The European Union has directed Chinese fast-fashion e-commerce giants Temu and Shein to disclose their compliance with EU online content regulations by July 12. This move follows complaints lodged by consumer groups and designates both platforms as Very Large Online Platforms under the Digital Services Act. These designations impose stricter obligations on handling illegal and harmful content.
According to the European Commission, requests for information have been issued to Temu and Shein regarding their measures to combat illegal products, prevent user deception through manipulative interfaces, and safeguard minors. The Commission also seeks transparency in their recommendation systems, traceability of sellers, and compliance integration into platform design.
The enforcement action stems from consumer organisations’ complaints and underscores the EU’s commitment to ensuring digital platforms uphold regulatory standards. Failure to comply with the Digital Services Act could lead to fines of up to 6% of a company’s global turnover, emphasising the seriousness with which the EU views adherence to online content rules.
Temu and Shein are mandated to furnish comprehensive responses by the specified deadline, marking a pivotal moment in how global e-commerce giants navigate regulatory landscapes beyond their home markets. The outcome of these disclosures will be closely monitored as the EU continues to assert its regulatory authority over digital platforms operating within its jurisdiction.
Small businesses in the United States increasingly turn to AI to improve their operations, although many encounter significant challenges during implementation. According to research conducted by Morning Consult on behalf of Visa, 52% of small businesses have already integrated AI, and an additional 50% plan to do so within the next two years.
Despite these advancements, 90% of businesses face obstacles in adopting AI, citing difficulties such as understanding how to use AI tools (47%), navigating various options (36%), and concerns regarding compatibility and security (31% and 26%, respectively). The study also identifies marketing as the most promising area for AI adoption among businesses not currently using AI, indicating widespread optimism about AI’s potential to increase efficiency and generate revenue.
Denise Press, Visa’s head of small business for North America, emphasised the dual challenge of acknowledging AI’s importance while grappling with the practicalities of implementation. She recommends that businesses begin with low-risk AI applications, such as automating tasks like drafting press releases, to become familiar with the technology’s advantages.
Why does it matter?
There is a collective encouragement for small businesses to cautiously and optimistically embrace AI, utilising partnerships and expertise from vendors to navigate these transformative technologies effectively. However, the challenges highlighted—such as learning curves, security concerns, and navigating options—underscore the need for tailored support and guidance.
According to India‘s markets regulator, Infosys CEO Salil Parekh has settled charges related to insufficient internal controls to prevent insider trading during a 2020 contract. Parekh agreed to pay approximately $30,000 to settle the charge, which stemmed from a contract where Infosys provided a cloud-based record-keeping platform to US financial firm Vanguard.
The Securities and Exchange Board of India (SEBI) stated that Infosys failed to recognise certain unpublished price-sensitive information (UPSI) as such. Though SEBI did not specify the information, it held Parekh accountable for the lapse. In response, Infosys has implemented an internal policy to identify UPSI and now seeks approval from the board and audit committee for such information.
Additionally, Infosys has started breaking down the total contract value of deals into average revenue per annum for comparison with its annual revenue. The initiative aims to enhance transparency and prevent future lapses in internal controls.
Bearing AI has unveiled an enhanced Deployment Planner tailored for tramp shipping companies following the success of its liner shipping version. Unlike liners, tramp operators manage one-off contracts between ports, posing challenges for emissions optimisation and profitability.
The latest tool leverages advanced AI to analyse extensive historical and real-time data, offering actionable insights into critical operational issues. It allows chartering, operations, and environmental teams to experiment with vessel deployments, optimising environmental impact and profitability.
Built on robust machine learning models, the Deployment Planner predicts end-of-year performance for every vessel, even those without scheduled contracts. The aforementioned capability provides deep insights into emissions management, enabling tramp operators to achieve superior performance amidst dynamic scheduling.
