcement yesterday doesn’t back down an inch from still declaring it a bad idea.

 

Apple has also argued, consistently, that they seek to monetize third-party development for the iOS platform, and that being forced to change from their current system — (a) all apps must come from the App Store; (b) developers never pay anything for the distribution of free apps; (c) paid apps and in-app-purchases for digital content consumed in-app must go through Apple’s In-App Payments system that automates Apple’s 30/15 percent commissions — would greatly complicate how they monetize the platform. And now Apple has revealed a greatly complicated set of rules and policies for iPhone apps in the EU.

 

MG Siegler has a great — and fun — post dissecting Apple’s press release line-by-line. Siegler concludes:

I’m honestly not sure I can recall a press release dripping with such disdain. Apple may even have a point in many of the points above, but the framing of it would just seem to ensure that Apple is going to continue to be at war with the EU over all of this and now undoubtedly more. Typically, if you’re going to make some changes and consider the matter closed, you don’t do so while emphatically shoving your middle fingers in the air.

 

Some of these changes do seem good and useful, but most simply seem like convoluted changes to ensure the status quo actually doesn’t change much, if at all. Just remember that, “importantly, developers can choose to remain on the same business terms in place today if they prefer.” What do you think Apple prefers?

The puzzle Apple attempted to solve was creating a framework of new policies — and over 600 new developer APIs to enable those policies — to comply with the DMA, while keeping the path of least resistance and risk for developers the status quo: Apple’s own App Store as it is.

 

So the first option for developers is to do nothing — to stay in Apple’s App Store, exclusively, under the existing terms. (Apple made a few announcements yesterday that are effective worldwide, not merely in the EU, such as changes regarding the rules for streaming game services, mini-games, and mini-apps. For the sake of brevity — well, attempted brevity — I’m focusing on E.U.-specific changes related to DMA compliance.)

 

One point of confusion is that some aspects of Apple’s proposed DMA compliance apply to the App Store across all platforms (iPhone, iPad, Mac, TV, Watch, and soon, Vision), but other aspects are specific to the iOS platform — which is to say, only the iPhone. Third-party app marketplaces1 and web browsers using non-WebKit rendering engines are only available on iOS specifically, meaning they are iPhone-only,2 and not available for iPadOS. Apple’s main press release yesterday breaks out iOS changes and App Store changes separately, but on my first read did not make clear that the iOS changes did not apply to iPadOS.3

 

 

Here’s my summary of the options available to developers in the EU, under Apple’s proposal:

  1. Stay in App Store under the current (pre-DMA) rules, exclusively. Developers that take this option:
    • Are not permitted to use any of the new business termsavailable in the EU, but new iOS platform options for the EU, such as alternate browser engines, are allowed. (Because they are required to be allowed.)
    • Because nothing business-related changes under this option, the existing worldwide rules apply for paid apps, subscriptions, and in-app purchases (IAP), including the 30/15 percent commission to Apple and a requirement that apps exclusively use Apple’s App Store payments system.
    • The Core Technology Fee (CTF) is not collected, because the business terms haven’t changed. (See below re: the CTF.)
  2. Opt in to the new EU rules (all sub-options available under this choice require paying the Core Technology Fee for each app with over 1 million downloads in the EU):
    • After opting in to the new EU rules, developers can choose to remain in the App Store, and:
      • Use Apple’s App Store payments system: 20/13 percent commission + CTF paid to Apple automatically.
      • Use a custom in-app payments system (e.g. Stripe): 17/10 percent commission + CTF paid to Apple.
      • Use external links from inside apps to the web for payments and subscriptions: 17/10 percent + CTF paid to Apple.
      • The latter two options — using custom payment processing and/or external links to the web — are similar to the announced-last-week External Payment Link entitlement policy, regarding the developer’s obligation to track these payments, report sales to Apple monthly, and submit to audits by Apple to ensure compliance.
    • Distribute apps in one or more third-party marketplaces:
      • No option to use Apple’s App Store payment processing, because the apps aren’t coming from the App Store.
      • The only money due to Apple is the Core Technology Fee — there is no commission percentage on in-app transactions or links to the web.

