April 27, 2021
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Today's newsletter is 1,448 words, a 5-minute read.
Situational awareness: Spotify rolled out its new podcast subscriptions feature on the heels of Apple's similar project.
1 big thing: Congress drags algorithms out of the shadows
Tech platforms have built the heart of their businesses around secretive computer algorithms, and lawmakers and regulators now want to know just what's inside those black boxes, Axios' Ashley Gold and I report.
Why it matters: Algorithms, formulas for computer-based decision making, are responsible for what we get shown on Facebook, Twitter and YouTube — and, increasingly, for choices companies make about who gets a loan or parole or a spot at a college.
How it works: When posts "go viral," algorithms are usually why. Often, they work by detecting small blips in user interest and amplifying them.
- Algorithms' complexity and obscurity have helped tech firms make the case that they are neutral platforms. They also allow companies to duck responsibility for decisions about promoting and demoting content.
- But, at their core, algorithms are a set of priorities decided by humans.
- Users and critics, increasingly aware of the power of these systems, now want to hold companies more responsible for the outcomes their code produces.
Driving the news: At a hearing on "Algorithms and Amplification," executives from YouTube, Twitter and Facebook, along with Harvard researcher Joan Donovan and ethicist Tristan Harris, will testify Tuesday before the Senate Judiciary Committee's privacy, technology and law subcommittee.
Our thought bubble: The conversation in policy circles has long concentrated on the outer limits of content decisions — decisions about what gets removed and who gets banned. Those are what software people call "edge cases." What gets recommended, and why, is the center of the issue.
Between the lines: Platforms have long used their algorithms to boost business metrics, such at the amount of time spent on their site. Increasingly, though, they are also acknowledging and tapping the power of algorithms to limit the spread of misinformation or hate speech that doesn't merit an outright ban.
- Companies were reluctant to use their algorithms in these ways lest they be seen as putting their thumbs on the scale. But their inaction allowed problems to grow unchecked — including election interference, proliferation of conspiracy theories, vaccine hesitancy and COVID-19 misinformation.
What to watch: Democratic aides told Axios they see today's hearing as a chance to reset the conversation about algorithms and their role in public discourse, a topic that has often been politicized and devolved into partisan squabbling.
- Aides are looking forward to homing in on YouTube's recommendation algorithm, which serves up suggested videos for users based on their history. One question that may come up is how often YouTube users are recommended content that is later found to be in violation of YouTube's policy, an aide said.
Tech firms see their algorithms as a kind of trade secret and are reluctant to expose their inner workings, both to keep them from competitors and to make it harder for users to game their systems.
For their part, Facebook, Twitter and Google are expected to focus on the steps they are already taking, from offering the option of purely chronological feeds to better explaining how their systems work to allowing people more ways to signal the type of content they want to see.
- They also insist that showing harmful content isn't in their companies' long-term business interests, either.
2. Scoop: Dish wants California to reopen T-Mobile inquiry
Dish Network says that T-Mobile has gone back on promises it made in order to win permission to buy Sprint and is asking the California Public Utilities Commission to enforce the company's pre-merger commitments.
Why it matters: The effort, which follows a complaint to the FCC, centers on T-Mobile's decision to end support for Sprint's older CDMA network at the beginning of next year — a network still used by the majority of Dish's customers.
The big picture: T-Mobile's acquisition was controversial and the ultimate approval was conditioned upon selling Sprint's prepaid business to Dish. As part of that, Dish is using T-Mobile's network while it builds out its own 5G network from scratch.
The latest: In its petition to California regulators, Dish says that T-Mobile is going against a public commitment to operate the CDMA network for three years.
- "T-Mobile's January 1, 2022 date is inconsistent with prior statements the company made to the Commission — in sworn testimony and written briefs — that the network will be operational for at least three years to facilitate a seamless transition for customers utilizing the legacy Sprint CDMA network," Dish said in the filing, which was obtained by Axios.