Kristofer Maanum, Senior Product Leader at Bearing AI, highlighted the tool’s significance for tramp operators, facilitating informed decisions that balance efficiency and sustainability across varied contract scenarios. The Deployment Planner emerges as a crucial asset for managing fleet efficiency, mitigating compliance risks, and optimising operational costs in tramp shipping.
Company founder Charles Lazarus showcased Toys ‘R’ Us AI-generated short promotional clip at the 2024 Cannes Lions Festival in France. In an effort to regenerate interest in the brand, Lazarus collaborated with the creative agency Native Foreign using OpenAI’s Sora. Except for a few tweaks that require human input the 66-seconds video was created entirely by Sora.
Sora is a diffusion model capable of three modes of video creation. In addition to using text prompts to create videos, it is capable of extending, modifying and filling in missing frames in an existing video. For instance, it can take a video with static noise and gradually transform it by removing the noise over many steps. The AI model can also animate elements in an image.
Company CMO, Kim Miller, informed festival attendees that despite the film’s AI base, production required human involvement throughout the process, including a dependence on intuition. The film received mixed reviews on social media, with some even calling it creepy.
The Bank for International Settlements (BIS) has advised central banks to harness the benefits of AI while cautioning against its use in replacing human decision-makers. In its first comprehensive report on AI, the BIS highlighted the technology’s potential to enhance real-time data monitoring and improve inflation predictions – capabilities that have become critical following the unforeseen inflation surges during the COVID-19 pandemic and the Ukraine crisis. While AI models could mitigate future risks, their unproven and sometimes inaccurate nature makes them unsuitable as autonomous rate setters, emphasised Cecilia Skingsley of the BIS. Human accountability remains crucial for decisions on borrowing costs, she noted.
The BIS, often termed the central bank for central banks, is already engaged in eight AI-focused projects to explore the technology’s potential. Hyun Song Shin, the BIS’s head of research, stressed that AI should not be seen as a ‘magical’ solution but acknowledged its value in detecting financial system vulnerabilities. However, he also warned of the risks associated with AI, such as new cyber threats and the possibility of exacerbating financial crises if mismanaged.
The widespread adoption of AI could significantly impact labour markets, productivity, and economic growth, with firms potentially adjusting prices more swiftly in response to economic changes, thereby influencing inflation. The BIS has called for the creation of a collaborative community of central banks to share experiences, best practices, and data to navigate the complexities and opportunities presented by AI. That collaboration aims to ensure AI’s integration into financial systems is both effective and secure, promoting resilient and responsive economic governance.
In conclusion, the BIS’s advisory underscores the importance of balancing AI’s promising capabilities with the necessity for human intervention in central banking operations. By fostering an environment for shared knowledge and collaboration among central banks, the BIS seeks to maximise AI benefits while mitigating inherent risks, thereby supporting more robust economic management in the face of technological advancements.
Italy’s financial watchdog, Consob, has begun experimenting with AI to enhance its oversight capabilities, particularly in the initial review of listing prospectuses and the detection of insider trading. According to Consob, these AI algorithms aim to swiftly identify potential instances of insider trading, which traditionally requires significantly more time when conducted manually.
The agency reported that its AI algorithms can detect errors in just three seconds, a task typically taking a human analyst at least 20 minutes. These efforts were part of testing conducted last year using prototypes developed in collaboration with Scuola Normale Superiore University in Pisa, alongside an additional model developed independently.
Consob views the integration of AI as pivotal in enhancing the effectiveness of regulatory controls to detect financial misconduct. The next phase involves transitioning from prototype testing to fully incorporating AI into Consob’s regular operational procedures. That initiative mirrors similar efforts by financial regulators globally who are increasingly leveraging AI to bolster consumer protection and regulatory oversight.
For instance, in the United Kingdom, the Financial Conduct Authority (FCA) has utilised AI technologies to combat online scams and protect consumers. That trend underscores a broader international movement within regulatory bodies to harness AI’s potential in safeguarding market integrity and enhancing regulatory efficiency.
