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Government & Policy

Low-cost hearing aids are now available over the counter in the US • ZebethMedia

Over the summer, Joe Biden issued the “Executive Order on Promoting Competition in the American Economy.” Included in the legislation was a push to make more affordable hearing aids available without prescription. Following a final rule from the FDA, those products are finally arriving on store shelves. A number of major U.S. drugstore chains have announced hardware that’s either available now or coming soon. The list includes a $799 model from Walgreens, a $200 device from Best Buy, a $199 hearing aid from Walmart and a variety of different options from CVS. In most cases, the hardware will be available as both an in-store purchase and online. Per the FDA, the new, prescription-free model will make hearing aids up to $3,000 cheaper in many cases. On the subject of prospected costs moving forwars, the agency writes, Currently, states regulate the personnel who may distribute hearing aids. We have no reason to suppose states will impose more onerous restrictions on hearing aids that will be prescription medical devices as a result of this final rule than are currently imposed on distribution of hearing aids. However, it is possible changes in state regulation of prescription hearing aids as well as potentially increased variation in state regulation of prescription hearing aids may increase the cost of hearing aids that convert to prescription medical devices. Hearing aids are one aspect of the executive order announced back in July to “promote competition in the American economy, which will lower prices for families, increase wages for workers, and promote innovation and even faster economic growth.” The order also includes items designed to lower prescription drug prices, banning or limiting non-compete agreements, expediting airline refunds and cutting the price of internet bills.

Online travel giant Booking.com faces antitrust probe in Spain • ZebethMedia

More tech antitrust activity: Spain’s competition watchdog has opened an investigation into potential anti-competitive behavior by the Dutch online travel agency giant, Booking.com, following a couple of complaints lodged by the Spanish Association of Hotel Managers and the Regional Hotel Association of Madrid. The national competition regulator said today that it will look into whether certain practices by Booking.com constitute an abuse of a dominant position in the provision of intermediation services to hotels — and therefore whether it is imposing unfair trading conditions on hotels located in Spain and imposing commercial policies that may have exclusionary effects on other online travel agencies and online sales channels. The Comisión Nacional de Los Mercados y La Competencia (CNMC) also said it will investigate whether Booking.com’s conduct includes practices that constitute an exploitation of a position of economic dependency of hotels in Spain — and, therefore, amounts to “unfair competition acts affecting public interest due to the distortion of free competition they have produced”, as its press release puts it. “After reviewing the complaints received and information gathered under the preliminary investigation, the Competition Directorate of the CNMC considers that there are grounds to support the possibility that Booking.com B.V. may have breached articles 2 and 3 of the SCA [Spanish Competition Act] and article 102 of the TFEU [Treaty on the Functioning of the European Union],” the CNMC added. Booking.com was contacted for comment. The Spanish watchdog has up to 18 months to conduct its investigation and reach a final decision. It also noted that the opening of formal proceedings does not prejudge the final result. The market power of Booking.com, a veteran of the first wave of Internet startups, in the travel space has long been a cause concern for European Union lawmakers — apparently helping to compel a recent reboot to the bloc’s antitrust regime which is due to kick off next year. Booking.com is a likely contender for being designated as a gatekeeper under this pan-EU Digital Markets Act (DMA) — which would trigger an ex ante regulation of its core platform service, requiring compliance with a set of up-front operational measures and conditions across its regional operations which are aimed at ensuring fair dealing with other businesses that rely on the platform to reach their own customers. However the DMA is unlikely to immediately speed into action next year as the process of designating gatekeepers will take several (or even many) months as the Commission steps up to fulfil a new role regulating Big Tech. That means that, in the meanwhile, national competition probes — such as the one announced today by Spain’s CNMC — have to fill the gap. In this case by relying on established (slower) competition regulation tools which typically require a robust investigation of a complaint prior to any intervention — a process that can take years for any necessary corrective orders to be made.

