ETtech Morning Dispatch on Feb. 3, 2021: Jeff Bezos to step down as Amazon CEO, Expanded 'Google Tax' in India

Good morning, ETtech Reader.

Jeff Bezos will step down from his role as the Amazon CEO later this year, the biggest and the most significant change of guard at the company he founded back in 1994.

Andy Jassy, the CEO of Amazon Web Services, will take over the helm of the e-commerce giant in the third quarter while Bezos will transition to the role of executive chairman.

Closer home, we already have two crucial budget-related developments — pertaining to ‘Google Tax’ in India and the proposed fintech hub at GIFT City, Gandhinagar. Also in the news today is US President Joe Biden, who has revoked the Trump administration’s ‘Buy American, Hire American’ policy, and Airtel that denied claims of a data breach.

Here’s a look at the top tech news to start your day.

1. Jeff Bezos to step down as Amazon CEO

Jeff Bezos, Amazon’s founder and chief executive, will hand over the reins of the e-commerce firm he founded to Amazon Web Services' Andy Jassy and transition into the role of an executive chairman later this year.

"I've never had more energy, and this isn't about retiring," Bezos said in a note to employees. "As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions."

The news came along with Amazon's fourth quarter results. The company has reported its third consecutive record profit and quarterly sales above $100 billion for the first time.

Also Read: AWS’ Andy Jassy, Jeff Bezos' successor, is the most important person in tech

2. More foreign firms to come under Google Tax search

Surabhi Agarwal | ET Bureau

The Centre’s clarification on the scope of the equalisation levy on digital transactions, provided in Union Budget 2020-21 on Monday, will bring more foreign entities selling goods and services to either businesses or consumers through online platforms under the ambit of the tax, legal and industry experts told The Economic Times.

The story so far: Previously, the 2% levy was being paid by global internet services companies such as Google, Netflix and Adobe. But there was still a lot of ambiguity over the scope of the tax that allowed several overseas firms to remain outside the tax net.

Several overseas entities that were selling online to Indian consumers have until now remained out of the ambit of the levy by arguing that they either do not have Indian operations or that they earn no commission on the sales.

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3. ADB in talks to set up fintech hub at GIFT City

Saikat Das & Ashwin Manikandan | ET Bureau

Asian Development Bank is in talks with GIFT City for setting up a fintech hub, a proposal for which was announced in Union Budget 2021-22.

Driving the news: The multilateral agency is likely to make an initial investment of Rs 1,000 crore into the platform to equip fintech firms with skill development tools, new technology and resource mobilisation, two senior bankers familiar with the matter told The Economic Times.

Asian Development Bank did not immediately respond to ET’s query.

Why it matters: While details are awaited on the proposed fintech hub, industry watchers say such hubs are crucial for the fledgling sector to grow into a full-fledged industry. Digital modes of payment have firmly taken root in the country’s financial system, as UPI-based transactions surged during the pandemic year. A fintech hub would also benefit GIFT City, which has grown in fits and starts over the past decade.

4. Airtel denies claims of a data breach


Anandi Chandrasekhar & Apoorva Mittal | ETtech

Details of more than 2.5 million Airtel subscribers were available on a hacker group’s website for about three months before it was taken down on Tuesday, cybersecurity researcher Rajshekhar Rajaharia flagged in a tweet, although the company denied that its data had been breached.

The details: The hacker group, which identified itself as ‘Red Rabbit Team’, had put on its website personal details of Airtel users, including their names, dates of birth, phone numbers, addresses and Aadhaar IDs. They were up for sale for bitcoin worth $3,500. ET was able to review the data and verify a sample of the phone numbers, which were found to be active subscribers of the telecom operator.

Independent researchers, including Rajaharia, also were able to verify that the personal data indeed belonged to Airtel subscribers. In fact, a user had flagged the leak on the telco's Facebook page on December 31, cybersecurity researcher Avinash Jain told ET.

The clarification: “In this specific case, we confirm that there is no data breach at our end,” an Airtel spokesperson said. “In fact, the claims made by this group reveal glaring inaccuracies and a large proportion of the data records do not even belong to Airtel. We have already apprised the relevant authorities of the matter.”

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5. Joe Biden revokes Trump’s ‘Buy American, Hire American’ order

Priyanka Sangani | ET Bureau

US President Joe Biden has revoked the ‘Buy American Hire American’ (BAHA) executive order of predecessor Donald Trump, which had resulted in high denials of H-1B and L-1 visas.

