Protocol - TikTok takes the pressure off Meta

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By Sarah Roach, Nat Rubio-Licht and Kate Cox
September 15, 2022

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Good morning! Senators grilled social media companies yesterday over security concerns and concluded that the platforms don’t optimize for user safety. But there might be at least one way to help.

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Grilling season

 

Social media platforms took center stage on Capitol Hill yesterday. And one of lawmakers’ key conclusions was that companies are optimizing for attention while turning a blind eye to safety issues.

The first session was with former Twitter and Meta execs, and focused on platforms being more transparent about how their algorithms work.

  • Alex Roetter, Twitter’s former SVP of engineering, said algorithms are “doing exactly what they’re intended to do, which is maximize attention on the platform.” If some of the content that platforms share was penalized, those algorithms may perhaps change.
  • Members of the Senate Homeland Security and Governmental Affairs Committee talked about the Platform Accountability and Transparency Act as a way to help. The bill would require platforms to comply with university researcher data requests or lose Section 230 protections, which platforms would rather keep.

Then TikTok was put in the hot seat. In a second session, the committee pressed executives from YouTube, Meta, Twitter and TikTok on security concerns with their platforms, including topics like immigration and content that’s harmful to children — but it was the final company in the list that had the hardest time.

  • TikTok’s relationship with China in particular was put under a microscope, giving the other platforms a bit of a break from the fire compared to past hearings, Protocol’s Hirsh Chitkara notes.
  • TikTok COO Vanessa Pappas was grilled by the committee on whether TikTok is sharing data with China, which she denied. She claimed that the allegations in a BuzzFeed News report, about U.S. user data being accessed repeatedly by China-based employees of the company, were unfounded.
  • Pappas also engaged in a heated discussion with Sen. Josh Hawley about whether any ByteDance employees held Chinese government or Chinese Communist Party affiliations. Pappas said she couldn’t “vouch on the political affiliation of any particular individual.”
  • “You have no way to assure me that they don’t have access to our citizens’ data, and you won’t answer my question in a straightforward way about whether a CCP member has ever gained access,” Hawley said.
Meta may have enjoyed having an easier time of things yesterday. But any relief may be fleeting. "The change in spotlight isn’t just about China," Hirsh wrote. "Congress is also paying more attention to TikTok because it’s passing Meta as the most influential social platform in the U.S."

— Sarah Roach and Nat Rubio-Licht

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It’s time to fine

 

Google can’t seem to steer clear of antitrust complaints. They’re in the U.S. and abroad, and no matter how hard the company’s trying to push back, regulators are moving forward.

The biggest of them all is the EU’s $4 billion fine, which Google had appealed.

  • The European Union’s General Court yesterday upheld a 2015 antitrust ruling against Google, though it shaved around 215 million euros off the fine, bringing it down to 4.125 billion euros, or about $4.12 billion.
  • The original dispute centered on whether Google used the dominance of Android to promote its search engine.
  • The case is one of several in which EU regulators fined Google several billion dollars. In 2021, Google lost a different appeal over a $2.8 billion fine for behaving anticompetitively with its shopping service. And in 2019 it was fined $1.69 billion for bundling advertising and search.

Meanwhile, here in the U.S. one of many massive antitrust lawsuits got a green light to move forward.

  • A federal judge ruled Google has to face the ad tech antitrust lawsuit by a group of state attorneys general.
  • U.S. District Judge P. Kevin Castel did dismiss claims Google colluded with Facebook in the “Jedi Blue” program, but he otherwise gave the green light for the group of 17 attorneys general to make the case that Google abused its market power on three other counts.
  • Those focus on Google’s ad-buying tools, in-app networks, ad exchanges and publisher ad services.

And the antitrust suits don’t stop coming. Cases in the U.K. and the Netherlands are reportedly next to come Google's way.

  • A group of publishers are planning to sue Google over its digital advertising practices in both British and Dutch courts, Reuters reported.
  • The same law firm is handling both cases, which aim to ”obtain compensation” on behalf of U.K. and EU publishers for “damages [Google] has caused to this important industry.”
  • Google could theoretically be on the hook for up to $25.4 billion between the two as-yet-unfiled suits.

It’s not all antitrust, though. Regulators in South Korea say Google’s breaking privacy laws, too!

  • South Korea on Wednesday fined Google and Meta around $72 million for violating South Korea’s privacy law.
  • Regulators said Google didn't notify users adequately about data collection, set default settings to "agree" and hid other options, according to TechCrunch.
  • The fines are the largest South Korea has ever levied against a company for violating personal information protection law, TechCrunch reported.

