Nov 1, 2018

Axios Login

By Ina Fried
Ina Fried

Today we bring you a special edition of Login — our Tech Guide to the Midterms.

Situational awareness: FiveThirtyEight forecasts a 6-in-7 chance Democrats take the House and a 6-in-7 chance Republicans hold on to their Senate majority.

1 big thing: Midterms will shape new privacy rules

Illustration: Sarah Grillo/Axios

The midterm elections are consequential for many, many reasons. But, in addition to all the other issues on the ballot, voters on Tuesday will be choosing the lawmakers who will try to hammer out privacy rules for major tech players like Google, Facebook and Amazon.

Why it matters: California’s recently-passed privacy law goes into effect in 2020, and the European Union has already started to enforce its General Data Protection Regulation. Leading firms like Apple and Facebook are begging Congress to set rules now that are nationwide and, they hope, friendlier to the industry, Axios' David McCabe reports.

Driving the news: Democrats are poised to take the House majority — and want strict privacy controls.

  • Rep. Ro Khanna has produced a “Bill of Rights” for internet users that includes the right to “opt-in consent to the collection of personal data by any party and to the sharing of personal data with a third party.”
  • Speaking with Politico, one House Democrat predicted a “tug of war” with industry over privacy should the party win a majority.

Even if they don't take the Senate, Democrats there are also expected to push for stricter rules.

  • “What everybody needs to know is that preemption [of state laws] is a very, very big deal, and you don’t do it unless you’re satisfied that the federal law that’s preempting the state law provides significant protections,” Sen. Brian Schatz said in September.
  • Sen. Ron Wyden debuted a draft of his own privacy bill Thursday morning that gives the Federal Trade Commission more power to police and punish privacy violations and creates a national opt-out system for consumers.

The big picture: Key Republicans support some sort of federal privacy law but have made it clear they worry about encroaching too strongly on industry.

  • Senate Commerce Chairman John Thune said at a hearing last month that while federal legislation is needed, passing “onerous requirements that do not materially advance privacy would be a step backward.”
  • Mississippi Sen. Roger Wicker, who is seen as a possible replacement for Thune as chairman should Thune move up in GOP leadership, has said there needs to be a federal privacy law in place by the end of 2019.

“There is a real opportunity to do something bipartisan here, and it means everybody's going to have to, at some point, lay down their partisan markers and work on a bill,” Schatz said earlier this year.

The bottom line: Lots of things can — and do — change after elections. But for the first time, lawmakers have Silicon Valley asking for federal regulation and a hard deadline in California’s rules. Privacy advocates hope that will be a potent combination, and Democrats taking the House could shake things up further.

Go deeper: Read David's full story.

2. Working behind scenes for "blue wave"
Giphy

Techies have lent their expertise, time and money to campaigns in advance of election day, David writes.

Why it matters: Many in Silicon Valley were particularly dismayed by President Trump's victory in 2016 and several high-profile players have worked to support a potential “blue wave.”

  • Volunteering: Some techies have volunteered their time or money. Tech For Campaigns has recruited 9,400 tech worker volunteers to be matched up with campaigns. A spokesperson said the group had worked with roughly 115 candidates in 17 states.
  • Sponsoring: Others have backed specific candidates, such as Tech Solidarity’s “Great Slate” project to drive cash to a group of progressives in competitive districts.
  • Investing: VCs have looked to invest in products aimed at helping candidates. That includes Chris Sacca and LinkedIn founder Reid Hoffman. Higher Ground Labs, which was founded in 2017 to help progressives, now has more than 20 companies in its portfolio.
  • Strategizing: Donors worked behind the scenes. Scott Krisiloff, who advises Y Combinator president Sam Altman’s political efforts, has worked with Senate Democrats’ top political action committee on issues related to digital strategy and donors, according to a source familiar with the matter.
  • Running: Some former tech workers — including former Groupon exec Suneel Gupta and former Uber exec Brian McClendon — are actually running for office in Michigan and Kansas, respectively.

Yes, but: Earlier this year, Bloomberg reported that Hoffman’s Win The Future initiative had floundered despite promising at its launch to shake up the political system.

  • And while workers from many of the big tech companies are volunteering for political campaigns, some told Axios they were under pressure not to talk about it as their companies aim to fight the perception they are taking sides in U.S. politics.

Read more from David here.

3. Personal donors lean left, but firms hedge bets
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Data: Contribution amounts are from the Center for Responsive Politics as of Oct. 26, 2018; the company list is from Fortune 500; and company sectors are from Yahoo Finance and original research. Get the data. Chart: Harry Stevens/Axios

Tech’s campaign contributions skew further to the left than the rest of the Fortune 500, per a new analysis by Axios’ Harry Stevens.

Details:

  • Political action committees and employees affiliated with the tech members of the Fortune 500 gave roughly $17.7 million to candidates this cycle.
  • $13.1 million went to Democrats, and $4.4 million went to Republicans.
  • Yes, but: Some of the major tech corporate PACs tend to give down the middle, even if employees give more to Democrats.

