Enforcement Directorate targets Amazon & Flipkart

Written by: Aarthi Ramnath, Aakriti Anand, Raghav Bikhchandani & Yash Budhwar

Enforcement Directorate targets Amazon & Flipkart

US corporate giants often run into trouble with antitrust agencies—but this time, they’re fallen foul of law enforcement. The Enforcement Directorate (ED) is investigating links between Amazon and Flipkart (owned by Walmart) and third party sellers on their platforms: “The investigation (under FEMA) has revealed that most of their preferred sellers are either their former employees or kin of former associates/employees.” This means the companies exercise “direct control” over these companies. Amazon and Flipkart even control some of their bank accounts.

The fraud is blatant, according to ED officials:

The agency quizzed a preferred seller of one of the e-commerce giants. His questioning revealed that while the seller’s annual turnover ran into over a few thousand crores, his annual profit was merely Rs 20 lakhs. The said seller in question lives in a two-room apartment.

ED claims to have evidence that Amazon and Flipkart directly manage profit margins, warehouses etc of these companies.

Reminder: According to foreign direct investment laws, e-commerce platforms cannot store goods from sellers—and sell them directly to consumers. They must act strictly as online platforms for third-party brands. The rules also say that no single seller should account for more than 25% of a platform’s sales. The ED claims that all these laws have been broken.

Also this: The two companies ran into trouble in the past for egregious violations. Example: Flipkart’s biggest seller—WS Retail—was, in fact, started by its founders Sachin Bansal and Binny Bansal—driving more than 60% of the sales on the platform. In 2021, authorities threatened to slap a Rs 11,393 crores ($1.35 billion) fine—when the Bansals falsely claimed to have cut all ties.

The bigger picture: Antitrust agencies have been accused of favouritism toward Indian brands—punishing multinationals like Amazon while giving Mukesh-bhai a free pass, for example. But that doesn’t mean they are innocent.

Reading list: Economic Times has everything you need on the raids and the latest allegations made by the ED. Reuters has more on Amazon’s past violations—while New Indian Express details the WS Retail saga.

AI shocker: Is machine training a myth?

The context: All the hype over Large Language Models (LLMs) relies on a core premise: That machines get better with ‘training’. It is why companies like Meta and OpenAI dismiss ‘hallucinations’—a polite word for outright false information served up by chatbots. Hey, they’re still learning!

What happened now: An investigation by The Information shows that the LLMs may not be improving all that much. Unnamed OpenAI researchers offers this unwelcome bit of news:

Orion, the company's codename for its next full-fledged model release, is showing a smaller performance jump than the one seen between GPT-3 and GPT-4 in recent years. On certain tasks, in fact, the upcoming model “isn't reliably better than its predecessor,” according to unnamed OpenAI researchers cited in the piece.

In fact, the performance jump between GPT-4 and GPT turbo isn’t that large either.

Point to note: Experts like Gary Marcus have been arguing that LLM models have reached the point of diminishing returns—where increasing scale no longer offers greater payback. Below is a graph of how well various generations of OpenAI’s GPT have performed on New York Times’ game Connections:

What this really means: The ‘scaling laws’ assume that LLMs will get better as long as you increase their computing power and training data. But the real limitation may be this:

A large part of the training problem.. is a lack of new, quality textual data for new LLMs to train on. At this point, model makers may have already picked the lowest hanging fruit from the vast troves of text available on the public Internet and published books.

One possible solution: Instead of building large AI models, companies may start building smaller ones for specific tasks. The original Information piece is paywalled, but Ars Technica has an excellent analysis of its implications. Also read: Gary Marcus on the lack of progress in LLM learning.

Speaking of Big Tech: The US Department of Justice plans to pressure Google to sell Chrome—as a remedy for its monopolistic practices. In a recent landmark judgement, a US court ruled that Google was guilty of misusing the dominance of its search engine:

Owning the world’s most popular web browser is key for Google’s ads business. The company is able to see activity from signed-in users, and use that data to more effectively target promotions, which generate the bulk of its revenue. Google has also been using Chrome to direct users to its flagship AI product, Gemini, which has the potential to evolve from an answer-bot to an assistant that follows users around the web.

