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How to fix the internet (by Nick Clegg)

Wednesday 26 May 2021

In an op-ed for CNBC, Facebook’s Sir Nick Clegg has set out the company’s vision for internet reform. But is there more to the former deputy prime minister’s proposals than meets the eye?

Here’s what you need to know this week: 

  • Sir Nick Clegg proposed “bipartisan” internet reforms on behalf of Facebook

State by state  

  • Apple earned more from its App store than from global music 
  • Google was threatened by Russia 
  • Facebook was at the centre of an internet anonymity case 
  • Tencent recorded high Q1 profit thanks to gaming
  • Amazon saw its anti-union vote challenged
  • Microsoft faced difficult questions over the past behaviour of Bill Gates 

State affairs

Facebook long ago concluded that internet reform is inevitable, and has been trying to get on the front foot ever since. This week it deployed Sir Nick Clegg, vice president of global affairs at Facebook, to set out for CNBC four areas of possible “bipartisan” reform. 

As one tech insider told us, Clegg’s piece is really an argument against other regulatory measures potentially more damaging to Facebook – particularly those emanating from Europe. Mark Zuckerberg is smarting from Apple’s anti-ad tracking update (see this NY Times piece) and is fighting to prevent further shackles being put in place. 

Taking Clegg’s proposals in turn: 

  • Section 230. Clegg suggested reforming S.230, the law protecting platforms from liability for third-party content. Social media companies should be only granted immunity for unlawful content if they have systems in place for identifying and removing it, he said. But the proposal is narrow. 1) Facebook already has such measures in place so wouldn’t be impacted; 2) Clegg said nothing about “harmful” content – only the smaller “unlawful” category; and 3) He didn’t mention algorithms either, and particularly whether platforms should be liable if algorithms amplify a dangerous post. 
  • Elections. Clegg said Congress should tighten rules around social media usage in elections and do more to “root out organized networks seeking to mislead people”. Facebook has a point here. Congress has failed to pass any such legislation since Russia interfered in the 2016 Presidential election. 
  • Privacy. The US was “watching from the sidelines” as other countries wrote the global playbook on privacy, Clegg said. He was talking mainly about Europe, which in recent years has introduced a host of new privacy laws including its ePrivacy Directive and the Schrems II judgment, which could prevent Facebook transferring EU data to the US.
  • Data transfers. Clegg argued that Facebook’s customers should be legally able to transfer material to other social media platforms. Facebook wants such reforms because they would help assuage arguments from antitrust regulators that it is stifling competition.

A Facebook supporter could accurately point out that no other social media company is suggesting such detailed plans for reform. A cynic might quote Representative Anna Eshoo, a California Democrat whose district includes Silicon Valley. She thinks such proposals are a “masterful distraction” and a “a classic example of Facebook hoping that we miss the point”.

Microsoft: Power

Bill Gates pursued a sexual relationship with a Microsoft employee over 20 years ago. His actions have cast a long shadow: an internal investigation into the affair could have caused him to leave the Microsoft board last year. In an interview with CNBC this week, Microsoft’s current CEO, Satya Nadella, spoke out against C-Suite executives abusing their power but wouldn’t comment directly on his old boss. Nadella did reveal that Microsoft had a policy prohibiting improper behaviour among executives since 2006. “The Microsoft of 2021 is very different from the Microsoft of 2000,” he said. However, in a 2016 discrimination case, Microsoft was accused of being a “good ol’ boy” company that allowed women to be “ignored, abused, or degraded”. We should add: the lawsuit was dropped before such claims could be tested.

Facebook: Privacy

An Irish secondary school whose staff were insulted anonymously on Instagram has demanded that Facebook disclose who was running the account. In the Irish High Court, the school admitted the posts in question were neither illegal nor defamatory and that they simply wanted to “discipline” the offender. As the judge pointed out, an anonymous user of a social media platform has an expectation that their identity will not be disclosed. The question was whether the school’s desire for discipline – rather than for any legal remedy – overrode that expectation. Unable to decide, the judge passed the case to the European courts. What the ECJ says could have far-reaching implications for internet anonymity.

Amazon: Labour 

In April Amazon defeated activists hoping to establish its first unionised warehouse in Alabama. Now the union is contesting the results. Its case could hinge on a single mailbox recently installed inside the warehouse and used by workers to post their ballots. Last week the National Labor Relations Board heard testimony from some employees that they suspected Amazon had access to the mailbox. As Bloomberg points out, to overturn the vote the union doesn’t have to show that Amazon actually knew who had posted which ballot; just that there was an appearance of interference. 

Google: Independence 

When Sir Nick Clegg talked about a “segregated” internet “subject to extensive surveillance” (see main story above) he was referring to countries like China and Russia. On the day his article was published, Moscow gave Google 24 hours to delete “prohibited content” or face a slowdown in its traffic. Twitter endured similar punitive measures after refusing to scrub content from its platform – part of a wider push by Russia towards internet “sovereignty”. (Twitter is also facing pressure from police in India.) President Putin is also furious at Alexei Navalny’s use of Google-owned YouTube to foment protest. If you’re interested in that subject, listen to our audio investigation, The Navalny Show.

Apple: Economy

Apple stat of the week: its App Store commission revenue is now larger than its total global digital music revenue. As Ben Evans points out, Apple was once the iPod company: and a dominant force in the music industry because of it. Now, Apple Music is only one of several music streaming services. In contrast, the company’s App Store revenue was close to $15 billion in 2020. Of course, commission payments are at the centre of the Apple vs Epic court case – currently wrapping up. Worryingly for Apple, the judge, Yvonne Gonzalez Rogers, has expressed concerns about the 30 per cent App Store levy. To read more about what we think of the Apple vs Epic case, read our Tortoise Take on Friday.

Tencent: Profits

The big five US tech states reported stunning Q1 profit growth last month. Now it’s Tencent’s turn. The Chinese media giant recorded $7.42 billion in profit in the first three months of the year, a 65 per cent rise on last year. The analyst-beating results were driven mostly by online gaming sales which boomed during the pandemic. Tencent now wants to focus even more resources on creating “large-scale and high-production value” gaming titles with global appeal. But it faces growing pressure from Chinese antitrust regulators which may force it to sell off assets, pay heavy fines and give up key music rights.

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 States 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.

Alexi Mostrous

Luke Gbedemah