Jun 18, 2020

Axios Login

By Ina Fried
Ina Fried

Axios will be hosting a live, virtual event on Friday honoring Juneteenth and discussing the current state of race relations in America. Join markets editor Dion Rabouin tomorrow at 12:30pm ET for a discussion featuring former senior adviser under President Obama Valerie Jarrett and co-founder of BET Bob Johnson

Today's Login is 1,563 words, a 6-minute read.

1 big thing: Washington's rush to smash tech's liability protection

Illustration: Aïda Amer/Axios

A new Justice Department proposal released Wednesday accelerates a headlong charge in Washington to rewrite a law that protects online services from being sued over user-created content, Axios' Scott Rosenberg and Margaret Harding McGill report.

Why it matters: If Congress approves any of the bills in play, every dispute over content moderation on platforms like Facebook, Google and Twitter could turn into a court case — while the government could find itself with a big new job deciding whether companies like Facebook and Twitter are acting neutrally and "in good faith."

Driving the news: The Justice Department is urging Congress to revise Section 230 of the 1996 Communications Decency Act. That law lets online services post content from users without assuming legal liability for it, as traditional publishers do. The DOJ's proposal would remove that protection if those services...

  • ... purposefully facilitate or solicit third-party content that violates federal law.
  • ... fail to apply "good faith" in content moderation, meaning they consistently apply their own terms of service and provide "reasonable" explanations of enforcement actions.
  • ... "purposefully blind themselves and law enforcement to illicit material." That's a reference to platforms that encrypt users' communications without giving the government access.

The big picture: The DOJ proposals join a raft of other plans to modify Section 230.

  • President Trump's May 28 "Executive Order on Preventing Online Censorship" called for narrowing the scope of the law and ordered the Commerce Department to petition the Federal Communications Commission to craft and enforce rules that would narrow the law.
  • A bill proposed Wednesday by Sen. Josh Hawley (R-Mo.) would require online platforms to include in their terms of service a pledge of "good faith" and all details of their content moderation policies, then let users who feel wronged sue the firms.
  • The EARN IT Act, an earlier bipartisan proposal in the Senate, took aim at child sexual exploitation online and threatened platforms with losing their immunity under Section 230 if they failed to meet government-set standards for preventing abuse.

Between the lines: Most of these proposals are fueled by conservatives' anger at what they view as bias and censorship by the platforms, most prominently Twitter's move to police two of Trump's tweets.

  • Perception of such bias is widespread on the right, but evidence remains scarce.

What they're saying:

  • "The practical effects of the recommendations are to repeal Section 230 because they allow completely unfounded litigation to get past early dismissal," said Neil Chilson, senior research fellow with the Charles Koch Institute and former chief technologist at the Federal Trade Commission.
  • The DOJ proposals "would seriously curtail platforms' ability to moderate content and respond quickly to emerging problems — like new kinds of abusive online behavior, which internet users are endlessly inventive in coming up with," said Daphne Keller, director of the program on platform regulation at Stanford's Cyber Policy Center.

Our thought bubble: Aggrieved users have been demanding "good faith" and consistency from content moderators for as long as we've been online — from today's social networks to blogging platforms, comment sections to discussion forums, bulletin boards to USENET.

  • Handing responsibility for resolving these endless queues of contention to the legal system might keep lawyers and judges fully employed, but it's unlikely to satisfy anyone else.

The bottom line: The odds aren't good for any of these bills to pass a Congress where each party controls one house. But some of the promoters of rewriting Section 230 may be less interested in enacting a law than in intimidating tech companies.

2. Schiff: Trump tweets complicate election forensics

Photo: Shawn Thew - Pool/Getty Images

Ahead of a House Intelligence Committee virtual hearing with Facebook, Google and Twitter on Thursday, Chairman Adam Schiff (D-Calif.) tells Axios that he worries the president's attacks on Twitter and other tech companies could complicate Congress' and the intelligence community's efforts to learn more about election interference, Axios' Sara Fischer reports.

Driving the news: Schiff says the president's criticism "certainly heightens the concerns of the social media companies and how they interact with the Congress and with the administration which threaten to make it more difficult to get information from them. I hope it won't have that impact."

The big picture: Thursday's hearing on foreign influence and election security is meant to help lawmakers and the public better understand misinformation and election security threats ahead of 2020.

Testimony is expected from:

  • Nathaniel Gleicher, head of security policy at Facebook,
  • Nick Pickles, director of global public policy strategy and development at Twitter,
  • and Richard Salgado, director for law enforcement and information security at Google.

Schiff says the hearing is for lawmakers to learn about what the platforms are finding, not just to grill them about their actions.

