Daily Tech Snippet: Monday February 2

• Chinese agency softens criticism of Alibaba on sales of fake goods: It was only two days ago that a Chinese government regulator chastised the Alibaba Group, the e-commerce giant, for failing to curb the sale of fake goods on its sites. Now the two appear to have made up in a hurry. The regulator, the State Administration for Industry and Commerce, said on Friday that its leader, Zhang Mao, had met with Alibaba’s executive chairman, Jack Ma, to discuss cooperating to fight counterfeiting and protect consumers. The agency made its criticism of Alibaba in a report released on Wednesday. But it is now backing away from the findings of that report, calling it a recounting of a July meeting between the two sides and not an official document with legal weight. It is a surprisingly quick turn of events for both Alibaba and the Chinese agency, given the public criticism that the S.A.I.C. delivered to one of its country’s most important Internet players. The S.A.I.C.’s blunt tone disappeared in the Friday statement. The agency described Alibaba as “steadfast and resolute” in fighting the sale of counterfeit goods, though it maintained that e-commerce platforms in China still needed to improve their self-policing. Both sides pledged to work more closely on matters like creating new regulatory mechanisms. “Both sides believe that the regulators and online platforms share the common interest to promote the healthy development of the online commerce industry and creating an online shopping environment where consumers feel safe and satisfied,” the regulator said, according to an English-language translation of its statement. In a post on its corporate blog, Alibaba said it planned to hire 300 people to form an anticounterfeiting task force to bolster its policing staff. A representative for Alibaba said in a statement: “The most recent S.A.I.C. posting speaks for itself. We feel vindicated.”

• Some of the damage might be lasting though - Alibaba stock is down 15% in a week, and class action lawsuits in the US might follow non-disclosure of SAIC meeting before IPO: Alibaba's representatives discussed the SAIC's claims in meetings with the agency's Internet regulation director, Liu Hongliang, in July—about two months before its record-breaking New York Stock Exchange debut. Did Alibaba need to disclose this information before going public? Following the plunge in Alibaba's stock price, which has dropped almost 14 percent since Monday, the class action lawyers are taking aim at the company. Pomerantz, a firm that says it fights "for the rights of the victims of securities fraud, breaches of fiduciary duty, and corporate misconduct," announced yesterday an investigation for Alibaba investors. Rosen Law Firm is investigating allegations the company "may have issued materially misleading information to the investing public," the New York-based firm announced yesterday. The firm "is preparing a class action lawsuit to recover losses suffered by [Alibaba] shareholders." Several other law firms have said they're investigating, too. Responding to the law firms' announcements, Alibaba said today in a statement to Bloomberg that it is a company "with strong values" that "will vigorously defend the truth and our reputation."

• Verizon finally to allow complete opt-out of mobile ‘Supercookies’: (more coverage here)Verizon Wireless, which has been under fire by privacy advocates since late last year, has decided to make a major revision to its mobile ad-targeting program. Users who do not want to be tracked with an identifier that Verizon uses for ad-targeting purposes will soon be able to completely opt out, the company said on Friday. In the past, Verizon allowed users to opt out of the marketing side of the program, but they had no option to disable being tagged with its undeletable customer codes, which critics dubbed “supercookies.” Some security researchers quickly illustrated that third parties, like advertisers, could easily exploit Verizon’s persistent tracking to continually follow a user’s web browsing activities. In a recent interview, Praveen Atreya, a Verizon director who helped develop the technology behind the mobile marketing program, said the company was considering allowing its subscribers to opt out of being tagged with its undeletable customer codes. On Friday, Verizon confirmed this decision. But even if Verizon now allows subscribers to opt-out of having their online activities tracked using a unique customer code, that option may not satisfy privacy advocates who say consumers are unlikely to understand the implications of default tracking. Some say Verizon should have the feature turned off by default and require people to voluntarily switch it on. But whether Verizon ultimately gives its subscribers the choice to opt out or opt in, cyber-security experts say Verizon will still have to grapple with a basic issue: how to prevent third parties from hijacking its unique customer codes for their own purposes?

