Elizabeth Holmes concedes mistakes—to a point
Regrets, she has only a few.
Under questioning by federal prosecutors for the first time Tuesday, Theranos founder Elizabeth Holmes finally acknowledged she made some pretty big mistakes in the run-up to her company’s spectacular collapse.
On trying to pressure The Wall Street Journal’s top brass into quashing damaging stories about Theranos: “I couldn’t say it more strongly: The way we handled the Wall Street Journal process was a disaster. We totally messed it up.”
On threatening, via a high-powered lawyer, to sue former employee turned whistleblower Erika Cheung: “I sure as hell wish we had treated her differently and listened to her.”
On personally adding the logo of drug maker Schering-Plough to a Theranos-authored pharmaceutical validation report, giving investors the false impression that Schering-Plough endorsed the findings: “I absolutely wish that I had bolded that [the reports] were written by us.”
It’s an awfully convenient time for contrition, of course. The blood-testing wunderkind turned Silicon Valley cautionary tale faces up to 20 years in prison if convicted on 11 fraud-related charges. She’s accused of misleading investors, patients and business partners about Theranos’ faulty technology, which promised to run extensive medical tests using a miniscule amount of blood.
What’s more notable from her Tuesday testimony, however, is the lack of personal responsibility taken by Holmes on matters that could prove more damaging to her defense.
Take, for example, Holmes’ comments on publicly trashing the Journal’s accurate reporting. Holmes uses wishy-washy words that describe her feelings about her actions—”we totally messed it up”—as opposed to owning the impact.
In 2015, Holmes unequivocally made a false statement when she told CNBC’s Jim Cramer immediately after the Journal’s initial article questioning Theranos’ technology that “every test that we offer in our laboratory can run on our proprietary devices.” Such a false claim not only undercut the reporting, but surely aimed to reassure investors and others with a stake in Theranos’ success.
During her five days on the stand to date, Holmes also frequently said she couldn’t recall key details of allegations against her or denied any nefarious intentions. The charges against her require proving that she knowingly broke the law.
Ultimately, Holmes is largely banking on jurors believing her claims that her former romantic and business partner, Sunny Balwani, manipulated her through emotional, verbal, and physical abuse. (Balwani denies the allegations.) That defense wades into sticky territory, resting on difficult questions about intimate partner violence, the legal implications of any such abuse, and burdens of proof.
Jurors will decide whether Holmes’ defense is legally or factually suspect. For now, they’re seeing that Holmes is only willing to take enough personal responsibility to keep her out of prison.
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UK officially nixes Meta-Giphy deal. The United Kingdom’s antitrust regulator ordered Facebook parent Meta on Tuesday to sell recently acquired GIF platform Giphy, finding that the $400 million deal completed in 2020 created monopolistic conditions in the world of GIFs. The Financial Times reported Sunday that the UK’s Competition and Markets Authority was expected to announce the decision this week. The CMA determined that the deal could give Facebook undue market power by denying or limiting access to GIFs, driving even more traffic to the social media platform, and boosting Facebook’s already-sizable share of display ads. Facebook officials said they disagree with the ruling and are considering options in response, including an appeal.
Microsoft investors want Bill’s dirty laundry. Microsoft shareholders voted Tuesday to force the disclosure of company sexual harassment case information and the results of any independent investigations into executives, including departed co-founder Bill Gates, The Wall Street Journal reported. The outcome follows a May report by the Journal that the company’s board engaged a law firm to investigate an employee’s claim that she had an affair with Gates while he served as a top executive. Microsoft opposed the shareholder motion, offering instead to provide information about its implementation of sexual harassment and gender discrimination policies.
Meta’s crypto chief cashes out. The leader of Meta’s uneven venture into cryptocurrency announced his resignation Tuesday, citing a desire to tackle new entrepreneurial challenges. David Marcus, who jumped from PayPal to Facebook in 2014, oversaw the company’s ill-fated attempt to launch a Facebook-based cryptocurrency called Diem and a public digital wallet. Facebook debuted a wallet for a cryptocurrency called Novi in October, but the offering is not yet available to the broader American public. Meta CEO Mark Zuckerberg, in a Facebook comment on Marcus’ post announcing his resignation, said the company “wouldn’t have taken such a big swing on Diem” without him.
Once more, with feeling, for Haugen. Facebook whistleblower Frances Haugen is scheduled Wednesday to continue her tour of legislative bodies, this time testifying before the House Energy and Commerce Committee, Axios reports. Haugen is expected to address her recommendations for addressing the worst excesses of Big Tech, many of which were illuminated by the extensive internal research she leaked showing negative aspects of Facebook and Instagram. While legislators from both sides of the aisle have voiced support for legal tweaks to Section 230, which shields tech platforms from liability when users post illegal content, and other laws governing Silicon Valley, no consensus appears imminent. The former Facebook manager has testified before the U.S. Senate and the European Union, and British and French parliaments.
FOOD FOR THOUGHT
Guilty until proven innocent on Facebook. Immediately after Kyle Rittenhouse killed two people and injured another during the Kenosha, Wis., riots, Facebook officials made the teenager persona non grata on their platform. They removed Rittenhouse’s Facebook and Instagram accounts, blocked searches of his name and removed posts praising him. Now, with Rittenhouse acquitted of all charges after claiming self-defense, the BBC reported that Facebook is reversing those measures. The case illustrates the enormous challenges facing moderators at social media and technology companies, particularly when the exact facts and legal nuances of hot-button cases aren’t immediately known.
From the article:
Mr. Rittenhouse is considered a patriotic hero by some, and a reckless vigilante by others. The line between support and glorification of violence is a difficult judgment for moderators.
In December last year the BBC found videos on YouTube of people recreating Kyle Rittenhouse's shooting at gun ranges. The platform removed them, only after they were alerted to the videos.
However, YouTube did not remove other videos that glorified Mr. Rittenhouse's actions. YouTube's moderation of Rittenhouse content was on a case by case basis.
Facebook took a very different approach.
IN CASE YOU MISSED IT
Verizon CEO on what’s next for 5G in 2022, by Dan Catchpole
Match reaches $441 million settlement with Tinder over valuation, by Chris Dolmetsch, Tina Davis, and Bloomberg
Ether futures ETF filings are stacking up, but approval may still be far off, by Jessica Mathews
How diplomacy can (and can’t) solve the world’s cybercrime crisis, by Meredith Balkus
Jack Dorsey is trying to avoid making a Bill Gates mistake, by Felicia Hou
BEFORE YOU GO
A more perfect metaverse? If anyone can make the case that the metaverse doesn’t have to be all cynicism and skepticism. it’s the chief executive of the company behind Pokemon Go, of course. Speaking at Fortune’s Brainstorm Tech conference in Half Moon Bay, Calif., on Tuesday, Niantic CEO John Hanke argued for a future metaverse that makes daily life easier, giving us more time and space for genuine human interaction, as opposed to one that replicates our current reality. Said Hanke: “Let’s pause a moment here and ask the question: Is that the future we want to build?”
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