Daily Tech Snippet: Monday, January 4

• Facebook fights for Free Basics in India, global test-case: India has become a battleground over the right to unrestricted Internet access, with local tech start-ups joining the front line against Facebook founder Mark Zuckerberg and his plan to roll out free Internet to the country's masses. The Indian government has ordered Facebook's Free Basics plan to be put on hold while it decides what to do. The program, launched in around three dozen developing countries, offers pared-down web services on mobile phones, along with access to Facebook's own social network and messaging services, without charge. But critics say the program, launched 10 months ago in India in collaboration with operator Reliance Communications, violates principles of net neutrality, the concept that all websites on the internet are treated equally. It would put small content providers and start-ups that don't participate in it at a disadvantage, they say. "India is a test case for a company like Facebook and what happens here will affect the roll out of this service in other smaller countries where perhaps there is not so much awareness at present," said Mishi Choudhary, a New York-based lawyer who works on technology and Internet advocacy issues. Also at stake is Facebook's ambition to expand in its largest market outside the United States. Only 252 million of India's 1.3 billion people have Internet access, making it a growth market for firms including Google and Facebook.

• Uber’s No-Holds-Barred Expansion Strategy Fizzles in Germany: Uber is rapidly expanding its ride-hailing operations across the globe. But here in this city of 690,000 — less than the population of San Francisco, Uber’s hometown — the company recently did something unusual: It retreated. In early November, Uber shut its small office in Frankfurt’s centuries-old city center after just 18 months of operation, mothballing the online platform that had let people in the city hail rides through a smartphone app. The pullback was spurred in part by drivers like Hasan Kurt, the owner of a local licensed taxi business, who had refused to work with the American service. With more than 20 years of experience as a taxi operator, Mr. Kurt said he disliked how Uber barreled into Frankfurt in early 2014, using primarily unlicensed drivers who had not passed the same exams and health checks required of licensed drivers. That low-cost service, UberPop, which is similar to UberX in the United States, faced legal challenges and was eventually outlawed, last March, by German regulators. Uber then tried to recruit licensed operators like Mr. Kurt to build its service within the letter of the law. But Mr. Kurt would not budge. “It’s not part of the German culture to do something like” what Uber did, Mr. Kurt, 45, said over a cup of tea last month during a break in his busy holiday schedule. “We don’t like it, the government doesn’t like it, and our customers don’t like it.” Uber’s withdrawal from Frankfurt is just one of a multitude of retreats by the company — now valued at $62.5 billion — across Europe in recent months. In November, Uber also pulled out of Hamburg and Düsseldorf after less than two years of operating in each of those German cities. In Amsterdam, Uber recently stopped offering UberPop. And in other European cities, Uber faces the prospect of being beaten back — or at least contained. In Paris and Madrid, Uber has been confronted by often violent opposition from existing taxi operators, while in London, local regulators are mulling changes that could significantly hamper Uber’s ambitions there. Uber’s aggressive tactics also turned off potential customers like Andreas Müller, a financial analyst who tried the company’s Frankfurt service after first using Uber on a business trip in Chicago. Mr. Müller said he liked the convenience of paying through his smartphone, but soon turned against the company after reading that it had continued operating in violation of court orders and did not directly employ its drivers, who are independent contractors. “That might work in the U.S., but that’s not how things are done here in Germany,” said Mr. Müller, 37. “Everyone must respect the rules.”

• It’s Amazon and Also-Rans in Retailers’ Race for Online Sales: Two decades after Jeffrey P. Bezos started Amazon in his Bellevue, Wash., garage, his e-commerce juggernaut could be forgiven for letting up on its rapid growth. Not Amazon, though, which steamrolled through 2015, capturing an ever-growing share of United States retail sales. Of every additional $1 Americans spent for items online this year, Amazon captured 51 cents, according to a recent estimate by analysts at Macquarie Research. And of the expected $94 billion growth in all retail sales this year — both in stores and online — Amazon took a staggering $22 billion, or almost a quarter, Ben Schachter, a retail analyst at Macquarie, calculated. Two decades after Jeffrey P. Bezos started Amazon in his Bellevue, Wash., garage, his e-commerce juggernaut could be forgiven for letting up on its rapid growth. Not Amazon, though, which steamrolled through 2015, capturing an ever-growing share of United States retail sales. Of every additional $1 Americans spent for items online this year, Amazon captured 51 cents, according to a recent estimate by analysts at Macquarie Research. And of the expected $94 billion growth in all retail sales this year — both in stores and online — Amazon took a staggering $22 billion, or almost a quarter, Ben Schachter, a retail analyst at Macquarie, calculated. And at times, Amazon has seemed to be in danger of getting trapped in a race to the bottom that it brought on with its steep discounting. “They were just trying to sell more by underpricing everybody,” said Craig Johnson, president of Customer Growth Partners, a retail consulting firm. “But they realized they would never make any money that way. They evolved,” he said. “It’s much a different company than it was five years ago.”

• Bill Miller Is Misfiring on Twitter Options After Boon on Amazon: Bill Miller turned to an unusual strategy in mounting his comeback as a top stock picker, buying options on hard-hit technology companies to make leveraged bets with a big impact on his returns. The tactic paid off in 2013 and 2014 as Apple Inc. and Amazon.com Inc. rebounded and helped lift Miller’s $2.3 billion Legg Mason Opportunity Trust to a top ranking. The veteran manager is having less success so far with a similar wager on Twitter Inc. that he escalated last quarter, when he owned options allowing him to buy $350 million of the stock -- equal to 15 percent of the fund’s assets. The massive wager highlights how some managers are using derivatives to boost profits in mutual funds, tightly regulated investment vehicles that have strict limits on what they can invest in. The technique allows funds to make big wagers with relatively little money up front, though they can lose that money should their bet go wrong. Proponents of the strategy include bond manager Bill Gross, who has said managers need to use leverage to juice up gains in a low-return environment. “You are going to get a much bigger pop to the upside,” said Abraham Goodfriend, founder of Yedid Capital Management, a Miami Beach, Florida-based firm that employs options. “The downside is, if you are wrong you are going to lose all your money” paid for the contracts. Miller bought options on 9 million shares of Twitter in the third quarter, filings show. The drop in value of the options may be one reason the fund lost 4.6 percent over the past month and ranked among the bottom 5 percent of peers, according to data compiled by Bloomberg, though it’s still ahead of 95 percent for 2015. Buying options frees cash to invest elsewhere and allows a fund to bet on a large number of shares with a small down payment, boosting returns if the underlying stock gains. Miller said in an e-mailed response to questions that options occasionally provide more potential reward for the amount of risk being taken than the underlying stocks. “This almost always happens after the stock has gone down significantly, which was the case with” Amazon, Apple and Twitter, he wrote.