Pivot - More GOP Twitter suspensions, Parler is back, and FTC Commissioner Rebecca Slaughter on the future of big tech

Episode Date: January 19, 2021

Kara and Scott talk about Twitter suspending republican Rep. Marjorie Taylor Greene for spreading misinformation about the election. They also talk about Parler's resurgence on the internet. Then in Friend of Pivot, we hear from FTC Commissioner Rebecca Slaughter on antitrust lawsuits against Facebook and the future of tech regulations under the Biden administration. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Support for Pivot comes from Virgin Atlantic. Too many of us are so focused on getting to our destination that we forgot to embrace the journey. Well, when you fly Virgin Atlantic, that memorable trip begins right from the moment you check in. On board, you'll find everything you need to relax, recharge, or carry on working. Buy flat, private suites, fast Wi-Fi, hours of entertainment, delicious dining, and warm, welcoming service that's designed around you. delicious dining and warm, welcoming service that's designed around you. Check out virginatlantic.com for your next trip to London and beyond and see for yourself how traveling for takes forever to build a campaign. Well, that's why we built HubSpot. It's an AI-powered customer platform that builds campaigns for you,

tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers. Get started at HubSpot.com slash marketers. college. I'm a little tired. I had a lot of meetings, a lot of meetings today. I'm in New York City. I drove up in a sealed vehicle. And then I've been just getting my son a bunch of stuff. He needs all kinds of things like marshmallows and hot chocolate because he's got to be in quarantine for several days. That's right. He's back in school. Yeah, he is. They're going to do hybrid classes, which is really exciting. So we'll see. Now that you all, all you NYU professors have gotten all

your shots, you better get back to school. That's all I got to say. It's back to school. Back to school. So anyway, so I got to drive down to Washington. I'm a little tired. I'll be honest with you. And I'm also interviewing Ralph Macchio from the Karate Kid tomorrow. So I had to watch all the Cobra Kai's, which I did.

Ralph Macchio. Wow. I mean, you know, Zuckerberg, Cook, that's one thing, but when you get to Macchio, you have arrived. You know what? It's the biggest hit on Netflix, my friend. This is really interesting. A lot of these revival shows, and this one is wonderful, actually. It's a shockingly good, I don't know what it is. It's a revival. It's 20 years later, 30 years later. It's really good. It's 80s music 30 years later it's really good it's 80s music everybody loves 80s music everyone loves 80s everything it's not just that because it could be hokey and terrible it's really well done it's incredibly well done anyway it's a little hokey so i gotta

get back to dc which is which we like to call fortress dc uh and hopefully they'll let me into the city if as long as i'm not carrying you know ammunition and munitions which apparently all these people like drive there and can't believe they get caught with a trunk full of guns and bullets. It's crazy. That's shocking to me, because as a group, they seem strikingly practical and intelligent to me. No, they're not. It's crazy. Like, really, they drive up to, like, checkpoints with, like, a trunk full of weaponry in the middle of this, like millions of troops. And, you know, Stephanie Ruhle is down there right now in D.C. I'm going to be seeing her tomorrow, possibly.

And she's doing a story about the vendors that got hit, the restaurants. This would have been a big money making weekend for everyone, even in the middle of the pandemic because of Trump and because of the backlash he has created and all this difficulty and the backlash to the backlash, essentially, they're going to have this problem that nobody gets to go to the inaugural. My kids don't get to go. It's just really sad what's happened here. Yeah, agreed. It's really sad. But back to Netflix. Have you seen Bridgerton?

No, not yet. I'm not ready for porn yet. So I will. Oh, it's total porn. That's, but it's really well-produced porn. I said, I was watching the last one. I'm like, this is like Cinemax on a higher, a better, you know, bigger production budget. Yeah.

And the guy is handsome. I thought you'd have a man crush on him. The Duke or whatever. Yeah. He's hot. Oh yeah. He's a tall drink of lemonade. Is he?

Yeah. That's what I heard. That's what I heard. I knew you'd like him. Speaking of a tall drink of lemonade, which has nothing's what i heard that's what i heard i knew you'd like him speaking of uh of tall drink of lemonade which has nothing i'm trying to make a shift but you know one of the things we've talked about is how well uh people that are that are getting fit and he is very fit obviously um but peloton's facing a backlash from users uh for delayed delivery and poor customer service um it's quadrupled in value to almost 40 billion during the pandemic it's a

great product i love my Peloton. But they're having trouble delivering the goods, delivering the bikes themselves. What do you think about that? Well, this is a supply chain, Peloton. And this is another reason why I think once Peloton stock comes down, there's a decent chance it'll be acquired by a big tech firm, most likely Apple. We've talked about that. most likely Apple. We've talked about that. But if you think of,

if you think about the sweat industrial complex, it's a big, big business, and it's all been dispersed to people's homes and living rooms and the mirror and all this stuff. And Peloton took advantage of that, but the supply chain, people don't, you know, it is hard to assemble a connected device. It's relying on components coming from all manner

of the four corners of the earth. So it's not a, I don't think it's a surprise they've run into supply chain problems. People, one thing people have never really, people know that Apple's a great retailer. They understand that they're a fantastic marketer. Their CEO is a supply chain guy. Their ability to bring $550 of chipsets and sensors together from different regions of China and Taiwan and the U.S. and sell it for $1,100, you know, the logistics here

are just extraordinary. So I think it's more surprising it took so long for this supply chain hiccup. But anyways. Yeah, it's interesting. But people love the product. That's the thing.