 

Under option (2) — the catch-all for opting in to the new rules available in the EU — the sub-options are not mutually exclusive. Developers that opt in to the new EU rules can have (or keep) apps in the App Store and distribute those same apps, or different apps, via third-party app marketplaces. Or they can stay in the App Store exclusively (under the new business terms, with lower commissions but also the CTF), or they can distribute exclusively via app marketplaces.

 

Only options (1) and (2) are exclusive. However, once a developer opts in to the new EU rules, that decision is irrevocable. Quoting from the Q&A section of Apple’s “Update on Apps Distributed in the European Union” document:

Developers who adopt the new business terms at any time will not be able to switch back to Apple’s existing business terms for their EU apps. Apple will continue to give developers advance notice of changes to our terms, so they can make informed choices about their businesses moving forward.

(That entire FAQ section is a good summary and worth reading.)

 

THE CORE TECHNOLOGY FEE

Apple’s description of the CTF:

The Core Technology Fee (CTF) reflects Apple’s investment in the tools, technology, and services that enable developers to build and share their apps with Apple users. That includes more than 250,000 APIs, TestFlight, Xcode, and so much more. These tools create a lot of value for developers, whether or not they share their apps on the App Store.

 

The CTF only applies to developers who adopt the new terms for alternative distribution and payment processing — and whose apps reach exceptional scale. With membership in the Apple Developer Program, eligible developers on the new business terms get a free one million first annual installs per year for each of their apps in the EU. See terms for more details. Under the new business terms for EU apps, Apple estimates that less than 1% of developers would pay a Core Technology Fee.

 

Apple’s description is clear on the following point, but it’s worth reiterating: the CTF only applies to downloads above 1 million, like a marginal tax rate. So a developer whose app goes from 1,000,000 EU user downloads to 1,000,001 will only owe Apple €0.50 in Core Technology Fees. The CTF is recurring each year however, and updates count as downloads. Installing the same app on multiple devices does not count as multiple installations though.4 The CTF is calculated per user, per app, per year. (Apple has a CTF calculatordevelopers can use to game scenarios of prices, distribution method, and download counts.)

 

In plain language, the DMA demands that Apple unbundle its monetization for the App Store from its monetization of the iOS platform. Apple’s existing, purely commission-based, monetization for iOS apps implicitly bundles together the value provided from the App Store and iOS.

 

So under option (1) — where developers choose the existing rules for App Store distribution, including App Store exclusivity — nothing changes and Apple collects its 30/15 percent commissions from App Store transactions.

 

But under option (2) — where developers opt in to the new EU rules — Apple’s monetization for the App Store is severed from its monetization for the iOS platform itself. That’s why the commission fees under the new EU rules are reduced to 20/13 percent for apps distributed through the App Store that use the App Store payment system, and 17/10 percent for apps distributed through the App Store that use custom payment processing. Effectively, Apple is saying that their fair share of App Store distribution is 17/10 percent, and that Apple’s own App Store payment processing is worth an additional 3 percent. (3 percent is almost indisputably a fair estimate for the cost of payment processing alone.)

 

And, that’s why apps distributed outside the App Store will only pay Apple the CTF, with no commission on sales. The commissions under the new EU rules are only for the App Store, so apps from marketplaces don’t pay them. The Core Technology Fee is how Apple proposes monetizing the value provided by iOS itself.

 

All developers who opt in to the new EU rules are subject to the CTF. No developers who remain in the App Store under existing policies are subject to the CTF.

 

MARKETPLACE APPS ARE THE ONLY DISTRIBUTION OUTSIDE THE APP STORE

Third-party marketplace apps are the only way for developers to distribute apps in the EU outside the App Store. Apple’s proposal has no option for direct downloads of apps from developer websites. Apple has rules for who can become an app marketplace. You have to be a company, not an individual. You must “provide Apple a stand-by letter of credit from an A-rated (or equivalent by S&P, Fitch, or Moody’s) financial Institution of €1,000,000 to establish adequate financial means in order to guarantee support for your developers and users.” And more. In short, the qualifications aren’t trivial, but nor are they overly complicated.

