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Sep 12, 2017 | 3 min read

Economy

This Week in GAFAnomics, September 12th

“This Week in GAFAnomics” features top articles from FABERNOVEL’s internal Slack discussions. Read here your weekly dose of curated news about the Network Economy.

Joachim Renaudin

Project Analyst


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GAFAnomics [ga-fɑː-nom-iks], noun: A modern, networked, economic system spurred by the eponymic GAFA (Google, Amazon, Facebook, Apple) but also encompassing Unicorns, Chinese tech giants and all other companies changing our lives through computer technology.

#The week of September 12th

So what happened this week in GAFAnomics ?!

 

Tesla updates its car software to help escape hurricane Irma

Source: harryson

Last week, Tesla announced a last-minute software update in Florida, extending the battery range of its cars to help Tesla owners escape from hurricane Irma. Tesla vehicles have 75Kwh batteries, but some are deliberately blocked to 60Kwh by the software, prompting owners to purchase a battery upgrade for 5000$. Exceptionally, Tesla now unlocked this limit to guarantee its users’ safety. Smart move from Tesla, who immediately benefited of great press coverage. This decision actually highlights one of Tesla’s key specificities: its cars are much more than just electric vehicles, they are software-powered cars. This means the carmaker can update the car’s features, and more importantly gather navigation data, even after the car is out of the factory.
A great example of how even highly industrial companies can leverage software to become real-time companies.

 

Europe starts tackling the GAFA tax issue

Europe has decided to tackle the tax issue of the Tech Giants’ operations in the old continent. Today, the taxation of these companies is directly linked to the location of their headquarters. Yet, the digital economy means these companies can make profits in many states without leaving a physical footprint and then transfer revenues to low-tax countries where they are domiciliated (e.g Ireland).
But times are changing. Europe is thinking of linking companies’ domiciliation not only to their physical footprint but also to their “digital footprint” (i.e number of users, volume of data, digital advertising revenue) in order to tax value where it’s created.

By changing the legal framework, the EU will finally be able to ensure Google, Apple or Facebook are rightly taxed on their European profits. As well as acknowledge the fact that in the digital economy what drives revenue is the amount of users and the volume of data rather than the number of employees or property size.

 

American cities are fighting to host Amazon’s gigantic campus

Source: SlashGear

With 50,000 direct jobs and billions of dollars in investments, Amazon wants to build an impressive new lead office in the US, to be used as “second headquarters” after its Seattle home. The e-commerce giant launched a public request for proposals amongst cities willing to host the new Amazon Headquarters… in exchange for large tax breaks.

But Amazon’s HQ2 filings tell us more about the future of American cities than Amazon itself. According to this HBR article, the list of criteria imposed by Amazon sets the new standards that cities must respect if they want to be a part of the growing digital economy:

  • Capacity to produce skilled technical talent
  • Access to global markets through modern infrastructure: Airports, logistic, network
  • Connected and sustainable placemaking: efficient green transportation
  • Culture and diversity: great education institutions and diverse population

Who will win the fight? Probably the city willing to give the largest tax break.

 

Will your self-driving car be American?

Source: qimono

Last week the US Congress passed a bill to accelerate the deployment of self-driving cars. The bill enables the federal government to exempt carmakers from current car regulations and safety standards imposed on traditional cars. A welcome change as the variety of safety laws in different American states complicated the task of building and testing self-driving cars for automakers. In Europe, Germany has implemented some laws to simplify the development of self-driving cars, but no EU directive has been adopted.

American carmakers and tech giants are already leading the race in building autonomous cars. European carmakers are also investing tremendous amounts in self-driving technology, but they won’t  be able to compete on equal terms if the EU maintains its legal framework.

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