CAIT embraces imposition of extra tax on foreign eCommerce companies, Court blocks Future Group’s sale of assets to Reliance Industries, Google announces closure of Stadia Game Studio and more.

CAIT embraces imposition of extra tax on foreign eCommerce companies, US Congress raises concerns over eCommerce FDI rules, New Cryptocurrency eCommerce market place launched, Court seeks Centre’s response on violations by Social Commerce Platforms, Court blocks Future Group’s sale of assets to Reliance Industries, Netflix tests ‘Timer Feature’ for Android users, Twitch dominates Live Video Game streaming during Pandemic, Google announces closure of  Stadia Game Studio, Spotify debut’s in South Korea, Warner partners with FMG to launch Music Licensing Platform, Sony Music acquires Kobalt’s AWAL for USD 430 million, Big Brands skip the Super Bowl Commercials this year, Saregama and Josh sign Music Licensing Deal and Indian Fire TV users doubled Consumption in 2020.

CAIT embraces imposition of extra tax on foreign eCommerce companies

The Confederation of All India Traders (CAIT) has welcomed a budget proposal that would amend section 163 sub clause (3), section 164 clause (cb), section 165 sub section 3 and clause (b) of the Finance Act, 2016. This amendment would impose 2% extra tax on foreign eCommerce companies. This tax will be applicable for consideration of sale of goods and provision of services regardless of whether the provider owns such a portal or is provided or facilitated by ecommerce operators. The CAIT noted that the introduction of an equalization leavy is meant to create an equal playing field and prevents circumvention of tax laws with regards to digital transactions.

US Congress raises concerns over eCommerce FDI rules

Several entities including lobbying groups in the US and the US Congress have raised concerns regarding India’s proposed changes to its Foreign Direct Investment (FDI) rules which is expected to severely impact entities like Amazon, etc.  The US-India Business Council has asked India to reconsider the new rules due to fears that these rules would greatly limit the scale of eCommerce markets. A Congressional Research Service report on India-US relations noted that both Amazon and Walmart were concerned about the negative impacts of these changes.

New Cryptocurrency eCommerce market place launched

CashPay is a new platform that brings eCommerce a step closer to Blockchain Technology through an open distributed ledger that records transactions between two parties in a decentralized manner that involves trust, faster transactions, no hidden costs, etc. It uses Utility Token ($CPZ) or cryptocurrency to make transactions happen and has plans to offer a variety of services including CashPay Shop, CashPay EZ (Payment Gateway) and CashPay Passport (Merchant Wallet). The platform is going to begin with an initial implementation of the $CPZ (token), closely followed by CPZ Beta. The company will also be launching country-specific ecommerce websites and smartphone apps.

Court seeks Centre’s response on violations by Social Commerce Platforms

The Delhi High Court issued notices to the Ministry of Consumer Affairs, Food and Public Distribution as well as the three companies that operate the start-ups, Fashnear Technologies (Meesho), Sociofy Enterprise (GlowRoad) and O (1) India (Shop101) in response to a PIL filed before it. The PIL alleged that the lack of display of names of manufacturers, country of origin and MRP causes harm to the public and calls into question the authenticity of the products. The petitioner also contended that these details have been mandated to be mentioned according to the Consumer Protection (Ecommerce) Rules, 2020 and the Legal Metrology (Packaged Commodities) Rules, 2011.

Court blocks Future Group’s sale of assets to Reliance Industries

The Delhi High Court has blocked the sale of Future Groups assets to Reliance Industries after Amazon raised objections to the USD3.4 billion deal. Amazon had argued that the sale of its assets was prohibited under a 2019 deal to anyone on a restricted persons list including Reliance. Future later said that it was not bound by an arbitrator’s order that put this deal on hold prompting Amazon to petition the court to enforce the same.

Netflix tests ‘Timer Feature’ for Android users

Netflix starts testing its new timer feature that would allow viewers to set a timer for their favorite show or movie. It allows viewers to choose between timeslots of 15, 30 and 45 minutes where the session will automatically end thereafter. Currently in its global test phase, it will be tested on adult profiles on select subscribers on Android devices and would be rolled out to everybody if it finds that this feature improves the Netflix mobile experience. This feature may prove to be useful for those users who want to control their watching time.
In the recent past, Netflix has come up with several developments to uplift the mobile experience such as using xHE-AAC code for better audio and is also testing spatial audio support for Air-pods.