The judge has not laid out the punishment for the violations as yet—which is what the Justice Department hopes to influence. If it succeeds, Chrome could be sold for around $20 billion. Bloomberg News via Business Standard has the best reporting—and Quartz has more.

The future of news: Influencers not journalists?

According to a new Pew survey, one in five Americans get their news from influencers—who have no background or knowledge of journalism. Translation: People like Joe Rogan—or Dhruv Rathee, if this was an Indian survey. The trend was even more pronounced among younger people (37%). In the US, many of these news-fluencers are rightwing. The more worrying bit: The shift has not moved the needle on the gender gap in news: 63% of these influencers are men—only 30% are women. The gap is most pronounced on X and Facebook.

Why this matters: “expect legacy news outlets that are losing viewers and subscribers to start partnering up with popular influencers, no experience necessary”—which isn’t good news for journalists. Axios has lots more on the study. (NBC News)

Can Covid shrink cancer tumours?

During the pandemic, doctors noticed that cancer patients with severe Covid infections saw their tumours shrink. A new study has revealed the reason why. When you have cancer, your monocytes—a special kind of immune cells—no longer do their job of alerting your immune system to the presence of pathogens. In fact, they become protectors of tumours:

[C]ancer cells can co-opt monocytes —“like a demon summoning forces,” says [Ankit] Bharat—and form an immune wall protecting the tumour from being discovered and attacked by additional immune defences.

The SARS-CoV-2 virus flips their behaviour right back:

They look the same, and are still recruited to the tumour sites, but instead of protecting the cancer cells, they start to bring specific natural killer cells—which are the body’s main cells that kill cancer—to these tumor sites. So where before the cancer was brainwashing the monocytes into protecting the cancer, the virus now helps them to attack cancer.

How cool is that? TIME has more on why this happens—and what it implies for cancer treatments.

Moving on to fat cells: New research has revealed a surprising reason for the ‘yo-yo effect’—where we tend to put back the weight we’ve lost. Turns out fat cells “remember” their previous state—and return to it more quickly:

The analysis showed that fat cells were affected by obesity in a way that altered how they responded to food, potentially for years. In tests, the cells grew faster than others by absorbing nutrients more swiftly… “The memory seems to prepare cells to respond quicker, and maybe also in unhealthy ways, to sugars or fatty acids.”

Point to note: From an evolutionary point of view, the yo-yo effect helps maintain body weight during periods of food scarcity. The Guardian has lots more on the study.

Farewell, Rafa!

Rafael Nadal finally bid farewell to professional tennis. Last month, he said the Davis Cup would be his last tournament—because he didn’t feel that he could compete to win anymore. His last match—which he lost yesterday in straight sets 6-4, 6-4 to the Netherlands’ Botic van de Zandschulp—may have confirmed the wisdom of his decision. But the adoring crowd made it the sweetest defeat in his career:

There were the usual tributes—the best of which was his bro-love Roger Federer’s emotional letter—which takes us back to this lovely throwback moment:

The worst: Nike’s shameless merchandising play—a Rafa kit for other Nike-paid tennis players—which they flaunted on the court. Example: Lorenzo Musetti:

A more tasteful tribute: The Nike ad below.

Also check out ATP’s cool mashup of Nadal’s most memorable shots. (The Guardian)

What caught our eye

business & tech

The Verge has a must-read insider look into Elon Musk’s lawsuit against OpenAI—featuring emails that expose the startup’s rocky origins.
New York Times has a good read on how Substack is betting on political content and recruiting stars, but still struggling to turn a profit.
Say hello to El Capitan—the world’s newest most powerful supercomputer that will be used to help build nukes.
Coming in 2025: Reliance-funded Addverb’s first humanoid robot, using Jio’s AI platform.