Shares of Korean internet giant Kakao slide after fire disrupts service • ZebethMedia

The stock price of South Korea’s internet giant Kakao tumbled on Monday after a fire at a data center that cut off power on Saturday, causing several service malfunctions. The blaze at the SK C&C data center, which houses the servers of Korea’s two largest internet companies — Kakao and Naver — disrupted Kakao’s messaging, ride-hailing, payment and game apps, and Naver’s internet search and news services, over the weekend. Some disruption is ongoing — mainly affecting Kakao’s services. On Monday morning, Kakao’s share price dropped more than 9%. Its peer Naver also slid 2% at the opening of trading before recovering. At the time of writing, Kakao said it had restored KakaoTalk, the country’s dominant messaging app — with more than 46 million monthly active users in South Korea as of September 2022 and 53 million globally. On Monday afternoon it also said it had completed recovering its financial services. But some other services are still down. Meanwhile, Naver, which faced partial disruptions as a result of the fire on Saturday, quickly restored most of its operations on Sunday. According to a report by Bernstein, Kakao’s slow recovery process was caused by the company’s lack of owned server infrastructure and “high dependence” on the SK C&C data center. It also highlights Kakao’s lack of a well distributed backup system. The report pointed out that Naver was able to resume its primary services promptly because it has owned server infrastructure and a well-designed backup process. KakaoTalk remains the dominant messaging service in South Korea and the Bernstein report predicts it will maintain its position despite the outage, given how far behind its rivals are in marketshare terms. Additionally, it points out that Kakao’s messaging app is linked to other services such as Kakao bank, payment and ride-hailing services, so users are unlikely to replace the app with less fully featured alternatives like WhatsApp or Telegram, per the report. The second largest messaging app after Kakao in South Korea is FaceBook Messenger but it has only 3.9 million MAU as of September 2022. While Naver’s messenger app, Line, has about 1.6 million monthly active users. In its statement on Saturday night, Kakao said the fire broke out at around 3:30 PM (local time). It added that it is investigating the matter. A statement by Naver on Saturday afternoon said it is aware of issues impacting its services as a result of the fire. South Korean President Yoon Suk-yeol also made public comments on Monday following the incident — remarking that a private company operates KakaoTalk but describing it as practically a national communications infrastructure. Yoon called on the government to investigate the exact causes of the fire. “I respect corporate autonomy and creativity, but that is based on the premise that the market reasonably allocates resources and income in a system of fair competition,” Yoon said. “If a monopoly situation causes market manipulation, the government should take systemic action.”

India launches 75 digital banking units across rural areas in financial inclusion push • ZebethMedia

India on Sunday launched 75 digital banking units in villages and small towns across the country in a move that it said will help bring financial services and literacy to more citizens. The digital banking units, set up in collaboration with over 20 public and private banks, are brick-and-mortar outlets that are equipped with tablets and internet services to help individuals and small businesses open their savings accounts, access government identified schemes, perform verifications, make transactions and avail loans and insurance. The physical outlets, span across all Indian states and union territories, will provide services in two modes. “Self-service mode will be available 24x7x365 days,” said Shaktikanta Das, Governor of Reserve Bank of India, in a virtual conference. “The banks are also free to engage the services of digital business facilities and correspondence to expand the footprint of DBUs,” he said. Das said the units will also offer a digital assistance zone to answer queries from individuals and small businesses and hear their grievances. Availing banking services has traditionally been a struggle for people living in villages and small towns, said Prime Minister Narendra Modi. Even as more than a billion bank accounts exist in India, people living in remote areas have had to typically take a day off from the work to visit a nearby city for their banking related work. “We have given top priority to ensure that banking services reach the last mile,” he said. “We not only removed the physical distance but, most importantly, we removed the psychological distance.” The digital banking units are part of the Modi government’s years-long efforts to serve people in the far flung areas of the country. The government launched Jan Dhan Yojana, a scheme to get all citizens access to banking and financial services in 2014. More than 470 million bank accounts have been opened as part of the scheme, “Today the entire country is experiencing the power of Jan Dhan Bank accounts,” said Modi. “This opened the way for loans for the poor without collateral and provided Direct Benefit Transfer to the accounts of the target beneficiaries. These accounts were the key modality for providing homes, toilets, gas subsidy, and benefits of schemes for farmers could be ensured seamlessly. The IMF has praised India’s digital banking infrastructure. The credit for this goes to the poor, farmers and labourers of India, who have adopted new technologies, made it a part of their lives,” he said.

