The Notorious N.A.D

Here’s what you need to know this week:

• Affairs of state: The Notorious N.A.D – Nadine Dorries drops a “rap bill” on online safety

State-by-state:

• Apple also promised more pay
• Microsoft is toxic
• Meta dominated a VR market
• Google is being probed again
• Amazon landed £425 million from the UK government
• Tencent is still in trouble

On one of the platforms she’s seeking to regulate with new laws, culture secretary Nadine Dorries recorded a 41 second “rap” explaining the approach that the UK government has taken in shaping the Online Safety Bill, and what it thinks it will achieve. 

The video has drawn ridicule, as expected – one Twitter follower replied “the problem with Nadine Dorries online harms bill is that it doesn’t protect anyone from the awful harm caused by Nadine Dorries online” – but it also includes some interesting claims.

We’ll spare you the cultural analysis, but here’s what the “lyrics” tell us, how they relate to the draft legislation, and what some experts think:

Will the bill make children safer online? Andrew Puddephatt OBE, the chair of the Internet Watch Foundation (IWF), told us that the bill should aim to ensure that “children are not collateral damage” in “the growing power of the internet”, but that the legislation needed “greater clarity on the timetable” and how groups like the IWF can work with Ofcom. At the moment, the types of assessment that platforms will have to perform have not been clearly specified. 

Reporting on content that could be harmful to children and removing it, as well as adding age verification, are ways that the Online Safety Bill might “make the internet safer for the younger generation”.

Do the terms effectively tackle scams and anonymity? The Online Safety Bill doesn’t mention scams; but it does set out duties for platforms to deal with fraudulent content and advertising. 

Platforms will have to use “systems and processes designed to… prevent individuals from encountering content consisting of fraudulent advertising”.

The bill also seeks to make platforms act to end the proliferation of anonymous profiles. But the legislation itself doesn’t mention exactly how internet users will be “protected” from “anonymous abusers”. 

The bill will require all platforms to offer users the option of identifying themselves. But says that “the [identity] verification process may be of any kind (and in particular, it need not require documentation to be provided)”. 

So, effectively, nothing.

Is freedom of expression threatened by the bill? Freedom of expression has become a point of contention around the bill. 

Dorries’ video flashed a screenshot of an opinion piece written by Chris Philp, Under-Secretary of State for Tech and the Digital Economy, which argues that the Online Safety Bill “poses no threat to free speech”. But what does the 19th section actually say, and will it establish protection?

“Duties about freedom of expression and privacy” are set out in the bill, requiring all platforms (both large and small) to “have regard to the importance of protecting users’ right to freedom of expression within the law”. 

This means that existing laws that govern freedom of expression in the UK, like Article 10 of the Human Rights Act 1998, will have to be observed; a condition that already exists for all platforms, though this right is “subject to formalities, conditions, restrictions or penalties as prescribed by law”. 

Speech that is deemed as “encouragement of terrorism”, for example, is illegal under the Terrorism Act 2006, and is not within our rights. 

What is new in the Online Safety Bill, section (19), is the requirement for platforms to make publicly available a statement of the “positive steps” that have been taken to protect users’ right to freedom of expression within the law. 

Ben Greenstone, managing director of Taso Advisory, consulted DCMS on the Online Safety Bill when it was at white paper stage. He told us the current draft “would have a chilling effect on freedom of expression” as platforms adjust their appetite for risky content. “The almost certain outcome is that you get an over moderation of content”. 

Platforms will have a new obligation to report on content and why they have allowed it, or why it has been removed.

At this stage, the nuts and bolts of the legislation haven’t been worked out. 

Importantly, the format of impact assessments, the frequency of reporting, and the definitions of harmful content remain unclear.

Platforms like Instagram, Facebook, YouTube and TikTok will have to wait and see how secondary legislation shapes their obligations.

For now, and rather than clear things up, Dorries is putting the simple messages front and centre. Until we see the detail, her mic drop feels premature.

