Aug 8, 2017

Axios AM

By Mike Allen
Mike Allen
1 big thing: Tech @ war with the world

America's largely romantic view of its tech giants — Facebook, Google, Apple, Amazon, etc. —is turning abruptly into harsh scrutiny. Silicon Valley suddenly faces a much more intrusive hand from Washington, based on rapidly accumulating vulnerabilities in nine big areas:

  1. Content in a 50-50 nation: After the election, the left was furious about the spread of fake news online, which is sure to get worse. And a lot of conservatives worry about the tech giants injecting liberal bias into their handling of political comments and stories.
  2. Privacy controversies.
  3. Sexism, an issue freshly ignited with this week's eruption at Google over an engineer's manifesto blaming biology for the shortage of women engineers, and accusing the company of a "politically correct monoculture." The engineer said last night that he'd 'been fired for ""perpetuating gender stereotypes."
  4. Job-killing robots, automation and artificial intelligence.
  5. Paranoia by the companies about a bill by Sen. Rob Portman (R-Ohio) to constrain human trafficking, because it gives victims and state attorneys general new tools against social networks and other online sources of exploitive content.
  6. Backlash over the mounting data trove about us: In many cases, we aren't the customer — we're the product.
  7. Contribution to income inequality.
  8. Tax avoidance by shifting revenue overseas.
  9. Astonishing concentration of wealth and power.

Big tech, already facing billions in fines from European regulators, is an increasing target of both U.S. political parties:

  • Steve Bannon and his nationalist acolytes in the White House are eager to take on the tech companies as selfish and monopolistic, and top GOP staffers are warning Google, Facebook and Amazon not to get too aggressive with their net-neutrality advocacy.
  • Bannon's not the only conservative floating concerns about the power of these companies. Sen. Ted Cruz (R-Texas) told Axios' David McCabe just before the Senate left on recess: "I certainly have concerns about media companies and large tech companies putting their thumb on the scales and skewing political and public discourse."
  • Rep. Marsha Blackburn (R-Tenn.) introduced a privacy bill this year that would put the same restrictions on Google and Facebook as it would on Comcast, Verizon and other internet providers.
  • On the other side, Sen. Elizabeth Warren (D-Mass.) called in June for a revival of antitrust enforcement.
  • Last month, House and Senate Democrats singled out corporate monopolies as a key target of the party's new "better deal" economic platform.
  • Lobbyist Bruce Mehlman, executive director of the Technology CEO Council, a business consortium, said: "No industry in the history of the world has gotten to this level of ascendancy not run into political crosswinds."
  • Another top lobbyist told me: "The AI [artificial intelligence] issue is the big monster in the room — only a handful of members of Congress even understand what it means. It sounds sexy and scary at the same time. That is probably where Congress is going to wake up shortly and get heavily involved."
  • One problem for pols licking their chops: Most consumers love and depend on the products. And they like using the "utility" (Facebook, Google, etc.) for free.

When I showed a draft of this item to my tech colleagues at Axios, they pointed out that many of the giants have been trying to recalibrate their Washington operations for the Trump era:

  • Facebook hired a former top Senate aide to Attorney General Jeff Sessions. Google, with long Democratic ties, did "an about-face" to woo Republicans after the election, the N.Y. Times wrote. Amazon hired a lobbyist with close Trump ties, Brian Ballard.
  • A key executive at one of the targeted companies told me: "It's the attitude and the mood of the country, underscored by the election. It's hit in so many different directions, including the institutions of news and the institutions of higher learning."

Be smart: Today's conditions — populist rage in the country, combined with growing suspicion of corporate behemoths — closely mirror those that gave us Teddy Roosevelt's trust-busting of oil and steel at the turn of the 1900s, and the progressive reforms that ushered in today's antitrust protections.

What do you think? Drop me a note at mike@axios.com, and we'll continue the conversation.

2. "Advancing harmful gender stereotypes"

Recode's Kara Swisher writes that Google's firing of the engineer who sent an explosive manifesto on women and tech "is sure to attract a firestorm of criticism on both sides, putting the search giant in the crosshairs of a wider debate about gender issues ... in Silicon Valley and across the country":

  • The memo — titled "Google's Ideological Echo Chamber" — "was up for days without action by Google [then] went viral within the search giant's internal discussion boards this weekend."
  • Google CEO Sundar Pichai wrote in a memo to employees: "To suggest a group of our colleagues have traits that make them less biologically suited to that work is offensive and not OK."
  • The engineer, James Damore, told Bloomberg he's "currently exploring all possible legal remedies."
  • Although Bloomberg and others identified Damore, Swisher wrote: "I am not publishing his name, because he — and others who disagree with him — have been threatened with violence online."
3. Article of the day

With climate scientists worried that the Trump administration might suppress a major report, the N.Y. Times gets a leak and posts the full text. It's the lead story of the paper, "Climate Report Full of Warnings Awaits President," by Lisa Friedman:

  • "The draft report by scientists from 13 federal agencies, which has not yet been made public, concludes that Americans are feeling the effects of climate change right now. It directly contradicts claims by President Trump and members of his cabinet who say that the human contribution to climate change is uncertain, and that the ability to predict the effects is limited."
  • Why it matters, from Axios energy reporter Ben Geman: The report, and what the administration does with it, brings to a head the collision between the views of federal scientists and top Trump officials, who dispute the scientific mainstream on human-induced global warming.
  • See the draft report.
4. Exclusive stats: The reach of Snapchat