Starlink isn’t a charity, but the Ukraine war isn’t a business opportunity • ZebethMedia

What appeared earlier this year to be a selfless act of technotopianism, the widespread deployment of Starlink terminals in Ukraine, has soured as SpaceX and governments disagree on who ultimately should foot the bill of this unprecedented aid campaign. Some expect Elon Musk — one of the richest men in the world — to cough up, while others say the world’s richest military should as well. Both claims have merit, but this game of financial chicken will cost Ukrainian lives. The effort began in late February, just days after Russia invaded Ukraine. Musk said Starlink terminals were “on the way” but provided little detail. Many took this minimal, rather promotional approach to mean what it clearly implies: that SpaceX was providing the terminals itself, either gratis or with some understanding as to their purchase. The latter proved to be the case as it came out that the U.S. Agency for International Development had paid for some, the Polish and other European governments for more, and various militaries and NGOs contributing for the cost of transport, installation, and apparently the monthly fees for the service itself. USAID described “a range of stakeholders” providing a first wave of support totaling around $15 million at the time. But the costs weren’t a one-time thing. Musk recently tweeted that 25,000 terminals have been deployed in Ukraine, 5 times the original shipment — thousands have been destroyed in the fighting, and more are needed. The connectivity costs $4,500 per month, supposedly, for the highest tier of service. Going by estimates noted by CNN, that adds up to around $75 million per month in ongoing costs. Some understandably questioned the wisdom of relying on this new and unproven tech in a battlefield, but reports from the country’s military suggest it has been very helpful. The fact is the capability was accepted in the spirit it was offered, and used to the most of its capacity, but the length and scale of the war have caused the situation around Starlink to evolve beyond its original scope. It’s true that SpaceX can’t be held completely accountable for tens of millions of dollars in costs, free service, or lost income (however the money should be defined). But it’s no good playing the victim either: they went into this eyes open with the intention of providing an expensive and essential service in a war-torn country, apparently with no real plan to cover the cost. On the other hand, the governments walked into this too. They can’t possibly have expected SpaceX to cover the cost of the hardware and software on its own, or if they did, they should have gotten it in writing. But having funded part of it, does that mean they’re on the hook for all of it? Meanwhile Ukraine’s military has come to rely on the service, and are right in saying that whatever happens, whoever has to write whomever an I.O.U., the terminals must stay on — or soldiers defending their country will be put in direct and immediate danger. This 3-way standoff has no easy resolution, so let’s start with what we know needs to happen: Starlink connectivity must continue in Ukraine at nominal cost to them, not forever but indefinitely. Any other outcome is too disastrous for everyone involved. So the internet stays on. Who pays for it? If SpaceX wants anyone to take its request seriously, it needs to play ball, and that means transparency as to the actual costs and payments involved. It goes without saying that Musk must discontinue his vexatious, narcissistic antics — too much is at stake for him indulge in his usual egotism. Taxpayers in a dozen countries have already paid for it and will in all likelihood continue to for months, if not years. What are the actual costs involved? $4,500 per terminal for access seems excessive, for one thing — that’s retail rate for early adopters, not a bulk rate for government partners in a life-saving operation. The Pentagon may not be a paragon of thrift but to charge full price in this situation is unseemly. (Not to mention this is probably the best possible PR the company could get while it’s trying to drum up demand for its real consumer service. Money cannot buy this kind of exposure.) Governments also need to pick a number and be firm about what can and can’t be provided as part of the aid package. Ukrainian officials would no doubt love it if every available Starlink terminal was shipped next day to the country, but that’s not possible, the way other forms of aid that would be helpful are not possible, for instance certain military assets that are too costly or difficult to spare. The cost of supporting the Ukrainian defense is large, and the U.S. is dedicating billions to that cause. How much of that money will be earmarked for Starlink connectivity? Pick a number and start negotiating. Is it $10 million per month? $20 million? What do those costs depend on, how will they be tracked? SpaceX can take that sum and provide an agreed-upon level of service and hardware. As much as everyone appreciates the fast movement on this back in February, a few hasty phonecalls and “we can make that happen” conversations does not constitute a long-term plan for covering the cost of a deployment that has grown to be worth hundreds of millions of dollars and numerous Ukrainian lives. Like any compromise, it will leave everyone a bit unhappy — but it won’t leave anyone disconnected, shafted, or dead. This complicated and awkward situation is the result of inadequate preparation and communication by a constantly shifting group of stakeholders. What is needed from SpaceX and its government partners is not finger-pointing but transparency and commitment.

