Monthly Archives: January 2021

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Big tech companies are clamping downon far-right accounts, personalities, and apps. On Friday, YouTube banned former Trump strategist Steve Bannons War Room podcast. Twitter permanently suspended President Donald Trumps account late on Friday. The company also banned former national security adviser Michael Flynn and attorney Sidney Powell, two high-profile promoters of Qanon conspiracy theories who had aided Trumps efforts to overturn the presidential election. Meanwhile, Apple is threatening to pull conservative social media site Parler from its app store unless Parler immediately institutes a moderation policy, according to a report from BuzzFeed News.

The purge comes days after a mob of Trump supporters stormed theUS Capitol Building, clashing with law enforcement and leaving five peopleincluding a Capitol police officerdead. The mob,which shut down counting of the Electoral College vote for hours,was incited by months of false election fraud allegations promoted by Trump, Powell, and their allies. Trump spoke to the mob shortly before the violence and encouraged them to march to the Capitol.

The suspensions come after years of Trumpworld allies using social media to create alternate realities and outlandish conspiracy theories. Trump has used Twitter throughout his presidency to bypass the mainstream media and speak directly to his followers, once even bringing the United States to the brink of nuclear war with North Korea. It took an unprecedented siege of the Capitol for Twitter to finally act decisively, and only after Trump used the platform to repeat his election fraud lies and praise the insurrectionists, whilehalf-heartedly telling them to go home.

YouTube, in particular, has been a hotbed of misinformation over the years. Experts have blamed it for the radicalization of disaffected viewers through algorithms that offera continuous stream of incendiary content, as described by reporter Kevin Roose in his 2019 New York Times investigation. More recently, Bannon used the platform in November to call for the beheading of FBI director Christopher Wray and Anthony Fauci, the countrys top infectious disease expert who has often been at odds with Trump over the handling of the coronavirus pandemic.

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Big Tech Is Purging Trumpworld's Biggest Conspiracy Theorists - Mother Jones

Social media giants are facing backlash following the Capitol siege. NYU Stern Professor of Marketing Scott Galloway joins Yahoo Finance Live to discuss.

- President Trump is back on Twitter this morning after the platform temporarily blocked his account in response to the Capitol building riots on Wednesday. The president tweeted a video last night ensuring a quote, "smooth, orderly, and seamless transition of power." Facebook, meanwhile, continuing to ban the president from the platform indefinitely. Both social media companies now facing growing backlash over their perceived role in inciting the violence that engulfed Washington.

Let's bring in Scott Galloway. He is a professor of marketing at NYU. Scott, I know you have been looking at this issue for some time. You got a lot to say. Where should the conversation go from here in terms of how Congress and lawmakers move forward on regulation?

SCOTT GALLOWAY: Well, I think a fair question is, how did we get here, when we have essentially a mob Insurrection on our capital, and our lawmakers have to use furniture to secure the doors. And we find that the most meaningful action or what we find the next day is that we're begging 30-something-year-old CEOs of companies to block their account. So you sort of have to wonder, how did we get here?

So, you know, I'd like to think that this is the beginning of the end of big tech as we know it. I think this is another example that when you have algorithms that are profit-driven, and these algorithms are different, and figure out the tribalism, and dividing us, is very profitable. And it ends up in an overrun or a seizure of our capital, I think it's just another data point or another point in the line that moves towards increased scrutiny, increased regulation. But I absolutely think it's coming. And this is just going to put on the exclamation point of the fact that something needs to happen here.

- And Professor, I mean, when we talk about what needs to happen, that seems to be you know one of the key areas around social media. But it's not just social media. When we talk about how we got here, too-- and it's something that a lot of focus has not been on some of the traditional media players-- but you look at the viewership at some of these cable news programs during the Trump administration. I mean, this week, when that siege on Capitol Hill happened, CNN hit record numbers in terms of viewership.

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You can make the case that terror, fear, is very good for them. A president rallying his base with lies is very good for them. And you think about advertising around that, it's not just social media. So are you kind of surprised that these companies are getting hit with those questions when maybe perhaps, traditional media outlets are not as much?

SCOTT GALLOWAY: No, that's a fair point. So Facebook and Twitter aren't doing anything that CNN and Fox aren't doing it. They're just doing it at scale using processing power and networking effects. And about 30, 40 years ago, first, CNN, and then mostly, Fox, recognized that news used to be 97% truth in reporting, and 3% novelty and opinion. And they slowly but surely flipped that, recognizing the tribalism and opinion and novelty, which is kind of code for misinformation, drives much more engagement, which leads to more ads.

