A big privacy case & Amazon's smart-dumb deal

Happy bank holiday Monday! Keeping it short today:

WhatsApp is suing the Indian government over new internet laws it says will “severely undermine” user privacy.

WhatsApp’s current messaging architecture is propped up by end-to-end encryption: the company doesn’t know what’s in the messages you send, and it doesn’t know who sends which messages.

India’s new laws are designed to tear down that E2E architecture, requiring apps to trace the “first originator” of a message to create a central database that can be used to monitor online activity. WhatsApp’s concerns here are two-fold.

Concern #1: security. As the country’s most popular app, weakening end-to-end encryption will erode the security of the 400-million-plus people who use WhatsApp in India. In the words of WhatsApp’s lawyer: “a government that chooses to mandate traceability is effectively mandating a new form of mass surveillance.”

Concern #2: effort. Huge privacy infringements aside, creating and maintaining a traceable database of millions of messages is a bulky undertaking that vacuums copious amounts of time and money.

The other side: the Indian government says its intention isn’t to poke holes in privacy - but to curb fake news, violence and other ills.

All good and well (if true) but super unrealistic.

Matthew Green, a cryptographer at Johns Hopkins University, explains it better than I ever could:

Traceability and end-to-end encryption can’t coexist.

Also: India’s new IT laws are eerily reminiscent of China circa ‘06, when Beijing slowly laid the groundwork for The Great Firewall – a project that stopped external info from flowing into the country and allowed authorities to control what was shared internally.

The result was the exit of Facebook, Google and Twitter from China, and the rise of domestic behemoths WeChat, Baidu and Weibo.

The outcome of WhatsApp’s case will reveal which model – Chinese-style firewall or Western-style free internet – India’s government is floating towards.

Amazon just dropped $8.5bn to buy MGM, the Hollywood studio behind James Bond, Rocky and The Handmaid’s Tale.

Against the backdrop of ever-vicious streaming wars, the deal gives Amazon three things.

So, on paper, the acquisition seems like a smart move. But will an Amazon-MGM duo be the leviathan that kills Netflix? Probably not.

First, MGM doesn’t own the full rights to the jewel in its crown: 007. The Bond franchise is partly owned by Eon Productions in the UK, who exercise strict control over how the character is used and, following the deal announcement, waved away gossip that Bond would be exclusive to Amazon: “we are committed to continue making James Bond films for the worldwide theatrical audience.”

In a similar vein, a lot of MGM’s legacy titles, like The Wizard of Oz, aren’t owned by the studio anymore - making MGM more akin to a gilded icon of times past than a modern studio churning out cutting-edge content. And, in terms of price, $8bn is a lot to pay for little more than a legacy logo.

As a result, “it feels like Amazon’s following a playbook from five years ago.”

We’re living in the happy-go-lucky era of media mergers and consolidation, "where well-resourced tech-backed companies are cannon balling into the entertainment industry and every company is reorienting itself around streaming,” per Observer.

It’s hard to feel like this onslaught of M&A etches deeper than mega-services collecting spare parts in a muddle of brand identity and strategy.

But then again - this is Amazon we’re talking about. It’s not like the deal is void of all value and, even if it was, a billion-dollar price tag is hardly going to dent the tech giant’s bottom line.