— Kate Cox

A MESSAGE FROM PROJECT LIBERTY

Combining the power of cutting-edge tech, effective governance principles and a civic movement, Project Liberty is transforming how the internet works and who it works for. Join us at Unfinished Live, September 21-24, to learn more and to get involved.

Learn more

When to choose buying over building

 

Gusto has gone through a growth spurt since its early days as a provider of payroll management software for small and medium-sized businesses. In the decade since it was founded, it exploded into a $10 billion business with 200,000 customers. With that growth, co-founder Edward Kim decided it was time to make deals.

Last year, the company started an acquisition spree. Rather than creating competing products, it acquired tax credit research company Ardius in June 2021, tax software provider Symmetry a month later and remote hiring company RemoteTeam in October 2021.

  • Kim told Protocol Fintech reporter Ryan Deffenbaugh that while Gusto’s core mission and product has remained the same, the ability to offer more to small businesses “gave us some buy opportunities.”
  • The pandemic’s strain on small businesses added urgency, he said. “We didn’t have the luxury of time. We couldn't wait two years to build what Ardius had built and get it in the hands of small businesses.”

The pandemic may have been the catalyst for the acquisitions, but they have since provided major benefits to Gusto’s client base. “We just have to keep listening to our customers and see ways that we can help,” Kim said.


Read more about how Edward Kim decided the time was right for making deals.

People are talking

 

Mark Bergen said YouTube is always trying to “have its cake and eat it, too”:

  • “They want a big brand cast presentation for advertisers … while ignoring the creators that don’t necessarily reflect the values that it wants to reflect.”

Bob Chapek hinted at a platform that combines all of Disney's offerings:

  • "You have to step back and look at this as Disney is a lifestyle ... but we need to embrace that.”

Making moves

 

Envoy acquihired Worksphere, a workplace management tool, for an undisclosed amount.

Maarten Van Horenbeeck and Nubiaa Shabaka joined Adobe as CSO and chief privacy officer, respectively. Van Horenbeeck comes from Zendesk, and Shabaka’s from AIG.

Brad Olson is the new CEO of Sollis Health. Olson is Peloton’s former chief business officer.

Scott Levine is Brightcove’s new SVP, head of product. Levine was most recently in a similar role at TelevisaUnivision.

Daniel Brennan is Dataiku’s first legal chief. Brennan was previously Twitter’s deputy general counsel.

In other news

 

Gary Gensler is testifying before the Senate Banking Committee today. He's expected to stand by his views on crypto oversight and new rules on climate-related disclosures.

Walmart's introducing virtual fitting rooms, allowing users to see what clothes would look like on their own bodies when they're shopping online.

The Merge has arrived. In other words, Ethereum shifted to a "proof of stake" system that's expected to reduce energy consumption (but there are still big climate concerns).

Google’s Area 120 unit seems to be crumbling. Some employees of the in-house incubator were reportedly told to find a new job at Google or leave, and many projects within the division have been canceled, Bloomberg reported.

Employees are reportedly struggling with Tesla's back-to-office plans. There aren't enough chairs and parking spots to accommodate everyone, and it's hurting morale.

Period-tracking app Flo introduced an anonymous mode, which lets people use the app without their name, email address and other identifiers being tied to their health data.

Twilio laid off about 11% of staff. CEO Jeff Lawson said the company grew too fast and “without enough focus on our most important company priorities.”

The California attorney general sued Amazon for anticompetitive practices, claiming the company punished third-party merchants for offering lower prices on other marketplaces.

The state of emoji address

 

It’s the most wonderful time of the year: Yes, the season of Adobe’s Emoji Trend Report. Here are some highlights from this year’s report:

  • The top five emoji include the laughing crying face 😂, thumbs up 👍, red heart ❤️️, sideways laughing-crying face 🤣 and sad face 😢. Well deserved, everyone.
  • Some people misunderstand other emoji, including the cowboy face 🤠, the cherry 🍒 and the upside-down smiley face 🙃.
  • Most respondents said emoji help them connect with colleagues as they work remotely, adding that using emoji has a positive impact on their likeability and credibility.

A MESSAGE FROM PROJECT LIBERTY

Combining the power of cutting-edge tech, effective governance principles and a civic movement, Project Liberty is transforming how the internet works and who it works for. Join us at Unfinished Live, September 21-24, to learn more and to get involved.

Learn more

 

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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