Technocracy pt. 1
Tech and government's relationship status: it's... complicated.
Welcome to Trusty, a weekly newsletter exploring how technology is changing the ways people build trust by guiding you through the top headlines from Silicon Valley, D.C., Wall Street and beyond. Subscribe below to get future issues delivered straight to your inbox!
Hey Trustees!
Wow, this week was full of interesting tech stories — although that’s pretty much standard these days. But the real reason you’re getting another late night missive is because I talked to several really smart, thoughtful people this week who think there are better ways to regulate tech companies than by simply breaking them up, as Senator Warren has proposed.
Unsurprisingly, the issue is a bit more complicated, and their comments reflected that. Importantly, however, each one agreed that these companies:
Have immense economic and political power,
Have helped alter the structure of our economic and political systems themselves, and
Have altered them in both positive and negative ways.
Equally important is where each disagrees: whether we should reallocate that power and, if so, who should get to reallocate it, who it should go to, and what it should look like.
But they all also acknowledged the role those same tech companies have played in empowering individuals to participate in our economy, politics and society in ways that were previously unimaginable (say, by being able to distribute a newsletter essentially for free). Most seemed genuinely excited about the prospect that solutions can now come from anywhere.
So, in that spirit, I want to try something different this week…
I want to get you all involved.
At the end of this issue, I’ve put some quotes from these experts that help define the problem(s). If you have thoughts on this topic, let me know by replying to this email.
Next week, I’ll say more about the conversations I had with my sources, which got into some really tricky aspects of the economic, legal and political hurdles we as a society face when it comes to regulating tech.
And, I’ll also weave in your responses (anonymously, of course), since this is — and will continue to be — a vitally important discussion that people shouldn’t feel left out of simply because they don’t have a Ph.D in economics or political science.
But first, some news:
DEMOCRATS DEBATE TECH REGULATION
What happened: candidates took aim at big tech during the Democratic primary debate Tuesday, discussing whether Twitter should ban President Trump and whether companies should be broken up, among other topics.
Why it matters: Tuesday’s debate highlighted how candidates are talking more about tech regulation on the campaign trail, but also — despite some agreement on the problems — how much their solutions differ.
Learn more: Cat Zakrzewski / Washington Post
CANDIDATES TARGET VOTERS ON FACEBOOK
What happened: the New York Times published a series of charts illustrating which voters Democratic candidates have been targeting with their Facebook ads. According to the analysis, most candidates are prioritizing reaching older voters and women.
Why it matters: the ad spend data provides a window into campaigns’ primary strategies. But the Times also notes that those strategies stand in stark contrast to President Trump’s messaging, which it says looks more like a general election strategy.
Learn more: Shane Goldmacher + Quoctrung Bui / New York Times
LAWMAKERS CRITICIZE TECH’S LEGAL SHIELD
What happened: in a hearing Wednesday, lawmakers criticized Section 230 of the Communications Decency Act, which shields tech companies from legal liability for content published on their platforms, while executives from Google and Reddit testified in support of the measure.
Why it matters: lawmakers, frustrated with the proliferation of content they view as problematic, have increasingly taken aim at Section 230, arguing that companies should play a more active role in policing the internet. While none of the members expressed a desire to fully repeal the legal shield, there is a growing appetite for modifying it in some capacity.
Learn more: David McCabe / New York Times
DEMOCRATS INTRODUCE MEDIA LITERACY BILL
What happened: last Friday, Democratic lawmakers introduced The Digital Citizen and Media Literacy Act, which would help local schools develop media literacy programs by setting aside $20 million in Department of Education grants.
Why it matters: lawmakers introduced the bill just days after the Senate Intelligence Committee released the second volume of its bipartisan report on Russia’s efforts to interfere in the 2016 presidential election. The move shows a growing focus on educating individuals about how to detect disinformation themselves, rather than solely relying on technology companies to police content.
Learn more: Maggie Miller / The Hill
UBER CLAIMS IT HAS ZERO DRIVERS
What happened: court documents obtained by the Washington Post provided details about how Uber makes its case that drivers who use its platform are contractors — not employees.
Why it matters: Uber’s lawyers have taken this stance to help the company avoid legal liabilities for the actions of drivers in incidents such as car accidents and sexual assaults.
