Dec 3, 2019

Axios Login

By Ina Fried
Ina Fried

Today's edition comes to you from Login guest host Scott Rosenberg, while Ina takes a well-deserved vacation day on a tropical island.

Today's Login is 1,455 words, a five-minute read.

1 big thing: Fired Google workers to bring federal case

Illustration: Sarah Grillo/Axios

Four employees fired by Google right before Thanksgiving plan to file an unfair labor practices complaint this week with the National Labor Relations Board (NLRB), charging that the company fired them for engaging in protected labor organizing.

Why it matters: The prospect of engineers challenging an iconic Silicon Valley firm under well-established labor laws could mark a sea change for the largely non-unionized tech industry.

Google's side: In a statement to the press last week, Google referred to "an increase in information being shared outside the company" and said the four employees were let go because they were found to be "involved in systematic searches for other employees' materials and work. This includes searching for, accessing, and distributing business information outside the scope of their jobs."

The workers say the suggestion that they leaked information is "flatly untrue" and that they believe they were fired for their activism in various causes within Google, including organizing against the company's potential work with Customs and Border Protection.

  • "The company's code of conduct states unequivocally: 'don’t be evil, and if you see something that you think isn't right — speak up!' And we did," the four fired Googlers wrote on Medium.

What they're saying: In an interview with Axios, the four fired employees — Laurence Berland, Paul Duke, Rebecca Rivers, and Sophie Waldman — said their firing a week ago was abrupt and left them trying to line up legal representation over a long holiday weekend.

  • "This feels very much about scaring people who are trying to come together to act," Duke said.
  • "This isn't really about us — this is about the hundreds of thousands of people who work at the company, and Google's fear of their power," Berland said.

The big picture: Google has recently faced challenges from employees on several fronts, including:

  • Ethical controversies that have sparked employee unrest, including a now-scuttled project named Dragonfly to re-enter China's search market with a product censored to satisfy the Chinese government, and a now-cancelled joint research project with the Pentagon called Maven aimed at using AI to analyze imagery from drones.
  • Charges of bias, including complaints from some conservative employees that the company's culture suppresses their point of view — and from outside critics on the right who maintain, with little evidence, that Google search is biased against them.
  • A previous challenge at the NLRB over employee complaints that Google had stifled their freedom of workplace expression. In September, Google reached a settlement with the NLRB that required the firm to post public statements reminding employees of their rights.

What to watch: Other companies will closely follow how far Google's engineers go in organizing further protests, and how much leverage they are able to bring to bear.

Our thought bubble: Google's cherished freewheeling culture has already taken lots of blows. Whatever happens at the NLRB, the company is likely to find it extremely difficult to turn back the clock to its startup-era heyday of open debate and management-employee trust.

Go deeper: Tech's new labor unrest

2. Senators' year-end push on privacy

After months of talks on bipartisan legislation, Senate Commerce Committee leaders have unveiled dueling privacy bills ahead of a hearing this week. But insiders believe the process might still yield a compromise both parties can embrace, Axios' Margaret Harding McGill reports.

What they're saying: "Now there's actually opportunity for serious negotiations between the different positions," said Jules Polonetsky, CEO of the Future of Privacy Forum, which did a comparison of the two bills. "These bills have more in common than they have dividing them."

The Republican version: Commerce Committee Chairman Roger Wicker circulated his discussion draft, the United States Consumer Data Privacy Act, last week.

  • It would provide consumers with the ability to access, correct, delete and port data that companies have about them, and it would provide limited rule-making authority to the Federal Trade Commission, according to a copy obtained by Axios.
  • But it would also preempt state privacy regulations and would not provide individual citizens with a private right of action to sue companies, two sticking points for Democrats.

The Democratic version: Commerce Committee Ranking Member Maria Cantwell's Consumer Online Privacy Rights Act, also announced last week, gives the FTC greater enforcement authority and would allow consumers to enforce the law by bringing civil lawsuits.

  • "Both bills take the idea that privacy needs to be protected seriously," said Free Press senior policy counsel Gaurav Laroia.

Meanwhile, Privacy for America, a coalition of advertising industry trade groups, has a "new paradigm" for privacy out Tuesday that it sees as a third way forward on the issue.

  • Rather than focusing on obtaining consumers' consent to share data over and over, the framework calls for banning data practices that could lead to misuse, such as using data to make housing or credit eligibility decisions.

