May 21, 2021
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Today's newsletter is 1,573 words, a 6-minute read.
1 big thing: The techlash is a bust
After three-and-a-half years, the U.S. backlash against tech's biggest firms has failed to dent or daunt them, Axios' Scott Rosenberg writes.
The big picture: Today, Google, Apple, Amazon and Facebook are massively richer, more powerful and more determined to push their products and services deeper into our lives than they were in January 2018, when Axios first used the term "techlash."
Since then, the companies have run a gantlet of withering criticism and government complaints that they violate users' privacy, dull kids' brains, cheat their competitors, and undermine American democracy.
- Their CEOs have regularly trooped or Zoomed to Capitol Hill. Mark Zuckerberg alone appeared a half-dozen times for countless hours of "I'll get back to you on that."
- They have been sued by the DOJ and states (Google) and by the FTC (Facebook) as well as by the EU.
- They have paid a variety of record fines, including Google's $5 billion EU antitrust fine and Facebook's $5 billion FTC penalty in 2019.
- They have infuriated politicians on both sides — conservatives believe they've been censored, and progressives believe social media promotes misinformation.
Yes, but: So far the assault has barely scratched these companies' gleaming confidence.
- Social media firms have taken a reputational hit from years of this assault.
- But their profits are up across the board and they sit on massive hoards of cash.
And, crucially, the past three years have so far failed to produce any significant new law reining in tech's power.
The Biden administration has appointed some tough critics of tech power, and hostility to tech is bipartisan.
- But the parties diagnose the problem differently, and getting any legislation passed in a divided Congress is still a long shot.
What's next: It's not that tech leaders don't see threats on the horizon. But their fears lie in different directions.
What keeps tech CEOs awake at night are questions like:
- Where can we find new growth? Showing percentage gains year after year is tough when you're delivering record profits already.
- Are we losing the kids? Each new demographic wave threatens to drown whoever surfed the last one to success.
- Are we losing our employees? A younger workforce is increasingly trying to hold firms to their idealistic mission statements.
- Will the next platform shift disrupt us? Every decade or two a new dominant mode of computing reshapes the industry's landscape, and those moments are when Goliaths fall and Davids rise.
The bottom line: Antitrust lawsuits could still bite. But right now the tech giants still have way more to fear from one another than from anyone else.
2. Snapchat unveils bid to dominate AR
Snapchat yesterday unveiled a new version of its 3D glasses called Spectacles, giving it a big boost in the race to deliver augmented reality devices to consumers, Sara Fischer reports.
Why it matters: In focusing narrowly on AR for the past five years, Snapchat has been able beat bigger rivals like Apple and Facebook to unveiling its AR glasses.
Driving the news: Snap's new Spectacles have four built-in microphones, two stereo speakers and built-in touchpad controls to send pictures and videos using AR to friends.
- The glasses are fully integrated with Snapchat's Lens Studio, a desktop application designed for developers to build and distribute AR lenses.
Yes, but: The Spectacles aren't for sale yet. And with a battery life of 30 minutes, they're not ready for mass market consumption.
- They are only available to creators who want to make augmented reality filters with the glasses using Snapchat's Lens Studio developer tools.
- Snap won't say when the product will be widely available for consumers. Its goal is to learn more by putting Spectacles into more users' hands.
What's next: Most people will continue to engage with Snapchat's AR products through its "lenses" or 3D images and videos that are overlaid onto real-life pictures and videos.
3. Exclusive: Chamber pushes ransomware fight
The U.S. Chamber of Commerce is calling on the federal government to do more to fight ransomware as businesses continue to be hit with financially motivated attacks.
Why it matters: Once they are hit, businesses often feel they have no choice but to pay up — hence the need and desire for collective action.
Driving the news: The Colonial Pipeline attack was a highly public example of what many companies and government agencies have been quietly grappling with as hackers hijack systems and lock data by tapping vulnerabilities, then encrypt everything until a ransom is paid.
- Bloomberg reported yesterday that CNA Financial quietly paid $40 million in March to regain control of its systems after a ransomware attack.
Between the lines: Per to the Chamber, the average attack takes systems down for 21 days and it can take nine months or more to fully recover.
- In a letter today, the Chamber calls on the Biden administration and Congress to make the issue a higher diplomatic priority, disrupt the payment systems used by ransomware hijackers, enhance global law enforcement efforts as well as create a fund for victims.
4. Scoop: Antitrust bill aims to boost state AGs
A bipartisan group of lawmakers are introducing a bill Friday that would give states more control over which court hears antitrust lawsuits brought against companies, according to a copy of the proposal obtained by Ashley Gold.
Why it matters: This bill would ensure that state AGs — which are suing companies more and more — get home-court advantage by choosing the court to hear the case and ensuring the case stays there.
- Between the lines: While the legislation may appear to be a narrow procedural change, it would give a big boost to the chances states' top enforcement arms have of winning antitrust lawsuits.
What's happening: Rep. Ken Buck (R-Colo.), ranking member of the House Judiciary antitrust subcommittee, will introduce the bill called the State Antitrust Enforcement Venue Act, along with Committee Chairman Rep. David Cicilline (D-R.I.).
How it works: Currently, when an antitrust case is brought by the DOJ, it cannot be transferred to another court. This gives the federal government home-court advantage.
- When a state attorney general files a lawsuit, however, the company being sued can try to move the case to a venue that may be friendlier or more convenient for them.
- The bill would allow state AGs, who are pursuing antitrust cases against Google and Facebook, to keep cases where they want them to be heard.
What to watch: This is the first of a series of antitrust bills to come from the House Judiciary Committee. Other bills are expected regarding interoperability and shifting the burden of proof for proposed mergers.
5. White House enlists dating apps in vaccination push
The White House is teaming up with nine of the largest dating sites to offer badges and other perks to those who have gotten their COVID-19 shot.
Why it matters: The White House has an ambitious goal to get 70% of American adults to have had at least one vaccine shot by July 4.
Details: Sites are offering various types of premium content such as boosts, super likes and super swipes to those who get vaccinated as well as ways for people to share their vaccination status in their profile.
- Those taking part include Tinder, OkCupid, Bumble, Badoo, BLK, Hinge, Chispa, Match and Plenty of Fish.
Between the lines: According to research from OkCupid, people who are vaccinated or plan to get vaccinated receive 14% more matches than people who don’t plan to get vaccinated.
6. Take note
- Apple CEO Tim Cook is set to testify when the trial resumes today in Epic vs. Apple, with closing arguments expected on Monday.
- Digital identity firm Socure has hired Gary Sevounts as its first chief marketing officer.
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