 

But marketplace apps must be real “stores”. A marketplace can decide to exclusively distribute apps from a certain category — like games — but must be open to submissions from any developer in that same category. Company XYZ can’t create a marketplace that only distributes XYZ’s own apps. That’s not a proper category. Nor would Apple consider to be a proper category something like, say, “Apps from companies founded by Harvard dropouts whose origins were depicted in fun movies by Aaron Sorkin.”

 

One key restriction for developers who wish to distribute through multiple stores (including Apple’s App Store): an installation from one store cannot overwrite an existing installation of the same app from another store. The user must manually delete the installation from the old store first, then re-install the app from the other store. Apple claims — reasonably, perhaps — that this restriction is because they don’t know whether a fresh installation from a different store will preserve the data from the app installed via the previous store.

 

But this also means that if, say, Meta starts distributing their apps through a third-party marketplace (perhaps their own Meta Store), and wishes to encourage iOS users to switch from App Store installations to installations from the Meta Store, each user who does so must delete their existing installations of Meta’s apps before installing the new ones.

 

Third-party marketplace apps — the actual app store apps — will not be permitted in Apple’s App Store. To install a marketplace app — and third-party app marketplaces will be apps themselves — users must go to the marketplace app’s website. Safari (and other web browsers that adopt new APIs) will offer to install marketplace apps after confirmation from the user that they really want to install it. That confirmation scaresheet and the subsequent installation is provided by the system.

 

Part of what makes the DMA a terrible law (in this writer’s estimation) is its ambiguity and inscrutable language. It’s completely unclear whether Apple’s proposal to only allow distribution of apps outside the App Store through marketplace apps is compliant. Many proponents of the DMA have been under the conviction that the DMA mandates gatekeeper platforms like iOS to permit direct downloads of apps from the web (like on PCs and Macs). Here’s Article 6, Section 4 of the DMA, boldface all-caps emphasis added:

4. The gatekeeper shall allow and technically enable the installation and effective use of third-party software applications OR software application stores using, or interoperating with, its operating system and allow those software applications OR software application stores to be accessed by means other than the relevant core platform services of that gatekeeper. The gatekeeper shall, where applicable, not prevent the downloaded third-party software applications OR software application stores from prompting end users to decide whether they want to set that downloaded software application OR software application store as their default. The gatekeeper shall technically enable end users who decide to set that downloaded software application OR software application store as their default to carry out that change easily.

 

By Apple’s interpretation, all of those or’s would be and/or’s or and’s if the DMA demanded that iOS support both third-party marketplaces and direct installation of individual apps and games. See below regarding the uncertainty of this interpretation.

 

 

Read More

 

 

— Techmeme

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Israel supporters use apps to mass report pro-Palestinian content; tech platforms question ‘citizen-led propaganda’

—  The apps raise questions for tech platforms over ‘citizen-led propaganda’ campaigns, experts say

 

 

Taylor Lorenz / Washington Post:

 

 

As the war in Gaza rages on, and both sides battle for support and public attention, supporters of Israel are making use of tools that allow them to mass report pro-Palestinian content as violating a platform’s rules.

 

The tools also generate AI-written suggested responses to posts online, allowing users to flood the comments of pro-Palestinian posts with pro-Israel messaging.

Experts who study communication online say the widespread use of such tools influences the online discussion of the war and is ushering in a new era of citizen-led propaganda campaigns. But the use of the tools does not appear to violate platform rules against what’s known as “coordinated inauthentic behavior,” or posts that appear to come from unrelated individuals but are really the result of an organized effort, often through automated accounts.

“Working in an orchestrated fashion can be violative, but it quickly becomes a gray area, and that’s why these apps exist,” said Nora Benavidez, senior counsel and director of digital justice and civil rights at Free Press, a nonpartisan organization that lists its goals as protecting free expression and civil liberties.