Big Tech and industry lobby groups accused in EU transparency complaints • ZebethMedia

Members of the European Parliament have lodged complaints against three tech giants, Amazon, Google and Meta, with the EU’s Transparency Register — aka, the oversight process that’s intended to track lobbying activity aimed at the bloc’s lawmakers — accusing the trio of breaching the lobbying transparency rules by using smaller front organizations to press their interests opaquely. The complaints, which were reported earlier by Politico and Bloomberg, also take aim at a series of tech industry associations and lobby groups — including a number whose names imply they represent the interests of startups and small businesses — that the MEPs allege have been involved in a Big Tech astroturfing operation targeted at two major pieces of EU digital regulation, the Digital Services Act (DSA) and the Digital Markets Act (DMA), per documents we’ve reviewed. Tech trade association the Computer & Communications Industry Association (CCIA), online ad industry body the IAB Europe, and SME and startup lobby groups Allied for Startups, SME Connect and the Connected Commerce Council (3C) are also named in the astroturfing complaints — which have been filed by three social-democrat lawmakers: Paul Tang, René Rapsi and Christel Schaldemose. The MEPs are calling for the accused tech giants’ access to the European Parliament to be revoked if their complaints are upheld. We understand nine complaints have been filed in total (two targeting Google). Deceiving lawmakers with fake lobby groups harms the democratic process. That’s why @SchaldemoseMEP @repasi and I tabled complaints triggering official investigations. If proven, access to parliament for involved Big Tech companies needs to be denied — Paul Tang (@paultang) October 14, 2022 While the DSA and the DMA have both now been adopted, the EU lawmakers remain concerned about the impact on future digital policymaking if non-transparent Big Tech policy influenceOps are not rooted out. The MEPs’ complaints follow a report back in April, compiled by civil society groups Corporate Europe Observatory and Global Witness using freedom of information requests, that revealed how a raft of tech giants sought to influence the two major EU digital policy files — spending big on pushing self-interested amendments to the (then) draft regulations. Some of this Big Tech lobbying activity included injecting detailed suggestions into late-stage closed-door policy discussions between EU institutions — presenting lawmakers with suggested wording for amendments aimed at watering down provisions that directly threaten their interests — such as in areas like tracking-based advertising. (In the event, the DSA and DMA were passed with some restrictions on tracking-based advertising, though not the outright ban a number of MEPs had been pushing for.) The complaints also cite a Medium post by Georg Riekeles — a Brussels-based director of the European Policy Centre think tank (which lists a few tech giants as members itself) and a former EU official himself — who warned this summer that: “As the EU debated the DSA and DMA package, front groups and other forms of hidden lobbying were swarming. I dare say never before had Brussels seen efforts at such a scale and with such brazenness. Many of practices deployed are not only totally out of line with the established code of conduct in interest representation but also with the most basic ethical and behavioural principles in society.” “As public scrutiny and research uncovered in the case of ‘Big Tobacco’, outsized vested interests create ecosystems of thought and influence to manipulate civil society and policymakers,” Riekeles’ blog post went on. “At this point, Big Tech’s interference strategies need to be systematically monitored, and actions taken to counter them. The EU’s capacity to act in defence of fundamental interests starts with the independence and transparency of EU institutions but requires also a wider societal ecosystem of tech control.” Systematic monitoring of Big Tech lobbying is exactly what the EU lacks, the MEPs’ complaints suggest, as transparency rules that are intended to spotlight corporate lobbying are being systematically circumvented by the use of a sprawling network of third parties funded by (or otherwise press-ganged into alignment with) well-resourced tech giants in order to project their interests by making their talking points resemble a grassroots lobbying campaign, rather than what is actually behind the effort: Gigantic self-interest. Such astroturfing tactics very obviously erode accountability and subvert democracy — enabling the corporate interests with the deepest pockets and greatest market power to build the most potent influence operations, by expanding the reach and interconnectedness of their third party networks through which they can channel and amplify their lobbying firepower while keeping their own brand name ‘clean’ at a safe distance. A couple of lobby campaigns cited in the complaints — one called ‘Targeting Startups‘ (which is now busy taking aim at a fresh EU digital policy proposal, the Data Act); and a second called the ‘Coalition for Digital Ads of SMEs‘, which ostensibly promoted small business interests in tracking-based advertising — are shown in one of the documents as not themselves registered in the EU transparency register but having a long list of backers/funders; some of which are in the transparency register (including some entities that list Big Tech entities as their members/backers), while others are not, so their funding sources are not declared. “You can only get an access badge for EU institutions [as a lobbyist] if you are registered [in the transparency register]. But as Google, Amazon and Meta are in the register they have agreed to abide by the codes of conduct. And the codes demand all registrees to not obstruct the register itself as well. So having another organization lobbying on their behalf is obstructing,” Tang told us, explaining how transparency concerns arise from this interlinked mesh of declared and non-declared interests lobbying EU policymakers. “What we are dealing with here is all kinds of branch organizations / national organizations / EU lobby organizations etc, that are actively promoting the narrative coming from Big Tech — and the only thing we know is that someone called the 3C contacts us and if we look them up in the transparency register they