What's next: The Wednesday hearing will likely show whether Commerce Committee members are still trying to reach a compromise.

Go deeper: The future of privacy starts in California

3. Facebook's master growth plan
Expand chart
Data: Visual Capitalist, Digiday, Microsoft's 10-K, Investopedia; Note: Microsoft's product sales share includes services from their "Productivity and Business Processes" category; Chart: Andrew Witherspoon/Axios

Facebook created its massive business by handing out a free social network and monetizing it through ads. As it expands into other businesses like commerce, payments, and hardware, it's mostly sticking with that formula, Axios' Sara Fischer reports.

The big picture: Advertising as an industry has historically grown at roughly the same rate as the GDP, albeit a bit slower since the 2008 recession. For Facebook to maintain its revenue growth rate, especially through a possible recession, it's aiming to quickly expand its addressable market through free products.

  • For now, the company is not interested in products that create friction between businesses and consumers, like paywalls or memberships, because it thinks that will limit the growth of businesses that Facebook is depending on to buy ads on Facebook.
  • Facebook's foray into payments, for example, isn't about the company ultimately becoming a payment processor, but about facilitating higher engagement between businesses and consumers.
"If we can serve more businesses and serve all of them well with free tools, then in time, they can grow, hire and support more communities. Some of them will advertise in time."
— Facebook chief revenue officer David Fischer, in an interview with Axios

By the numbers: Facebook sees plenty of room to expand its ads businesses.

  • Currently, the tech giant makes around $55 billion in annual ad revenue, compared to Google's $116 annual ad revenue.
  • Google, like Facebook, makes most of its money off of advertising on free-ad supported products, like search, news, video, directions, maps, etc.
  • Facebook currently estimates it has 140 million businesses operating on its platform globally, with 7 million advertisers across all of its family of apps.

The bottom line: Facebook's plan to grow its business is to make it easier to get more companies to grow their businesses on Facebook's back — and hook them on buying more Facebook ads.

Read Sara's full story.

4. Under fire, TikTok tweaks digital gift policy

TikTok will raise the minimum age for in-app purchases for its popular social media app this month as it faces growing congressional scrutiny, Margaret reports.

The big picture: TikTok is taking hits on fronts ranging from concerns about Chinese control and censorship to safeguarding children's privacy.

Driving the news: The Chinese-owned app is rolling out a new policy that will require users to be at least 18 years old to buy, send or receive virtual gifts.

  • The previous minimum age for in-app purchases was 13. Users have to be at least 16 years old to host a livestream where the gifts are exchanged.
  • TikTok allows fans to send video makers digital gifts, like emojis, that can be turned into cash.
  • "We are making these changes to foster a safe environment where users of all ages can enjoy a live stream without encountering misuse, such as any pressure to send virtual gifts," Eric Han, TikTok head of safety, said in a blog post.

Background: A BBC News investigation in July found that some video makers offered perks like sharing their phone number in exchange for virtual gifts, with children as young as 11 paying hundreds of dollars.

  • Sen. Marsha Blackburn (R-Tenn.) pressed TikTok on children's privacy practices in a November letter, accusing the company of manipulating children's online purchases.
  • TikTok outlined its policy changes in a response to Blackburn last week.
  • TikTok head Alex Zhu is expected to meet with Blackburn next week, according to a person with knowledge of the plans.
5. Take Note

On Tap

Trading Places

  • Jonathan Pawlow joins ITI, the tech industry lobby, as senior director, government affairs, after serving for 12 years as aide to House Armed Services Committee Chairman Adam Smith.

ICYMI

  • Facebook created a chatbot named Liam to help employees deal with awkward questions from family and friends about the company's many controversies and negative news stories. (New York Times)
  • The Trump administration is proposing $2.4 billion in tariffs on French cheese, wine and other goods in retaliation for France's new digital services tax, which the U.S. says discriminates against American tech giants. (AP)
  • Amazon Web Services rolled out the beta of a new service giving customers access to quantum computing in the cloud supplied by third-party providers. (TechCrunch)
  • A new Russian law will require hardware vendors to pre-install Russian-made software on all new devices beginning next summer. (Axios)
6. After you Login

Yes, it's officially holiday season, so here's a little drummer boy you won't get sick of.

Ina Fried