Apr 7, 2021

Axios Login

On this date in history, back in 2021, you read this very newsletter.

Today's edition is 1,217 words, a 5-minute read.

1 big thing: Facebook's new plan to nip product misuse in the bud

Illustration: Aïda Amer/Axios

Over the last year, Facebook has quietly built up a small "responsible innovation" team with a huge mission: Look at upcoming products and help prevent them from being misused to cause harm.

Why it matters: Facebook has spent much of the last few years dealing with the shortcomings of its existing products, especially with regard to misinformation, data privacy and abuse.

Details: The team is led by Zvika Krieger, who was was exploring similar issues as head of a World Economic Forum center in San Francisco before joining Facebook last year.

  • Facebook hasn't talked much publicly about Krieger's team or its work since we scooped his hire last year, but he shared some details Tuesday night in a World Economic Forum panel I moderated.
  • Krieger said the team, which works directly with those developing new products, brings together people with backgrounds in anthropology, sociology, neuroscience, human rights, diversity and inclusion, civil rights and law.

How it works: Krieger said his main goal is to engage product teams early, when he can still ask whether the product should be built at all and if it should, how to identify and mitigate unintended misuses.

  • "If you are just a box-checking exercise or if a product is about to launch in a week and (someone) says, hey, can you do an ethics check on this, that’s not a real engagement," Krieger said.
  • At the same time, he is trying to send the message to the rest of Facebook that his team isn't just a roadblock. "Considering potential harms doesn't have to slow teams down. In fact, it often saves them time down the road," he said. "The worst-case scenario is not realizing the potential harm until after launch — that is what we are trying to avoid as much as we can."

The big picture: Facebook's next generation of products is likely to be more pervasive and intrusive than today's News Feed and groups, including virtual worlds, augmented reality glasses with facial recognition and other powerful technologies.

  • Facebook has already said its Reality Labs unit will begin testing augmented reality glasses later this year in order to learn what people's expectations are around a product that might be able to record the world around it, among other potential areas of concern.

Yes, but: Building a healthy reflex for internal self-criticism can come hard inside a huge successful corporation. Look at Google, which created a team devoted to studying the ethics of artificial intelligence, then pushed out some of those same people in an explosive public controversy.

My thought bubble: It's too bad there weren't enough people asking these questions when Facebook was building its original product — or at any time during its first decade, when so many of its recent problems germinated.

2. Apple's stricter app rules take effect soon

Beginning with iOS 14.5, due out in the next couple of weeks, iPhone apps will have to ask users for permission to track their digital activity.

Why it matters: Only if a user gives permission will apps have access to the unique advertising identifier assigned to each device. Apple will also take action against apps that try to fingerprint individual devices via other methods.

  • Apple first announced the plan last June, but delayed making it mandatory until now to give the industry more time to prepare.
  • Apple is continuing to prepare customers, app makers and the ad industry about the change. Today it is making changes to a cartoon it uses to illustrate a hypothetical example of how apps can track people's activity, including sharing information with data brokers.
  • Facebook and others remain opposed to what Apple is doing, but are preparing their apps to comply with the rules.

Between the lines: One place you won't see the ad-tracking permission prompt is within Apple's own apps. The rules do apply to Apple, but the company said none of its apps, including those with ads, use such tracking.

3. E3 is back, but it's unclear if industry needs it

A scene from E3 2019 at the Los Angeles Convention Center. Photo: Kyle Grillot/Bloomberg via Getty Images

After missing 2020 entirely, the long-running E3 gaming trade show will return in June, albeit in an all-digital format, Axios gaming correspondent Stephen Totilo reports.

Why it matters: The event, which takes place June 12–15, gives the industry an opportunity to at least gather online, though not everyone is taking part.

Between the lines: For now, trade show organizers are still dealing with how to translate in-person gatherings into a compelling online event. Longer term, they face the challenge of proving the large gatherings are needed at all in a post-COVID world where where retail orders don't need to be placed at a huge show and exhibitors can just stage their own live-streamed showcases.

  • Video game hype, like a lot of tech promotion, has been going digital for years. And the pandemic has kept exhibitors from wanting to show up. See this year's largely irrelevant all-digital CES or the shrinking Mobile World Congress.
  • Last year, Sony PlayStation, which traditionally had one of E3's biggest booths, said it would skip the event.

As for this this year: EA and PlayStation aren't listed as attendees, and Activision is also taking a pass, Axios has learned. However, show organizers say Nintendo, Xbox, Capcom, Konami, Ubisoft, Take-Two, Warner Bros., Koch Media, and more will be there.

  • Also in E3's favor is the fact that gaming itself has been booming amid the pandemic.

The bottom line: When E3 didn't happen last year, a host of digital gaming showcases filled out the summer calendar. E3 might try to come back, but as a digital event it's just not as special.

4. Coinbase posts monster results ahead of listing

Illustration: Sarah Grillo/Axios

Cryptocurrency company Coinbase posted $1.8 billion in revenue for Q1 2021 — more than it brought in for all of 2020, ahead of its direct listing next week, Axios' Kia Kokalitcheva reports.

Why it matters: Coinbase's public listing is hotly anticipated and seen by insiders as an event that will bring validation to the industry.

  • Coinbase's business is highly dependent on bitcoin and the cryptocurrency market at large. So it's no surprise that CFO Alesia Haas greatly emphasized during a short presentation on Tuesday how the company manages its revenue and expenses.

What they're saying: "To state the obvious, our business is hard to forecast," Haas said during the scripted comments, adding that it's largely because it can't predict the prices of bitcoin and other cryptocurrencies.

  • As such, the company forecasts multiple revenue and expense scenarios so it can be prepared. It also uses periods of high profits to build up its balance sheet so it has reserves during so-called "crypto winters," when prices are down, so it can continue investing in longer-term areas.
  • "We seek to roughly break even in terms of profitability over time," she added.
5. Take note

Trading Places

  • Samy Bengio, a leader on Google's ethical AI team, is resigning from the company following the forced exits of Timnit Gebru and Margaret Mitchell, as Bloomberg scooped on Tuesday.
  • Roblox is announcing today the hiring of Morgan McGuire as its first chief scientist. McGuire, who will lead the creation of a research unit within Roblox, was previously director of hyperscale graphics systems research at Nvidia.
  • Amplitude, which helps companies better understand their digital customers, named former Western Digital HR chief Julie Currie as its first chief people officer, and hired former Postmates lawyer Elizabeth Fisher as its first general counsel.

ICYMI

6. After you Login

The reality of AI-generated human-like images has gotten scarily good, as evidenced by this site. But, as many are pointing out, the technology is less good when its data sources include group photos, leading to so-called "side demons." Check out this Twitter thread for some spooky examples.