Jul 29, 2020

Axios Login

By Ina Fried
Ina Fried

I hope you got a good night's sleep. Today is shaping up to be a busy one for tech news.

Today's Login is 1,729 words, a 7-minute read.

1 big thing: Tech CEOs' task: Stay cool, wave flag

Illustration: Sarah Grillo/Axios

When the big four tech CEOs testify before Congress today, they have one key job, per Axios' Scott Rosenberg: Demonstrate their firms are good corporate citizens by enduring questioning without offending or putting their feet in their mouths.

The big picture: In recent history, CEOs have failed in one of two ways — making self-serving statements that are transparently untrue, or letting their contempt for the machinery of democracy show.

  • Tobacco CEOs famously did the former in 1994.
  • Bill Gates arguably did the latter when Microsoft was under antitrust threat in 1998.

What to watch: Of the four CEOs testifying before the House Judiciary Committee, Mark Zuckerberg already passed this test two years ago.

  • His retort to Sen. Orrin Hatch's question about how Facebook profits without charging users —"Senator, we sell ads" — was disarmingly forthright.

Tim Cook and Sundar Pichai have also testified before.

  • They're both consummate technocrats who are unlikely to flinch, weird out or crack under pressure.

Jeff Bezos is the wild card. It's his first time before Congress, and for most of the 25 years he's run Amazon he has avoided confronting hostile questions in public.

  • He's also the richest person in the world, by most accountings, and that could give him a sense of invulnerability. (Although it wasn't enough to protect him from having his intimate photos stolen.)

In opening statements posted Tuesday, all four executives plan to offer different versions of a "we're good for America" argument.

  • Zuckerberg: "Facebook is a proudly American company. We believe in values — democracy, competition, inclusion and free expression — that the American economy was built on. Many other tech companies share these values, but there’s no guarantee our values will win out. For example, China is building its own version of the internet focused on very different ideas, and they are exporting their vision to other countries."
  • Cook: "Apple is a uniquely American company whose success is only possible in this country."
  • Bezos: "The trust customers put in us every day has allowed Amazon to create more jobs in the United States over the past decade than any other company."
  • Pichai: "Our work would not be possible without the long tradition of American innovation, and we’re proud to contribute to its future ... Our teams of engineers are helping America solidify its position as the global leader in emerging technologies like artificial intelligence, self-driving cars, and quantum computing."

They may get help making that case from the committee's GOP members.

  • Panel Republicans have been briefed to argue that their chief gripe with tech — allegations of anti-conservative bias — is indeed a competition problem, per a memo by GOP committee staff first reported by Politico and obtained by Axios.
  • But the memo nudges members to say that upending antitrust laws could just punish companies for being big and smother American innovation, and that Congress should trust antitrust enforcers in the Trump administration to do their jobs.
  • Yes, but: There's no guarantee GOP lawmakers will play along. At least one (see below) is now convinced antitrust laws need rewriting to rein in tech.

Be smart: The high drama in the collision between lawmakers and tech leaders won't play out under the hot lights of a Capitol chamber but in the cool squares of a videoconference, thanks to pandemic-era social distancing.

  • That has left some critics of the tech companies' practices fretting that the CEOs will get off easy.
  • It will also underscore how thoroughly every sector of society, including government, now depends on their screens and services.
  • Of note: The videoconferencing provider Congress uses is Cisco Webex.

What's next: The show begins at noon EST.

Go deeper:

2. Conservatives aim to dampen GOP's antitrust fervor

Antitrust laws don't need updating, big isn't bad and American success should not be punished, argues a new conservative coalition, as Axios' Ashley Gold reports.

Why it matters: That case echoes some of the arguments House Republicans are poised to make at the hearing Wednesday. The groups are looking to provide heft to such arguments and tamp down on the antitrust fervor sweeping the populist wing of the GOP.

Driving the news: The Alliance on Antitrust officially launches Wednesday, bringing together more than a dozen right-of-center groups and individuals and spearheaded by the Committee for Justice, a Republican group that promotes conservative judicial nominees.

"We're concerned about the direction this debate is taking," Ashley Baker, director of public policy at the Committee for Justice, told Axios. "The debate is all over the place, and people are conflating content moderation with antitrust."

  • Members include traditionally Republican groups, including: National Taxpayers Union, FreedomWorks, Citizens Against Government Waste, Institute for Policy Innovation and Taxpayers Protection Alliance.

What's next: Baker said members will be sending letters to Congress, including one sent Wednesday morning to the antitrust panel, urging lawmakers to separate antitrust from privacy and content moderation concerns.

The U.S. Chamber of Commerce is also defending the antitrust status quo with a new campaign this week urging policymakers not to rewrite competition laws or politicize the enforcement of existing ones.

The other side: Rep. Ken Buck, a Republican on the antitrust panel, told Axios that he, too, thought the government should leave American companies alone until his panel spent a year investigating the platforms.

  • Congress should update antitrust law to reflect today's market, Buck contended. "I don't think you can get to privacy issues and bias if you didn't have this anti-competitive behavior, and so I think they're all related," he said.