This has happened to a lot of, like, great products. I remember when the iPhone came out and not everybody had to wait and wait and wait to get it. Yeah. I think ultimately this will be fine for them, but they really do have to lean heavily into getting the supply chain perfect in some ways. Yeah. You know, that stuff, I mean, think about, but if you think about really the, okay, the most valuable company in the world, Apple, the company that's added, I think the most market cap, well, I actually think

it's Apple, but one of the big four, Amazon. What are they? Their victory is in supply chain. Everybody talks about blitz scaling and technology, but if you think about Walmart adding hundreds of billions of value through click and collect, if you think about Apple's ability to put this incredible phone at high margin and put it in stores around the world, including their 550-year-old temples. If you think about Amazon, the thing that's taken them from kind of 50 billion to one and a half trillion was Prime. It's supply chain.

We all talk in the 90s. And value. Well, but in the 90s, for a hot minute, it was brand, it was the gangster competence. And people like that, and it's controlled the narrative and Starbucks and Nike. But I'll tell you, if you're a young person and you're coming out of school and you want to think about how do I develop a skill set that foots well to where the market is headed,

it is about operations and supply chain. And that's where the real innovation is. People are, companies are reallocating capital out of marketing and advertising. Into distribution supported by robust, really robust black and supply chain. So sexy, supply chain. It's anything but sexy. It's the opposite of that. It's as sexy as the Duke in Bridgerton. His supply chain is sexy as the Duke in Bridgerton. Yeah, no, you're right.

It's Shonda Rhimes. Is that her name? Shonda Rhimes. Shondaland, yeah. Shondaland, yeah. She got a quarter of a billion dollars to do porn. That's good for her.

You know, you didn't watch the other shows. They were very... What were the other shows? They were down that road. She's just gotten the Netflix permission to go even further down the road.

Grey's Anatomy? Hello, all of them. She's like a huge... Oh, she was Grey's Anatomy. I never saw Grey's Anatomy. Oh, my goodness. She She's like a huge... Oh, she was Grey's Anatomy. I never saw Grey's Anatomy. Oh, my goodness. She's like the biggest hit maker in Hollywood.

Really, truly. Yeah. You know, after Dick Wolf, I guess he was also a big hit maker, but he's... And that's the Law & Order series, but she is like the top level

of creator in Hollywood and Netflix getting her and this being a big hit is a big deal. Good for her. They paid up for her. Anyway, we're going to get... Oh, by the way, Google, just for people to know being a big hit is a big deal. Good for her. They paid up for her. Anyway, we're going to get, by the way, Google, just for people to know, has completed its acquisition of Fitbit. So it's going to be a really interesting space.

Healthcare is going to be an interesting space going forward. And I think you're right. I think Peloton is going to get bought by one of them. And Apple is the best choice because it looks like an Apple device, right? It feels like an Apple. And Apple is actually competing with Peloton with some of the fitness stuff. But they're definitely in there. We'll see what happens. But we're going to move on to big stories. Obviously, it continues to be the situation with tech companies and politics.

Twitter has suspended Representative Marjorie Taylor Greene's account temporarily. The company said the well-known QAnon adherent violated the civic integrity policy after posting false information about Trump's election defeat. She's deep into QAnon, along with several other new members of Congress. This company policy has also been used to remove thousands of these QAnon-related accounts, which Marjorie Taylor Greene has endorsed. Last week at the Trump impeachment hearing, the congressman wore a face mask that said censored across the front. I think she's an

appalling person and should be expelled from Congress, but she was voted in here and she continues to spew rhetoric that's really demented, actually. Meanwhile, Parler, the social media app that hosted unbrowled far-Right Message Boards, is back online. The website has a message from CEO John Mates, who I interviewed recently, that says, Now seems like the right time to remind you all, both lovers and haters, why we started the platform. We believe privacy is paramount and free speech essential, especially on social media. He goes on to say, we'll resolve any challenge before us and plan to welcome all of you back soon. We will not let civil discourse perish. It's a little bit of a high-handed, high-horse thing from John Mates,

who really, you know, he did a really terrible job in his interview with me. And so, what do you think, Scott Galloway, of all this? Well, the most dangerous thing about last week wasn't this mob, and I'm parroting Fareed Zakaria, my kind of intellectual role model back. It's not, the most interesting thing about last week wasn't the mob, it was the recognition or the realization that a large portion of America believes, is convinced that there was election interference. We have gone full Russia where the truth

is no longer a thing. And it goes back to that saying that if you can get people to believe absurdities, you can get them to commit atrocities. And if you think about, and I love this quote, and I said it last week, that fascism is essentially the temporary alliance

between the elite and the mob. And the mob is going to pay a price here. They are going to be put in jail, I believe. But we now have to turn to the elite, and that's the Fox News. That's the representatives who, I don't even call them Senator Holly and Cruz. I call them Sedition Holly and Sedition Cruz,

who knowingly spread misinformation. And also where the profane has become the obscene here is after canceling, suspending one account, after Jack Dorsey going through all this hand-wringing and suspending one account 1,449 days into his 1,460-day tenure. We have found that just canceling, suspending that one account has reduced misinformation about this election by 72%. Yeah, So this bullshit lie that has been propagated by the lipstick on cancer that is Sheryl Sandberg, that is Jack Dorsey,

that it would be impossible for us to police these platforms. We always said, well, it would be expensive, but it would be possible. Well, guess what?

I was wrong. It's not even expensive. Yep. That's interesting. One account being shut down and 72% Has the misinformation that resulted in an effective insurrection and violence has gone away. But it wasn't one account. They also cracked down on a lot of QAnon accounts.

This is the same thing. You're right. This woman allowed to spew this really nonsense and lies is really something. And they act like it's the height of civil discourse at Parler is ridiculous. It's just not civil discourse. It's something else.

