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Swedish tech scene cheers $1bn investment

More than one billion dollars has already been invested in Sweden's tech scene in 2015, according to a new report tracking funding flowing into the Nordic country.

Swedish tech scene cheers $1bn investment
Swedish kronor, hot off the press. Photo: Riksbanken/TT
The money has come from around 180 investors, according to Industrifonden, the Swedish venture capital fund that carried out the research.
 
“The Swedish startup sector is booming and continues to punch above its weight in terms of global winners,” the report concludes.
 
It adds that business angels, international hedge funds and corporate investors have all stumped up money for the growing tech scene so far in 2015, with foreign donors participating in about 40 percent of all Swedish funding rounds.
 
Among deals involving international participation, investment from the USA was most common, followed by the UK.
 
But the research suggests that a few wealthy Swedish individuals or companies remain most influential, with Sweden's top ten most active investors involved in half of all deals.
 
Music technology, software and ecommerce were among the key sectors to attract investment.
 
The news comes as a global buzz continues around Swedish startups, especially those in the capital.
 
Following in the footsteps of the likes of Skype, Spotify and Mojang, Stockholm is fast becoming one of Europe's biggest tech hubs. According to separate recent research for investment firm Atomico, Stockholm has the largest number of billion dollar companies per capita outside of Silicon Valley.
 
Other European cities are also increasingly viewing the Swedish capital as a strong source for international talent, with leading business and technology group Berlin Partner recently linking up with Visit Berlin to try and convince Stockholm-based startups to relocate to Germany.
 
Jessica Stark, founder and CEO of SUP46, a Sweden-based startup members' group told The Local in September that the initiative was “a great validation of our startup scene (…) a natural development given the amount of exciting startups we have here.”
 
But there are ongoing concerns about Sweden's infrastructure, most notably its current accommodation shortage, as the startup scene continues to grow.
 
“The housing market is a bit tricky but there is help to be had,” Julika Lamberth, Business Development Manager for Stockholm Business Region, told The Local last week.
 
She said the state-funded organisation – set up to drive investment to the city – was consulting with businesses and international professionals in the city to analyse the problem. This includes stepping up efforts to link tech firms with local municipalties and real estate companies in the area.
 
“We are a facilitator and we can connect interesting players together (…) to make it easier for international companies to continue to attract international talent,” she added.

TECH

Cookie fight: Austrian activist in tough online privacy fight

Five years after Europe enacted sweeping data protection legislation, prominent online privacy activist Max Schrems says he still has a lot of work to do as tech giants keep dodging the rules.

Cookie fight: Austrian activist in tough online privacy fight

The 35-year-old Austrian lawyer and his Vienna-based privacy campaign group NOYB (None Of Your Business) is currently handling no fewer than 800 complaints in various jurisdictions on behalf of internet users.

“For an average citizen, it’s almost impossible right now to enforce your rights”, Schrems told AFP. “For us as an organisation, it’s already a lot of work to do that” given the system’s complexity due to the regulators’ varying requirements, he added.

The 2018 General Data Protection Regulation (GDPR) imposes strict rules on how companies can use and store personal data, with the threat of huge fines for firms breaching them.

While hundreds of millions of euros in fines have been imposed following complaints filed by NOYB, Schrems said the GDPR is hardly ever enforced. And that’s a “big problem”, he added.

He said the disregard for fundamental rights such as data privacy is almost comparable to “a dictatorship”. “The difference between reality and the law is just momentous,” Schrems
added.

‘Annoying’ cookies

Instead of tackling the problems raised by the GDPR, companies resort to “window dressing” while framing the rules as an “annoying law” full of “crazy cookie banners”, according to Schrems.

Under the regulation, companies have been obliged to seek user consent to install “cookies” enabling browsers to save information about a user’s online habits to serve up highly targeted ads.

Industry data suggests only three percent of internet users actually approve of cookies, but more than 90 percent are pressured to consent due to a “deceptive design” which mostly features “accept” buttons.

Stymied by the absence of a simple “yes or no” option and overwhelmed by a deluge of pop-ups, users get so fed up that they simply give up, Schrems said. Contrary to the law’s intent, the burden is being “shifted to the individual consumer, who should figure it out”.

Even though society now realises the importance of the right to have private information be forgotten or removed from the internet, real control over personal data is still far-off, the activist said. But NOYB has been helping those who want to take back control by launching
privacy rights campaigns that led companies to adopt “reject” buttons.

 Shift of business model 

Regulators have imposed big penalties on companies that violated GDPR rules: Facebook owner Meta, whose European headquarters are in Dublin, was hit with fines totalling 390 million euros ($424 million) in January.

One reason why tech giants like Google or Meta as well as smaller companies choose against playing by the GDPR rules is because circumventing them pays off, Schrems said.

Thriving on the use of private data, tech behemoths make “10 to 20 times more money by violating the law, even if they get slapped with the maximum fine”, he added.

Contacted by AFP, both companies said they were working hard to make sure their practices complied with the regulations.

Schrems also accuses national regulators of either being indifferent or lacking the resources to seriously investigate complaints. “It’s a race to the bottom,” Schrems said. “Each country has its own way of not getting anything done”.

Buoyed by his past legal victories, Schrems looks to what he calls the “bold” EU Court of Justice to bring about change as it “usually is a beacon of hope in all of this”.

Meanwhile, the European Commission is considering a procedures regulation to underpin and clarify the GDPR.

In the long-run, however, the situation will only improve once large companies “fundamentally shift their business models”. But that would require companies to stop being “as crazy profitable as they are right now,” Schrems said.

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