Oct 9, 2019

Axios Login

I'm off today for Yom Kippur, so thanks to Scott Rosenberg for helping finish things up.

Today's Login is 1,384 words, a 5-minute read.

1 big thing: For tech, it’s all hard problems now

Illustration: Eniola Odetunde/Axios

The tech industry spent the last two decades connecting the world and getting computers into every home and hand — but that's turning out to have been the easy part. Now, every problem tech companies face is fiendishly hard, Scott writes.

Driving the news: Sen. Elizabeth Warren (D-Mass.) unloaded on Facebook Monday:

"Facebook has incredible power to affect elections and our national debate. Mark Zuckerberg is telling employees that he views a Warren administration as an 'existential' threat to Facebook. The public deserves to know how Facebook intends to use their influence in this election."
— Warren, on Twitter

Why it matters: The last time presidential candidates were warning about interference in U.S. elections, the interloper was Russia. Now, it's Facebook — and the entire industry it sits atop.

The big picture: Facebook, Google, Amazon and Apple have entered a world where their product innovations and profit margins are beginning to matter less than their ability to navigate treacherous political, social, and ethical rapids.

  • Everywhere you look, far beyond the loudest headlines about hate speech and partisan bias online, tech companies face conflicting imperatives from their customers, governments, stakeholders and critics.

1. Security vs. privacy

  • Americans want tech to make their daily lives safer — but they also want companies to keep their information private.
  • No one in industry or government can easily reconcile those wishes.
  • Smart doorbells can protect homeowners' front yards — but they also invoke dystopian scenarios of 24/7 surveillance on every street.
  • Encrypting text messages protects them from advertisers, scammers and snoops. Law enforcement authorities fear it will also make it harder to stop human trafficking and remove images of children's sexual abuse.
  • Big company efforts to make internet infrastructure more secure can look like monopolistic behavior to critics, as Google is discovering with its advocacy of the DNS-over-HTTPS standard.

2. Promoting freedom abroad vs. regulation at home

  • The Trump administration has begun writing protections for internet companies resembling U.S. law into new trade pacts, including one recently signed with Japan and the pending USMCA deal with Mexico and Canada, the New York Times reports.
  • Meanwhile, the same U.S. law — Section 230 of the Communications Decency Act, which protects online platforms from liability for user-contributed content even when that material is edited or moderated — is under fierce attack in Congress from bipartisan critics, who argue it gives tech firms too much power to squelch speech.

3. The lure of convenience vs. the value of resilience

  • The American public has broadly embraced Amazon's e-commerce model, even as some feel twinges of remorse over the death of local retail.
  • Amazon's near-monopoly means it may have to shoulder more public responsibility and more regulation, and critics want it to stop competing as a seller on its own platform.
  • Meanwhile, the now-dominant software-as-a-service model, which offers economies of scale to suppliers and convenience to consumers, is showing its geopolitical vulnerability: Adobe cut off all its customers in Venezuela this week after the U.S. tightened trade sanctions on that nation.

4. The ideal of transparency vs. the reality of disinformation

  • Facebook has long promised to help solve the "truth decay" problems its service has deepened by providing academic researchers with the data they need to study the issue, but the effort has stalled.
  • That's in part because the company also wants to avoid handing troves of data to third parties who could misuse it — after all, that's where the Cambridge Analytica scandal that kindled its loss of public trust started.

Our thought bubble: The tech industry still commands such a reserve of money and talent that it might find a path through this maze.

  • Facebook's careful, creative effort to create a "Supreme Court"-like appeals board for content moderation decisions is one promising example.
  • Yes, but: Too often, tech leaders and insiders lack knowledge of history, sociology, psychology, and themselves — and their optimistic self-blindness has often been to blame for the dilemmas they now face.

The bottom line: Policymakers and engineers are both accustomed to making and living with tradeoffs, but someone has to make a final call over where these choices land. The fight now is over who that will be: companies, governments, or the public.

2. Twitter misused customer info for advertising

Twitter disclosed Tuesday that it "unintentionally" allowed some users' email addresses and phone numbers to be used to match them with marketing lists even though the information had been provided for account security.

Why it matters: It's the latest example of a tech company misusing user data.

"We cannot say with certainty how many people were impacted by this, but in an effort to be transparent, we wanted to make everyone aware. No personal data was ever shared externally with our partners or any other third parties."
— Twitter blog post

But, but, but: The information was used to help tailor which advertising some users saw.

"As of September 17, we have addressed the issue that allowed this to occur and are no longer using phone numbers or email addresses collected for safety or security purposes for advertising."

  • It's not immediately clear why Twitter is only now notifying users.

Meanwhile: While in Twitter's case the use was accidental. Facebook, in contrast, intentionally used phone numbers provided for security to also target ads until the FTC complained.

3. Senators detail more 2016 Russian meddling

Photo: Zach Gibson/Getty Images

The Senate Intelligence Committee Tuesday released the second volume of its report on Russian interference in the 2016 presidential election, focusing on the social media disinformation campaign led by the Kremlin-backed Internet Research Agency, Axios' Zachary Basu reports.

Why it matters: The report, which provides further bipartisan evidence of Russia's election meddling in 2016, finds "the IRA sought to influence the 2016 U.S. presidential election by harming Hillary Clinton's chances of success and supporting Donald Trump at the direction of the Kremlin."

  • It also says that the IRA's activities were "part of a broader, sophisticated, and ongoing information warfare campaign designed to sow discord in American politics and society" and that IRA activity increased, rather than decreased, after Election Day 2016.

The big picture: As one of its recommendations, the committee calls on the Trump administration to "reinforce with the public the danger of attempted foreign interference in the 2020 election."

4. Speech in U.S. spotlights China's censorship

Illustration: Rebecca Zisser/Axios

In less than 48 hours, 3 American companies in the business of mass entertainment have found themselves at the center of a political storm about China's aggressive censorship, Axios' Kia Kokalitcheva and Sara Fischer write.

Why it matters: Media and entertainment have long acted as extensions of free speech with a mass reach, making them both vehicles for public expressions of controversial views and targets of government censorship.

Driving the news: Most visibly in the press, the National Basketball Association is currently facing the wrath of the Chinese government after a team's general manager expressed support for Hong Kong protesters and the league has refused to denounce him. But there's more:

It's no surprise that Hollywood is treading carefully around the Chinese government given its large market's importance to Hollywood.

  • Upsetting the Chinese government can impact U.S. film exports. China has blocked or delayed films in the past. Most recently, it delayed the release of "Crazy Rich Asians," which cut into revenues for Warner Bros.

In contrast: American companies have a history of bending to China's requests in the name of preserving their access to its market — but these are usually related to censorship for Chinese customers, or other less visible requests.

The big picture: This is all happening against the backdrop of an ongoing trade war between the U.S. and China.

What's next: Some are calling for U.S. regulators to reconsider TikTok parent company Bytedance's acquisition of Musical.ly, the American short-video app it acquired in 2017 from growing fears it will censor American users in accordance with its political speech preferences.

5. Take Note

On Tap

Trading Places

  • Panasonic has hired former Uber and Tesla battery expert Celina Mikolajczak.


6. After you Login

Math is fun.