By Sarah Roach and Nat Rubio-Licht
July 6, 2022
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Good morning! Big Tech has been bracing for the EU’s rules on digital regulations, and yesterday the European Commission passed both the DMA and DSA in a landslide. Pay attention: Regulation in Europe has a way of becoming the global standard.
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Here come the tech regulations
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The European Commission yesterday passed two massive bills cracking down on tech’s bread and butter. The regulations will go into effect starting next year.
As a refresher, these bills are sweeping in scope. The DMA focuses on messaging, social networking, browsers and mobile operating systems across Big Tech, and the DSA takes aim at illegal and harmful content.
- The DMA asks messaging services like WhatsApp to open itself up to other platforms. (Security experts have told me that is just as complicated as it sounds.) It’ll also force Apple to allow third-party app stores and payment systems on iPhones.
- The DSA forces platforms to take down harmful content faster and asks them to better explain their recommendation algorithms.
The road ahead hinges on proper enforcement, but that will be tricky. Breaching any of the rules would result in a huge fine that Big Tech would surely try to fight — with their huge legal teams. And it’s unclear if the European Commission will get enough resources to even carry out the enforcement.
- The Commission will create teams around different aspects of the bills. One team, for instance, will look at messaging interoperability.
- The EU is recruiting over 100 employees to help enforce the bills, too.
- And at a press conference yesterday, Andreas Schwab, a lawmaker who oversaw the legislation, said enforcement will lean on whistleblowers. “There will be more and more people in the world and also gatekeepers who will say, ‘Hey listen, why don’t we make these markets better and fairer?’” he said, referring to Frances Haugen’s damning Facebook report.
Getting the right resources to enforce these acts will be an uphill battle. Especially given that some of Big Tech’s systems are so complex that the companies themselves don’t fully understand how they work.
— Sarah Roach (she/her/hers)
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The crypto crash’s winners and losers
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Crypto’s in chaos. Exchanges are halting withdrawals, mergers and acquisitions are ramping up and layoffs are numbering in the hundreds.
Several crypto firms are consolidating, with moneyed companies looking to take advantage of the crash as a way to expand. "More-prudent companies over the last couple of years are the ones that are now really well positioned to scoop up a lot of assets,” Alex Johnson, author of the Fintech Takes newsletter, told me.
- BlockFi agreed to potentially sell itself to FTX for up to $240 million, and Crypto lender Nexo signed a term sheet to acquire fellow lender Vauld. FTX was also rumored to be eyeing the once-soaring Robinhood.
Others, though, are pumping the brakes.
- Celsius, Babel Finance and several others paused withdrawals and trades.
- Crypto lender Three Arrows Capital defaulted on a $666 million loan, was ordered to liquidate and filed for Chapter 15 bankruptcy last week, setting off a chain reaction of problems at other crypto companies. And just this morning, Voyager Digital filed for Chapter 11 bankruptcy.
- The crash is sifting out companies with unsustainable growth, bad business models and unrealistic valuations. “It’s grounding the space back to something that's a little bit more realistic,” Cathy Yoon, chief legal officer at MPCH, said.
Regulation is likely on the way, given the number of individual investors and consumers who’ve felt the sting. “Regulation tends to follow swiftly after consumer harm,” Johnson said.
— Nat Rubio-Licht (they/them/theirs)
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The ecologist behind Microsoft’s climate plan
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Microsoft Chief Environmental Officer Lucas Joppa is responsible for leading the company’s lofty environmental and climate goals. In this week’s “How I Decided,” Joppa chatted with Climate editor Brian Kahn about his move from academia, where he studied ecology, to shaping one of the tech industry’s most robust climate plans.
- “Climate change is probably the grandest systems kind of crisis that the world's ever seen. My training helps me not become overwhelmed by the complexity of the issue. I understand the technological requirements, but I also understand the climate models and the socioeconomic models that the IPCC runs," he said.