One key committee goal, according to Schiff, is to understand what domestic and international efforts, if any, are being used to spread misinformation or manipulate the 2020 election.

  • He notes that China's efforts to spread misinformation are significant.
  • Manipulative behavior by Iran, Russia and North Korea is also under review.

The bottom line: Schiff says that he understands the tough position that fact-checking politicians' speech puts tech companies in, but "I don't think it's that difficult of a decision morally and ethically and in terms of whats right for our democracy."

3. Spotify, Warner Bros. strike podcast deal

Photo: Aytac Unal/Anadolu Agency/Getty Images

Spotify announced two mega podcast deals in the past 24 hours: A deal with Warner Bros. and DC Entertainment to produce a slate of original podcasts, and a deal to distribute podcasts exclusively from Kim Kardashian West, Sara reports.

The big picture: The company is doubling down on its commitment to podcasting, a medium it thinks can drive higher profits for the company through advertising. Spotify also aims to use its partnership with Warner Bros. and DC to unlock a new type of podcast storytelling.

Details: Spotify, Warner Bros. and DC Entertainment — a subsidiary of Warner Bros. that houses franchises like Superman, Batman, Wonder Woman, and more — have inked a multi-year deal to produce and distribute an original slate of scripted podcasts, both dramatic and comedic, centered on the DC universe.

  • The end product will feel similar to that of a DC Entertainment film, with an exclusive web of complex characters and plot lines, but it will be produced exclusively for audio, and exclusively on Spotify.

Our thought bubble: While narrative, scripted podcasts have existed for years, this partnership will help drive the idea of franchising original intellectual property in the audio space.

Context: Spotify started out investing in podcast production and analytics companies, and is now moving to acquire talent, franchises and intellectual property.

Go deeper: Spotify lands exclusive rights to new Kim Kardashian West podcast

4. SF ballot measures would aim new taxes at tech

Photo: Hoberman Collection/Universal Images Group via Getty Images

San Francisco's board of supervisors has proposed November ballot measures that would tax companies that grant stock to their employees and those who pay top execs more than 100 times their median salary, Axios' Kia Kokalitcheva reports.

Why it matters: If passed, the measures, which aim to raise money for the cash-strapped city, could add to the growing acrimony between San Francisco and its tech-focused companies.

Details: Supervisor Gordon Mar revived a stock compensation tax proposal from last year.

  • The measure is expected to generate $50 million to $150 million annually.

In a separate proposal, Supervisor Matt Haney is seeking to add a tax on companies whose top executives' total compensation — including stock — is at least 100 times the median of its San Francisco-based employees.

  • The tax would cover companies that aren't headquartered in San Francisco but meet a number of criteria. However, it's unclear whether it would apply to privately-held companies and how regulators would enforced that.
  • It's expected to bring in between $60 million and $140 million annually.
  • Portland enacted a similar tax, which went into effect last year.

Between the lines: It's no secret that many in San Francisco, including some elected officials, blame the tech industry for the city's stark economic inequality, especially in regards to the ongoing housing (and relatedly homelessness) crisis.

The other side: Business execs, investors and advocates argue that these types of taxes could push companies to move out of San Francisco, or at the very least, choose not to set up shop there.

5. Benioff, PayPal back alternative to payday loans

Photo: Even

Salesforce chief Marc Benioff and PayPal Ventures are joining the latest funding round for Oakland-based start-up Even, which aims to provide a better alternative to payday loans.

Why it matters: Historically, those who need an advance on their pay often have few options and pay extremely high fees and interest rates.

Details: Even says it isn't disclosing how much it raised, saying it wants to focus not on the amount, but who is aligning themselves with the company.

  • The service now has more than 550,000 monthly active users, many from initial customer Walmart, though it has signed other unnamed large companies as well.

How it works: As we first wrote last year, Even is a subscription service that employers can offer to workers (either subsidized or not) to let them track their wages, begin saving and, when necessary, get some of their pay a bit early.

  • It charges the same amount per worker per month (roughly $6 to $8) whether they get a payday advance or not. CEO Jon Schlossberg told Axios the goal is to get people to start saving, noting 90% of people save virtually nothing each month. The advances on earned pay are meant so users without savings don’t dig themselves into a deeper hole.
  • "We don't trap you in a cycle of relying on it as can happen with many of the other products in that space," Schlossberg said. "People think it's too good to be true. That really is a scathing review of the financial services industry."
5. Take Note

On Tap

Trading Places

  • T-Mobile promoted accounting chief Peter Osvaldik as CFO, replacing Braxton Carter, who is retiring.

ICYMI

6. After you Login
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It turns out there are more hidden Easter eggs in The Office than I realized. I guess I will have to rewatch the whole series. Again.

Ina Fried