So I think all of them deserve a certain level of scrutiny. But there's just no doubt about it. And to your point, Facebook and Twitter aren't doing anything new. They're just doing it at a scale that's much more damaging. Instead of a dumpster fire, we have a mushroom cloud. But I think a lot of us are thinking, OK, there needs to be some sense of truth. The truth is a thing, and our media plays such an important role in our society. The question is how do we best-- who is the arbiter of that truth, and how do we best implement and create incentives such that misinformation and divisiveness doesn't result in creating massive wealth for people, which it is done at Facebook and Twitter?

- Scott, you talked about the cable news outlets. But how much of this conversation needs to broaden out to actually, the providers themselves? Those like our parent company, Verizon, who by the way, do show OAN or a Newsmax that have peddled the same conspiracy theories that we've seen on these platforms, too? I mean, is there a broader conversation that needs to happen here? And once again, where do lawmakers start?

SCOTT GALLOWAY: Well, I would argue-- so sure. So is it the content or is it the pipes that ultimately bears responsibility? And I think the answer is yes. And I think that there's probably going to need to be some sort of modifications or carve out to Section 230. There's already a carve out.

And Section 230 briefly protects, quote, unquote, "interactive or nascent interactive platforms that are no longer nascent" from being subject to legal liability if somebody puts content on the platform that inflames, antagonizes, or slanders a party. So they've basically been exonerated from that. And by the way, most traditional outlets are not exonerated or don't have exceptions from that. Just the online platforms.

I think the place to start is with breaking these guys up. I think that it's telling that we seem to be always begging the same one or two firms. I think increased competition would be good. I think you're going to need to see regulation. I think we're going to need to have profit incentives more aligned to the externalities, so I think it would be helpful to have a tax on media that's produced by an algorithm, because that is usually where you find the majority of the trouble starts.

And look, at the end of the day, I think when you have a platform that is consistently weaponized and used for organizing and spreading misinformation that results in the overrun of our Capitol and five dead people, I think those individuals should be held accountable. I'm not sure that anything is really going to change here until there's a perp walk.

And that is these individuals have delayed and obfuscated, slow rolled, they've had the ability to identify hate speech, they've had the ability to get in the way or to predict when there was going to be violence. And instead, they put their hands over their eyes and over their ears. So simply put, competition regulation. And if it's needed, criminal prosecution. This has gone so far beyond where we thought we would be.

- Scott. let me press on that point, because you're certainly right about that the scope and scale of these platforms-- and we're talking specifically Facebook and Twitter. But what we also saw in the lead up to these riots were conversations that were popping up outside of those platforms. Some users, of course, who have been kicked off of those platforms now going to a place like Parler. There was a thread that was going on Reddit-- that was taken off. So they started another site, and started the thread there, too. It feels like there's a bit of whack-a-mole that's happening.

SCOTT GALLOWAY: That's right. And it needs-- there needs to be regulation that applies to the existing guys and any new guys that's-- the side that they can profit from this information and pitting Americans against each other. So yeah, if we were just to say-- if we were just to get angry at Facebook and say, all right, you need to shut Trump down, you're going to see Trump just probably could go somewhere else, and his followers.

I don't think that solves the problem. I think it needs to be what I'll call systemic solutions that say, all right, let's be thoughtful around the harm that any media platform, when they knowingly spread misinformation because they know it creates greater engagement and more Nissan ads and more profits-- so they knowingly spread misinformation that results in harm, that they have liability. And that should be spread across-- I don't see why that wouldn't be spread across any media company. So you're right-- just trying to punish one or the other, like you said, it's just going to-- it's just going to pop up somewhere else. Needs to be a systemic solution.

- But Professor, I mean, we've been talking about that for years. At what point does it become, all right, they need to do something about it. It's just not-- it's clearly not working or Congress can't figure it out, because, you know, Cambridge Analytica was years ago. And now, when we're seeing groups kind of-- I guess the main difference would be actually using these platforms to plan things and act on maybe some of the messages we're seeing play out in more traditional media outlets. I mean, at what point do you just say, all right, look, enough is enough, and you have congressmen and women just come out and say, look, we just have to shut it down, because this has gone on too long?