Researchers say it is difficult to determine which comments have been generated by such tools because there’s no way to publicly track a user’s private activity across multiple apps. Social media companies would have to come up with ways to detect their use, which is challenging because the apps operate on their own platforms, not those of the social media companies. If the apps were automatically posting, they would likely violate rules against inauthentic activity. But third-party apps that simply encourage legitimate users to report posts escape that sanction.

There’s also no way to know with precision that actions taken against someone’s account or posts are in response to activity from these apps. Anecdotally, some users report that after their Instagram and TikTok posts were mentioned on the apps, the posts were either removed or heavily downranked, making them less accessible to a large audience.

Meta, which owns Instagram and Facebook, did not respond to a request for comment. TikTok also did not respond to requests for comment.

“I’ve had many posts taken down, I’d say upwards of 15 to 20 posts removed,” said Nys, a content creator who posts on TikTok under the handle @palestinianpr1ncess and spoke on the condition that she be referred to by first name only because she’s worried about repercussions when traveling to the West Bank. Nys said that each of her posts that has been surfaced on one of the apps has received a flood of pro-Israel, seemingly AI-generated comments. The post is also usually removed after many users report it for bullying or hate speech. “I’m not using hate speech,” Nys said. “I’m just doing commentary on everything happening in Palestine.”

Laura Chung, a content creator and podcaster, said that she believes a mass reporting campaign facilitated by one of the apps is what led to her TikTok account being removed in December. “I was creating pro-Palestine content for education purposes and I was going massively viral,” she said. “I believe it’s these apps that got me banned on TikTok.”

Joan Donovan, a noted disinformation expert who is an assistant professor of journalism at Boston University, said the apps are a new development in the propaganda battle being waged on the internet over Israel’s offensive in Gaza and that social media companies need to find ways to monitor their use.

“Social media is a terrain of warfare, not just for cyber troops, but also for citizen battalions armed with AI-enhanced bots and the ability to generate endless unique posts that evade current content moderation tools,” she said. “It is incumbent on tech companies to defend against such abuses.”

“This level of organization only exists on one side of the conflict,” said Emerson T. Brooking, a former cyber policy adviser to the Defense Department who studies disinformation and propaganda campaigns as a resident senior fellow at the Atlantic Council’s Digital Forensic Research Lab. “It exists for pro-Israel voices, and it exists because there are government ministries in Israel that support these tools and encourage their use.”

Brooking and other experts said they aren’t aware of any similar tools for Palestinian supporters.

At least one of these apps is directly tied to Israel. The app, called Moovers, encourages users to “Advocate for Israel, One Click at a Time.” It pulls in allegedly pro-Palestinian content from Instagram, TikTok, Facebook and X in a never-ending feed, allowing users easily to take action on that content, reporting it for review or commenting on it. It also provides pre-written pro-Israel scripts to respond to such posts.

In early December, a representative from Leaders, a Tel Aviv-based Israeli influencer marketing firm, began contacting creators in the United States, offering to pay them to promote Moovers to their audiences on Instagram. In emails viewed by The Washington Post, a representative from Leaders touted content on the Moovers app as “endorsed by Israel’s Government Advertising Agency.”

 

Read More

 

 

— Techmeme

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Top resolution for 2024 New Year: To avoid financial pitfalls by prioritizing savings as big safety net

NEW YORK — After more than two and a half years of struggling with high inflation, financial analysts are urging Americans to make building a solid nest egg of savings their top New Year’s resolution.

 

The prolonged period of high inflation has created severe financial stress for most U.S. households, as they are forced to pay more for everyday needs like food and housing. Low-income households have been particularly hard hit.

 

Despite the economic volatility in 2023, a recent study by USA Today found that more than four in five Americans feel some level of positivity about the U.S. economy going into 2024. However, Real Estate Developer, Serial Entrepreneur, TV Producer and Talk Show Host Dee Brown warns that there are several steps all households must take to help secure their financial foothold.

 

According to Brown, securing a financial future should be a priority for families. To assist with this, Brown recommends the following three steps:

 

1. Establishing an Emergency Fund: Setting aside a portion of income into an emergency fund can provide a safety net for unexpected expenses and financial hardships.