The big picture, per Sheila Krumholz, executive director of the Center for Responsive Politics (CRP): “Certain industries lean right or left, but major corporations generally hedge their bets — favoring the party in power, but delivering hefty sums to both sides — and on that score, 2018 is no different.” (CRP is the watchdog group that maintains the OpenSecrets database Stevens used.)

Go deeper: This broader, interactive analysis goes beyond tech.

4. Ad-tech innovations make it hard to stand out

A boom in new technologies, like digital TV ads, peer-to-peer texting, digital billboards and more, has made it easier for political campaigns to reach voters anywhere, at any time, Axios' Sara Fischer writes.

Why it matters: Newer, cheaper options to reach voters have made it easier to reach people, but harder to make a message stand out.

  • Texts: The most popular way for political campaigns to reach voters ahead of this year's midterms is flooding cellphones with personalized peer-to-peer text messages that are easy to deploy at scale because they aren't subject to the same regulations as automated texting.
  • Targeted TV advertising: TV ads that can be digitally targeted by household have become a powerful tool for midterm advertisers, because they can be cheaply aimed at very specific voting demographics. For campaigns, these targeted TV ads can be much easier to measure and are much cheaper than traditional TV spots.
  • Digital billboards: Out of home advertising — everything from billboards and subway posters to airplane ads — are used in political campaigns because they are easy to purchase at the local level. Many of these are also being converted into digital screens, that can be cheaper, as well as easier to track.
  • Viral videos: These are also being leveraged by candidates looking to gain a massive following quickly. The most famous example this cycle was Texas Democratic senatorial candidate Beto O’Rourke’s viral video about kneeling during NFL games.

Yes, but: The barrage of new ad products and messaging tools means it's harder than ever to truly capture a voter's attention, which is why many campaigns are still utilizing traditional television ads, email and regular mail to reach voters.

  • Spending on TV political advertising for the midterms will be nearly as high as presidential election spending 2 years ago, according to estimates from MAGNA.

The big picture: These new technologies are lowering the barrier to entry for many new candidates who may have less money but want to take on more established and well-funded competition.

Go deeper: Read Sara's full story.

5. Cybersecurity is the election's stealth issue

Cybersecurity is a growing problem in the U.S., both as a domestic and international issue. But, because it's not an issue that brings people to the ballot box, even candidates who care about the issue can't really campaign on it, Axios Joe Uchill reports.

What we're watching: Here's how two House candidates with cybersecurity backgrounds, one Democrat and one Republican, are handling the issue.

1. Tracy Mitrano, Democratic candidate for New York's 23rd Congressional District, says she's very concerned about cybersecurity.

  • “How do you think we’re going to be attacked next?” Mitrano asks.
  • A former director of information technology policy at in-district Cornell University, she says that national cybersecurity is one of the key reasons she’s running in 2016.
  • Yes, but: Mitrano says her research shows only 4% of her mostly rural district view cybersecurity as a top issue.

2. Rep. Will Hurd (R-Texas) is running for re-election in San Antonio, which is a hub for the burgeoning cybersecurity industry. He says he’s been asked once or twice at each town hall about cybersecurity.

  • “Almost every American has been impacted. They’ve needed to replace a stolen credit card or know someone whose identity has been stolen,” he says.
  • “People have been very clear that it is an issue. People are not clear what the issue is,” he adds.
  • Hurd is known for his work in cybersecurity and federal IT issues. He's a rare lawmaker with a cybersecurity background, having been a senior adviser to FusionX.

The bottom line: Both Hurd and Mitrano believe Congress lacks cybersecurity expertise. Neither think it's an issue someone can run on.

Read more of Joe's full story.

6. Take Note

On Tap

  • Earnings reports include Apple, GoPro and Spotify.
  • Employees at Google have organized a walkout to protest the company's handling of sexual harassment issues.

Trading Places

  • The German Marshall Fund of the United States named former OECD Ambassador Karen Kornbluh to run its newly created technology policy program.
  • Docker has hired VMWare's Kal De to be its CTO and former Microsoft marketing executive Neil Charney as its chief marketing officer.

ICYMI

  • Twitter now lets users report suspected bot postings. (The Verge)
  • T-Mobile US shareholders have approved its deal to buy Sprint, but it still needs the OK from regulators. (GeekWire)
  • WhatsApp confirmed plans to include ads in its "status" section, but declined to provide a timeline. (Gadgets 360)
  • World Wide Web inventor Tim Berners-Lee said tech giants like Facebook and Google may need to be broken up if they don't face sufficient competition. (Reuters)
  • Internet Freedom around the globe declined last year, according to a new report. (The Verge)
7. After you Login

These days, Virginia Sen. Mark Warner is among those leading the charge to police Big Tech. But in 2006, he was the first politician to publicly appear in Second Life. You can watch the video here.

Ina Fried