Apple is joining Microsoft in promising more pay. The tech state has said that it will boost salaries to help its workers cope with the rising cost of living. The FT has reported that the boost is pretty big – staff have been told that hourly pay in the US would grow by $22 per hour, which is a 45 per cent increase since 2018. Employers, including Apple and Microsoft, have found their labour bargaining positions weakened in the past year. The pandemic and rise of home working have changed expectations, and unionisation efforts are at an historic high. Increasing pay is one way that Apple might cope. 

Microsoft still has a “nearly unlimited tolerance for bad behaviour”. According to reporting from Insider, top executives and developers at the tech state are responsible for a culture of misconduct that includes verbal abuse and sexual harrassment. One story alleges that Alex Kipman, who leads Microsoft’s mixed-reality division, walked into a meeting to test a new headset and loaded up what one employee described as “VR porn”; scantily clothed women having a pillow fight. Back when he became CEO in 2014, Satya Nadella promised to tackle Microsoft’s toxic culture and turn it into a “respectful, diverse, and inclusive workplace”. Has he failed? Do read the full story here.

German virtual reality app developers are faced with a dilemma. Since a regulatory crackdown caused Oculus headsets to become unavailable in Germany, they have a choice: use smaller competitor headsets, or leave the German market. In 2020, The Federal Court of Justice – Germany’s highest court – confirmed an allegation that Facebook was abusing its dominant position in user data collection. Months later, the Federal Cartel Office opened a probe into the requirement of Oculus users to register a Facebook account before using the device. Shortly thereafter, Oculus entirely stopped selling headsets in Germany. This case demonstrates the problem caused by Meta’s market dominance in the VR space: either use Meta products, or leave the VR space. “Facebook has an insane market dominance and that needs to be broken. There’s no market when there’s only one developer,” Soenke Kirchhof, head of VR production studio INVR told Bloomberg. 

Google is being investigated by the Competition & Markets Authority (CMA). The tech state faces a probe over claims that it broke the law “by restricting competition in the digital advertising technology market”, according to a UK government press release. Following on from the UK watchdog’s investigation of project “Jedi Blue” (see Tech States Sensemaker, 27 October 2021), the CMA is examining the areas in which Google is the world’s largest service provider; advertising and media agencies, ad exchanges, and ad-publishing servers. Andrea Coscelli, chief executive of the CMA, said “we’re worried that Google may be using its position in ad tech to favour its own services to the detriment of its rivals.”

Amazon has landed lucrative deals with the UK government. Since 2020, Amazon has agreed £425 million worth of UK government contracts according to the Centre for International Corporate Tax Accountability and Research. The study highlights that Amazon’s tax contributions in the UK were less than a tenth of the sum that Amazon received in government contracts. Amazon’s main UK-based businesses; Amazon UK Services, Amazon Online UK and Amazon Digital UK, footed a £22.3 million tax bill in 2020. In comparison to the £425 in agreed contracts, this doesn’t seem like a lot. An Amazon spokesperson told the Guardian that the “calculations are misleading and do not include the bulk of our business. Comparing a contract value over many years to an incorrect corporation tax figure for a single year is highly misleading”. Amazon claims to have invested £32 billion in the UK job market and infrastructure since 2010. 

The perfect storm of strict Covid measures, and a regulatory crackdown is only intensifying. Tencent began laying off significant numbers of staff in March 2022, and recent reporting shows that it is now firing swaths of staff from its gaming and fintech departments. A source inside Tencent’s Interactive Entertainment Group (IEG) said the layoffs came as a result of the government enforcing a nine-month freeze on the approval of new games – a measure which has recently been lifted. Alibaba, Tencent and JD.com all posted their slowest revenue growth on record in recent weeks. 

Thanks for reading,

Luke Gbedemah
@LukeGbedemah

Additional reporting by Sebastian Hervas-Jones