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Google isn’t testing FLoCs in Europe yet

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Early this month Google quietly began trials of ‘Privacy Sandbox’: Its planned replacement adtech for tracking cookies, as it works toward phasing out support for third party cookies in the Chrome browser — testing a system to reconfigure the dominant web architecture by replacing individual ad targeting with ads that target groups of users (aka Federated Learning of Cohorts, or FLoCs), and which — it loudly contended — will still generate a fat upside for advertisers.

There are a number of gigantic questions about this plan. Not least whether targeting groups of people who are non-transparently stuck into algorithmically computed interest-based buckets based on their browsing history is going to reduce the harms that have come to be widely associated with behavioral advertising.

If your concern is online ads which discriminate against protected groups or seek to exploit vulnerable people (e.g. those with a gambling addiction), FLoCs may very well just serve up more of the abusive same. The EFF has, for example, called FLoCs a “terrible idea”, warning the system may amplify problems like discrimination and predatory targeting.

Advertisers also query whether FLoCs will really generate like-for-like revenue, as Google claims.

Competition concerns are also closely dogging Google’s Privacy Sandbox, which is under investigation by UK antitrust regulators — and has drawn scrutiny from the US Department of Justice too, as Reuters reported recently.

Adtech players complain the shift will merely increase Google’s gatekeeper power over them by blocking their access to web users’ data even as Google can continue to track its own users — leveraging that first party data alongside a new moat they claim will keep them in the dark about what individuals are doing online. (Though whether it will actually do that is not at all clear.)

Antitrust is of course a convenient argument for the adtech industry to use to strategically counter the prospect of privacy protections for individuals. But competition regulators on both sides of the pond are concerned enough over the power dynamics of Google ending support for tracking cookies that they’re taking a closer look.

And then there’s the question of privacy itself — which obviously merits close scrutiny too.

Google’s sales pitch for the ‘Privacy Sandbox’ is evident in its choice of brand name — which suggests its keen to push the perception of a technology that protects privacy.

This is Google’s response to the rising store of value being placed on protecting personal data — after years of data breach and data misuse scandals.

A terrible reputation now dogs the tracking industry (or the “data industrial complex”, as Apple likes to denounce it) — as a result of high profile scandals like Kremlin-fuelled voter manipulation in the US but also just the demonstrable dislike web users have of being ad-stalking around the Internet. (Very evident in the ever increasing use of tracker- and ad-blockers; and in the response of other web browsers which have adopted a number of anti-tracking measures years ahead of Google-owned Chrome).

Given Google’s hunger for its Privacy Sandbox to be perceived as pro-privacy it’s perhaps no small irony, then, that it’s not actually running these origin tests of FLoCs in Europe — where the world’s most stringent and comprehensive online privacy laws apply.

AdExchanger reported yesterday on comments made by a Google engineer during a meeting of the Improving Web Advertising Business Group at the World Wide Web Consortium on Tuesday. “For countries in Europe, we will not be turning on origin trials [of FLoC] for users in EEA [European Economic Area] countries,” Michael Kleber is reported to have said.

TechCrunch had a confirm from Google in early March that this is the case. “Initially, we plan to begin origin trials in the US and plan to carry this out internationally (including in the UK / EEA) at a later date,” a spokesman told us earlier this month.

“As we’ve shared, we are in active discussions with independent authorities — including privacy regulators and the UK’s Competition and Markets Authority — as with other matters they are critical to identifying and shaping the best approach for us, for online privacy, for the industry and world as a whole,” he added then.

At issue here is the fact that Google has chosen to auto-enrol sites in the FLoC origin trials — rather than getting manual sign ups which would have offered a path for it to implement a consent flow.

And lack of consent to process personal data seems to be the legal area of concern for conducting such online tests in Europe where legislation like the ePrivacy Directive (which covers tracking cookies) and the more recent General Data Protection Regulation (GDPR), which further strengthens requirements for consent as a legal basis, both apply.

Asked how consent is being handled for the trials Google’s spokesman told us that some controls will be coming in April: “With the Chrome 90 release in April, we’ll be releasing the first controls for the Privacy Sandbox (first, a simple on/off), and we plan to expand on these controls in future Chrome releases, as more proposals reach the origin trial stage, and we receive more feedback from end users and industry.”

It’s not clear why Google is auto-enrolling sites into the trial rather than asking for opt-ins — beyond the obvious that such a step would add friction and introduce another layer of complexity by limiting the size of the test pool to only those who would consent. Google presumably doesn’t want to be so straightjacketed during product dev.

“During the origin trial, we are defaulting to supporting all sites that already contain ads to determine what FLoC a profile is assigned to,” its spokesman told us when we asked why it’s auto-enrolling sites. “Once FLoC’s final proposal is implemented, we expect the FLoC calculation will only draw on sites that opt into participating.”