 

2. Budgeting and Expense Tracking: Creating a detailed budget and tracking expenses can help families prioritize spending, identify areas for saving and avoid unnecessary financial stress.

 

3. Investing in Retirement Accounts: Contributing to retirement accounts such as 401(k)s or IRAs can help build long-term financial security and ensure a comfortable retirement.

 

By taking these steps, Brown believes that households can secure their financial future and mitigate the impact of high inflation and economic volatility.

 

Dee Brown quote/tips:

“Building a solid nest egg of savings is a lifeline in times of economic uncertainty. By establishing an emergency fund, budgeting wisely and investing in retirement accounts, families can take control of their financial future and secure their foothold in today’s challenging economy.”

 

More on Dee Brown:

Dee Brown is a multifaceted entrepreneur, award-winning producer, director, writer, author, talk show host and philanthropist. He is the Founder and CEO of the P3 Group Inc., the nation’s largest African American owned, public-private partnership real estate development firm. Brown has amassed more than 30 years of solid, record breaking experience in real estate sales and development, management, construction, infrastructure, water/sewer and environmental projects in the private and governmental sectors. He also serves as the Founder and Chairman Emeritus of the nonprofit Brown Foundation Community Development Corporation.

 

He is also a proud 2023 recipient of President Biden’s Lifetime Achievement Award.

 

Brown holds a bachelor’s degree from the University of Memphis, an MBA from Bethel University and numerous professional certifications. He is a lifetime member of Kappa Alpha Psi Fraternity Inc., NAACP, Producers Guild of America, National Academy of Television, Arts & Sciences, the International Documentary Association and Entrepreneur Leadership Network. He also serves on the Documentary and Nonfictional Committee for the Producers Guild of America. As a contributing writer for Forbes.com, Entrepreneur.com, Metro & Peoria Magazines, Brown shares his insights and vast business experience with readers around the world.

 

Dee Brown is also the Executive Producer and Director of Tiger Run: The Untold Story. This highly acclaimed documentary compiles interviews, game footage and other behind the scenes video of Coach Prime — NFL Legend Deion Sanders — and showcases his mission to transform the lives of players at Jackson State University at its annual Pro Day event.

 

https://www.youtube.com/watch?v=KC73Xj-FDCE

www.DeeBrownCeo.com

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The AACCNJ responds to the press announcement of the Murphy Administration’s Disparity Study

TRENTON, N.J. —  The African American Chamber of Commerce of New Jersey (AACCNJ) responds to the release of the Murphy Administration’s Disparity Study.

The Office of Diversity and Inclusion oversaw the effort, which was the first study of its kind to be commissioned by the State since 2003. It was conducted by Mason Tillman Associates, LTD.

Gov. Murphy recently signed a package of legislation into law in Trenton. (Rich Hundley III/ NJ Governors Office).

“On behalf of the 1.2 million black residents and over 88,000 black owned businesses in the state of New Jersey, the announcement of the completion of the disparity study, is the news that we have been patiently awaiting and have prepared our hearts and minds to receive,” said John E. Harmon, Sr., IOM., Founder, President & CEO, African American Chamber of Commerce of N.J. (AACCNJ).

“Acknowledgement is an essential step to establishing the proper pathway to a credible coexistence. Today’s announcement serves as confirmation of what we all knew, and we are eagerly looking forward to a focused strategic alignment with the Murphy Administration, said Harmon.”

“This study speaks to the intolerance for equitable participation in taxpayer funded opportunities resulting in wide social and economic disparities that cannot be glossed over. It is incumbent on this administration, and the legislature, to not try to appease Black and Brown People with well-crafted conciliatory statements given the magnitude of harm we have been dealt with over the years,” said John E. Harmon, Sr.

“As I read through the pages of the Disparity Study it is difficult for me to conclude that there was not a greater degree of awareness, which should have led our leaders to figure out how they could have procured more opportunities to make our state more equitable, while we awaited the completion of the Mason Tillman Study,” said Harmon.

“There were substantial gains for contract awardees and elected officials since 2015 and the economic benefits for Blacks and Brown people in our state have not been reciprocated. The Port Authority of New York and New Jersey completed its disparity study in 2017 with results that were almost identical. Herein, a lost opportunity to apply best practices to really produce a Stronger and Fairer Economy,” said Harmon.