SCOTT GALLOWAY: I love it when someone is more cynical than me. So yeah, you're right, it has been too long. And, I mean, just as an example, Mark Zuckerberg all of a sudden deciding to suspend the president's account-- it wasn't him calling on his better angels. The reason that President Trump was kicked off of Facebook for two weeks was because of Stacey Abrams. And that is Facebook has done the calculus here, and they recognize the people overseeing these committees are going to have a different view on them.

There was an unholy alliance between Zuckerberg and Donald Trump where basically, the deal was you don't break me up, and I'll let you to continue to weaponize and spread misinformation. And that-- that alliance has been broken. So I'm hopeful that there's a new Sheriff in town, and the shadow being cast by the Biden-Harris administration has already resulted in more change at Facebook in the last 10 days than we've seen in the last 10 years.

So I'm hopeful. I've been hopeful for probably too long. I think you're right. There's been-- there's been a total inaction. They have slow rolled the whole thing effectively. But I think that's about to change. I think all of us were really rattled by the events of this week, I think we're fed up. I think we have an administration now that is probably more inclined to do thoughtful action. But there is going to be action. If it doesn't happen at a federal level, it's going to happen at the state level. I think people are fed up and don't like having to beg 30-somethings to save our country.

- Yeah, far be it for me to steal the cynical crowd away from you. But very, very interesting stuff to see it all play out. And obviously, perhaps, convenient that they would have made these moves against President Trump just two weeks before he's now out of office. And of course, we'll see how it all plays out. But Professor Galloway, I love having you on. Appreciate you taking the time today.

SCOTT GALLOWAY: Thanks, guys.

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This may be the 'beginning of the end' for big tech following Capitol siege: Scott Galloway - Yahoo Finance

On 15 December, the EU unveiled the Digital Markets Act and the Digital Services Acts (DMA/DSA), the ... [+] most thorough reworking of the digital regulatory landscape to date.

By Michael G Jacobides, Sir Donald Gordon Professor of Entrepreneurship & Innovation and Professor of Strategy at London Business School, Martin Bruncko, deep tech investor and Senior Advisor for Evolution Ltd. and Rene Langen, a Senior Advisor for Evolution Ltd.

On 15 December, the EU unveiled the Digital Markets Act and the Digital Services Acts (DMA/DSA), the most thorough reworking of the digital regulatory landscape to date. Given that many tech players may comply with the highest common denominator of regulation, to avoid multiple offerings, and given the EUs leadership in regulating tech and the appetite of the US to follow suit, these rules may extend well beyond Europe.

Much of the DMA is focused on a stricter approach to so-called gatekeepers i.e., the dominant, Big Tech companies such as Facebook and Google. The Act is the EUs response to growing unease over our existing regulatory apparatus, which is ill-suited to address the exclusion of rivals and customer abuse in digital marketplaces. Moreover, Europe is concerned about losing out in the digital economy since Big Tech just so happens to be based in the US.

A gatekeeper is a particularly powerful player that may need to be held to higher standards. In deciding what constitutes a gatekeeper, the European Commission focused primarily on customer reach, total turnover and market capitalisation. It concentrated on firms that use their technology platforms to engage with partner firms through multi-party ecosystems, and identified practices that should be banned and controls that should be imposed. Although gatekeepers are open to competition in principle, the key offenders such as Google, Apple, Facebook and Amazon are entrenched, partly due to multi-product ecosystems that actively lock customers in. They have based their growth on expanding into an ever-increasing number of verticals. In Googles case, this journey began with search, before progressing to email and storage, followed by content via YouTube, then mobile interfaces with Android, and now health by acquiring FitBit. Facebook, meanwhile, is tightening the links between the parts of its own ecosystem comprising Instagram and WhatsApp, and is keen to expand into new areas-such as finally launching Libra, its own currency.

This multi-product ecosystem approach goes well beyond the conglomerate strategies deployed by the commercial titans of yesteryear. Todays Big Tech firms dont just want to cross-sell or benefit from common overheads. Rather, they harvest their power from users in a cycle that reinforces their strength: their scope enables a deep and detailed understanding of their customers activities and interests, which begets strength in the current services they provide and allows for entry into new onesall amplified by AI capabilities that allow them to build and test predictive models in real time. The sheer breadth and duration of customers engagement underpin the success of Big Tech firms, but each one leverages this access, and the information that it yields, in a different way. The business models of both Google and Facebook depend directly on data that customers generate simply by using digital platforms. Apple relies less directly on data, but still trades in it, receiving billions from Google in exchange for making it the default search engine on Apple devices. Furthermore, Apple may be headed in the direction of its Big Tech peers, as the share of its revenue from (data-driven) services including its App Store and apps within it increases.

