Amazon-Future case reaches final stages with SIAC, ED and RBI probe Flipkart and Amazon, B2B eCommerce Platform UDAAN reaches USD 3.1 billion valuation, USTR finds 2% Tax on Digital Economy Discriminatory, Facebook inks Licensing Deal with TIPS Music, Neil Young sells Music Rights, Apple takes down 39,000 Games from China App Store and Xiami Music App shut down by Alibaba.
Amazon-Future case reaches final stages with SIAC
The legal battle that ensued between Amazon and Future Group, after Reliance India Limited’s acquisition of 30% stake in Future Retail, has reached its final stages. According to the Singapore International Arbitration Centre (SIAC), a panel has been formed on January 5th, 2021, to give the final verdict. The e-commerce giant had claimed that Future breached the non-compete contract through its USD 3.5 billion deal with Reliance. Future had suffered massive setbacks with the COVID lockdowns and claimed that Amazon had failed to help them at the time of need.
ED and RBI probe Flipkart and Amazon
The government has tasked the Reserve Bank of India (RBI) and Enforcement Directorate (ED), to probe into allegations of Foreign Direct Investment (FDI) policy and Foreign Exchange Management Act (FEMA) violations by Amazon and Flipkart. This comes after a complaint filed by the Confederation of All India Traders (CAIT) claiming FDI Rules and FEMA violations in the USD 204 million deal between Flipkart and Aditya Birla Fashion & Retail. Flipkart’s spokespersons have refuted the claim.
FDI rules disallow overseas retailers into the country in the multi-brand segment or e-commerce. Consequently, Amazon and Flipkart, which are controlled largely by American multinational retail corporation, Walmart, operate as marketplaces. There have been many claims that this is an exploitation of the loopholes in the policy. No formal complaint has been registered as yet.
B2B eCommerce Platform UDAAN valued at USD 3.1 billion
Homegrown B2B e-commerce start-up, Udaan, has recently raised USD 280 million, increasing its valuation to USD 3.1 billion. This has been raised from both new and existing investors, helping the company take a significant jump from its 2019 valuation, which was reported at USD2.8 billion. Udaan caters to small and medium business owners and its growth has been accelerated by the COVID-19 lockdown which saw an increased digital dependency in conducting business.
USTR finds 2% Tax on Digital Economy Discriminatory
The United States Trade Representative (USTR) recently concluded its investigation which had started in July 2020 under S 301 of the US Trade Act. This was triggered by the imposition of India’s Digital Services Tax (DST) that placed a 2% tax on non-resident e-commerce companies. The USTR came to the conclusion that this was “unreasonable or discriminatory and burdens or restricts US commerce and thus is actionable under Section 301 (of its Trade Act)”. This conclusion comes from the evidence that of the 119 Companies that are likely targets of the DST, 86 are based out of the US. This could mean that the US government is authorized to withdraw trade benefits, impose duties and import curbs or deny federal permits to supply services in some sectors.
The Indian Officials have defended the levy as fair and further stated that once global consensus has been reached, the levy shall be dropped.
Facebook inks Licensing Deal with TIPS Music
Bollywood music label Tips Music and social media giant Facebook have signed a Global licensing deal that would allow users of Facebook and Instagram to add the music from the Tips library to their creative content.
More players in the Indian social media market are investing in licensing music from popular music labels which. Earlier this year T-series had sent multiple copyright infringement notices to a number of content sharing application companies for using their music without publication. Many have attributed the newfound drive to acquire licenses to the ban of popular short video sharing app TikTok from the Indian market.
Neil Young sells Music Rights
Veteran musician Neil Young sold fifty-percent of the rights to his music to Hipgnosis Songs Fund Limited. This comes days after the singer had his music taken down from Jay-Z owned streaming site TIDAL, after clarifying that they did not own the masters to his music. Hipgnosis, has recently acquired the publishing rights of Lindsey Buckingham and Jimmy Lovine’s producing rights.
Apple takes down 39,000 Games from China App Store
In its largest purge so far, Apple has taken down a total of 46,000 apps off its China app store, of which, 39,000 were games. This comes as a result of the Chinese Government tightening the regulation around unlicensed games. China requires all paid apps which have in-app purchases to obtain licenses. According to the Chinese company AppInChina, almost a third of the 60,000 games on the China App Store did not have licenses.
Apple had given publishers till the end of June 2020 to provide proof of license to continue offering their app in China. This deadline was later extended to 31 December, 2020. Android App stores operated by Xiaomi and Alibaba have been noted to have enforced the licensing requirements previously.
Xiami Music App shut down by Alibaba
Users lost access to the once beloved music app Xiami, as Alibaba shut down the 12 year old app after attempts to revive it failed. Founded in 2008, Xiami appealed to a large young demographic because of its aesthetic design, interactive social features and focus on indie artists. It was acquired by Alibaba in 2013.
In 2016 Tencent acquired majority stake in China Music Group which amounted to Tencent’s music apps controlling as much as 75% of China’s music streaming market. This was the beginning of the end for Xiami which lost a significant number of music rights that ultimately led to a large loss in the number of its users. Tencent continues to dominate China’s music scene with newer apps like NetEase Music.
Authored and compiled by Neharika Vhatkar (Associate, BananaIP Counsels) and Srinjayee Gupta (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.
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