Learn more: Greg Bensinger / Washington Post
TESLA AUTOPILOT ETHICS
What happened: Bloomberg explored the ethical minefield that lies ahead for Tesla, other autonomous vehicle companies, regulators and courts as they work to reduce traffic fatalities while minimizing deaths caused by autonomous vehicles themselves.
Why it matters: while most companies work quietly in closely controlled test environments, Tesla has opted to put its technology in the hands of hundreds of thousands of consumers. It hopes to leverage the massive amounts of data collected by customers’ cars to improve the software more quickly, but its refusal to release collision data has drawn criticism.
Learn more: Zachary Mider / Bloomberg
APPLE’S SCREEN TIME BYPASSED BY TEENS
What happened: parents are reporting that their teens have found numerous — and often, easy — ways to circumvent Apple’s Screen Time, a feature the company introduced to discourage overuse of its devices.
Why it matters: the parents noted that they’ve reported the bugs to Apple, which has at times been slow to implement solutions — if at all. The ease at which teens have been able to find workarounds and Apple’s response have left some parents concerned about the company’s commitment to reducing addiction to its products.
Learn more: Reed Albergotti / Washington Post
AMAZON WATCHING CUSTOMERS’ SECURITY FOOTAGE
What happened: Amazon has been enlisting human workers to watch footage from customers’ Cloud Cam home security systems in an effort to train the artificial intelligence behind it.
Why it matters: the revelation draws more attention to the human workforce still required to power automated technologies, often unbeknownst to consumers.
Learn more: Natalia Drozdiak + Giles Turner + Matt Day / Bloomberg
PINTEREST ALGORITHM EMBRACES BIAS
What happened: a profile of Pinterest highlighted how the company has taken a different approach to curating content than rivals like Facebook and Twitter by making the curation process more visible to users and allowing them to refine their interests (which the algorithm uses to suggest content).
Why it matters: Pinterest has gained attention recently as one of the few tech “unicorns” that has remained profitable since going public. This profile argued that the company’s transparency with users helped it grow more intentionally — though not as rapidly — as its rivals.
Learn more: Will Oremus / OneZero
FACEBOOK’S LIBRA BACKERS DROP OUT
What happened: last Friday, eBay, Visa, Mastercard, Stripe and Latin American payments company Mercado Pago all withdrew from the Libra Association, a coalition of organizations that Facebook had recruited to help it launch a digital cryptocurrency.
Why it matters: the news is a massive setback for Libra, as these companies — who withdrew their support following intense criticism of the project from lawmakers, regulators and central bankers — gave Libra legitimacy and could have contributed valuable advice on navigating financial regulations.
Learn more: AnnaMaria Andriotis + Peter Rudegeair / Wall Street Journal
FED TRIES VALUING THE INTERNET
What happened: Federal Reserve Chairman Jerome Powell said in a speech last week that the central bank is looking for new ways to value the economy in the digital age.
Why it matters: with digital services increasingly being offered to consumers for free, the Fed is concerned that traditional economic statistics like GDP — which measure what’s bought and sold — no longer accurately capture economic activity. One alternative approach estimates that search engines are worth over $17,000 annually to consumers, while Facebook is worth more than $500.
Learn more: Yian Mui / CNBC
SOFTBANK + JP MORGAN WORKING TO SAVE WEWORK
What happened: SoftBank, WeWork’s largest private investor, and J.P. Morgan Chase, which was planning to lead the company’s IPO, are now scrambling to work out a financing deal to save the company.
Why it matters: sources told CNBC that, absent additional funding, We Co. is set to run out of money by mid-November and is gearing up for layoffs, the latest development in the company’s recent financial woes.
Learn more: Alex Sherman + Ari Levy / CNBC
ILLINOIS HOSTS ELECTION SECURITY HEARING
What happened: Democratic lawmakers heard testimony on Tuesday from election officials and cybersecurity experts about Illinois’ efforts to safeguard its voting systems ahead of the 2020 elections.
Why it matters: according to a recent Senate Intelligence Report, Illinois was ground zero for Russia’s election-meddling efforts in 2016, where hackers were able to access the data of 76,000 voters from the Illinois Board of Elections website.