- "What really formed the foundation of our early work, is if we do this — ”this” being achieving our carbon negative commitments — and we do it in a way that doesn't make it easier for everybody else, we didn't really do anything at all, right?"
Read Joppa’s full interview with Brian here.
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SPONSORED CONTENT FROM VERSAPAY
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Executives that don't align CX ambitions with accounts receivable leave money on the table: Fewer than half of executives (44%) see better communication with customers as a benefit of digitizing AR. Meanwhile, 72% state that their AR department isn't customer-oriented enough, implying that executives understand the need for customer-oriented AR departments, but aren't aware that they can close that gap as part of their AR digitization project.
Read more from Versapay
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Jeremy Legg said AT&T’s having no trouble hiring:
- “Now that the world’s shifted a bit, with Silicon Valley equity not what it was, there’s a lot of people looking up over the horizon, going, ‘Wait a minute.’”
Jon Cunliffe said the crypto crash shows a need for tight regulation:
- “Technology doesn’t change the laws of economics and finance and risks.”
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Deezer went public in France, but shares fell as much as 35% on its first day of trading.
eToro called off its SPAC merger with FinTech Acquisition and is laying off 6% of its staff.
Chip Childers joined VMware as chief open source officer. He was most recently the chief architect at Puppet Labs.
Susan Athey is the Justice Department's new antitrust economist. Athey teaches at Stanford and has consulted for Epic and Microsoft on antitrust suits.
Jason Fung, TikTok's former head of gaming, is launching a blockchain gaming startup called Meta0.
Michael Lillie is OneSpan’s new CIO. Lillie previously worked at Qlik, Endurance International Group and elsewhere.
Richard Murray is Hilbert Capital’s new CEO. Murray was Cevian Capital’s director of Investor Relations.
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The U.K.’s antitrust regulator is probing Amazon over whether it's giving an unfair advantage to its own sellers.
Uber is launching in Israel by connecting to a network of licensed taxis in the country.
Amazon took a stake in Grubhub and is giving Prime users a one-year membership to the food delivery service as part of the deal.
The U.S. is trying to block chipmaking tool sales in China. Officials are in talks with the Dutch company ASML to stop exporting lithography machines, which are critical for chipmaking.
Big Tech is spending more on the cloud. Amazon, Microsoft and Google made up 65% of global cloud-service spending in the first quarter of this year, an increase from 52% four years ago.
The Senate Intelligence Committee asked the FTC to investigate TikTok for allegedly misleading lawmakers about accessing the data of U.S. users.
Twitter is suing the Indian government, challenging block orders on some posts and accounts.
Russia really wants companies to have offices in the country. Lawmakers approved a bill that issues foreign tech companies bigger fines if they don’t have an office there.
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Canva is pretty straightforward, but it does have a few hidden gems. Protocol Workplace reporter Lizzy Lawrence chatted with Canvanauts (that's what Canva calls its employees) to learn about its most useful keyboard shortcuts:
- In Presenter mode, type “D” for a drumroll and “M” for a mic drop animation.
- When you’re building your presentation, type “R,” and you’ll get a rectangle. Typing “L” gives you a line.
- But perhaps the most useful: Typing “/” opens a magic tool where you can search for things to add to your presentation. If you want your presentation to include a picture of a lizard, for example, just search for “lizard” and you can choose animations or videos to add.
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SPONSORED CONTENT FROM VERSAPAY
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Executives that don't align CX ambitions with accounts receivable leave money on the table: A resounding 96% of respondents claimed that there is work to do in digitizing their AR departments, yet 60% agreed that their AR departments haven’t been prioritized as much as other departments for digitization. At a time when the importance of securing cash flow is higher than ever, many businesses are not putting enough focus on it.
Read more from Versapay
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Thoughts, questions, tips? Send them to sourcecode@protocol.com, or our tips line, tips@protocol.com. Enjoy your day, see you tomorrow.
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