He also specified that any user who has blocked third-party cookies won’t be included in the Origin Trial — so the trial is not a full ‘free-for-all’, even in the US.

There are reasons for Google to tread carefully. Its Privacy Sandbox tests were quickly shown to be leaking data about incognito browsing mode — revealing a piece of information that could be used to aid user fingerprinting. Which obviously isn’t good for privacy.

“If FloC is unavailable in incognito mode by design then this allows the detection of users browsing in private browsing mode,” wrote security and privacy researcher, Dr Lukasz Olejnik, in an initial privacy analysis of the Sandbox this month in which he discussed the implications of the bug.

“While indeed, the private data about the FloC ID is not provided (and for a good reason), this is still an information leak,” he went on. “Apparently it is a design bug because the behavior seems to be foreseen to the feature authors. It allows differentiating between incognito and normal web browsing modes. Such behavior should be avoided.”

Google’s Privacy Sandbox tests automating a new form of browser fingerprinting is not ‘on message’ with the claimed boost for user privacy. But Google is presumably hoping to iron out such problems via testing and as development of the system continues.

(Indeed, Google’s spokesman also told us that “countering fingerprinting is an important goal of the Privacy Sandbox”, adding: “The group is developing technology to protect people from opaque or hidden techniques that share data about individual users and allow individuals to be tracked in a covert manner. One of these techniques, for example, involves using a device’s IP address to try and identify someone without their knowledge or ability to opt out.”)

At the same time it’s not clear whether or not Google needs to obtain user consent to run the tests legally in Europe. Other legal bases do exist — although it would take careful legal analysis to ascertain whether or not they could be used. But it’s certainly interesting that Google has decided it doesn’t want to risk testing if it can legally trial this tech in Europe without consent.

Likely relevant is the fact that the ePrivacy Directive is not like the harmonized GDPR — which funnels cross border complaints via a lead data supervisor, shrinking regulatory exposure at least in the first instance.

Any EU DPA may have competence to investigate matters related to ePrivacy in their national markets. To wit: At the end of last year France’s CNIL skewered Google with a $120M fine related to dropping tracking cookies without consent — underlining the risks of getting EU law on consent wrong. And a privacy-related fine for Privacy Sandbox would be terrible PR. So Google may have calculated it’s simply less risky to wait.

Under EU law, certain types of personal data are also considered highly sensitive (aka ‘special category data’) and require an even higher bar of explicit consent to process. Such data couldn’t be bundled into a site-level consent — but would require specific consent for each instance. So, in other words, there would be even more friction involved in testing with such data.

That may explain why Google plans to do regional testing later — if it can figure out how to avoid processing such sensitive data. (Relevant: Analysis of Google’s proposal suggests the final version intends to avoid processing sensitive data in the computation of the FLoC ID — to avoid exactly that scenario.)

If/when Google does implement Privacy Sandbox tests in Europe “later”, as it has said it will (having also professed itself “100% committed to the Privacy Sandbox in Europe”), it will presumably do so when it has added the aforementioned controls to Chrome — meaning it would be in a position to offer some kind of prompt asking users if they wish to turn the tech off (or, better still, on).

Though, again, it’s not clear how exactly this will be implemented — and whether a consent flow will be part of the tests.

Google has also not provided a timeline for when tests will start in Europe. Nor would it specify the other countries it’s running tests in beside the US when we asked about that.

At the time of writing it had not responded to a number of follow up questions either but we’ll update this report if we get more detail.

The (current) lack of regional tests raises questions about the suitability of Privacy Sandbox for European users — as the New York Times’ Robin Berjon has pointed out, noting via Twitter that “the market works differently”.

“Not doing origin tests is already a problem… but not even knowing if it could eventually have a legal basis on which to run seems like a strange position to take?” he also wrote.

Google is surely going to need to test FLoCs in Europe at some point. Because the alternative — implementing regionally untested adtech — is unlikely to be a strong sell to advertisers who are already crying foul over Privacy Sandbox on competition and revenue risk grounds.

Ireland’s Data Protection Commission (DPC), meanwhile — which, under GDPR, is Google’s lead data supervisor in the region — confirmed to us that Google has been consulting with it about the Privacy Sandbox plan.

“Google has been consulting the DPC on this matter and we were aware of the roll-out of the trial,” deputy commissioner Graham Doyle told us today. “As you are aware, this has not yet been rolled-out in the EU/EEA. If, and when, Google present us with detail plans, outlining their intention to start using this technology within the EU/EEA, we will examine all of the issues further at that point.”