Learn more: Dell Cameron / Gizmodo
INTERNET ACCESS CORRELATES WITH INEQUALITY
What happened: a recent Census report found that states with the worst broadband internet access rates also tend to have higher rates of inequality.
Why it matters: the report highlighted how internet access has become essential for upward mobility in the digital economy, and despite federal funding for programs connecting rural and low-income households, a significant “digital divide” persists.
Learn more: Scott Rosenberg / Axios
COLLEGES USING DATA TO RANK STUDENTS
What happened: college admissions departments, with help from consulting firms, are collecting data on prospective students to determine how likely they are to apply or accept an offer and assign them rankings among other candidates.
Why it matters: the data operations build profiles based on, among other sources, prospective students’ web browsing activity, which experts caution could further disadvantage those from low-income families that don’t have the same level of access to technology.
Learn more: Douglas MacMillan + Nick Anderson / Washington Post
NBA NAVIGATES HONG KONG TWEET FALLOUT
What happened: after Houston Rockets General Manager Daryl Morey tweeted his support for protestors in Hong Kong, several Chinese organizations severed their partnerships with the National Basketball Association. The NBA apologized for the tweet, but eventually walked that back after meeting criticism from American fans.
Why it matters: the controversy highlighted the challenges facing U.S. businesses like the NBA — which generates 10% of its revenue from Chinese customers — who want access to lucrative Chinese market but worry about political backlash at home.
Learn more: Jordan Valinsky / CNN
SAUDIS STILL FUNDING SILICON VALLEY
What happened: Saudi Arabia’s annual investment conference struggled to attract attendees from Silicon Valley, who are still wary of associating with the country after its assassination of journalist Jamal Khashoggi last year. However, the Saudis continue to pour money into Silicon Valley.
Why it matters: while American tech executives sought to avoid media attention by skipping the high-profile conference, they’ve continued to accept funding from Saudi investors through vehicles like SoftBank’s Vision Fund.
Learn more: Theodore Schleifer / Recode
ALGORITHMS AUTOMATING POVERTY
What happened: an investigation by the Guardian revealed how, around the world, technologies driven by artificial intelligence are automating people’s interactions with their governments, often in ways that further entrench poverty.
Why it matters: the investigations showed that such technologies often make mistakes, and with no easy ways to seek redress, victims of those those mistakes can be left without access to crucial government services.
Learn more: Ed Pilkington / The Guardian
US EXPORTS SENSITIVE TECH
What happened: drawing on data from the Department of Commerce, The Information built a chart showing the countries to which the U.S. exports technology deemed “sensitive” for national security reasons.
Why it matters: despite efforts by the Trump administration, U.S. companies still export technologies such as encryption software and drones to dozens of countries including China, Syria, Iran and Turkey.
Learn more: Matt Drange + Mike Sullivan / The Information
Technocracy
At risk of massively oversimplifying things, I want to kick off the discussion with one quote from each of the sources I spoke with this week that, together, seem to encapsulate much of the debate over how to regulate tech companies.
Andrea O’Sullivan, a feature writer at the Mercatus Center at George Mason University:
“We’re in the middle of a techlash. People are really upset at Google and Facebook for different reasons.”
Cory Doctorow, a science fiction author, activist, journalist and co-editor of blogging site Boing Boing:
“The concern from the beginning, literally from the framing of the Constitution, is about power. Everything else… flows out of a concern about concentrated corporate power."
Max Gulker, a senior research fellow at the American Institute for Economic Research:
“I think that all of this tension really comes back to the idea that our technology and our culture have evolved faster than our concept of how we govern ourselves.”
Luigi Zingales, a professor of entrepreneurship and finance at the University of Chicago:
“We don’t want to go back to a world without Google or Facebook. I’m not a Luddite and I don’t think that this is a reasonable solution.”
To sum that all up: we agree technology has led to some unforeseen outcomes — some great and some not so much — but can’t agree on what those are. Tech companies have too much power, but so does our government, and neither is capable of — nor should be in charge of — making (all) the rules for this new world. Oh, and we definitely don’t want to go back to the old world.
You’ve got it from here, I trust you.
If you enjoyed Trusty or think someone you know might, please share by clicking the button below! Thanks for reading and stay tuned for next week’s issue!