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Is the tech-lash faltering?

Is the tech-lash faltering?

Welcome to Tech Nations Sensemaker – a weekly newsletter dedicated exclusively to covering the tech giants

Here’s what you need to know this week: 

  • State of the Nation: Big Tech fought back against regulators

Nation by Nation  

  • Facebook was drawn into the Israeli-Palestinian conflict
  • Apple hired and fired a ex-Facebook ad exec 
  • Google faced walkouts from a key AI ethics groups
  • Tencent paid to acquire new users in old and rural communities
  • Amazon bought the studio behind James Bond
  • Microsoft amped up security against cyber attacks 

State of the Nation

Is the tech-lash faltering? As big tech expands its reach ever further, regulators are finding that clamping down on it is easier said than done. 

Proposals such as the EU’s Digital Services Act and the UK’s Online Safety Bill show that greater scrutiny is on the way, but there have been setbacks recently for regulators. How effective they are seems to depend to a large extent on what they are trying to enforce:

  • State aid rules (less effective): Last week Amazon won a big case against the European Commission over $300 million in back taxes. An EU court found that regulators had failed to prove the company got an illegal advantage from Luxembourg, where it was based. Apple previously overturned very similar accusations that it enjoyed special tax treatment from Ireland. And before that, Starbucks defeated the Commission in its own tax case. Margrethe Vestagar, the EC competition chief, has now switched focus to filing antitrust challenges against the same companies. 
  • Anti-trust laws (more effective): The new (ish) Biden administration has chosen a string of anti-tech officials to sit in key positions in the Federal Trade Commission. One, Lina Khan, wrote a seminal paper calling for regulators to look past consumers and focus on how big tech treats its suppliers. Such political support means regulators now see anti-trust as a major weapon against the tech companies. The US Department of Justice, the FTC and several states attorneys general are among those to have brought antitrust cases against them, as has Vestagar. 
  • Safety and online privacy (mixed): US states proposed 27 bills to protect people’s privacy from big tech in 2021 alone, the New York Times reported. But states have had to take these steps because of foot-dragging by Congress, where despite several hearings lawmakers have passed only one bill against the tech nations. Similarly, the UK’s Online Safety Bill, which could penalise social media firms for failing to remove harmful content, has been two years in the making and still has a long way to go before becoming law. At a recent Thinkin, former DCMS Minister Baroness Nicky Morgan said she was frustrated by the delay: watch here.

Finally, it’s worth noting that China’s regulators are ramping up their own antitrust challenges against big tech. Tencent’s outsized share of the online music-streaming market has put it in the cross hairs – but it’s far from alone. The regulators are going after dominant players in video gaming, online literature and ride-hailing too, as the South China Morning Post promises to reveal. 

Facebook: Diplomatic relations

If Facebook thought deciding on President Trump’s fate was hard, it’s now being forced to weigh in on Israel and Palestine. The company’s top lobbyists are to meet officials from both sides to discuss disinformation about the conflict which has been widely shared on Facebook-owned WhatsApp and is inflaming tensions in the region. Some cases are clear-cut – like the Israeli government spokesperson who tweeted a 2018 clip from Syria as evidence that Palestinain militants were firing rockets into Israel. Others are likely to be less so. 

Microsoft: Cybersecurity 

Microsoft has announced a partnership with Darktrace that’s intended to beef up security of its email and cloud systems. After the Colonial Pipeline and SolarWinds hacks, cybersecurity is way up Microsoft’s agenda. Dave Palmer, Chief Product Officer at Darktrace, told us his firm’s technology works by detecting anomalous activities. Many of us are now targeted by “tailored cyber attacks” like fake emails from managers asking for system updates, or falsified invoices from companies we’ve worked with. Darktrace’s promise is that it can spot such attacks by analysing our personal digital behaviour and flagging anything that looks unusual. 

If you’re interested in cybersecurity, we’ll be discussing this topic and much more at the Responsible AI Forum in June (see below).

Amazon: Culture 

Tim Cook dressed up as Tom Cruise at Apple’s recent product launch (you can watch the cringe-inducing performance here). Now Jeff Bezos has gone one better. Amazon’s chief executive is in talks to buy the James Bond franchise and MGM, the studio behind it. The film and TV industry is consolidating into the hands of a few key players, and the acquisition of MGM for roughly $9 billion would stabilise Amazon’s position after Discovery’s merger with WarnerMedia, and help it compete with Netflix and Disney+. Incidentally, MGM’s latest much-delayed Bond adventure – No Time To Die – will be released on 30 September in the UK. Bezos steps down as CEO in the second half of 2021, leaving him plenty of time to catch it at the cinema. 

Google: Ethics

Google’s troubled relationship with AI ethics gets worse. Ever since it fired the noted AI expert Dr Timnit Gebru in December, it’s faced criticism that it has failed to support black and female executives. Last week Marian Croak, Google’s ethics lead, tried to draw a line under the issue by doubling staffing at the company’s AI ethics unit, but it hasn’t worked. Three key groups of AI scientists – Black in AI, Queer in AI and Widening NLP – wrote an open letter to Google this week ending their sponsorship relationships with the company. They condemned the dismissal of Gebru and Dr Margaret Mitchell, who set up the ethics unit but was fired in February, and argued that research integrity and transparency were needed in addition to more staff. (Croak’s background in invasive surveillance tech has also attracted criticism.)

Apple: Discrimination

Apple hired a former Facebook advertising manager, and then fired him just a few days later. The exec, Antonio Garcia Maritnez, was brought in to boost Apple’s ads team but immediately drew criticism for views expressed in his book Chaos Monkeys in which he described women in Silicon Valley as “soft and weak, cosseted and naive”. Apple employees want to know why this wasn’t picked up before the hire. Martinez recently tweeted that his literary works were a known element during his recruitment, and that he was the “ultimate fool and butt of all jokes in the book”. Read some of the text in question here.

Tencent: Population growth

Most Western media companies are obsessed with attracting millennials. Tencent, by contrast, is after an older demographic. It’s paying users of its Paindoudou app about 0.03 dollars a day to watch classic Chinese TV shows in an effort to target more of the country’s elderly and rural population. Silver surfers are growing in number in China, where 100 million over 50s now have access to mobile communications. Tencent sees them – and the residents of China’s smaller cities and rural areas – as a key growth demographic. 

And finally…The Responsible AI Forum at Waddesdon 

On 10 June Tortoise and Lord Rothschild are hosting an absolutely stellar event with the aim of setting out an agenda for the development and deployment of AI as a responsible technology. Keynote speakers include Masayoshi Son, founder of Softbank, Demis Hassabis, founder of Deepmind, and Helle Thorning Schmidt, former Prime Minister of Denmark and co-chair of the Facebook Oversight Board – among many others.

To take a seat at the table become a member of the Tortoise AI Network. Just click on the link and we will be in touch. 

Thank you for reading the Tech Nations Sensemaker. We’re trying to do something new with our tech coverage – and we’d love to hear what you think. Please email opinions, tips or stories to alexi@tortoisemedia.com or luke.gbedemah@tortoisemedia.com.

Luke Gbedemah

Alexi Mostrous