• Line launches grocery delivery in Thailand, seeks to make jump to eCommerce from messaging as growth slows: (More coverage here) A month after introducing its own Uber-like service in Tokyo, Line — the Japanese messaging service known for its zany cartoon stickers — is taking a first step towards grocery sales and delivery in Southeast Asia, in the style of U.S. startup Instacart. Beginning in Thailand this week, where it claims 36 million registered users, Line will offer up a range of perishable and non-perishable goods via its messaging app. It is initially testing the concept using a daily deals model, which will include three daily deals and two “heavily discounted” offers per week, but there are plans to do more over time. The promotions will be publicized by three existing Line ‘brand’ accounts that have showcased promotions for consumer products since last year — in other words, Line users deliberately opt in for the grocery deals, it isn’t spam that is sent to all. The longer-term plan here is for Line to build out a fuller channel for food (and general) shopping across Southeast Asia. Finally, Line is promising free, next-day delivery for all purchases, although the company isn’t handling this side of the project. aCommerce — a Bangkok-based startup that raised $10.7 million from Docomo and others last summer, and works with Line on other commerce ventures — will provide the logistics and fulfillment backbone. Line claims 92 million active users across Japan, Thailand and Taiwan, and it seems feasible that a mobile commerce play could work in these markets. But its most recent financial report showed new user growth is slowing, and half of its 181 million active users worldwide is located in those three aforementioned countries. That makes the potential adoption of regional and global services somewhat uncertain at this point.

• Spotify seeks to raise $500M at $6-7B valuation, delay IPO: Spotify, the popular streaming music service, has retained Goldman Sachs to raise $500 million in private investment, a move that would probably delay the possibility of an initial public stock offering in the near future.As a result of this latest round of investment, Spotify’s valuation would increase to at least $6 billion, and possibly $7 billion or more, according to a person briefed on the company’s plans, who spoke on the condition of anonymity. In its last fund-raising round, in late 2013, it took in $250 million and was valued at more than $4 billion. Spotify says it now has 60 million users around the world, 15 million of whom pay. On Wednesday, it scored a coup in the digital music market when Sony said it would soon shut Music Unlimited, its failed streaming outlet, and replace it with Spotify.

• Google CFO sounds unconcerned at prospect of browsers replacing Google as default search engine: Patrick Pichette, Google's chief financial officer, says people can change. On Thursday's earnings call, he suggested that people will seek out Google's search engine even if their browsers default to a different one. "If they love Google, they'll continue to find Google, whichever platform, whichever browser," Pichette said on the call. "The way to win in this in the long term is very simple. You just make wonderful products. And when you make wonderful products that are magical, people will find them." That's some magical thinking, but it's probably wrong. In November, Mozilla switched to Yahoo! as the default search engine on Firefox in the U.S. The next month, Google's share of the U.S. search market sank 4 percentage points, the biggest drop since 2009, according to analytics firm StatCounter. That month, Yahoo increased its share by 3 percentage points. Pichette declined to comment on the Mozilla deal. Google isn't in danger of losing its money-printing machine to Marissa Mayer any time soon. Even after that victory last month, the Yahoo chief executive officer has amassed just 10.4 percent of the U.S. search market. Google has 75.2 percent of it—and even more in Europe. There's only so much impact Firefox can have. The once-dominant browser has been left hanging onto about 12 percent of U.S. users, according to StatCounter. And there's still a chance that some Firefox faithful will switch their settings back to Google. The real reason Google investors are biting their nails over the Firefox deal is because Apple could do the same thing. Apple makes a lot of money from Google searches made through its Safari Web browser on the iPhone and iPad. But it's no secret that relations between the two companies are about as deflated as Tom Brady's footballs. Besides dropping Google Maps and YouTube from home screens, Apple went with Microsoft's Bing to power Siri's new search features. Microsoft knows better than anyone that default software settings stick. A few years back, Microsoft researchers discovered that less than 5 percent of users touch any application settings at all.