EU Tech Tax, Amazon vs Alphabet, China’s Target: CEO Daily for March 21, 2018
Good morning. Andrew Nusca here, filling in for Alan.
We’re addicted to our connected devices, is my point. But perhaps that’s not the right characterization. Ex-Google design ethicist Tristan Harris appeared at Fortune’s Brainstorm Health conference in Laguna Niguel, Calif., on Tuesday to underscore how outmatched our attention is when it comes to digital services.
From a biological standpoint, we can’t win when it comes to a buzzing phone or a pop-up notification. “What we’re calling addiction is basically AI pointed at our brains,” Harris said. Do you really have the willpower on a daily basis to resist the efforts of hundreds of engineers working to engage your subconscious? Can you really endure a world where business models are built on stealing your attention away from you?
I certainly can’t; neither can Kevin Durant. The Golden State Warriors basketball star acknowledged exactly that in the summit’s blockbuster closing session. Durant told Arianna Huffington that he “wasn’t the same person” when he fell into the habit of checking social media several times a day. He read too many comments and tangled with trolls. So he resolved to use it less. It’s not always easy, Durant acknowledged, but the ROI presented itself immediately. “I felt so free,” he said.
So put down the phone and figure out what your priorities are today. If the strategy is good enough for an NBA MVP, it’s good enough for a corporate chief. Best wishes for a productive (and interruption-free) day.
Today’s news below.
Europe's Tech Tax
The European Commission has added fuel to the potential trade war fire, by unveiling a proposal to tax big international tech firms (i.e. U.S. tech firms) according to their revenues, rather than their profits. It's only an interim measure, and it still needs to be approved by the European Parliament and individual EU countries. But it's likely to solicit a furious response from the White House. European Commission
Amazon has overtaken Google parent Alphabet to become the U.S.'s second-most valuable publicly listed company (the first, naturally, is Apple). It was only last month that Amazon overtook Microsoft to claim the No. 3 spot. However, Amazon's place at No. 2 is largely due to Alphabet losing 0.39% of its value over Facebook's Cambridge Analytica scandal—Google isn't directly implicated, but like Facebook it faces a lot of criticism over the way it uses people's data. Reuters
If President Donald Trump does decide to go ahead with his massive tariffs against China, what U.S. product will China hit in response? The most likely candidate is the humble soybean. China's Global Times state mouthpiece published an editorial late Tuesday that accuses the U.S. of breaking World Trade Organization rules with its subsidization of soybean production—much as the U.S. is accusing China of giving its companies an unfair advantage on the world stage. Global Times
The emissions-cheating scandal is far from over. German prosecutors raided BMW's Munich headquarters, as well as its engine plant in Austria on Tuesday. Prosecutors said they suspected the company of using a "test bench-related defeat device." The company recalled more than 10,000 cars last month to fix an issue with its engine management software. The timing of the raid is not great for BMW, which is releasing its 2017 results today. BBC
Around the Water Cooler
R.I.P. Pete Peterson
Pete Peterson, co-founder of the Blackstone Group and former commerce secretary under Richard Nixon, passed away Tuesday at the age of 91. Stephen Schwartzman, Blackstone's other co-founder, said: "He was a great partner. We both had no idea when we started Blackstone in 1985 that the firm would grow to this scale and importance. The firm was his pride and joy." Bloomberg
German Succession Crisis
Germany's economy is largely reliant on so-called Mittelstand companies, which are specialized, small to medium-sized firms that tend to be family-owned. However, the sector faces major change, with today's company owners often having no clear successor (partly due to the country's low birth rate.) A survey shows about 100,000 of these entrepreneurs want to retire over the next couple years but don't yet know to whom they should hand over the reins. Financial Times
Former Trump-whisperer Steve Bannon reportedly oversaw Cambridge Analytica's dodgy collection of Facebook data in order to "test the power of anti-establishment messages" such as "drain the swamp" and "deep state." This was back in 2014, way before Bannon joined Trump's 2016 campaign, and at a time when Bannon was a top executive at Cambridge Analytica, and the head of Breitbart News. The allegation comes from Chris Wylie, the Cambridge Analytica worker-turned-whistleblower. Washington Post
The Transportation Security Administration (TSA) said it does not check the data held on the electronic devices of passengers taking domestic flights. The agency was responding to a lawsuit from the American Civil Liberties Union's San Francisco chapter, which demanded that the TSA explain its procedures and policies for intra-U.S. flights. Acting on reports from people who claim their devices were scanned for data, the civil rights group still wants to see documentation to prove that the TSA doesn't rifle through such devices. L.A. Times