Why it matters: The move is expected to translate into fewer visa rejections and requests for evidence in the upcoming visa lottery in April for FY22 which begins on 1 October. H-1B visa denial rates increased to 24% in FY18 and 21% in FY19), compared to 10% in FY16 and 13% in FY17, after the BAHA order took effect in April 2017.

Executive decisions: Last week, Biden signed an executive order to strengthen manufacturing in America, and BAHA — which was drawn up to create higher wages and employment rates for US workers by restricting immigrant workers — was revoked as part of that order.

ETtech Done Deals

■ B2B manufacturing platform Zetwerk has raised $120 million (Rs 880 crore) in a Series D funding round led by US-based Greenoaks Capital and Lightspeed Venture Partners. The fundraising, values the company at around $600 million, sources said.

■ Accenture will be acquiring Imaginea, a cloud and platform engineering firm headquartered in Mountain View, California which also has offices in London and throughout India.

■ Eternis Fine Chemicals has acquired UK-based specialty chemicals firm Tennants Fine Chemicals for an undisclosed sum, as the Rajen Mariwala-owned company seeks to expand its range of aroma chemicals and leverage multi-location manufacturing and distribution platforms through the buyout.

■ Siemens Gamesa Renewable Energy, a wind turbine manufacturer based in Spain, has chosen Infosys to implement an enterprise resource planning (ERP) system. ERP refers to software and systems used to plan and manage an organisation’s core supply chain, manufacturing, services, financial and other processes.

■ UiPath has closed a $750 million Series F funding round at a post-money valuation of $35 billion, registering a more than three-fold jump from a valuation of $10.2 billion in July last year. This comes less than a month after the robotics firm had filed confidentially for an initial public offering with the US Securities and Exchange Commission (SEC).

Other Top Stories We Are Covering

Entrepreneurial gains out of Budget 2021: The incentives announced for the startup sector in the Union Budget 2021-22 are likely to accelerate entrepreneurial activity in IITs and IIMs of the country, experts said.

Govt tops up Startup India Seed Fund: The government has allocated Rs 126 crore towards the Startup India Seed Fund for the financial year 2021-22. The fund aims to provide financial assistance to early stage startups in sectors such as water management, biotechnology and defence, which do not usually attract institutional venture capital funding.

Tech Mahindra’s pandemic task forces showing results: Tech Mahindra set up internal task forces soon after the coronavirus outbreak to quickly adapt to changes in the marketplace and build a future-ready organisation. “It is a holistic approach, addressing all aspects, and it has started delivering results very strongly,” Tech Mahindra Chief Financial Officer Manoj Bhat said.

Karnataka holds talks with Wistron to restart iPhone plant: The Karnataka government has held talks with top executives of Wistron Corp. and six staffing firms, in a bid to get Apple Inc.’s contract manufacturer to restart operations at its plant near Kolar. The Taiwanese company had suspended manufacturing at the 44-acre facility in the Narasapura Industrial Area after it witnessed riots on 12 December last year.

Atos ends merger talks with DXC: French technology services and consulting firm Atos has ended talks with New York-listed rival DXC about a potential acquisition. The combined entity would have created a total workforce of nearly 75,000 people in India, thereby giving a potential cost advantage in services delivery.

Global Picks We Are Reading

'Papa Musk' tweets raise cheer in the wrong Clubhouse: When Elon Musk says something, something moves somewhere on a market. Just not always what you might expect. Shares in Clubhouse Media Group jumped 117% at one point on Monday after the billionaire Tesla CEO tweeted on Sunday he would go live on the similarly named social media audio app. (Reuters)

Why tech employees stay: When any big Silicon Valley scandal breaks, the news is usually followed by a flurry of tweets and social media posts from vocal outsiders asking why tech employees don’t just leave. The companies have crossed the line of morality, they say. Quitting institutions that are constantly in the negative spotlight makes sense to critics—why would anyone stick around?

Those on the inside know the decision is far from simple. (The Information)

How to fix Facebook groups: The QAnon conspiracy theory, promotions of bogus health treatments and calls for violence based on false claims of election fraud have a common thread: Facebook groups.

But mitigating the harms of Facebook is not as simple as the company’s critics believe. Still, many of the toxic side effects of Facebook groups are a result of the company’s choices. NYT's Shira Ovide asked several experts in online communications what they would do to reduce the downsides of the groups. Here are some of their suggestions. (The New York Times)