And two things that I saw this week, there was a great piece in Politico about how Trump thought she and others were crazy, including Sidney Powell, and then sort of fell into the belief system of these conspiracy theories, how easy it is to be radicalized. And the second one that I think we do leave out, which Ben Smith wrote a fantastic column about the lawsuit that Fox settled.

Fox had the guy who was killed just by a mugger, the Rich settled, had this, the guy who was killed in, by a, just by a mugger, the Rich family, Seth Rich, and that Fox turned it into this ridiculous evidence-free conspiracy theory, and then had to do this massive payout that they didn't want to announce until after the election. And there's a quote that I think was 100% right that Ben had, there's only one multi-billion dollar media corporation that deliberately and aggressively propagated these untruths. That's Fox Corporation. And I think there is not enough focus also on cable, you know, in terms of cable and what it did, and especially Fox News. And he also wrote, remember, that's the genius of the Murdoch's management of the place. They collect the cash while evading responsibility and letting their hosts work primarily for Mr. Trump.

This was Sean Hannity who was doing this. We cannot leave the echo chamber between these crazy people and Fox News and how that fuels the entire sort of conspiracy theory, hatred, hate mongering kind of stuff. I got shit five years ago for saying that big tech was dangerous. No, you're just jealous of our innovators. Then I got a lot of shit for saying that Sheryl Sandberg was bad for women in our country and that Mark Zuckerberg was a sociopath two years ago. No, you're jealous and overreacting. And then I got a lot of shit on Twitter for comparing Hitler to Trump or for comparing Trump to Hitler. And everyone likes to think we've all gotten this cold comfort that, oh, he's been voted out of office. It's over. No, it's not. We put Hitler in prison in the 30s.

And guess what? He came back. When you have an individual that has been, it is basically- We didn't. Germans put Hitler in prison. Excuse me, Germans. A modern society that was known as an incredibly productive society that appreciated art, that appreciated education, and everybody keeps saying it can't happen here. Well, guess what? It is happening here. But it is happening here when you can effectively decide that you have no fidelity to the truth, you end up with tyranny. And what has been so shocking and so upsetting and has put us in such an uncomfortable place

is that the stupid, the people who really have been co-opted by this, who believe that despite the 62 cases accusing different electoral districts of some sort of fraud or some sort of impropriety have been not only rejected, but they wouldn't even be heard because they were so ridiculous. There are still something like 60% of Republicans think there was election interference. Yeah, that's why they kept repeating it, the conspiracy theories, and they were more outlandish. You know, the problem is the elite thinks, oh, that's crazy, Venezuela, Hugo Chavez, ha-ha, like in this massive, there's one that Sidney Powell, this massive conspiracy between India and all these countries. The Pelosi family. Whatever, whatever.

It's like, but they do stick. And one of the things that you have to go watch, there's a New Yorker video of a reporter that was on the scene there. I saw that. That is so disturbing what these people think they were doing. And, you know, everyone's like, oh, it's stupid they are. I'm like, they believe what they're saying there about, you know, that there's a conspiracy. What can we find on these scumbags? When nothing's going on, they have convinced themselves that something is.

And so what's happened is not just Fox News, but the rest of them is that there was always going to be a conspiracy theory in our world. And look how much damage it did without the amplification of online. Now amplified by online, it is, look, Hitler didn't need the internet to become Hitler, right? This has created a situation that the far right is using to spew conspiracy theories that are going to be impossible to control. Well, every great tyrant or fascist has had their medium, and Trump and his cohort. But look, I think the FBI and the criminal courts are going to hold the mob accountable. I'd like to think that voters and maybe the Southern District of New York will hold Trump and his family accountable.

It's time for all of those and shareholders to begin holding these media companies accountable. They knew what they were doing. They claimed they threw up their arms and said there was nothing we could do. You know who could solve 90% of the hate speech on Twitter? A fucking eighth grader with an old laptop. By just finding the 35 accounts or the 40 accounts that, because it's not only what you're saying, it's how much influence and how much followership you have.

And then in come the trolls who have a vested interest. The Russians basically outlined this entire strategy. And what the head of their propaganda machine said was that we never anticipated we wouldn't need to plant the stories. We need to add some fuel, but America is now creating its own stories. And there has to be a penalty when you're a senator, when you're a CEO, when you're on the board of directors of a company and you knowingly know, you know, remember all this, we want to give voice to the unheard and, oh, well, lying is bad, but I think the person who's the Holocaust denier should be heard. No, they shouldn't. There's danger here. There's incredible danger. And this is all from our senators, all from the CEOs of these companies.

And then they immediately pivoted to, well, there's nothing we can do about it. It would be impossible. And the cost to do it would, well, there's nothing we can do about it. It would be impossible. And the cost to do it would not only be bankrupt us and innovation and capitalism and our shareholders, but it would be a threat to the First Amendment.

And that was all a lie. This is not a hard- What do you make of the CEO, John Mates, gets sort of on his ridiculous high horse here where she's like, we believe privacy is paramount. We all agree that. Free speech is essential,

especially on social media. We will not let civil discourse perish. I think the part of the matter is it's not civil discourse. It's lies. Well, no, it's okay. I buy all of that. I buy all that. What I also buy though, is that when you knowingly create a platform that traffics and profits from misinformation and lies that result in a Capitol Police law enforcement officer being bludgeoned by a fucking fire extinguisher, you bear some responsibility. So what do you do? What do you do about the Fox News as well? Because I think you can't leave them out of it.