“We just celebrated in the past week, what would have been the 95th birthday of Rev. Dr. Martin Luther King, Jr., his powerful words have even greater significance today,” said John E. Harmon, Sr.

“An individual has not started living fully until they can rise above the narrow confines of individualistic concerns to the broader concerns of humanity. Every person must decide, at some point, whether they will walk in the light of creative altruism, or in the darkness of destructive selfishness,” Dr. Martin Luther King Jr., Montgomery, AL. Aug. 11, 1957.

“As we move forward, we plan to work in partnership with the State to put forth best practices that will provide the constituency of the AACCNJ, and others, with consistent access to opportunities and resources that they can leverage to strengthen their enterprises and ideals while mitigating past underperformance,” said Harmon. “Our mutual goal henceforth is to have a more equitable participation in every area of the public sector wherein economic opportunities exist.”

“We put forth a call to action for your continued support of the AACCNJ, so that we may continue to advocate for a more equitable share of the state’s balance sheet, we have been a leading voice in the advocacy for the completion of this disparity study since our inception in 2007”, said Harmon. “We now claim a seat at the table to ensure that reciprocity, and recompense become a reality with what Dr. King called “the fierce urgency of Now,” on behalf of our constituents and the beloved community. Let us combat selfishness, which is self-destructive behavior, not providing opportunities for those with the capabilities to contribute to the success of the state; let us embark on a new chapter of authentic and transparent collective collaboration.

Background and timeline

Dec. 23, 2020 “The Department of the Treasury announced several key initiatives on Wednesday that will advance the Murphy Administration’s commitment to ensuring Minority-, Women-, and Veteran-Owned Businesses (MWVOB) can more fully participate in New Jersey’s multi-billion-dollar supply chain.1

“Chief among these initiatives is the commissioning of the first disparity study in 20 years to measure current spend data, which is viewed as key to identifying and opening up new opportunities for MWVOBs to contract with the State of New Jersey to provide goods and services. The disparity study has been a priority for the Murphy Administration from day one.”2

“This disparity study is not only long overdue, it is an integral part of our vision for a stronger, fairer, and more resilient, post-COVID economy that opens doors for diverse businesses to play a greater role in shaping our state’s future,” said Governor Phil Murphy. “This study will provide us with an opportunity to create a more equitable business environment, which is a win for us all.”3

“Recognizing how long it has been since the last study was conducted, we tried to ensure that this new study will capture as much data as possible, beyond just statistics that are available on our spend, but also including outreach to stakeholders and community groups as well,” said Treasurer Muoio. “This will give us the tools and the information necessary to determine where our strengths and weaknesses lie so we can implement more equitable procurement strategies moving forward. The state has a vast supply chain of goods, commodities, and professional and financial services and in a truly equitable society every qualified vendor in our state should have the opportunity to participate in the economy fueled by their tax dollars.”4

The goal, as laid out in the bid solicitation, is to research, structure, and conduct a comprehensive and legally defensible disparity study of the State’s contract awards in construction, goods, and services over a five year period (July 1, 2015 through June 30, 2020) to determine whether there is a disparity between the number of qualified minority, women, and veteran-owned businesses ready, willing, and able to perform services, and the number of vendors/contractors actually engaged to perform such services. The Disparity Study will include a review of contracts for construction, goods, commodities, and services and shall be appropriately structured so that the state may, if appropriate, use the information to fashion race- and/or gender-neutral, and if necessary, race- and gender-conscious methods of achieving those goals for state contracts and employment by state vendors.5

The State of New Jersey held a series of virtual business community meetings on Sept. 20, 21, and 22, 2021 regarding its disparity study. AACCNJ’s member organizations participated in the meetings conducted by Mason Tillman Associates.

