Jul 9, 2021

Axios Login

I was waiting for the perfect intro to come to me. Maybe I should have met it half way.

Today's newsletter is 1,454 words, or a 5-minute read.

1 big thing: New Biden order takes aim at Big Tech

Illustration: Rae Cook/Axios

President Biden is setting the federal government's sights on the power of Big Tech and Big Telecom in a competition order that will urge more regulation and enforcement against the sectors, Axios' Margaret Harding McGill reports.

The big picture: The new executive order, expected to be signed Friday, includes over 70 initiatives aimed at promoting competition in areas of the economy where the Biden administration finds a troubling amount of concentration — including technology markets.

Details: According to a White House fact sheet, the order takes aim at Big Tech by...

  • Adopting a policy of giving greater scrutiny to mergers by dominant online platforms, focusing on those involving smaller competitors, "serial mergers," data accumulation, the effect on privacy and competition of free products.
  • Encouraging the Federal Trade Commission to adopt new rules on the accumulation of personal data, and banning unfair methods of competition on online marketplaces (with the White House calling out platforms' developing copycat products to compete with small business).

The White House also wants internet service providers to offer a "broadband nutrition label" detailing their internet packages to give consumers more transparency when they're buying service.

  • The executive order will encourage the FCC to reinstate net neutrality rules prohibiting the blocking, throttling or paid prioritization of web traffic that were repealed by President Trump's FCC.

Flashback: Both net neutrality and the broadband labels were policy proposals spearheaded by the FCC under President Obama.

What's next: Biden will give remarks about the executive order at a signing ceremony Friday afternoon, according to the White House.

Go deeper: More highlights from the order

2. How Russia invaded Facebook

Image: HarperCollins

"Oh f---, how did we miss this?" Facebook CEO Mark Zuckerberg asked, looking around at the somber faces of his top executives, the New York Times' Sheera Frenkel and Cecilia Kang write in their book, "An Ugly Truth: Inside Facebook's Battle for Domination," out Tuesday.

In an excerpt provided first to Axios' Mike Allen, the authors write that the executives met Dec. 9, 2016, for a briefing on what Facebook's security team knew about Russian meddling on the platform during the election won by Donald Trump.

The security team, it turns out, had first spotted Russian activity on the platform in March 2016. But Zuckerberg and COO Sheryl Sandberg were just being told about it nine months later.

  • The eight-page handout for the meeting — written by Alex Stamos, then Facebook's chief security officer — "acknowledged that Facebook was sitting on a trove of information proving that a foreign government had tried to meddle in the U.S. election."

Frenkel and Kang, in a chapter called "Company Over Country," write that "no one else spoke as Zuckerberg and Sandberg drilled their chief security officer":

Why had they been kept in the dark? How aggressive were the Russians? And why, asked a visibly agitated Sandberg, had she not known that Stamos had put together a special team to look at Russian election interference? Did they need to share what Stamos had found with lawmakers immediately, and did the company have a legal obligation beyond that?

What happened: The security team "had uncovered information that no one, including the U.S. government, had previously known," the authors write.

  • "Stamos felt that he had been trying to sound the alarm on Russia for months."
  • Stamos said: "It was well within my remit to investigate foreign activity within the platform. And we had appropriately briefed the people in our reporting chain ... It became clear after that that it wasn’t enough."

At the meeting, "Stamos gave a somber assessment of where they stood, admitting that no one at the company knew the full extent of the Russian election interference," we learn from "An Ugly Truth."

  • "Zuckerberg demanded that the executives get him answers, so they promised to devote their top engineering talent and resources to investigate what Russia had done on the platform."

Facebook spokesperson Dani Lever replied in a statement to Axios:

  • "In 2016, we and those in the government and media did not fully recognize the nature and scope of foreign interference in our elections. Since 2017, we have removed over 150 covert influence operations originating in more than 50 counties, and a dedicated investigative team continues to vigilantly protect democracy on our platform both here and abroad."
3. Signal Boost: Post-pandemic fight for your workout

Illustration: Sarah Grillo/Axios

The gym industry, battered by a year of pandemic-related closures and customer losses, faces an added hurdle as it looks to recover: the rise of home workout technology.

The big picture: Health clubs in the U.S. saw revenue drop by more than half last year. Meanwhile, Americans working at home started getting in shape there as well, Peloton sold bikes as fast as it could make them, and Apple started selling fitness subscriptions.

Driving the news:

Now, as the U.S. reopens, gyms face the challenge of having to win back lost customers.

  • Many gyms turned to tech as well during the pandemic, offering streaming or on-demand fitness classes for those who couldn't or wouldn't come in person.

By the numbers: Expanding to online services only helped stem the bleeding for the gym industry, which has lost an estimated 1 million jobs.

  • Eight major chains filed for bankruptcy and 17% of fitness centers closed permanently, according to industry trade group IHRSA.
  • Business is recovering, but it isn't back to pre-pandemic levels — and the industry hasn't won the kind of government stimulus given to the restaurant and travel industries.

Yes, but: Don't count out the gym, says Chris Craytor, the CEO of Charlottesville, Virginia-based ACAC Fitness and Wellness, which owns a dozen gyms in the mid-Atlantic region.

Just as people want to eat in restaurants after a year of take out, Craytor said people want the benefits of doing their workout in person.

"Going to a health club is about more than just the treadmill or weights," said Craytor, who is also on the board of the IHRSA. "It's about the sense of community, the friends you make there."

  • Craytor acknowledges that health clubs will need to "up their technology game" and that it is tough for cash-strapped gym owners to make the needed investments.

But the new tech-based workout options offer something that earlier versions lacked: Because they increasingly rely on networked apps, they're challenging in-person gyms where they're strongest — that very "sense of community" Craytor cited.

What's next: Gyms are trying to augment in-person service with on-demand and live classes that patrons can do from home.

  • Among the companies aiding in the effort is Xplor Technologies, which helps boutique gyms add online components to their mix.

Go deeper: The future of fitness is at a fork in the road

4.. Exclusive: TikTok automates more video takedowns

Illustration: Aïda Amer/Axios

TikTok is rolling out a new system that will allow the company to block videos that violate its policies automatically when they're uploaded. The social network is also changing the way it will notify users when their content is removed, Axios' Sara Fischer reports.

Why it matters: TikTok says the new system will help reduce the number of distressing videos (such as those with violent content) that its safety team must review, freeing staff to focus on more nuanced content areas, like hate speech, bullying and harassment.

Details: Beginning this week, TikTok will test the automatic deletion of several content categories that violates its policies, like minor safety, adult nudity and sexual activities, violent and graphic content, illegal activities and regulated goods.

The big picture: The changes are part of a wider company effort to be more transparent about the way TikTok moderates content.

What's next: TikTok said that as a part of the update, it will also change the way it notifies users when they violate its community guidelines.

5. Take note

On Tap

  • Friday! (Need I say more?)

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6. After you Login

Zaila Avant-garde. Photo: Jim Watson/Pool/AFP via Getty Images

By correctly spelling "murraya," Louisiana teenager Zaila Avant-garde became the first African American to win the Scripps National Spelling Bee. But it's not Avant-garde's first claim to fame. She's already in the Guinness Book of World Records for her basketball prowess.