The other side: T-Mobile, for its part, has said it provided Dish with more than the six months' notice required in its contract with the satellite firm. T-Mobile maintains that Dish is responsible for converting its customers over to phones compatible with T-Mobile's current network, just as it is doing for former Sprint customers still on the older network.
Go deeper: T-Mobile, once an upstart, joins the giants
3. Internet industry braces for new privacy rules
The days of unwieldy internet user tracking by advertisers are coming to an end, sending the web's largest publishers scrambling to come up with new ways to target digital ads to make money.
Why it matters: The new online privacy changes coming this week and in coming months are a massive pivot from the decades-long practice of selling hyper-targeted ads to users based on their web history. Many big web publishers rely on targeted ads to support their businesses.
Driving the news: Apple on Monday began rolling out its long-awaited app tracking transparency feature that asks Apple iOS users whether they would like to opt out of having their data tracked by third-party apps.
- The change, arriving in conjunction with Apple's iOS 14.5 software update, has Apple's tech rivals — especially Facebook — nervous about the impact that the update will have on their advertising businesses.
- Beginning Monday, users began receiving notifications when they updated their devices with Apple's latest software asking them whether they want to share their data.
- Gaming app publishers originally told Axios that they expected very few people — 15–20% — to actually opt in to having their data be shared. But a new analysis from AppsFlyer, a mobile software company, says opt-in rates may be higher, possible minimizing the impact of Apple's changes on the ad ecosystem.
Between the lines: For publishers that rely on user data to sell banner ads, new privacy changes coming to web browsers will also force them to make significant changes and important business decisions.
- Google said earlier this year that it — along with other web browsers like Apple's Safari and Mozilla's Firefox — would begin phasing out web cookies, the technology that's been used for decades to track people's web history for the primary purpose of selling ads.
- Last month, Google said it had begun working with publishers and advertisers to test a new solution called Federated Learning of Cohorts (FLoC), which targets groups of people instead of tracking individuals.
The catch: Google's solution requires broad industry support, and many web publishers are skeptical.
- WordPress, the blogging platform that supports a huge chunk of the internet's websites, last week called Google's alternative a "security concern," that could unintentionally facilitate disparities amongst people on the web.
Be smart: Some industry bodies, like ad tech giant The Trade Desk, are proposing alternative to third-party cookies that still allow marketers to track individuals.
- The Trade Desk's solution, called the Unified ID 2.0, also requires broad buy-in from the industry. Already several big companies have joined the movement, like the Washington Post, ad tech company Criteo and Nielsen.
4. Toyota buys Lyft's self-driving car business
Toyota's Woven Planet subsidiary has acquired Lyft's autonomous driving unit, Level 5, for $550 million, Axios' Kia Kokalitcheva reports.
Why it matters: After ride-hailing companies poured a lot of money into, and made big deal out of their investments into autonomous driving, both Uber and Lyft have now sold off their self-driving car units.
- It's also notable that Lyft is selling its unit to Toyota despite its initial close relationship with General Motors, which invested $500 million into the ride-hailing company along with a partnership to work on autonomous driving.
- Since then, GM acquired self-driving startup Cruise, raising questions about its relationship with Lyft.
Deal details: Of the $550 million in cash, Lyft will get $200 million upfront subject to certain closing adjustments, and $350 million over a five-year period.
- The companies have also signed a partnership to use Lyft's system and fleet data as part of Woven Planet's development of autonomous driving tech.
The bottom line: A few years ago, companies including Lyft made bold predictions about the rapid arrival of autonomous driving — but it's clear that getting there is much harder, and some companies are now cutting their losses and focusing on their core competencies.
5. Take note
- Earnings reports include Microsoft, Google, Pinterest and AMD.
- Adobe is holding its virtual Adobe Summit conference today through Thursday. As it kicks off the event, Adobe is announcing a new e-commerce deal with FedEx.
- Real estate tech firm Opendoor hired Mike Cieri as VP of product for its buyer unit.
6. After you Login
Check out this incredible video of a beluga whale returning a lost cell phone that had fallen off a boat. (Bonus: the woman who lost the phone happens to also be named Ina, but that's the least cool thing about the story.)