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October 17, 2022
Attention Bay Area readers: I'll be interviewing Axios co-founders Mike Allen and Roy Schwartz at 6pm Tuesday evening at Book Passage in Corte Madera, talking about their new book on Smart Brevity. Come check it out.
📣 Situational Awareness: Ye, formerly Kanye West, plans to acquire Parler, a Twitter-like social media app that has become a haven for conservatives.
Today's Login is 1,281 words, a 5-minute read.
1 big thing: Silicon Valley congressman's midterm warning
Illustration: Gabriella Turrisi/Axios
Ro Khanna, the Democrat who represents a big chunk of Silicon Valley in Congress, is still optimistic that his party will hold onto the House and that Congress will pass meaningful regulations of Big Tech. But if Republicans win the House, he warns, they'll devote less time to those issues and more to investigating Hunter Biden.
What they're saying: "These debates are going to be about the Republicans interested in perpetuating a cultural war, where they are going to be targeting the most vulnerable in our societies, people who they think are don't fit the mold of how they define a true American, and it is going to be an ugly, ugly two years," Khanna told me in an interview at last week's Lesbians Who Tech Summit.
Although Khanna's district includes a wide swath of the tech industry's home in towns like Sunnyvale, Cupertino, Santa Clara and Fremont, he is an advocate for laws that would curb Big Tech's power.
- Among the restrictions Khanna favors are ones that would expand privacy protections beyond California's existing law as well as a change in antitrust law that would shift the burden of proof in large deals, requiring the acquiring company to prove a deal won't hurt competition.
- "In retrospect, it seems obvious to me that Facebook shouldn't have been able to acquire Instagram, or WhatsApp," he said. "Right now the law is stacked towards the acquirer. If you shifted the presumption, and you say, 'No, it's actually stacked against the acquisition, you have to show that it's not going to be anti competitive,' that I think threads the needle."
Yes, but: Khanna said he wants such restrictions limited to very large deals. Limits on buying smaller companies, he said, would be a step in the wrong direction.
- "I think when you start doing that, you're actually going to dry up a significant amount of startup innovation (and) venture capital," he said.
The big picture: Members of Congress have proposed new bills around privacy and antitrust and children's online safety, but so far none have passed the full chamber.
- Khanna isn't sure there are enough votes in the Senate to advance the current antitrust bill.
- "My guess is they probably don't have the 60 votes yet," Khanna said, referring to the number of Senate votes needed to overcome a filibuster. "And that means it may unfortunately be punted to the next Congress."
On privacy legislation, Khanna said he isn't a big fan of the current bipartisan bill before Congress, which would preempt state laws, including California's.
- He says he understands companies' desire to have a single federal law rather than a patchwork of state regulation, but argues that any federal legislation should be stronger than state laws.
- "California should be the floor," he said. "And then the federal legislation should be stronger, stronger, specifically on enforcement, where I think California is weakest."
Between the lines: Some federal legislation on tech issues could yet pass in the post-election lame duck session, but the larger question is which party emerges with control of Congress after the midterms.
- Khanna said he wouldn't mind a reasonable debate over corporate tax cuts versus investment in education or deregulation versus regulation. But, he said, that's not how a Republican-controlled House would spend its time.
What's next: Khanna also said he would support the creation of a new federal agency to govern tech regulation that could augment the work currently split among the Federal Trade Commission, the Federal Communications Commission and the Department of Justice.
- "Absolutely, we need a digital agency," he said. "And we need a much stronger enforcement force. Because any antitrust case, it's very difficult, especially under the current case law."
- Yes, but: Getting such an agency approved and funded would be an uphill climb given the difficulty Democrats have had passing any new tech legislation — and the funding limits the existing regulatory agencies already face.
Go deeper: How Democrats' big plans for Big Tech shrank to tiny steps
2. Uber Eats to deliver pot in Toronto
Illustration:Rebecca Zisser/Axios
Customers of Uber Eats in Toronto will be able to order cannabis starting Monday, thanks to a new partnership with Leafly.
Why it matters: It's the first time that marijuana delivery will be available through a major third party delivery platform, such as Uber, according to Leafly.
How it works: Those in Toronto aged 19 and over will be able to order in the app as they would from a restaurant, although when searching for cannabis users will be warned they must be of legal age.
- However, deliveries will be made by the cannabis retailer's staff rather than an independent driver.
- The staffer delivering the order will also verify a customer's age and sobriety, in order to conform to Canadian law.
- The program will begin with three retailers: Hidden Leaf Cannabis, Minerva Cannabis and Shivaa's Rose.
Between the lines: Uber had previously partnered with a retailer in Ontario, Canada to allow customers to order cannabis, but under that deal they had to pick up their order themselves.
What they're saying: "We are partnering with industry leaders like Leafly to help retailers offer safe, convenient options for people in Toronto to purchase legal cannabis for delivery to their homes, which will help combat the illegal market and help reduce impaired driving," Uber Eats Canada general manager Lola Kassim said.
3. Scoop: Flipboard cuts 21% of staff
Flipboard CEO Mike McCue. Illustration: Rebecca Zisser/Axios
Online content aggregator Flipboard last week laid off 24 staffers, or 21% of its workforce, Axios has confirmed.
Why it matters: The cuts are one more sign that a slowdown in the online advertising market, fed by broader economic headwinds, is hurting a range of tech firms large and small.
What they're saying: "Yes, we restructured due to the bad economy and tough outlook for the digital ad business," CEO Mike McCue said in an email interview. "As a result we had to make the painful decision to let 24 members (21%) of the team go. We're doing everything we can to support them through this transition."
Between the lines: Flipboard launched in 2010 as an iPad-only app that pulled together content from other sources in an attractive design.
- While it has expanded into video and increased local coverage, Flipboard today faces stiff competition from Apple News as well as news aggregators from Google, Meta and other providers.
4. Meta ending support for Instant Articles
Illustration: Annelise Capossela/Axios
Meta is ending support for Instant Articles, a proprietary mobile format it debuted in 2015 to quickly load news articles on the Facebook app, Axios' Sara Fischer scooped on Friday.
Why it matters: It's part of a broader effort by Meta to move away from investments in news content on its apps.
- Meta also confirmed recently that it was shutting down Bulletin, its newsletter platform for journalists and writers.
- Earlier this year, Axios reported that the company was cutting funding for U.S. news publishers.
Details: The company plans to discontinue support for Instant Articles in mid-April 2023, giving news publishers six months to readjust their Facebook strategies, a source told Axios.
- A Meta spokesperson told Axios in a statement that the format is underutilized.
5. Take note
On Tap
- Oracle CloudWorld takes place today through Thursday in Las Vegas.
Trading Places
- Hims and Hers Health named Brian O'Shaughnessy to be its first chief communications officer and hired Amazon and Walmart veteran Josh Krueger as vice president of fulfillment operations.
- FTC commissioner Noah Joshua Phillips stepped down from his position last week and will join the law firm Cravath, Swaine & Moore as a partner.
ICYMI
- Workers at a second Apple Store, this one in Oklahoma, have voted to unionize. (CNBC)
- Internal Meta documents show how the company's transition to building a metaverse has encountered glitchy tech, uninterested users and a lack of clarity regarding goals. (Wall Street Journal)
6. After you Login
This dog really likes watching horse racing.
Thanks to Scott Rosenberg and Peter Allen Clark for editing and Bryan McBournie for copy editing this newsletter.
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