The DPC has a number of investigations into Google’s business triggered by GDPR complaints — including a May 2019 probe into its adtech and a February 2020 investigation into its processing of users’ location data — all of which are ongoing.

But — in one legacy example of the risks of getting EU data protection compliance wrong — Google was fined $57M by France’s CNIL back in January 2019 (under GDPR as its EU users hadn’t yet come under the jurisdiction of Ireland’s DPC) for, in that case, not making it clear enough to Android users how it processes their personal information.

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Vietnamese electric motorbike startup Dat Bike raises $2.6M led by Jungle Ventures

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Son Nguyen, founder and chief executive officer of Dat Bike on one of the startup's motorbikes

Son Nguyen, founder and chief executive officer of Dat Bike

Dat Bike, a Vietnamese startup with ambitions to become the top electric motorbike company in Southeast Asia, has raised $2.6 million in pre-Series A funding led by Jungle Ventures. Made in Vietnam with mostly domestic parts, Dat Bike’s selling point is its ability to compete with gas motorbikes in terms of pricing and performance. Its new funding is the first time Jungle Ventures has invested in the mobility sector and included participation from Wavemaker Partners, Hustle Fund and iSeed Ventures.

Founder and chief executive officer Son Nguyen began learning how to build bikes from scrap parts while working as a software engineer in Silicon Valley. In 2018, he moved back to Vietnam and launched Dat Bike. More than 80% of households in Indonesia, Malaysia, Thailand and Vietnam own two-wheeled vehicles, but the majority are fueled by gas. Nguyen told TechCrunch that many people want to switch to electric motorbikes, but a major obstacle is performance.

Nguyen said that Dat Bike offers three times the performance (5 kW versus 1.5 kW) and 2 times the range (100 km versus 50 km) of most electric motorbikes in the market, at the same price point. The company’s flagship motorbike, called Weaver, was created to compete against gas motorbikes. It seats two people, which Nguyen noted is an important selling point in Southeast Asian countries, and has a 5000W motor that accelerates from 0 to 50 km per hour in three seconds. The Weaver can be fully charged at a standard electric outlet in about three hours, and reach up to 100 km on one charge (the motorbike’s next iteration will go up to 200 km on one charge).

Dat Bike’s opened its first physical store in Ho Chi Minh City last December. Nguyen said the company “has shipped a few hundred motorbikes so far and still have a backlog of orders.” He added that it saw a 35% month-over-month growth in new orders after the Ho Chi Minh City store opened.

At 39.9 million dong, or about $1,700 USD, Weaver’s pricing is also comparable to the median price of gas motorbikes. Dat Bike partners with banks and financial institutions to offer consumers twelve-month payment plans with no interest.

“These guys are competing with each other to put the emerging middle class of Vietnam on the digital financial market for the first time ever and as a result, we get a very favorable rate,” he said.

While Vietnam’s government hasn’t implemented subsidies for electric motorbikes yet, the Ministry of Transportation has proposed new regulations mandating electric infrastructure at parking lots and bike stations, which Nguyen said will increase the adoption of electric vehicles. Other Vietnamese companies making electric two-wheeled vehicles include VinFast and PEGA.

One of Dat Bike’s advantages is that its bikes are developed in house, with locally-sourced parts. Nguyen said the benefits of manufacturing in Vietnam, instead of sourcing from China and other countries, include streamlined logistics and a more efficient supply chain, since most of Dat Bike’s suppliers are also domestic.

“There are also huge tax advantages for being local, as import tax for bikes is 45% and for bike parts ranging from 15% to 30%,” said Nguyen. “Trade within Southeast Asia is tariff-free though, which means that we have a competitive advantage to expand to the region, compare to foreign imported bikes.”

Dat Bike plans to expand by building its supply chain in Southeast Asia over the next two to three years, with the help of investors like Jungle Ventures.

In a statement, Jungle Ventures founding partner Amit Anand said, “The $25 billion two-wheeler industry in Southeast Asia in particular is ripe for reaping benefits of new developments in electric vehicles and automation. We believe that Dat Bike will lead this charge and create a new benchmark not just in the region but potentially globally for what the next generation of two-wheeler electric vehicles will look and perform like.”

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Binance Labs leads $1.6M seed round in DeFi startup MOUND, the developer of Pancake Bunny

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Decentralized finance startup MOUND, known for its yield farming aggregator Pancake Bunny, has raised $1.6 million in seed funding led by Binance Labs. Other participants included IDEO CoLab, SparkLabs Korea and Handshake co-founder Andrew Lee.

Built on Binance Smart Chain, a blockchain for developing high-performance DeFi apps, MOUND says Pancake Bunny now has over 30,000 daily average users, and has accumulated more than $2.1 billion in total value locked (TVL) since its launch in December 2020.