Snapchat's first original program, "Good Luck America" — which CNN alumnus Peter Hamby began as an election show, then was extended because of Trump — averaged over 5 million unique viewers per episode in its second season, Axios' Sara Fischer reports:

  • The season totaled 29 million total unique viewers globally, 45% more than the prior season. Almost 75% of those viewers are under the age of 25, and over 90% are under age 35.
  • Why it matters: The success of "Good Luck America," as well as the launch of a twice-daily NBC News program on the app, demonstrate a major shift in how TV news will transition to mobile.
  • More stats.
5. Megatrend: "The End of Typing"

"The Next Billion Mobile Users Will Rely on Video and VoiceTech" — Wall Street Journal front-pager by Eric Bellman:

  • "Instead of typing searches and emails, a wave of newcomers — 'the next billion,' the tech industry calls them — is avoiding text, using voice activation and communicating with images.
  • "They are a swath of the world's less-educated, online for the first time thanks to low-end smartphones, cheap data plans and intuitive apps that let them navigate despite poor literacy."
  • Why it matters: This drama is "playing out on smartphones across Asia, the Middle East and Africa in places with pockets of less-educated people who are just getting online."
  • "The sheer size of the Indian market means gaining even a small share can bring huge traffic and expansion. Only around 400 million of India's 1.3 billion people are online."
6. Worth the click

A forward-looking installment of Axios Sourced, our take-you-there video series, with deputy health-care editor Sam Baker: "[A] bombshell that Trump absolutely could drop any day now ... [is] if the Trump administration decides it's gonna stop paying these cost-sharing subsidies to insurance companies."

See the YouTube.

7. Inside Air Force One

The N.Y. Post's Marisa Schultz talked to New York congressmen who were aboard Air Force One on July 28, returning from a gang event on Long Island, when Trump shook up his staff:

  • "Fox News was flashing on TVs in the conference room area of the plane where the four sat with chief of staff Reince Priebus and communications director Anthony Scaramucci. The rivals were at opposite ends and not speaking to each other."
  • "Trump was in his private cabin ... Also on the plane were UN Ambassador Nikki Haley and deputy national security adviser Dina Powell."
  • "On the way back from the MS-13 event, Priebus left the others at the conference table area and went into Trump's private Air Force One office. The chief of staff came out with a 'poker face' and didn't let anyone know the stunning news that he had just lost his job. He continued working."
  • "Afterward, Trump met with [Rep. Dan] Donovan in his office. He asked him what he thought of Homeland Security Secretary John Kelly. He's an American hero, said Donovan, who serves on the House Homeland Security Committee. ... 'I told you,' Trump remarked to Powell."
  • "At Trump's urging, [Donovan] broke the news to the other lawmakers — asking that they keep it quiet until the official announcement."
  • Trump "made the announcement himself on Twitter as they returned to Washington. 'The reason we were delayed getting off the plane is he was tweeting it as we were on the tarmac trying to get off the airplane,' [Rep. Chris] Collins said. 'He has to get off first.'"
8. Risk of civil war in South America

"Specter of coup, surge in violence haunt Venezuela," per Reuters: "Venezuela appears to be sliding toward a more volatile stage of unrest after anti-government forces looted weapons during a weekend raid on a military base and frustration over what some see as an ineffectual opposition leadership boils over."

  • "[A]nalysts have ... spoken of the threat of a low-intensity civil war in Venezuela barring some reversal in the country's current decline."
  • "In what could be a harbinger of more violent tactics by protesters, an improvised explosive device wounded seven police officers on motorbikes during the election of the constituent assembly on July 30."
9. Trump Hotel and D.C. culture

The Trump International Hotel's managers "press conservative, Republican and Christian groups to do business where they can rub shoulders with Trump's Cabinet," the WashPost's Jonathan O'Connell writes in a front-pager:

For the first time in presidential history, a profit-making venture touts the name of a U.S. president in its gold signage. And every cup of coffee served, every fundraiser scheduled, every filet mignon ordered feeds the revenue of the Trump family's private business. ...

There are no signs in the lobby to direct guests to daily events, velvet ropes block the public from meeting areas, and some groups holding conventions and banquets omit references to Trump's name in their promotional materials. ...

The Post spent part of every day in May in the hotel's bars, restaurants and lobby. What reporters saw ranged from events hosted by foreign groups with policy priorities to Republican glitterati ... White House aide Omarosa Manigault conferring with the former producer of "The Apprentice"; former Trump campaign adviser Corey Lewandowski plopping into a black leather chair marked "Reserved"; then-press secretary Sean Spicer. scrolling through his phone on a plush blue sofa in the lobby.

See an animated map.

10. 1 fun thing

"What Music Do Americans Love the Most? 50 Detailed Fan Maps," by N.Y. Times Upshot's Josh Katz:

  • "Of the artists on the Billboard Top 100 this spring, we looked at the 50 that were most watched on YouTube in the United States between January 2016 and April 2017. Each map shows relative popularity in different parts of the country."
  • You can enter a city or ZIP Code, or just behold Upshot's maps of Justin Bieber v. Florida Georgia Line. You might ask: Where are Chainsmokers most popular? Now you know!
  • Politico's Kevin Robillard tweets: "This article makes one thing clear: Americans in every section of the country have truly terrible taste in music."
Mike Allen