Meanwhile: 70% of Americans polled said tech companies are too big, per results shared exclusively with Axios of a survey from Utah State University’s Center for Growth and Opportunity and YouGov. (The survey polled 1,000 Americans, with a demographic breakdown reflecting that of the U.S. overall.)

Yes, but: Far fewer — some 44% — said big tech firms should be broken up.

Go deeper: Big Tech marshals a right-leaning army of allies for antitrust fight

3. Big Tech has no monopoly on bad ideas

Two startups caught my eye Tuesday for appearing to use powerful technology in problematic ways. One applies machine learning to try to determine a user's gender, while another is promising publishers the email addresses of those who visit their sites.

Why it matters: The tech industry is still operating on a "We can do it, so we should do it" basis that has repeatedly led to harm.

Driving the news:

  • Genderify debuted on Product Hunt with the promise of using machine learning to determine the gender of a person based on their name, username or email.
  • Jezebel has a story on GetEmail.com, which is telling publishers it can offer up the email addresses of people anonymously visiting their websites, potentially allowing them to send unsolicited emails or newsletters. According to Jezebel, GetEmail named right-wing news site the Daily Caller as one of its customers.

What they're saying: Both ideas were met with lots of criticism, but that doesn't mean they won't find someone willing to tap their services.

  • SongBox founder Michael Anthony, commenting on Genderify on Product Hunt: "Pretty brave of you to launch a gender stereotyping tool in 2020."
  • Genderify founder Arevik Gasparyan, in response: "As our AI model's decisions are based on already existing binary name/gender databases, our Product team is actively looking into ways of improving the experience for transgender and non-binary visitors."

Our thought bubble: A better long-term strategy would be to just ask people for their gender or email address. If they want to share that information, they will.

4. CEO says TikTok will reveal how its algorithms work

Illustration: Aïda Amer/Axios

In his first public statement as CEO of TikTok, former Disney exec Kevin Mayer says the company will be releasing the code that drives its content-moderation algorithms so that experts can observe how its policies are enforced in real time. He says TikTok will also reveal its data flows to regulators, and is calling on its rivals to do the same, Axios' Sara Fischer reports.

Why it matters: It's an unprecedented move that could help defuse concerns from U.S. lawmakers that the app is a data-harvesting tool for the Chinese government. It would also place TikTok ahead of its peers in terms of transparency.

Details: In the post, Mayer conceded that TikTok faces more scrutiny than its U.S. tech rivals "due to the company's Chinese origins."

  • "TikTok has become the latest target, but we are not the enemy," he wrote. "The bigger move is to use this moment to drive deeper conversations around algorithms, transparency, and content moderation, and to develop stricter rules of the road."
  • TikTok will launch a Transparency and Accountability Center in Los Angeles for moderation and data practices that will house all of its data flows and code moving forward. The center will host online tours of its data during the pandemic.
  • Mayer also touted TikTok's new investments in community building within the U.S., including the creation of a $200 million Creator Fund, which he expects to grow to a $1 billion investment in the U.S. and $2 billion globally in the next 3 years, and the creation of 10,000 new TikTok jobs across the U.S.

Yes, but: Despite his mostly friendly posture — including advising other companies mulling TikTok rivals to "bring it on" — Mayer did take a swipe at Facebook for trying to copy his company's product.

  • "Facebook is even launching another copycat product, Reels (tied to Instagram), after their other copycat Lasso failed quickly."

Meanwhile: TikTok's U.S. policy chief Michael Beckerman also wrote a letter Wednesday morning to the leaders of the House antitrust panel and full Judiciary Committee looking to preempt the likely citing of TikTok as an example of the threat Chinese firms pose to American rivals.

  • He says most of the investments in the company come from non-Chinese sources. He also highlights TikTok's U.S. jobs pledge and executive team and cites a range of voices dismissing concerns that Beijing is secretly using TikTok to spy on Americans.
  • "But ultimately, this is not just about the success of TikTok," Beckerman writes. "It is about a competitive marketplace that provides people with choices on how to spend their time online."
5. Take Note

On Tap

  • The House Judiciary Committee hearing with CEOs of Apple, Google, Amazon and Facebook (see above).
  • Possible news dumps designed to land while everyone is focused on said hearing.
  • Earnings reports include Qualcomm, PayPal and Samsung.

Trading Places

ICYMI

6. After you Login

Ahead of debuting its Surface Duo handheld, Microsoft is having some fun with the fact that products invariably leak. In recent days, various Microsoft employees have included cameos from the unreleased Android devices in their social postings.

  • My favorite so far is this one, from mobile exec Shilpa Ranganathan, who posted about baking with her 7-year-old daughter, throwing the dual-screen device in the picture for good measure.
Ina Fried

Editor's note: The fourth story has been corrected to reflect that TikTok policy executive Michael Beckerman wrote the company's Wednesday letter to lawmakers (not CEO Kevin Mayer).