The new funding will be used to expand Pancake Bunny and develop new products. MOUND recently launched Smart Vaults and plans to unveil Cross-Chain Collateralization in about a month, bringing the startup closer to its goal of covering a wide range of DeFi use cases, including farming, lending and swapping.

Smart Vaults are for farming single asset yields on leveraged lending products. It also automatically checks if the cost of leveraging may be more than anticipated returns and can actively lend assets for MOUND’s cross-chain farming.

Cross-Chain Collateralization is cross-chain yield farming that lets users keep original assets on their native blockchain instead of relying on a bridge token. The user’s original assets serve as collateral when the Bunny protocol borrows assets on the Binance Smart Chain for yield farming. This allows users to keep assets on native blockchains while giving them liquidity to generate returns on the Binance Smart Chain.

In statement, Wei Zhou, Binance chief financial officer, and head of Binance Labs and M&A’s, said “Pancake Bunny’s growth and MOUND’s commitent to execution are impressive. Team MOUND’s expertise in live product design and servie was a key factor in our decision to invest. We look forward to expanding the horizons of Defi together with MOUND.”

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Battery Resourcers raises $20M to commercialize its recycling-plus-manufacturing operations

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As a greater share of the transportation market becomes electrified, companies have started to grapple with how to dispose of the thousands of tons of used electric vehicle batteries that are expected to come off the roads by the end of the decade.

Battery Resourcers proposes a seemingly simple solution: recycle them. But the company doesn’t stop there. It’s engineered a “closed loop” process to turn that recycled material into nickel-manganese-cobalt cathodes to sell back to battery manufacturers. It is also developing a process to recover and purify graphite, a material used in anodes, to battery-grade.

Battery Resourcers’ business model has attracted another round of investor attention, this time with a $20 million Series B equity round led by Orbia Ventures, with injections from At One Ventures, TDK Ventures, TRUMPF Venture, Doral Energy-Tech Ventures and InMotion Ventures. Battery Resourcers CEO Mike O’Kronley declined to disclose the company’s new valuation.

The cathode and anode, along with the electrolyzer, are major components of battery architecture, and O’Kronley told TechCrunch it is this recycling-plus-manufacturing process that distinguishes the company from other recyclers.

“When we say that we’re on the verge of revolutionizing this industry, what we are doing is we are making the cathode active material — we’re not just recovering the metals that are in the battery, which a lot of other recyclers are doing,” he said. “We’re recovering those materials, and formulating brand new cathode active material, and also recovering and purifying the graphite active material. So those two active materials will be sold to a battery manufacturer and go right back into the new battery.”

“Other recycling companies, they’re focused on recovering just the metals that are in [batteries]: there’s copper, there’s aluminum, there’s nickel, there’s cobalt. They’re focused on recovering those metals and selling them back as commodities into whatever industry needs those metals,” he added. “And they may or may not go back into a battery.”

The company says its approach could reduce the battery industry’s reliance on mined metals — a reliance that’s only anticipated to grow in the coming decades. A study published last December found that demand for cobalt could increase by a factor of 17 and nickel by a factor of 28, depending on the size of EV uptake and advances in battery chemistries.

Thus far, the company’s been operating a demonstration-scale facility in Worcester, Massachusetts, and has expanded into a facility in Novi, Michigan, where it does analytical testing and material characterization. Between the two sites, the company can make around 15 tons of cathode materials a year. This latest funding round will help facilitate the development of a commercial-scale facility, which Battery Resourcers said in a statement will boost its capacity to process 10,000 tons of batteries per year, or batteries from around 20,000 EVs.

Another major piece of its proprietary recycling process is the ability to take in both old and new EV batteries, process them and formulate the newest kind of cathodes used in today’s batteries. “So they can take in 10-year-old batteries from a Chevy Volt and reformulate the metals to make the high-Ni cathode active materials in use today,” a company spokesman explained to TechCrunch.

Battery Resourcers is already receiving inquiries from automakers and consumer electronics companies, O’Kronley said, though he did not provide additional details. But InMotion Ventures, the venture capital arm of Jaguar Land Rover, said in a statement its participation in the round as a “significant investment.”

“[Battery Resourcers’] proprietary end-to-end recycling process supports Jaguar Land Rover’s journey to become a net zero carbon business by 2039,” InMotion managing director Sebastian Peck said.

Battery Resourcers was founded in 2015 after being spun out from Massachusetts’ Worcester Polytechnic Institute. The company has previously received support from the National Science Foundation and the U.S. Advanced Battery Consortium, a collaboration between General Motors, Ford Motor Company and Fiat Chrysler Automobiles.

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