sports & entertainment

To no one’s surprise—tickets to Coldplay’s newly added Ahmedabad concert are being resold to the tune of Rs 10 lakh on the secondary market.
Filmgoers, brace yourselves for screenings inside inflatable theatres at the International Film Festival of India (IFFI) in Goa—which commences today.
Shekhar Kapur has announced plans to launch an AI-focused film school in Mumbai’s Dharavi slum.
The propaganda film machine continues with sarkaari stamps of approval—this time, Madhya Pradesh has declared Godhra riots film ‘The Sabarmati Report’ as tax free.
The Hindu has a cool feature on Tadam Gyadu, a young graphic artist from Arunachal Pradesh who’s gone from sketching on the walls of his mud house to working for Marvel Comics.
Balle balle! India’s women’s hockey team has reached the final of the Asian Champions Trophy after beating Japan 2-0. Our final opponents: China.
Oscar-winning composer AR Rahman and wife Saira Banu have announced their separation after 29 years of marriage, citing emotional strain in their relationship.
Vulture has a good read on Murakami´s late-career struggles, with ´The City and Its Uncertain Walls´ epitomising the shift from “quirky brilliance to overlong, underwhelming maximalism.”

as for the rest

China’s assault on political dissenters in Hong Kong continues—45 pro-democracy activists have been sentenced up to 10 years in prison.
The incoming Trump administration reportedly wants to unleash driverless cars across the US, a move that would benefit his new bestie Elon Musk first and foremost.
An update on the harrowing mass rape case in France—Gisèle Pelicot says that it is time the masculine society alters the way it looks at rape, in her final statement to the court.
In a groundbreaking optical experiment, scientists have discovered that under the right conditions, even lasers can cast shadows.
Indian Express has a must-read on how a small village in Manipur—that had escaped the bulk of the violence that has engulfed the state since last year—became a new battlefront earlier this month.
Unsurprisingly, VIP culture remains prominent in India despite PM Modi’s promise to eradicate the practice.
The Tirupati Temple board has issued a ‘take voluntary retirement or seek transfer’ ultimatum to its non-Hindu workers.
In a bizarre incident, masked men reportedly broke into farm buildings at Windsor Castle near the residence of Prince William and Kate Middleton.
In light of the lame duck Biden administration allowing Ukraine to use US missiles to strike Russian territory, Putin has signed a revised nuclear doctrine for Russia.
Ukraine used US-supplied ATACMS missiles to strike a Russian ammunition depot in Bryansk, marking the first attack on Russian territory with these weapons.
Nearly 182 million children in low-and-middle-income countries lack access to adequate nurture.
A Pennsylvania school has shut, in light of an explicit deepfake scandal.
Continuing a recent spate of violent attacks, a driver rammed an SUV into schoolchildren and pedestrians outside a primary school in Changde, China, injuring several.
Twelve BJP MLAs—including nine without explanation—skipped a Manipur CM meeting addressing the state's ethnic conflict, signalling discontent over the government´s handling of the issue.
The presence of water usually offers hope for alien life. But a controversial research paper suggests we may be killing life on Mars—by introducing water to its surface.

Five things to see

One: BJP General Secretary Vinod Tawde was allegedly caught distributing cash for votes a day before Maharashtra goes to polls. EC officials reportedly found close to Rs 10 lakh (1 million) in his hotel rooms, and a diary with a note to distribute Rs 15 crore (150 million) to prospective voters. The video of Tawde’s ambush has since gone viral. (Indian Express)

Two: Paul Mescal reminded us why we love the Irish. Watch him respond to this question about his encounter with Charles—at the premiere of ‘Gladiator II’. (Independent UK)

Three: This video was made by animating 10,946 post-it notes—by artist Daren Jannace who created 30 doodles a day over a year. (Moss and Fog)

Four: Here’s the trailer for Sabrina Carpenter’s upcoming special, ‘A Nonsense Christmas’ which is set to stream on Netflix on December 6. (Hollywood Reporter)

Five: Also worth checking out: this trailer for Netflix’s upcoming true crime series ‘Apple Cider Vinegar’—based on the true-ish story of wellness guru and fraud Belle Gibson. (Empire)