By divvying up the pie this way, Big Tech firms conspire to lock customers into the walled gardens they have built. Alternatively, they can exploit the detailed knowledge they have gained, either by selling insight to advertisers or by taking part in the AdTech business themselves. For customers, there is a fine line between the convenience of customised offers and being locked in and Big Tech know exactly how to walk it.

So, what should we do about it? The best place to start is with Big Tech business models. With Chinese firms like Huawei, concern is often focused on how they could be gathering sensitive information about customers actions even though US-based Big Tech is already gathering far more, and monetizing it. So the real challenge, in our view, is to follow the money and look at what firms are actually able to do with the information they obtain. How do they gain power over customers or collaborators? How can they subvert the spirit of regulations, or even evade their scope?

As we assess the merits of proposed regulations, we also need to map their impact on both regulated firms and the collaborators within their ecosystems and ask the hard questions. Big Techs ability to collect information about customers, and their savviness in monetizing it, has obliterated much of the traditional media, undermining quality journalism and, ultimately, democracy. The fact that 70% of the digital ad spend in Europe goes to properties owned by Facebook and Google, as opposed to traditional media such as newspapers and magazines, has undermined the media sector. In the critical months ahead, large publishers such as SpringerVerlag will defend the regulations on these grounds. However, other, smaller publishers, ad agencies and developers will defend Big Tech, because they have formed symbiotic relationships with it. That is why we need to reach a firm yet nuanced view on what the regulation is intended to achieve.

We should also examine how regulations will actually affect Big Tech. Two crucial details could make a difference here: first, the asymmetric enforcement between gatekeepers and others, meaning that key players are held to a higher standard, and second, the fact that enforcement wont be devolved to national regulatory agencies. Yet, based on many interviews and detailed research, weve concluded that several of the remedies under consideration will add friction, but without necessarily changing the game like GDPR.

Barring the nuclear option of a breakup, we expect Google to be affected most, then Facebook, and finally Apple. However, the new rules may affect more than cash flow. First, Big Tech will have to put great effort into designing compliant IT systems. This will hold back their expansion and growth which regulators (understandably) want to slow down. It may hamper their innovation but can facilitate the innovation of other players by increasing competition, and reduce Big Techs control over their ecosystems. Furthermore, if expansion into new areas such as healthcare becomes more difficult for Big Tech, its hard to see how they will be able to sustain the growth rate implied in their current multiples. And if acquisitions are monitored more closely, with an eye to fostering competition, the firms may lose some of their allure for investors. Overall, the devil will be in the detail, and much depends on the vigour of implementation.

We expect significant pushback and debate in future months. Big Tech has geared up for the lobbying fight of its life. On the EU side, there is steely determination, partly for the right reasons. However, we believe there should be a far clearer separation between issues of regulation and customer dependency on one hand, and industrial policy on the other. Europe should set clear criteria that will apply to EU, US and Chinese firms alike, and consider how to regain its industrial might. It should not try, as the US did with China, to undermine its rivals firms to gain strength. Rather, it should cultivate its own tech ecosystem based on more democratic, open structures, and enact policies to boost EU tech.

EU regulations can help nudge the tech world onto a more competitive trajectory. While we may lose some of the seamlessness of a tightly run ecosystem, we will gain by ensuring competition really is a click away- which is far from being the case today. We expect 2021 to be a year of intense debate. We must ensure that we understand Big Tech business models and multi-product ecosystem lock-ins, so as not to lose the forest for the trees.

Michael G Jacobides is the Sir Donald Gordon Professor of Entrepreneurship & Innovation and Professor of Strategy at London Business School, Chief Expert Advisor on the Digital Economy at the Hellenic Competition Commission, and Lead Advisor at Evolution Ltd. Martin Bruncko is a former Innovation Minister of Slovakia & Head of Europe for the WEF, deep tech investor and Senior Advisor for Evolution Ltd. Rene Langen is a former Senior Partner at McKinsey a Senior Advisor for Evolution Ltd.

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EU Big Tech Regulation: Good Job On Trees, But What About The Forest? - Forbes