I think one of the things internet people have always said is like, well, TV is just as bad. And I'm like, in some cases, that is the case. So how do you end that without quashing free speech in some fashion? I just don't think we have conflated freedom of speech with freedom of reach. And I believe that Tucker Carlson should be allowed to say these things. But the problem is when you have a for-profit company that knowingly spreads misinformation and creates inflammatory rhetoric that results in violence and insurrection, we have laws that said that

that media company, especially if it's not protected by 230, is liable. So I'm not denying the right to say it, nor am I denying that family of that police officer who was bludgeoned by a fire extinguisher the ability to sue a company that knew they were spreading misinformation and that resulted in violence and death. I think there is a system. I think these companies have wrapped themselves in the innovator's blanket or 230, or we have been afraid to go after this. What does the innovator's blanket look like?

It's simple. I'm an innovator, and I write about personal loss and gender equality, and I'm a capitalist, and oh my God, do you own my stock? You've done really well. Or I go on silent retreats and have a beard and a nose ring and speak in slow, hushed tones, which must mean I'm a thoughtful person. No, you're not, motherfucker. You are a menace. Jack Dorsey is a menace. And civil and criminal courts, much less his direct, much less his shareholders need to hold him and his board accountable. We are not gonna move past this unless the bandits, the people that know they're damaging America, but profiting off of it, stop leveraging the stupids,

the people that damage themselves and damage society, unless we align incentives with externalities and the health of the Commonwealth. And we have been so fucking crazy overwhelmed with this idolatry of innovators that we have put it on hold and this woke bullshit notion that we need to understand both sides. No, we don't. We need to put these people in jail. They have committed crimes that has resulted in violence and death to innocents. resulted in violence and death to innocents. Yep.

I feel your pain. So what's going to happen? So, you know, what if Peter Thiel- Let's talk about that hot guy. Let's talk about the hot duke. We can look at the hot duke and also be angry at these. We have an ability, Scott, to like a hot duke and also be like, what the hell, Facebook? What the hell, Fox News?

Do you see people like Peter Thiel investing in alternative? How is Parler going to come back? They're just as simple. I mean, in a lot of ways, I think this guy is just an appalling CEO, and he's really quite ignorant. But I think he's been made a scapegoat of, even though he's returning with, you know, whatever, whatever, John, whatever. He has been made a scapegoat to take all the pressure off the bigger companies

who I think are much more responsible. Yeah, just as- Like Fox News, like Twitter, like Facebook. It's the heat shield. So, okay, Shell Sandberg's likability is a heat shield for Mark Zuckerberg. Mark Zuckerberg is a heat shield for Tim Cook, who becomes very indignant saying, you know, about monopoly power and security. They all become heat shields. And quite frankly, Parler is the gift that keeps on giving for Facebook and Google because they can go, oh, my gosh, they're awful.

Right. And everyone gets angry at them because they're worse and they're smaller. And by the way, Facebook has 50. they're worse and they're smaller. And by the way, Facebook has increased the number of lawyers in its legal department by 50% in the last 24 months. And so they're the new bad guy. Who benefited more from Facebook than Google, who just kind of sat back and said, oh yeah, Mark Zuckerberg, that's awful what they're doing. So everybody's looking for a new heat shield. Look at him. Look at what they're doing, right? So everybody's looking for a new heat shield. Look at him. Look at what they're doing.

It's worse. And the reality is- I got to say, if I had to pick, Mark Zuckerberg and Rupert Murdoch. Rupert Murdoch more. Yeah, that's a good Genghis and Khan. I think he just has less power, but he's kind of like, it has to be Mark. I think Dorsey Shore, but I think it's definitely Mark Zuckerberg, definitely Rupert Murdoch. And they are the twin poles of where we are right now benefiting from this i think mark is earnest and doesn't

can't believe this has happened i think rupert murdoch knows just what he's doing so um you know really if i had to think of the international worldwide villain it would be rupert murdoch because it's not just here it's in britain it it's in Australia, it's in lots of places of freedom. And this guy has just decimated it with his practices. Well, there's just sort of different levels. If you think about the analogy of people who drunk drive have driven on average drunk 200 times before they kill somebody or get a DUI. I mean, Zuckerberg's been at the bar drinking and driving. Rupert for 40 years has been doing shots behind the wheel. He's a very bright man. He knows what he's doing.

He absolutely, and they're very calculated. When they use the language around conspiracy theories, they say, it's been reported that, right? It's been reported that, yeah. Some people say. Some people say, or people close to the matter say. They have been very good at going just past the line, trusting that... Well, they had to pay up to Seth Rich's family. And that wasn't the beginning of it, but it was one of the moments where they just literally, Sean Hannity just lied, and so did Lou Dobbs, another winner over there. And they paid up. That's the same thing they do around sexual harassment. They just pay up. That's what they've been doing is just paying

up for their, and it's a cost of doing business for these people to lay waste to our democracy is a cost. Well, that's exactly right. And it goes to the algebra of disincentives. And we do not have- Is that your next book? The Algebra of Disincentives? No, my next book's called The Algebra of Wealth, Strategies for Personal and Economic Satisfaction. Anyways. No, but the algebra, we could never have. In East Germany at one point,

one out of every three government officials was just spying on other citizens or encouraged citizens to spy on other citizens. And they still couldn't keep a lid on it. So we cannot police all of this. No matter how much money we put into the FTC, the DOJ, we have to have an algebra of deterrence. And the algebra of deterrence is the most powerful cop in the world. And it says the following, the likelihood you get caught times the penalty, right, is greater than the expected risk-adjusted upside. And where the algebra of deterrence is working really well is that if someone calls me and says,

hey, for 100 grand, and I'll donate money to the crew team, I'll get your kid into USC, I'm slamming that phone because Aunt Becky did a perp walk. And the prospect that someone does a perp walk to try and get their kid into college has cleaned up immediately all of this bullshit around pretending your daughter rose crew. It has worked perfectly. There needs to be a perp walk. The algebra of deterrence needs to be implemented. Now listen, I'm going to interrupt you because I think we're going to be talking about that with someone who comes next and what we can do in a second. One of the things I think that's the most disturbing story of all the many stories that have been around today is that the FBI had to do a vetting of the National Guard that's protecting them all. It is a depressing scene and they're worried about

conspiracy theorists within the National Guard. It's just really quite depressing. And so you're going to see a lot more tougher regulation in Biden's Washington, as the Washington Post has a new story, Silicon Valley braces for tougher regulation in Biden's Washington. So we're going to bring on, we're going to take a quick break. And when we come back, we're going to talk to a friend of Pivot, someone I know very well, FTC Commissioner Rebecca Slaughter. Fox Creative. This is advertiser content from Zelle.

When you picture an online scammer, what do you see? For the longest time, we have these images of somebody sitting crouched over their computer with a hoodie on, just kind of typing away in the middle of the night. And honestly, that's not what it is anymore. That's Ian Mitchell, a banker turned fraud fighter. These days, online scams look more like crime syndicates than individual con artists. And they're making bank. Last year, scammers made off with more than $10 billion. Last year, scammers made off with more than $10 billion.

It's mind-blowing to see the kind of infrastructure that's been built to facilitate scamming at scale. There are hundreds, if not thousands, of scam centers all around the world. These are very savvy business people. These are organized criminal rings. And so once we understand the magnitude of this problem, we can protect people better. One challenge that fraud fighters like Ian face is that scam victims sometimes feel too ashamed to discuss what happened to them. But Ian says one of our best defenses is simple. We need to talk to each other.

We need to have those awkward conversations around what do you do if you have text messages you don't recognize? What do you do if you start getting asked to send information that's more sensitive? Even my own father fell victim to a, thank goodness, a smaller dollar scam, but he fell victim and we have these conversations all the time. So we are all at risk and we all need to work together to protect each other. Learn more about how to protect yourself at vox.com slash Zelle. And when using digital payment platforms, remember to only send money to people you know and trust. Support for this show comes from Constant Contact. You know what's not easy? Marketing. And when you're starting your small business, while you're so focused on the day-to-day, the personnel, and the finances, marketing is the last thing on your mind. But if customers don't know about you, the rest of it doesn't really matter.

Luckily, there's Constant Contact. Constant Contact's award-winning marketing platform can help your businesses stand out, stay top of mind, and see big results. help your businesses stand out, stay top of mind, and see big results. Sell more, raise more, and build more genuine relationships with your audience through a suite of digital marketing tools made to fast track your growth. With Constant Contact, you can get email marketing that helps you create and send the perfect email to every customer, and create, promote, and manage your events with ease all in one place. Get all the automation, integration, and reporting tools that get your marketing running seamlessly, all backed by Constant Contact's expert live customer support. Ready, set, grow. Go to constantcontact.ca and start your free trial today. Go to ConstantContact.ca and start your free trial today. Go to ConstantContact.ca for your free trial.

ConstantContact.ca. Scott, we're back and we have someone who I really have a lot of regard for, someone I know a little bit, Federal Trade Commissioner Rebecca Slaughter. federal trade commissioner, Rebecca Slaughter. Rebecca is on the Democratic side. And now that the administration will be, the Biden administration will certainly have a lot more power. The FTC actually, even with the Republicans in charge,

has had a pretty good commissioner. They've been pretty strong. They are just under overwhelmed and under resourced. So Rebecca, welcome to Pivot. Thanks so much for having me. I'm thrilled to be here. So one of the things last month, the FTC initiated an antitrust lawsuit against Facebook. When you're looking at all that's happened right now, you live in Washington, you're seeing what's going on at the Capitol in terms of like it looks like Fortress Washington. A lot of it has to do with a lot of the hate speech that goes on in these platforms. And then, of course, there's the antitrust issues.

Where are we going to go from here with the Federal Trade Commission and the federal government with relation to tech companies? I think it's a great question, and I think we are seeing the intersection right now of a lot of really important and really difficult issues. In terms of where the Federal Trade Commission goes, I think there are a few things on our agenda. Obviously, we filed one big antitrust case that will proceed through the courts. We will do other investigations and file other cases as appropriate. And I think we take the very big and very real questions we've heard about outsized monopoly power by large tech platforms really seriously. A lot of them present novel legal issues, and we have to work our way through those.

But just because they're new doesn't mean they're not real. So that's one area. The second area, I would say, is we have a lot of large tech companies under order right now with the Federal Trade Commission for different kinds of violations, privacy, for example. We need to make sure that those orders are being complied with. We need to be following up with enforcement actions where they're not, and that needs to be a top priority. So we get under-resourced, right? Go ahead, finish. Yeah, and then the third thing I was going to say is where we have new investigations, we need to make sure that our enforcement strategy focuses on effective deterrence.

Right. We just shouldn't keep coming back to the same table with the same companies again and again and again. And that means maybe taking companies to court rather than settling on inadequate terms sometimes. It may mean with partnering at other levels of government as we did with the state AGs in the Facebook case. I think you were about to reference, Cara, the fact that we're pretty dramatically under-resourced

and that's true. That means that we need to be really smart about our enforcement strategy and make sure that each federal dollar we spend goes as far as it can in making sure we don't have to spend more federal dollars to do more enforcement. So Scott, I'll have a question a minute, but talk about the under-resourced. Because one of the things is the Federal Trade Commission, compared to a lot of agencies, you had a commissioner that really pushed through, he's a Republican, that pushed through this Facebook thing. It wasn't as politicized as other. There's a little bit of that, but it's more an issue of resources, correct?

And his motto since he got to the agency has been vigorous enforcement. And I think he's taken that seriously. We don't agree on everything, but we've brought a lot of cases in a lot of different areas. And that's important. But the resource question is real and material and impacts every decision that we make. One statistic I like to talk about a lot is the fact that at the beginning of the Reagan administration, we had 50% more employees at the Federal Trade Commission than we do today. Another thing to think about over the last 10 years, the number of merger filings that we've gotten, mergers that we could potentially investigate has doubled. And I haven't done the math on our latest budget round, but before this point, as the filings had doubled, our budget had increased about 10%.

So the workload is really not, or the budget is not keeping pace with the workload. So they're swamping. They're essentially swamping. Yes. Yeah, they're flooding the zone. And I don't think the under-resourcing is accidental. So I think it's important that we make clear that we need more money. Now, let me pause with a plug of appreciation for the outgoing past last Congress that gave us

two budget bumps two years in a row at a time when that wasn't happening everywhere. That's real and material and important and has allowed us to basically keep treading water rather than having to cut back even further. So that counts for a lot. And we are enormously, enormously grateful. But it isn't enough to let us jump forward in enforcement the way I think we need to to keep pace with the demands of the market. Scott? Yeah, we were just talking. First off, Commissioner Slaughter, I just feel safer knowing that CEOs of media companies occasionally might get a call from someone saying, Commissioner Slaughter is on the line. That is so badass. Seriously, that is well done.

Thanks. algebra of deterrence isn't when Milken broke the law as he was a billionaire, but basically my understanding is his lawyer said, you're up against the DOJ and they have more resources than we do. And now that's flipped. And effectively the smart thing to do is to break the law because, and I'll point to one of your cases, you find Facebook $5 billion. My understanding is indemnified them for any misdoings along those lines up until that point. And if someone showed up at my door and offered me an insurance policy that indemnifies me for 1% of my market cap, it strikes me that these agencies have unwittingly become a co-conspirator versus a countervailing force. Haven't we become flaccid, anemic? Isn't the smart thing to do to break the law?

Well, that was exactly my concern with the Facebook settlement. Which you voted against. Yeah, I voted against it. And I wrote a pretty long dissent that I could have said in as few words as you just said right there. But it was basically that while $5 billion may sound like a lot of money, and it certainly sounds like a lot of money to me, the individual, it was not in this case enough to make the cost of lawbreaking not worth doing. And particularly

when it comes to what you refer to as the indemnification. So I think that that's something I'm really, really concerned about. I said in my dissent that I would have rather we took them to court if that was the best deal that we could get from the company. It's important to understand that we as an agency don't have the ability to just issue a fine, even where we think that the company has violated the law. We have to either take them to court and get a judge to determine an appropriate fine or make an agreement with them about what a fine and negotiate with them what a fine they're willing to pay is. But it's fair to stipulate in this case that few companies are willing

to pay a fine that is not profitable for them. So it's important for us to think about what the actions we take are and what message that it sends, not only to the specific company, but to the market in general. I think you're right that a lot of companies think it might be worth it to dare us to take them to court. months of 2020, we filed at least three merger challenges where we said to companies who are trying to merge, no, we think this merger is illegal and we will take you to court. They sort of dared us to do that. And when we did, they walked away from the mergers. They said, oh, wait, we don't think we're going to win on the law. We don't want to go through this process in court. And they walked away. So our willingness to go to court and make those demands publicly, I think, is an important part of our willingness to go to court and make those demands publicly, I think, is an important part of our ability to be deterrent. So talk about the Facebook lawsuit.

They have not walked away or done anything yet. What is the theory behind it? No, we're still pretty early in that case, and there are public complaints out there. But the general theory that it articulates that you could read in the complaints are that Facebook engaged in a practice of monopolization where they took the perspective that it was better to buy or bury potential competitors than to actually compete with them. And two of the acquisitions that the suits highlight are Instagram and WhatsApp, but those are not the only acquisitions. Right. So you're looking at some of the small acquisitions too, correct? That's fascinating to me, the killer acquisitions, essentially.

Yeah. The lawsuit talks about basically a pattern of behavior ongoing over many years basically a pattern of behavior ongoing over many years. That includes not just these big, well-known acquisitions, but the general approach of the company that rather than competing, they would rather buy competition and take it off the marketplace. And that's not what our antitrust laws want companies to do. We want companies to get out there and vigorously crush their competition by providing a better product and better services for consumers. So one of the questions I ask when you, does it change the FTC during the Trump administration?

Can you just explain what happens with the FTC? There's five commissioners. What happens next with the commission? And then how does that change under the Biden administration? There's five commissioners. What happens next with the commission? And then how does that change under the Biden administration? A lot of this attitude. Sure. So the FTC is an independent commission, which is a sort of odd creature of government. Rather than having a single head who's a part of the executive branch, we have five commissioners who are all presidentially appointed and Senate confirmed. five commissioners who are all presidentially appointed and Senate confirmed. And by tradition, three of them come from the party of the president and two of them come from the opposition party.

So I, Rohit Chopra and I were the Democratic commissioners over the last several years, obviously appointed by Trump, but representing a different party. And then there were three commissioners, including the chairman from the Republican Party. No one, the chairman hasn't made any announcements about his plans, but traditionally, chairman of agencies step down when their parties lose in part because that's been reported. Yeah, in part because the incoming president can designate anyone else as the chairman. And so if that happens, as has happened traditionally, then there would be two Republican commissioners left and a Democratic seat to fill with either a chairman or an additional commissioner, depending on who the president wants to put in charge of the agency.

And Mr. Chopra has gone to the Consumer Financial Protection Board, correct? Yes, we're very happy, very happy for my colleague, Commissioner Chopra, who is nominated this morning, or his nomination was announced this morning to lead the Consumer Financial Protection Bureau, where I think he will do a terrific job, although he will be sorely missed at the FTC. When he is confirmed over there, there will be an additional vacancy on the Democratic side at the FTC. My hope is that those things happen in pretty close order so that the Democrats don't become the minority party at the FTC, even as they have the presidency.

But you have to. You will get control of that, either you or someone else become the commissioner, correct? And there'll be two more Democrats. Yes, exactly. There will be a Democratic chair and then the president will appoint and the Senate will confirm additional seats. So there will be three Democrats. The timeline for that is anybody's guess. In the Trump administration, we didn't get the new slate of commissioners in until almost 18 months into the administration. I was part of that group. All of us were part of that group. But I would expect and hope that we'd move a lot faster. Commissioner, if you think about it, a lot of the controversy has been over how we distinguish or we create, and I don't know if they're real distinctions or ones that we have just made up in the abstract, but that we regulate and think of

interactive platforms and traditional media companies differently, and we regulate them differently. Do you think that they should be regulated differently? What do you think of that delta? Should that delta exist? It's an interesting question. I think what you're referring to, Scott, and you tell me if you're pointing at something different, is, for example, we have lots of regulations over broadcast and newspaper ownership and things like that. And we don't have similar regulations when it comes to edge providers who are involved in news and media dissemination? Is that what you're referring to? Yeah, everything from cable companies being regulated to liable law. I mean, it just sounds like they get to play by a different set of rules.

Yeah. Well, I think that a lot of rules and regulations that apply today were developed before these platforms and the edge providers even existed, much less had the kind of market power that they have today. When they were nascent technologies, wasn't that the wording? Yeah, if they were even nascent technologies, right? Sometimes, you know, some of the telecom laws we operate under date back to the 1930s. So, you know, they go pretty far back. And it's true that they have not been adequately updated. There is clearly a robust, I was going to say healthy, but I will start with robust debate in Congress about how and when and where those laws should be changed and what

they should do to protect it. But my general view is, yes, we should update our laws to keep pace with our markets. When the laws don't reflect market realities, that's a problem. It's a problem. So I have two more questions and Scott might have a final one. You're looking out that you are in Fortress Washington. I'm going back there today. I'm in New York right now. When you look at what has happened, all these conspiracy theories, the power, I always focus on, everyone always focuses on free speech and everything else. I focus on the power of these companies being so big and having such an impact and the dissemination happening.

What do you think is the, when you look at this, when you look at Washington right now, federal Washington right now is terrifying. How much blame do these companies, because it is about their power and you're talking about their power, not about their impact. How do you sort those two things out? Yeah, I think it's a really good point, Cara, and I do tend to see it the same way. I mean, there's a lot of question right now about was it the right decision for various companies to de-platform Trump or de-platform conservatives. And I think that that's not necessarily the right question to be asking, because obviously it was the right

question to take away content that was inciting violent insurrection and the violent overthrow of government. I don't think that's a close call. But the more complicated question is, what do we do about a society where that power lies in the hands of individual corporations and we have to rely on them to do the right thing, that's an enormous amount of power that's operating independently. And one thing I find a little troubling and a little bit ironic is that many of the same folks who are complaining about the deplatforming of conservatives and the effort to silence conservatives are the same ones who defend the rights of the market to operate freely and the same ones who resist government intervention and regulation of free market decisions or

resist antitrust enforcement. So I think what we're seeing is the problem with that market power from a different perspective right now. So I think the decisions were right here, but the questions that they raise are really, really big and profound for society. So as a citizen, I mean, obviously your experience at the FTC will inform this answer. will inform this answer, but just as a citizen, as a parent, I don't know if you're a parent, as an aunt, a parent, whatever it might be, someone who's concerned with the well-being of kids. She has a lot of kids. There you go. Oh, she and I have a lot of kids, but go ahead. As a parent, a citizen, a capitalist, or assuming you're a capitalist,

what platforms or media companies, let's group them all into loosely media companies, and I believe the platforms are media companies, do you find are the most troubling as a citizen and a parent? That is such a good question. So first of all, I have four kids, and they range from an infant to a third grader who's doing Zoom school from our house. I have two elementary school kids who are doing Zoom school from our house. And I have very much grappled with how to, even before the pandemic, I grappled with how to manage their online lives and introduce them to technology to use for good instead of for evil. And it's gotten worse in the pandemic as they have moved more and more online. And so I worry a lot about content that they might be exposed to

that is damaging, dangerous, disruptive, and particularly that might be out of my own view. So, for example, I will be honest, I have blocked YouTube on all of their devices because I don't know what they're going to get or how they're going to get it and what they're going to see. And I can't be monitoring them full time. They are fortunately too young to be on social media sites like Facebook or Instagram. But I will have a lot of concern when they get to the point where they're militating to be on those because I worry about the messages that they will get. I worry, honestly, a lot about my daughter and, you know, the images that she sees that help help her define or could undefine her sense of self-worth. I just think there are a lot of

That sounds like Instagram. Yeah. I mean, yes, I think there are a lot of vectors of concern here for me as a parent. And figuring out how to manage that is difficult. And part of why I have a real problem with the sort of law, the current legal regime around data right now is it puts all the burden on the parents and all the burden on the consumers to figure out what is going on, what data is being collected, how it's being used, how it's being turned around to manipulate or sell things to people, whether they be adults or children. And that is not a realistic expectation. Yeah, the whole antitrust Bork notion of consumer pricing, the prices being levied on parents is absolutely skyrocketed. It's a tax.

It's absolutely skyrocketed. It's a tax. I have one final question. When you look out at the conspiracy theories and everything else that's led to where we are today, do you think the lack of regulation is at the heart of this? Or do you think it's something just – there's always been conspiracy theories. of this? Or do you think it's something just, there's always been conspiracy theories. Every society from Nazi Germany to the Salem witch trials, there's always conspiracy theories everywhere. I feel like these companies in their size and scope have made, have amplified them. But Fox, you could, there was a story, the Seth Rich case was settled just the other day, and it

led to all kinds of conspiracy theories. Does our government have the ability to regulate this? And I don't want to say should it, but does it have the ability to control what's been unleashed? Well, I think what we have to go back to all the time is not the content, but also, like, why is that content spreading so virally? And really, at the end of the day, with every business, the question you have to ask is, what's the business model? How are you following the money? How is the business model here at the selling of advertising contributing to the dissemination of clickbaity and worse content in order to get more eyeballs, in order to get more clicks, in order to keep people online? And how is that cycle really damaging to our social fabric as much as anything else? That's what I worry about, that the mass, you know, the broad surveillance in order to support a targeted,

micro-targeted advertising system is one that necessarily lends itself to this enragement, this kind of incitement of explosive content, because it gets people online, it gets them watching and talking more. And so I don't think that we can come up with content only solutions. I don't think it's about regulating content. I think it's about thinking about what's the underlying motivation for that content to spread the way that it has spread and cause some of the damage that it has caused. So those are big, complicated questions. But if we're not looking at the root of the issue, we're definitely not going to be able to solve them. 100%. Scott, last question. Well, no, I just want to remind you that being being a commissioner for the FTC in these times and living in D.C. with four children under the age of eight, you don't live in the nation's capital. You're in Vietnam, Rebecca Slaughter.

And I'm talking about the Vietnam of the late 60s. Well, that's a good. I think that was your that was a thing that just went by. It was literally a helicopter that just flew. I can't imagine. You probably heard. As you were saying, Vietnam, Scott. You have your shit more together than anyone I know.

Four kids under the age of eight. And you're going to take down Facebook. And you're going after Facebook. Listen, nothing could be more chaotic than the house in which I live right now. So I feel like if I can get through the day here, I can manage other things. My daughter's teacher used to say kindergartners can do hard things. And I say that all the time. If kindergartners can do hard things, FTC commissioners can do hard things, too. So just a quick question.

Just give us a cliff notes. How did you end up at the FTC as a commissioner? What's the career path to that? Well, it's different for everybody, but I spent the 10 years before I was at the FTC working for Senator Schumer in the United States Senate as his chief counsel, first on the Judiciary Committee and then in his leadership office where my portfolio included a lot of things, but especially oversight of the FTC and policy work around privacy, technology, antitrust, the FTC and policy work around privacy, technology, antitrust, and related issues. So I got a really strong background in policy on the issues that the FTC deals with.

Well, get him on board, Rebecca. I know he's a little too friendly as far as I'm concerned to them. But is there a company, is there an area, Leslie, that you're going to? There's obviously Facebook and Google have been targeted, has been targeted by the Justice Department. Who's next? Well, I definitely am not going to say anything about any non-public investigations, but I will say this. If there are big questions out there about the behavior of companies, tech or otherwise, from either a competition or consumer protection standpoint, we want to know about them and I want us to be investigating them. So, you know, we take those things really seriously and the public debate and discussion around them, I think, is helpful

to highlight and raise issues that we should be thinking about and help us consider how we should be thinking about them. Well, on that note, we are going to end. Rebecca, you're amazing. I told Scott this was the case, and I'm so glad. There's such a canard that a lot of our public officials don't understand these major issues and think they're important and want to protect citizens, and they do. Thank you for your good work, Commissioner Slaughter. Thank you so much.

Thank you for having me. I really appreciate it. All right, Scott, isn't she impressive? Don't you feel a little better about her government? Yeah, I always do when we speak to these incredibly talented people who forego the opportunity to make— She could be working for Facebook. Yeah, 100% because they want to do the right thing. She could make bank. She could make bank doing that.

There's a lot of really dedicated public officials. We have to stop desecrating and we have to escape from the screed started in the Reagan administration that government is bad and that the people that go into government aren't competent people. They are not.

Some are, but not really. I think that there's a lot of- People that break into our government are bad and write, you know, and scroll threatening notes to the Speaker of the House. Anyway, we're going to do

one more quick break. We'll be back for wins and fails. The Capital Ideas Podcast now features a series hosted by Capital Group CEO, Mike Gitlin. Through the words and experiences of investment professionals, you'll discover what differentiates their investment approach, what learnings have shifted their career trajectories, and how do they find their next great idea? Invest 30 minutes in an episode today. Subscribe wherever you get your podcasts. Published by Capital Client Group, Inc. Do you feel like your leads never lead anywhere?

And you're making content that no one sees? And it takes forever to build a campaign? Well, that's why we built HubSpot. It's an AI-powered customer platform that builds campaigns for you, tells you which leads are worth knowing, and makes writing blogs, creating videos, and posting on social a breeze. So now, it's easier than ever to be a marketer. Get started at HubSpot.com slash marketers.

Okay, