When it comes to regulating Big Tech, Europe is siding with Big Brother, while the U.S. prefers to caveat emptor.
As leaders on both sides of the Atlantic contemplate how to force course corrections in Silicon Valley, several developments this week illustrated their diverging approaches to addressing the worst features of consumer technology and social media.
In the U.S., congressional leaders and Big Tech took steps or made declarations that reinforced a preference for giving users more control over their experience with technology. Meanwhile in Europe, lawmakers revelled in the testimony of Facebook whistleblower Frances Haugen, who has called for more centralized oversight of online platforms, as they approach the home stretch on legislation to expand government’s reach into algorithms, advertising, and other tech features.
Let’s start in the ol’ U.S. of A. Apple CEO Tim Cook on Tuesday doubled down on his commitment to asking iPhone users whether they will allow apps to track them for personalized ads, invoking the vision of company co-founder Steve Jobs.
“[Jobs] said that people should know what they’re signing up for, that you should ask them repeatedly for their permission in plain language,” Cook told The New York Times’ Andrew Ross Sorkin at the Times’ DealBook Online Summit. “You look back, it’s so simple, but it’s so profound that it hasn’t been the case many times.”
That same day, Axios broke news of a bipartisan House bill that would force large online platforms to give users an option to opt out of some algorithms that dictate what content they see. In an op-ed published Thursday by CNN, South Dakota Republican John Thune, a co-sponsor of the bill’s Senate companion, called the proposal “the best place to start” on holding Big Tech accountable.
“Supporters of this legislation are an ideologically diverse group, but we all agree that consumers should have more information and control over how algorithms—fed by users’ personal data—are influencing their online experiences,” Thune wrote.
Instagram also took steps this week toward empowering users, announcing that it’s testing a feature called “Take A Break” that will allow scrollers to get a notification if they have spent a certain amount of time on the app. Instagram head Adam Mosseri said the offering is “part of a broader effort to try and give people more control over their experience” with the app.
Contrast that to Europe. Haugen’s commentary bolstered ongoing efforts by the EU Parliament to pass legislation that would force online platforms to undergo content moderation audits and disclose some information about their algorithms to regulators, among other steps.
“We need to open up the black box that is the algorithm systems and ask platforms to assess the risk that any algorithm or change of algorithm poses to the user,” Christel Schaldemose, the EU Parliament’s lead negotiator of the legislation, told Politico Europe.
Haugen’s testimony also shined more light on progress in the United Kingdom toward a dramatic expansion of the government’s role in moderating online operators. Most notably, the UK is nearing approval of legislation that would result in potentially huge fines for platforms that fail to remove so-called “legal but harmful” content—a nebulous term that gives regulators significant powers.
American lawmakers certainly have sought to increase Washington’s influence over tech companies elsewhere, particularly on the antitrust front. But so far, unlike their European counterparts, Congress and Silicon Valley seem to trust the customer more than Uncle Sam.
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No signs of slowing for Rivian. The electric-vehicle automaker’s stunning public debut continued Thursday, as shares closed up 22% and its market valuation surged well beyond legacy stalwarts Ford and General Motors. Rivian closed at $122.99, leaving its IPO-priced shares of $78 in the dust. The biggest IPO since Facebook has prompted huge excitement among investors, with some projecting Rivian as the next Tesla, while skeptics worry that the virtually-revenueless company is now overvalued. Rivian's stock price continued to climb Friday in midday trading as of mid-afternoon.
The conglomerate crack-up continues. Toshiba, the 145-year Tokyo technology giant, will split into three companies amid shareholder pressure and fallout from years of mismanagement. The announcement comes two days after American mainstay General Electric disclosed plans to break up into three companies, citing the need for reinvention at the flagging giant. Activist investors have pushed for major changes at Toshiba following several crises, including a financial accounting scandal and a disastrous move into the nuclear energy sector.
Can’t find workers? Get a robot. North America’s labor shortage propelled record industrial robotics sales in the first three quarters of 2021, The Wall Street Journal reported. The continent’s companies ordered nearly 29,000 robotics units through September, with nonautomotive outfits, such as firms in the metal industry, leading the spike in demand. Total sales for the period reached $1.48 billion, just barely nudging higher than the previous record of $1.47 billion in 2017.
Manchin aims to short-circuit EV union perk. U.S. Sen. Joe Manchin came out Thursday in opposition to a component of Democrats’ climate and social spending bill that would give tax credits to buyers of electric vehicles made by unionized laborers. The West Virginia Democrat, speaking at a home-state plant run by union-unfriendly Toyota, said the U.S. government “shouldn’t use everyone’s tax dollars to pick winners and losers.” Domestic automakers such as Tesla and General Motors likely would benefit most from the proposal.
FOOD FOR THOUGHT
Binance steps out of the shadows. Imagine if the New York, London, and Hong Kong stock exchanges all combined—but you knew virtually nothing about how they’re run. That’s Binance. The world’s largest cryptocurrency exchange, which processes about $76 billion worth of transactions daily, has been a structural ghost. It has no formal address and operates without standard licenses, leaving regulators confused about who has jurisdiction over the outfit. But now, as crypto goes more mainstream, Binance is starting to peel back the curtain as it seeks to attract a wider customer base and government investigators close in, the Wall Street Journal reports.
From the article:
Financial regulators increasingly worry that digital assets, until recently dismissed by some as a fad, have grown so quickly they now are systemically important. In an October speech, Bank of England official Jon Cunliffe brought up the 2008 subprime-mortgage-fueled crisis and said of crypto, “When something in the financial system is growing very fast, and growing in largely unregulated space, financial stability authorities have to sit up and take notice.”
Binance is drawing the most regulatory attention. Authorities in a dozen countries have cautioned users in recent months the exchange is unregistered or not authorized to provide various services.
The Securities and Exchange Commission is looking into how Binance conducts business in the U.S., where it has many state licenses, according to former executives. The SEC has asked for a list of information from Binance’s U.S. affiliate, including how it relates to the global organization, according to one of the executives. Meanwhile, the Department of Justice is examining whether Binance has abetted money laundering, one former executive said. Bloomberg News previously reported the DOJ investigation.
IN CASE YOU MISSED IT
Rivian faces a tougher road to profitability than Tesla ever did, analysts warn, by Adrian Croft
Elon Musk isn’t sure Rivian can pass the ‘true test’ of automotive startups, by Dana Hull and Bloomberg
Johnson & Johnson shares jump as company follows GE and Toshiba in decision to split business apart, by Riley Griffin, John Lauerman and Bloomberg
Activision apologizes for ‘insensitive’ depiction of Koran in latest Call of Duty game, by Chris Morris
Robinhood promised to take crypto investors to the moon, and there’s no turning back now, by Rey Mashayekhi
Private jet travel reaches new heights as pandemic eases, by Jaclyn Trop
This year’s top tech gifts for gadget lovers, by Chris Morris
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BEFORE YOU GO
Clint Eastwood forever. With Universal Music Group embarking on the journey toward creating a musical act of nonfungible token apes, per Bloomberg, let’s pour one out for Gorillaz—pioneers way ahead of their time. If you’re not familiar with these cheeky Brits, let me break it down on a camel’s back. In a simpler time, when the art came before the commerce, musician Damon Albam and artist Jamie Hewlett teamed to form a band fronted by four animated characters called Gorillaz. For more than 20 years, Gorillaz has made us feel good with its unique blend of hip hop, electronic and pop, defying all expectations for an act and letting the music speak for itself (while also grabbing a Grammy along the way). So here’s to you, Gorillaz. No matter what pops out of the record label’s NFT machine, you’ll always be our first and favorite inanimate band.
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