Jan 17, 2020

Axios Login

By Ina Fried
Ina Fried

Hello from Munich. Just an FYI that Login won't be in your inbox Monday in observance of the Martin Luther King, Jr. holiday, but we will be back on Tuesday.

Meanwhile, today's Login is 1,431 words, a 5-minute read.

1 big thing: Small tech firms with Big Tech gripes

Illustration: Sarah Grillo/Axios

The tech industry's stories about itself always start with nimble startups with great ideas in a garage. But today, many small tech companies feel like they're fighting for survival in an industry where giants have grown entrenched and domineering.

Driving the news: That latter perspective will be on display for lawmakers Friday at a House antitrust subcommittee hearing in Boulder, Colorado, where four smaller companies will detail how they believe Google, Amazon, and Apple have smothered their growth.

The big picture: Silicon Valley once maintained that its small-and-scrappy ethos was the key to innovation, as Alexis Madrigal recently described in The Atlantic. But today's giant companies argue that important change happens only "at scale," and only operations their size can compete with China.

Here's the lineup for Friday's hearing:

1. David Barnett, founder of PopSockets: Barnett, whose company makes eponymous circular grips that stick to the back of phones, grew so frustrated with Amazon's treatment of his company that he eventually stopped selling on the platform.

  • Amazon failed to take real action against counterfeit PopSockets grips until PopSockets agreed to a nearly $2 million marketing deal, he said. Only then did Amazon start requiring vendors listing PopSockets products to provide evidence that they were authentic.
  • Eventually, PopSockets decided to stop selling directly to Amazon and instead sell its products through a reseller on the platform. But Amazon shut that down, citing policy violations. PopSockets subsequently returned to selling on Amazon.
  • Amazon says marketing fees or payments do not play a role in its efforts to police counterfeits, and that it requires some popular, widely available brands to sell directly to the company to ensure customers receive lower prices.

2. Patrick Spence, CEO of Sonos: The speaker maker said it worked with Google to include Google's voice assistant with its speaker, only to have Google steal Sonos technology for its own speakers.

  • Google spokesperson Jose Castaneda accused Sonos of making "misleading statements," and said, "Our technology and devices were designed independently."

3. Kirsten Daru, vice president and general counsel of Tile: Tile makes small devices to help track lost items like keys or a wallet.

  • The company was part of a group of firms that complained when Apple changed its settings to prevent apps, including Tile's, from obtaining "always-allow" location tracking during the set-up process, according to a Washington Post report.
  • Apple said the change was to protect users' privacy, but the company is working with developers interested in setting location tracking to "always allow" at set-up to include that option in a future software update.

4. David Heinemeier Hansson, CTO and co-founder of Basecamp: Hansson called for Google to be broken up after complaining that paid ads for competitors appeared before Basecamp's website does in Google search results.

  • To spotlight the issue, Basecamp bought Google ads that accused the search company of demanding ransom.
  • Castaneda said competitors can bid on trademarked terms because "it offers users more choice when they are searching."

The bottom line: Americans often root for the little guy, but antitrust enforcement in the U.S. has mostly focused on harm to consumers rather than protecting the rights of smaller companies.

2. Microsoft announces "carbon negative" pledge

Photo: Pedro Fiúza/NurPhoto via Getty Images

Microsoft vowed Thursday to be "carbon negative" by 2030 and announced new plans to fund emerging technologies and methods that pull CO2 directly from the atmosphere, as Axios' Ben Geman reports.

Why it matters: Those plans and other climate efforts Microsoft rolled out are perhaps the strongest among Big Tech companies.

The announcement comes as the sector overall is increasingly under pressure from activists over its emissions and work with oil industry clients.

The big picture: Microsoft said its pledge to be carbon negative — that is, to spur removal of more CO2 than it produces — would apply not only to its direct operations and energy supplies, but also to the far larger carbon output from use of its products in the economy.

  • In addition, Microsoft said that by 2050 it will "remove from the environment all the carbon the company has emitted either directly or by electrical consumption since it was founded in 1975."

The company's new efforts include...

  • Expanding its internal carbon tax to apply to its supply and value chains, not just emissions from its direct operations.
  • Creating a $1 billion fund to "accelerate the global development of carbon reduction, capture, and removal technologies."
  • New efforts to help suppliers and customers reduce their carbon footprints, and making carbon-cutting an "explicit" aspect of their procurement.

The state of play: A UN-led scientific report in 2018 concluded that pathways for holding temperature rise to 1.5°C require some level of carbon removal — not just steeply cutting and preventing emissions.