Coroner’s report into UK schoolgirl’s suicide urges social media regulation • ZebethMedia

A ‘Prevention of Future Deaths’ report following a U.K. coroner’s inquest into the suicide of British schoolgirl, Molly Russell, who killed herself almost five years ago after viewing content on social media websites that promoted self harm, has recommended the government looks at requiring age verification on sign-up to social platforms to ensure the separation of age-appropriate content for adults and children. The inquest into Russell’s death heard she binge-consumed content about suicide and depression on sites including Instagram and Pinterest — some of which was algorithmically curated for her, based on the platforms tracking her viewing habits — before taking her own life, aged 14. Coroner, Andrew Walker, concluded last month that “negative effects of online content” were a factor in her death, adding that such content “shouldn’t have been available for a child to see”. His ‘Prevention of Future Deaths’ report — which was made public today after being sent to a number of social media firms and to the government — also recommends that lawmakers consider setting up of an independent regulatory body to monitor online platform content, paying special attention to children’s access to harmful content and to content-shaping elements like algorithmic curation and advertising. Additionally, the coroner’s report recommends that the government reviews provisions for parental controls on social media platforms accessed by kids and considers powers that would provide caregivers with access to content viewed by children. “I recommend that consideration is given to enacting such legislation as may be necessary to ensure the protection of children from the effects of harmful online content and the effective regulation of harmful online content,” he adds, before urging platforms not to wait for a change in the law.  “Although regulation would be a matter for Government I can see no reason why the platforms themselves would not wish to give consideration to self-regulation taking into account the matters raised above.” Tech companies including Meta (Instagram’s owner), Pinterest, Snap and Twitter have been given 56 days to respond to the coroner’s report — with a deadline of December 8 for them to provide details of any actions taken or proposed (setting out a timetable for proposed actions), or else they must provide the coroner with an explanation why no action is being proposed by them. We reached out to the companies for a response to the coroner’s report. At the time of writing Meta had not responded. A Pinterest spokeswoman told us it has received the report and plans to respond by the due date. In a statement, the social sharing site added: Our thoughts are with the Russell family. We’ve listened very carefully to everything that the Coroner and the family have said during the inquest. Pinterest is committed to making ongoing improvements to help ensure that the platform is safe for everyone and the Coroner’s report will be considered with care. Over the past few years, we’ve continued to strengthen our policies around self-harm content, we’ve provided routes to compassionate support for those in need and we’ve invested heavily in building new technologies that automatically identify and take action on self-harm content. Molly’s story has reinforced our commitment to creating a safe and positive space for our Pinners. A Snap spokeswoman also confirmed it has received a copy of the Coroner’s report and said it’s reviewing it and will respond within the requested timeframe. A spokeswoman for Twitter also confirmed it has received the report too but said the company has nothing further to add. The U.K. government has already proposed legislation aimed at making the U.K. the safest place to go online in the world, as it touts its plan for the Online Safety Bill — a piece of legislation that’s been years in the making and has a stated focus on children’s safety. The bill also empowers a content-focused internet regulator, Ofcom, to enforce the rules. However the Online Safety Bill’s progress through parliament was put on pause by the recent Conservative Party leadership contest. Since then, the new prime minister, Liz Truss, and the new secretary of state she appointed to head up the department, Michelle Donelan, have extended that pause by freezing the bill to make changes — specifically to provisions tackling the area of ‘legal but harmful’ content in response to concerns about the impact on freedom of expression. There is no fresh timetable for restarting the bill. But with limited parliamentary time left before a general election must be called, and — more pressingly — widespread chaos across Truss’ government, it is looking increasingly likely the bill will fail to pass — leaving platforms to continue self regulating the bulk of their content moderation. (An age appropriate children’s design code is being enforced in the UK, though.) We contacted the Department for Digital, Culture, Media and Sport (DCMS) for a response to the coroner’s report. A spokesman at DCMS told us it would send a statement “shortly” — but six hours (and minus one chancellor) later we’re still waiting to receive it. Calls to the DCMS press office line were being routed to voicemail. (But SoS Donelan was spotted busily tweeting the latest Truss ‘hold-the-fractious-government-together’ line — which includes the unfortunate appeal that we “must come together and focus on delivering”) In a statement to the press following the coroner’s report, Molly Russell’s father Ian called for social media firms to get their house in order without waiting to be ordered to do so by unruly lawmakers. “We urge social media companies to heed the coroner’s words and not drag their feet waiting for legislation and regulation, but instead to take a proactive approach to self-regulation to make their platforms safer for their young users,” he said, adding: “They should think long and hard about whether their platforms are suitable for young people at all.”

