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Kidambi Srikanth needed 35 minutes to get the better of local hope Hans-Kristian Solberg Vittinghus 21-16, 21-10 in the opening round.
The United States Tennis Association was in full damage control mode defusing a controversy that erupted on Tuesday.
Second seed and five-time champion Federer, 37, made it 18 wins in 18 second round appearances in New York by seeing off error-plagued Frenchman Benoit Paire 7-5, 6-4, 6-4.
Tennis Canada said Williams's decision to pull out was made for personal reasons but did not elaborate.
Twenty-three time major champion Serena Williams suffered the worst loss of her storied career, falling 6-1, 6-0 to Britain's Johanna Konta in the first round of the Silicon Valley Classic.