Netflix Halts Service in Russia; Amazon Purchases E-Commerce Software Start-Up, Veeqo

by Hannah Dillon on 11th Mar 2022 in News

In this weekly segment, ExchangeWire sums up key industry updates in media, marketing, and commerce from around the globe. In this edition: Netflix halts its service in Russia following Ukraine invasion; Amazon’s acquisition of Veeqo confirmed; China APT41 breaches six US state government networks; and US House probe accuses Amazon of obstructing its investigation into Big Tech.

Netflix suspends service in Russia to protest Ukraine invasion

International streaming platform, Netflix, has temporarily suspended its service in Russia in protest of the invasion of neighbouring Ukraine.

The suspension follows Netflix’s refusal to comply with a new national law requiring streaming platforms to host 20 Russian propaganda channels, including state-backed Channel One and NTV, which is owned by Kremlin-backed Gazprom. The platform had also recently announced it would halt all acquisitions and productions in Russia.

Since launching in Russia in 2016, Netflix amassed roughly one million subscribers in the country, operating its streaming service in conjunction with Russia’s National Media Group. Prior to the invasion of Ukraine in February, the streaming giant had been developing four Russian productions, all of which have since been suspended.

Netflix’s decision to halt its service in Russia follows in the footsteps of other entertainment industry giants, such as Disney, Paramount Pictures, Warner Brothers, and Sony, who have all suspended or delayed the release of their new films in Russia. Outside of the entertainment industry, Big Tech giants including Apple, Meta, and Google have also restricted or suspended their services in Russia in the wake of the invasion.

Amazon acquires e-commerce software start-up, Veeqo

Amazon has acquired Veeqo, a start-up that develops tools to help online businesses sell products both on and off Amazon.

The Big Tech giant purchased the e-commerce software company in November 2021, with Veeqo announcing the acquisition in a company blog post, but received little other publicity until Monday (7th March), when Veeqo investor, Octopus Ventures, confirmed the deal. The exact terms of the acquisition have not been disclosed.

Based in Swansea, Wales, Veeqo was founded in 2013, and develops software to help retailers manage their businesses online, across e-commerce platforms such as eBay, Amazon, Walmart, and Shopify. Their software helps businesses to process and manage order shipping, returns, stock count, and more.

Amazon claims an estimated 40% of e-commerce sales in the US alone, and generated just under USD $150bn (£113.9bn) globally in 2021. By purchasing Veeqo, Amazon may be able to bolster its multi-channel fulfillment (MCF) programme by integrating more robust tools for sellers, luring them away from alternative providers.

A spokeswoman for Amazon commented, “We’re excited Veeqo has joined Amazon. We plan to continue investing in new features and improvements to help Veeqo serve sellers globally from its home in Wales, facilitate growth for sellers’ multichannel businesses and enhance the experience of their customers.”

US government networks breached by Chinese government-backed hackers

breach

Chinese government-backed hacking group, China APT41, has been found to have breached six US state government networks between May 2021 and February 2022, according to new reports published by cybersecurity firm Mandiant.

The investigation into the cyber attack has revealed that although APT41 has a history of mass scanning and exploiting vulnerabilities, this specific violation was a deliberate attempt to target US state governments. Details uncover that the Chinese hacking group managed to compromise these unnamed networks through targeting weaknesses in internet web applications, “including using a zero-day vulnerability in the USAHerds application (CVE-2021-44207) as well as the now infamous zero-day in Log4j (CVE-2021-44228).”

Mandiant, who are currently in talks with Google over a USD$5.4bn (~£4.1bn) acquisition, have managed to uncover “a variety of new techniques, malware variants, evasion methods, and capabilities” within their investigation, despite the overall goal of the hack remaining a mystery.

The cyber attack is revealed as the UK confirms they plan to take action against online scams as the government introduces new measures under their impending Online Safety Bill. As part of the new duty, fraudulent paid-for ads that feature on social media and search engines will be regulated. “It will mean companies have to clamp down on ads with unlicensed financial promotions, fraudsters impersonating legitimate businesses, and ads for fake companies.”

Amazon accused of obstructing US House investigation

A US congressional committee who investigated Amazon for potential anti-competitive behaviour has accused the company of illegally obstructing its progress.

The committee’s probe, which took place over 16-months, investigated long-standing suspicions that the e-commerce giant uses the data it has on sellers on its site to influence its own-brand products. The investigation, which also looked into antitrust concerns at Facebook, Google, and Apple, concluded that the size and influence of these Big Tech companies enables them to dictate “winners and losers” in the US economy. So far, Amazon is the only tech company probed by the committee to be accused of obstructing the investigation.

The committee has referred the matter to the Department of Justice, calling for executives at the e-commerce giant to be investigated for “potentially criminal conduct.”

In a letter to the US attorney-general, Merrick Garland, the group claimed that Amazon had “engaged in a pattern and practice of misleading conduct that suggests it was ‘acting with an improper purpose’ ‘to influence, obstruct, or impede’ the [committee]”, adding that the company withheld internal documents necessary to the investigation.

According to the Financial Times, the US Department of Justice confirmed it would review the committee’s letter.

Amazon responded to the accusation in a statement, saying: “There’s no factual basis for this, as demonstrated in the huge volume of information we’ve provided over several years of good-faith co-operation with this investigation.”