According to insider sources, India’s digital currency, the e-rupee, has seen a sharp decline in usage, dropping to just one-tenth of its peak usage in December. The Reserve Bank of India (RBI) launched the e-rupee in a pilot program in December 2022, aiming to provide a digital alternative to physical cash. By December 2023, the pilot had successfully reached a target of 1 million daily retail transactions, largely driven by user incentives and partial salary disbursements to bank employees via the e-rupee. However, daily transactions have plummeted to about 100,000 since the incentives waned.
The transaction drop highlights a need for more organic demand for the e-rupee. Sources involved in the project indicated that the remaining transactions are primarily due to banks continuing to disburse employee benefits through digital currency. At the end of each month, this practice temporarily boosts transaction numbers to between 250,000 and 300,000 per day. Despite the earlier push to test the system’s resilience at scale, the RBI is now focused on refining the technology and developing practical use cases for the e-rupee rather than expanding the pilot rapidly.
The challenge faced by the e-rupee is common. A survey by the Bank of International Settlements found that among 86 central banks, a third are piloting a central bank digital currency (CBDC). Even countries that have launched CBDCs, such as the Bahamas and Jamaica, have yet to experience much success. The Federal Reserve Bank of Kansas City noted that consumer adoption of CBDCs requires more than just the technology itself; it needs to offer additional value compared to traditional cash. As the RBI continues developing the e-rupee, the focus will be on creating compelling use cases that encourage widespread adoption.
Shopify is launching its new AI chatbot, ‘Sidekick,’ in early access as part of its 2024 Summer Edition updates. Sidekick, initially revealed last year, is designed to assist merchants with tasks such as creating discount codes, generating store reports, and suggesting blog post ideas. Currently, Sidekick is available to merchants with English stores in North America, but Shopify plans to expand its availability to other languages and regions.
In addition to Sidekick, Shopify announced several other AI tools to improve merchant efficiency. One notable feature is AI-powered product categorisation, which helps merchants by automatically suggesting taxonomy for product listings, making items more discoverable. Another tool provides suggested replies for customer chats in Shopify Inbox, although these replies need to be finalised by the merchant. Shopify is considering allowing AI to handle customer chats independently in the future.
Shopify is also enhancing its AI-powered image generator, which was launched in January, by integrating it into its iOS and Android apps and expanding its use within the Shopify admin. Over the past six months, Shopify merchants have saved over one million AI-generated images, highlighting the tool’s popularity and effectiveness.
The EU antitrust regulators have accused Apple of violating the bloc’s tech rules, potentially leading to a substantial fine. The European Commission, responsible for antitrust and technology regulation, announced its preliminary findings following an investigation initiated in March. That move marks the first charge under the Digital Markets Act (DMA), a law designed to curb Big Tech’s dominance and foster fair competition. Apple could face fines of up to 10% of its global annual turnover if it fails to address the concerns.
EU’s antitrust chief, Margrethe Vestager, highlighted issues with Apple’s new terms, which allegedly restrict app developers’ ability to communicate freely with their users and establish contracts. Apple maintains that it has made several changes to comply with the DMA based on feedback from app developers and the Commission. However, the Commission criticised Apple’s business terms, particularly allowing app developers to redirect customers to external websites to complete transactions and the fees charged for initial customer acquisition through the App Store.
The Commission is also investigating Apple’s new contractual requirements for third-party app developers and app stores. Key issues include the core technology fee, the multi-step process to download alternative app stores on iPhones, and eligibility criteria for developers to offer alternative app stores or distribute apps directly. Apple’s recent fee implementations in the EU have drawn criticism, notably from ‘Fortnite’ creator Epic Games. Additionally, Vestager criticised Apple’s delay in launching AI-powered features in the EU, which the company attributed to the DMA, suggesting that Apple might consider its AI integration anti-competitive.