Twitch dominates Live Video Game streaming during Pandemic

Twitch which is an Amazon owned platform that live-broadcasts videogames has sky-rocketed, hosting 91% of all video game streaming and serving over 2 million users at any given point of the day. In this ongoing pandemic, Twitch has become the one stop medium for consumers who live stream themselves playing videogames such as Fortnite and so on. About two thirds of its users live outside US with streamers broadcasting in languages other than English.
Twitch being the central hub of such activity also coincides with the general surge around the world in video gaming where new games are developed. Through Twitch, users are up to date with their favorite streamers thus building a global community.

Google announces closure of  Stadia Game Studio

Google announces shutting down of its in-house studio called SG&E which was planned to create and release original games. Google stated that it has stopped investing as it has proved to be extremely costly to create exclusive content from scratch by its internal development team, SG&E.
Google however maintains that it remains committed in ensuring a future for Stadia in Cloud gaming services and will focus on creating the best platform for gamers and providing technology to its partners. Players can play all games and will continue to bring third party games to the platform.

Spotify debuts in South Korea

The global music streaming company Spotify has made its long awaited debut in South Korea which is the sixth largest music market in the world. It will compete with other music streaming companies such as Melon, Genie and Apple Music and so on. It seeks to give access to over 60 million tracks to its users.
The company has now tapped into the South Korean market, which is home to the K-Pop genre, which is a multi-billion dollar industry with fan bases across the world. Over the last 2 years, Spotify has entered into new markets such as India, Russia and the Middle-East and is currently present in over 90 countries.

Warner partners with FMG to launch Music Licensing Platform

Warner Music Group (WMG) has recently partnered with the technology firm Feed Media Group (FMG) to launch Adaptr, which is an app that allows developers to integrate music into their app. It is a subscription based music licensing app with an aim to make licensing easier for developers to enable innovation and at the same time ensure the right holders are duly paid
Some of the features of Adaptr are that it provides tools for curating and enabling developers to create a customized musical experience. Developers can build a catalog from Adaptr’s pre-licensed library that includes music from WMG Artists and songwriters, BMG Records and so on. This is available only to companies that have raised less than USD 7.5 million in funding and the app must earn less than USD 4.5 million in revenue. It is based on a monthly subscription model that gives access to the platform’s music catalog.

Sony Music acquires Kobalt’s AWAL for USD 430 million

Sony Music entered into a multi million dollar agreement, worth USD 430 million with Kobalt, for the purchase of AWAL label services.  AWAL will now be a part of Sony Music’s new division of independent artist and label service offering. AWAL will continue to independently sign, develop and market its own artists and with the help of Sony expand its vision as it is enhanced by technology and network provided by The Orchard which is Sony’s Music Distribution company.

Big Brands skip the Super Bowl Commercials this year

Owing to the pandemic, big names such as Budweiser, Pepsi and Coke have decided to sit out their commercial buys for this year’s Super Bowl Ads as they seek to re think their branding strategy. It took more than two months for CBS to sell out ad space with newcomers and commercial staples having bought 30-second ad spots for USD 5.5.million for the Super Bowl game broadcasted on 7th February.

Saregama and Josh sign Music Licensing Deal

Saregama enters into a music licensing deal with Josh, which is a short video app launched by Verse Innovation. This deal will enable users of Josh to have access to the entire catalogue of  Saregama Library which is a diverse music library with over 1,30,000 songs covering several Indian languages such as Hindi, Malayalam, Tamil, Gujarati and so on.

Indian Fire TV users doubled Consumption in 2020

Amazon states that Fire TV Users in India have doubled their entertainment consumption with movies, cricket, online gaming, music, fitness and so on. Customers have spent more than 3 hours daily on their Fire TV devices. Alexa has become the voice to search and watch content as Amazon reveals that there has been more than 70% increase in customers using the Alexa voice remote.
While the sale of Fire TV continues to grow in metropolitan cities, Andaman and Nicobar Islands and the Union Territories are among the fastest growing states.

Authored and compiled by  Neharika Vhatkar (Associate, BananaIP Counsels), Lian Joseph (Legal Intern) and Shefali Girish (Legal Intern)
The Licensing and E-Commerce News Bulletin is brought to you jointly by the E-Commerce Law and Consulting/Strategy Divisions of BananaIP Counsels, a Top IP Firm in India. If you have any questions, or need any clarifications, please write to [email protected]  with the subject: eCommerce News.
Disclaimer: Please note that the news bulletin has been put together from different sources, primary and secondary, and BananaIP’s reporters may not have verified all the news published in the bulletin. You may write to [email protected]  for corrections and take down.

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