Axios Login

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September 24, 2019

Fun fact: Nick Clegg isn't the only former member of British Parliament at Facebook, at least for now. Richard Allan, who held the same seat as Clegg in the House of Commons, has been at Facebook for a decade, but plans to retire in the coming months.

Situational awareness: Europe's top court decided that Google won't have to filter search results about Europeans outside the EU under its "right to be forgotten" law, in a major victory for the search giant.

Today's Login is 1,313 words, a 5-minute read.

1 big thing: Nick Clegg, the mouth of Facebook

Photo illustration of Nick Clegg, head of global policy and communications at Facebook

Photo illustration: Axios Visuals. Photo via Ina Fried/Axios. Photo illustration: Chesnot/Getty Images

Don't "dismember" Facebook — regulate it better.

That's the prescription for a better future for Big Tech from Nick Clegg, the former U.K. deputy prime minister who now heads Facebook's communications and policy efforts. Clegg sat down with Axios for an hour-long interview last week at Facebook HQ in Menlo Park, ahead of his appearance later today at the Atlantic Festival in Washington, D.C.

Why it matters: As Facebook's fate lies increasingly in politicians' hands, the company has turned to a former politician to craft a defense.

The big picture: Clegg's message balances two goals:

  • Appealing to regulators around the world, who are eager to rein in tech companies.
  • Protecting Facebook's broader ambitions from the most extreme antitrust penalties.
"We genuinely don’t think dismembering FB or dismembering Amazon or dismembering Google is actually going to solve some of these underlying problems about data use, about privacy, about election integrity."
— Nick Clegg

Better rules may be less eye-catching than splitting up companies, Clegg argues. But he insists we'll see a better outcome by working on a single set of regulations governing privacy and other key issues and guiding all companies toward a safe, fair and open Internet.

  • "Otherwise, the likelihood is we will look back in in 5 to 10 years' time and realize that, if through perfectly laudable motives, we accidentally ended up Balkanizing the internet altogether," he said.

He points to Europe's GDPR standards as one answer that's already being implemented at a large scale (and which Facebook has said it will largely apply globally, in any case).

What he's saying: Clegg painted Facebook and the other big tech companies as "American success stories" and noted the irony that their home country was furthest down the road in talking about "dismembering" them.

  • "As a European politician and former deputy prime minister, we would give our right arm for just one of these companies."
  • "I come as a non-American to this job and say these are great American companies ... competing head-to-head with major global competitors, most of them based in China."

In summoning China, Clegg brings up the argument most likely to win political support for Big Tech in the U.S. — that the nation is locked in a global business battle.

At the same time, Clegg tried to make the case that the internet need not and should not turn into a collection of fiefdoms. He noted that he was just in India, where regulators have proposed legislation that would require companies to store data from Indian consumers there.

  • "How we respondent to firewalls being erected in China and elsewhere will set the trend lines for the data era for decades to come. We are right in the middle of that. The fight for the soul of the Internet is happening right now."

Clegg knows that people want to see action from Facebook, not just more words.

"There are lots of things for which Facebook has had to apologize, for which Facebook needs to prove it has learned its lesson and that things are going to change," he said.

Yes, but: Facebook isn't slowing down and waiting for trust to revive. It is plunging further into two of people's most sensitive areas: their homes and their wallets.

I asked Clegg why Facebook is charging ahead with both Libra, a Facebook-led cryptocurrency, and new Portal devices, essentially a bid to fill homes with Facebook developed-cameras and microphones.

  • On Libra, Clegg pointed to the 1.7 billion people around the world who lack a bank account.
  • "The vision for Libra is to create more access to better, cheaper, and open financial services — no matter who you are, where you live, what you do, or how much you have," he said.
  • "But we will take the time to get this right and are committed to fully addressing regulators' concerns and receiving appropriate approvals before launch."

2. Facebook buys a leading brain interface startup

A gamer wearing an Oculus headset

Facebook's Oculus VR headset. Photo: Amy Osborne/AFP/Getty

As if to emphasize the point that Facebook has no intention of slowing its ambitions, the company announced plans on Monday to buy CTRL-Labs, a startup developing an arm-worn device that reads brain signals. The companies did not disclose the deal's price tag, but reports range from upwards of $500 million to as much as $1 billion, Axios' Kaveh Waddell reports.

Why it matters: Facebook has been developing its own brain–machine interface for several years, but this is a major acquisition that could propel its technology forward — and in a way that's potentially less invasive of users' privacy.

Details: CTRL-Labs will join Facebook's Reality Labs division, and will drive new ways of interacting with virtual worlds, Facebook VP Andrew Bosworth wrote on Monday.

  • The startup has been developing wrist-worn devices that can read brain signals from nerves in the arm. It can tell, for example, if you are about to move a finger, but don't move it.
  • As Facebook's Bosworth described it, "It captures your intention so you can share a photo with a friend using an imperceptible movement or just by, well, intending to."

CTRL-Labs founder Thomas Reardon told Axios in an August interview that his company had already begun making some devices available to developers and academic researchers, in hopes of "beginning a new platform wave."

  • "In my dream, people feel frustrated when they take off the band," Reardon said.
  • While the device can pick up a decision to move, it can't decipher higher-level thoughts from your head.
  • That's unlike a different strain of technology that Facebook is working on: head-mounted devices that it says will allow users to do things like type with their thoughts.

3. Kik shuts app down and pivots to cryptocurrency

The offices of Kik

Photo: Kik

Kik, the Canadian maker of a messaging app popular with teens, is shutting down its app and laying off most of its employees, Axios' Kia Kokalitcheva reports. The company plans to focus solely on Kin, the cryptocurrency it created.

Why it matters: Kik is embattled with the U.S. Securities and Exchange Commission over whether or not Kin is a cryptocurrency or a security — and that battle is proving more costly than the company anticipated.

Go deeper: SEC sues chat app Kik over its $100 million token sale

4. Nonprofit's new directory for reporting harassment

Screenshot of I'm With Them's web site


Back in January, we told you about I'm With Them, a non-profit effort to reduce sexual misconduct in the workplace. It's led by former Broadcom CEO Scott McGregor and his wife, consumer and victims advocate Laurie Girand.

The group has now published a directory listing exactly how a worker at more than 150 companies can anonymously report sexual misconduct, fraud or other ethical violations.

Why it matters: The Sarbanes-Oxley Act requires that companies have an anonymous system for reporting various ethics violations to a company's board, but those systems vary from company to company and aren't always easy for an employee to find.

What they're saying: "We are surprised the SEC doesn't provide a directory like this," Girand said. "Our research showed us how challenging it is to identify this information. ... Companies assume they have handled reporting of sexual misconduct by their employees. Yet they often do not have systems in place for those affiliated or on the periphery of the organization: interviewees, suppliers, contractors and others."

5. Take Note

On Tap

  • The Senate Judiciary Committee's antitrust subcommittee is holding a hearing Tuesday on "Competition in Digital Technology Markets" focusing on acquisitions.
  • Niantic's Augmenting Cities conference continues in Oakland. I'll be moderating a session on how augmented reality is changing communities, and how it should be harnessed in the future.

Trading Places

  • Nextdoor named Chris Doyle, formerly of Twitter and CBC as its first country manager for Canada.


6. After you Login

Sorry parents of young kids, but this is how you will be spending Thanksgiving. (The trailer got 3 million views on YouTube in less than a day.)