  • Carbon removal methods include "direct air capture" technologies, large-scale forest planting and restoration, bio-energy coupled with carbon capture and storage, and more.
3. NBCU's Peacock goes all-in on ads

Illustration: Eniola Odetunde/Axios

NBCUniversal unveiled parts of its new streaming service, Peacock, to investors in New York Thursday, promising a consumer-friendly advertising experience that would set it apart from its many competitors, as Axios' Sara Fischer and Marisa Fernandez report.

Why it matters: Unlike some of its entertainment rivals, NBCU plans to offer free and low-cost subscriptions subsidized by advertising. Netflix and Disney+ are ad-free.

Details: NBCU is trying to make the case that, while it will have ads, they will be less intrusive.

  • Low ad load: While most TV shows have an ad load of roughly 15 minutes per hour, NBCU executives say that Peacock will have only 5 minutes.
  • Effective "frequency caps": Peacock will limit how much it airs the same ad so audiences aren't inundated.
  • High-quality video: NBCU says it will use new patent-pending technology to ensure video quality.

By the numbers: Along with debuting its ad strategy, NBCU also revealed its pricing plan. The service will have three pricing tiers:

  1. Free: Ad-supported, with limited programming.
  2. $4.99 a month: Ad-supported with current programming and favorites like "Friends" and "The Office."
  3. $9.99 a month: No ads with full programming, more than 600 movies and 400 TV series.

The streaming service will also debut six new scripted shows from creators including Mindy Kaling, Amy Poehler, Norman Lear and Will Forte. It will also be the only place to stream shows from the "Law & Order" and "Chicago Fire" franchises.

The big picture: With more people ditching their expensive cable packages for cheaper, digital TV options, Comcast, NBCUniversal's parent company, needs to ensure that it provides an incentive for consumers to keep buying its services, which also include home broadband.

  • Peacock will be offered to Comcast cable customers and internet-only Flex customers for free when it launches on April 15. The streaming service will launch nationally on July 15.

Sara and Marisa have more here.

4. Startup aims to make home rebuilding easier

CEO Nikki Pechet. Photo: courtesy of Homebound

Homebound, a startup that looks to help ease the process of rebuilding homes after a disaster, announced Thursday that it has raised a fresh $35 million in Series B funding.

Why it matters: In the wake of disasters, money often flows in to help residents rebuild. But homeowners often lack expertise and communities often don't have enough tradespeople to do the job.

How it works: Homebound pairs customers who have lost their homes in a fire with a concierge who helps guide them through the process from planning to ultimately moving back. The company uses digital tools to help homeowners monitor the reconstruction process, view plans, and keep tabs on their budgets.

Background: Homebound was conceived in the wake of 2017 wildfires in Northern California. A co-founder, Jack Abraham, lost his home in the fires.

"In the aftermath of the wildfires, homeowners who lost homes — including Jack — felt helpless as they started the process of trying to rebuild," CEO Nikki Pechet told Axios. "From tackling insurance claims to coordinating with contractors and architects, there was simply too much for anyone to navigate alone."

What's needed: Pechet says the company thought the hard part would be finding enough contractors. "But it was actually an amazing surprise when we found people outside of the Sonoma area who were willing and eager to be a part of our mission."

  • Instead, Pechet says the company has realized that finding enough people with local expertise is key, as is reminding customers that even with their service, rebuilding is still going to be a tough process, and helping them persevere.

What's next: For now, the 65-person company is focused on Santa Rosa and Malibu. Pechet said the company will only expand to additional areas when it has enough resources and local connections.

5. Take Note

On Tap

  • DLD takes place in Munich this weekend, and I'll be moderating several sessions.

Trading Places

  • NAB chief operating officer Chris Ornelas is leaving the broadcasting trade group on Feb. 1 to become general counsel for Beasley Media Group. Ornelas will be replaced by Curtis LeGeyt, who currently is NAB's executive VP of government relations.

ICYMI

  • A new report shows just how little many gig economy workers are making, after expenses. (Payup)
  • The EU is considering a temporary ban on the use of facial recognition in public spaces. (Politico)
  • New efforts aim to reduce child predators' use of online spaces like Fortnite and Minecraft. (OneZero)
  • Microsoft, Twitter and more than 100 other companies have signed a brief urging a court to strike down the Trump administration's "public charge" rule limiting legal immigration. (GeekWire)
  • Facebook is reportedly scrapping its plans to start integrating ads into WhatsApp. (Wall Street Journal)
6. After you Login

In honor of my trip to Munich, check out this map of every European city.

Ina Fried