Whistleblowers run Silicon Valley now

The testimony of the whistleblower, Frances Haugen, was revelatory, even after weeks of lead-up and blockbuster Wall Street Journal articles based on the information she provided. Still, I couldn’t help but wonder: Will the world’s sixth largest publicly-traded company by market cap be able to crush her?

Historically, whistleblowers haven’t had a good run in Silicon Valley. Power there is too concentrated. There’s too much money. Engineers tell themselves they alone can fix whatever is wrong with a system because, in many cases, they can. To be a whistleblower and air a company’s dirty laundry is tantamount to disbelieving the pervasive techno-optimism that’s sustained the industry. 

But maybe that’s turning. I’m thinking now of Dr. Adam Rosendorff, the former lab director at Theranos who’s emerged as former Wall Street Journal reporter John Carreyrou’s “Deep Throat” for his reporting on the company’s alleged fraud. Dr. Rosendorff testified that he personally saw the company’s blood-testing machines fail to provide accurate results, and that Elizabeth Holmes, Theranos’ then CEO, wanted to use them anyway to provide vital results for real patients. 

“I am feeling pressured to vouch for results that I cannot be confident in,” Rosendorff wrote in a parting email to Holmes, which was made public during the trial. 

Haugen’s testimony is so powerful because she has the keys to the kingdom. Her testimony isn’t easy to dismiss because Facebook — which tends to hire very smart people — is a company obsessed with its own platform, and pushes its employees and researchers to study it in order to make more money. 

Two things stuck out to me about her testimony today. The first was that Facebook has studied how ineffective parents are at helping their children deal with online bullying, and that she said the company’s executives have effectively done nothing about it. The other is that efforts to reduce harmful misinformation, even in politically unstable countries, were nixed by Zuckerberg himself. 

The parallels have been made to Big Tobacco, and they’re not wrong. But it is in fact bigger than that. Facebook is practically a country unto itself, an entity so large and influential that some people think it should have a seat at the U.N. (For what it’s worth, this is idiotic). The scope of Haugen’s information, coupled with her moral clarity and direct way of communicating, puts her on a parallel with Aleksandr Solzhenitsyn, the Soviet dissident whose meticulous document collection and interviews with other former prisoners exposed the true size of the country’s Gulag system. 

Facebook has responded in its own way to the scandal. Andy Stone, Facebook’s spokesman, has tried to undermine Haugen’s authority by saying she didn’t work directly on child safety. “Just pointing out the fact that @FrancesHaugen did not work on child safety or Instagram or research these issues and has no direct knowledge of the topic from her work at Facebook,” Stone wrote on Twitter. 

That’s all true — she had no problem saying so during her testimony — but the secret reports she unleashed are from the people who worked on it. And what’s notable, of course, is that Facebook makes no denial that Instagram hurts children. There’s also no denial that Zuckerberg knew his company inflamed hatred, division, and self-harm. There’s no denial that it knew how to manipulate parents to keep kids on the platform. 

What’s also missing is a reason to believe Facebook, at all. 

Kevin T. Dugan
@kevintdugan

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Tech sells off... Shares of tech companies continued to take a beating on Tuesday, as Treasury bond yields rose and the Federal Reserve gets closer to easing its easy-money policies. (One big outlier is Facebook, which sold off about 5% yesterday amid a global outage, but bounced back a bit after saying it wasn’t because of a hack). All this points to a tightening of borrowing costs, which investors worry will hamper tech’s profits. Nasdaq was down more than 7% from its peak on Sept. 7, bringing it closer to a 10% correction range. 

While Bitcoin flies. The cryptocurrency rose about $50,000 for the first time in a month on the back of growing institutional interest from Wall Street. Bank of America has opened a research desk on the asset class, while US Bancorp has opened a custody business. Other coins were also up. 

Is Tesla racist? A jury found that Tesla is liable for nearly $137 million in damages to a black former worker who was subject to racial epithets and harassment at a California factory. This comes a few months after another worker won a $1 million arbitration agreement, and a group of black workers are seeking class certification for a suit alleging systematic discrimination. 

FOOD FOR THOUGHT

Open the pod bay doors. Does anybody dislike William Shatner? He could have been like Harrison Ford, always ambivalent or outright hostile to the space hero that made his career, but he’s done just the opposite. He embraced the gimmickyness of it all, and is beloved beyond the usual hardcore Trekkies for his portrayal of Captain Kirk. Next week, the gimmick will send the 90-year old into space aboard one of Jeff Bezos’ Blue Origin craft. 

But he’s not the only one bringing Hollywood to the final frontier. A Russian movie crew boarded the International Space Station to be the first to film a movie in space. Since the space race is not just something that happened in the 1960s, but in fact a series of increasingly small stakes that involve the elusive line between atmosphere and vacuum, Russia gets to brag that it’s now the first country to do so, rather than just using pulleys and a sound stage. Sounds expensive! 

From the story: 

Aboard the space station, Ms. Peresild will star in “The Challenge.” It’s about a surgeon, played by Ms. Peresild, who embarks on an emergency mission to the orbiting lab to save the life of an ailing cosmonaut (to be performed by Mr. Novitsky). Few other details about the plot or the filming aboard the station have been announced.

The crew, using hand-held cameras both on board the capsule and in the space station, started filming scenes for the movie as the spacecraft approached the outpost, Rob Navias, a NASA spokesman, said on Tuesday.

IN CASE YOU MISSED IT

Ladies who launch: Women are powering the private space industry by Michal Lev-Ram

Exhausted and stressed out: parents take measures to limit COVID exposure in schools by Tali Arbel and the Associated Pres

New York City holds off on enforcing consumer data sharing law amid DoorDash lawsuit by Chris Dolmetsch and Bloomberg

D-Wave took its own path in quantum computing. Now it’s joining the crowd by Jeremy Kahn

Big Tech needs to tackle its water addiction by David Lynch

VMware CEO on cloud push, 5G, and artificial intelligence by Jonathan Vanian

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BEFORE YOU GO

Algorithmic control. China is tightening its grip even further on its tech industry by moving to regulate algorithms during the next three years. If you’re reading this far you probably have a sense that what companies like Facebook do in the dark deserves more scrutiny. 

Making “the algorithm” more transparent isn’t going to solve all the world’s problems. China’s industry is effectively nationalized under Xi Jinping, so parallels to any U.S. regulatory apparatus are moot. Fixing algorithms to promote propaganda or genocide is also bad. But maybe, also, this won’t be the end of the world.