NASA’s DART spacecraft bumped an asteroid off its orbit • ZebethMedia

The demise of a spacecraft is usually something rather poignant. But two weeks ago, NASA celebrated one’s destruction. On September 26, NASA executed the final stage of the Double Asteroid Redirection Test (DART), in which a spacecraft intentionally crashed into the asteroid Dimorphos to investigate whether such an impact could deflect an Earth-bound stellar object. A successful collision was the first cause for celebration, but now there’s even more reason to cheer. NASA has officially determined the DART mission a success, revealing in a press conference today that Dimorphos’ orbit has changed significantly due to the impact. In crashing DART into Dimorphos, planetary defense researchers hoped the spacecraft’s kinetic energy would transfer to the asteroid, altering its path. In theory, the same method could be used to protect Earth from an incoming asteroid. (For what it’s worth, neither Dimorphos nor the larger asteroid Didymos, which it orbits, pose a threat to our planet.) For mission success, DART needed to change Dimorphos’ nearly 12-hour orbital period around Didymos by at least 73 seconds. After two weeks of observations, the team revealed a 32-minute change in Dimorphos’ orbital period — more than 25 times longer than the benchmark for success. “This result is one important step toward understanding the full effect of DART’s impact with its target asteroid,” Lori Glaze, director of NASA’s Planetary Science Division, said in a press release. “As new data come in each day, astronomers will be able to better assess whether, and how, a mission like DART could be used in the future to help protect Earth from a collision with an asteroid if we ever discover one headed our way.” The DART team will continue to observe Dimorphos, gathering data from ground-based observatories; the Italian Space Agency’s LICIACube satellite, which imaged the collision in close range; and, eventually, the European Space Agency’s Hera mission, which is scheduled to survey Dimorphos in about four years. The image at top from LICIACube shows debris pluming into space from the impacted asteroid. “DART has given us some fascinating data about both asteroid properties and the effectiveness of a kinetic impactor as a planetary defense technology,” said Nancy Chabot, the DART coordination lead from the Johns Hopkins Applied Physics Laboratory, which managed the mission for NASA. “The DART team is continuing to work on this rich dataset to fully understand this first planetary defense test of asteroid deflection.” While we’re a long way off from full-fledged planetary defense capabilities, DART has at least demonstrated that we probably won’t need to send Bruce Willis into space to protect us — an autonomous spacecraft should do the trick.

Pakistan strips YC-backed Tag of fintech services, orders to pull apps • ZebethMedia

Pakistan’s central bank on Friday revoked the in-principle and pilot operations approval of Tag to operate as an electronic money institution in a move that poses existential threat to the firm. State Bank of Pakistan said in an order that it is revoking Tag’s approval to operate as an electronic money institution, the permission that is required for entities to offer innovative, user-friendly and cost effective low-value digital payments instruments such as wallets, cards and contactless payments. The central bank has also ordered the startup to close all customers’ wallet accounts and pull its apps from the app stores with immediate effect. The central bank’s action is in response to Tag violating regulatory requirements and “other concerns” that emerged during the pilot operations of the firm, it said. The decision has been taken to “protect the interest of the public at large,” it added. The regulatory action follows a months-long probe into Tag, which offers banking and financial services such as contactless payment, cards and wallets to users in Pakistan. The startup has been accused of forging documents to the central bank, according to an earlier investor letter obtained by ZebethMedia. The central bank ordered Tag in August to “immediately” refund all funds of customers. Tag is among the most valuable startups in Pakistan. It was valued at $100 million in its seed financing round in September last year. The startup counts Liberty City Ventures, Canaan Partners, Y Combinator, Addition and Mantis among its backers. The State Bank of Pakistan did not immediately respond to a request for comment via phone and email. Friday’s action is another blow to the nascent but fast growing startup ecosystem in Pakistan, which clocked record funding last year. Airlift, once the most valuable startup in the South Asian market, shut down in July this year after it failed to secure fresh funding. Tag’s chief executive couldn’t be immediately reached for comment. The startup will explore appealing the State Bank’s decision, a source with direct knowledge of the matter told ZebethMedia.

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