Jan. 9, 2023. “In spite of so many challenges, black businesses continue as the fastest-growing business segment of our country, so we remain very hopeful. With 94% of the black vote going to Governor Murphy in his last statewide election, we look forward to learning more about the tangible actions he will take in the second half of his final term to help level the playing field for all of us, said John E. Harmon, Sr. “Notably, we eagerly anticipate the announcement and projected timeline on a statewide Disparity Study that will further identify barriers and inequalities within our communities and take them head on.”

“These times remind me of words that were expressed by the late Dr. Martin Luther King, Jr.: “The ultimate measure of a man is not where he stands in moments of comfort and convenience, but where he stands at times of challenge and controversy,” stated John E. Harmon, Sr. “We are now in those times once again and the optimal outcomes can be realized when the rules of engagement are clearly defined, and the playing field is available to all to compete effectively with value being the declared goal. In conclusion, the data in this study confirms that Black people are still at the bottom.”

 

1 https://www.nj.gov/treasury/news/2020/12232020.shtml

2 https://www.nj.gov/treasury/news/2020/12232020.shtml

3 https://www.nj.gov/treasury/news/2020/12232020.shtml

4 https://www.nj.gov/treasury/news/2020/12232020.shtml

 

About the African American Chamber of Commerce of New Jersey

The AACCNJ performs an essential role in the economic viability of New Jersey. While providing a platform for New Jersey’s African American business leaders, to speak with a collective voice, the AACCNJ advocates and promotes economic diversity fostering a climate of business growth through major initiatives centering on education and public policy. The Chamber serves as a proactive advocacy group with a 501(c) 3 tax exemption, which is shared by the National Black Chamber of Commerce.

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 IT’SUGAR unveils  exclusive Barbie Chocolate bars in  collaboration with Mattel close to Valentine’s Day

 

FT.  LAUDERDALE, Fla.  —   IT’SUGAR, one of the largest specialty candy retailers in the U.S., is excited to announce the launch of a licensing deal with Mattel, introducing three exclusive Barbie Chocolate Bars.

 

These delicious chocolate bars, priced at $3.99 each, will be available at IT’SUGAR stores and itsugar.com beginning on Thursday, Jan. 25.

 

The IT’SUGAR Exclusive Barbie Collection celebrate Barbie’s enduring legacy. The chocolate bars feature packaging inspired by Barbie’s signature style, creating a visual delight for fans and collectors alike. These delectable chocolate bars are just the beginning, as IT’SUGAR will soon introduce a variety of other Barbie-themed products in stores and on its website over the next month.

 

“We are excited to bring the magic of Barbie to life through our exclusive collaboration with Mattel,” said Justin Clinger, Assistant Vice President Creative and Marketing of IT’SUGAR.

 

“These bars are just the beginning, and a delightful way for fans of all ages to experience the iconic Barbie brand.”

 

On Thursday, Jan. 25, the IT’SUGAR Exclusive Barbie Chocolate Bars will also be featured prominently across IT’SUGAR’s social media channels. Customers and Barbie enthusiasts are invited to join the celebration of Barbie’s timeless allure with these exclusive treats. Engaging in the conversation on social media using the hashtag #BarbieBars allows you to stay connected and be part of this delightful experience.

 

IT’SUGAR Stores epitomizes what the brand is known for: thousands of varieties of over-the-top sweets, humorous products, and immersive candy experiences with featured shops, including Sour Patch Kids, OREO, Nerds, Skittles, Reese’s, and Starburst. It also includes shops devoted to retro and international candy, TikTok-trending treats, and much more, providing endless playful entertainment for sugar enthusiasts of all ages.

 

About IT’SUGAR: 

IT’SUGAR is one of the largest specialty candy retailers in the world, with over 100 locations in U.S. and Canada. IT’SUGAR isn’t just a candy store – it transforms how the world experiences their favorite sugary treats. Known for its absurd sugar innovations that celebrate lighthearted rebellion, IT’SUGAR aspires to a future where everyone has access to the pure joy that comes from indulging in a world with fewer restrictions and more SUGAR. IT’SUGAR is a member of BBX Capital, Inc.’s family of companies and a subsidiary of BBX Sweet Holdings. For more information, please visit www.IT’SUGAR.com

 

For more information, please visit www.itsugar.com.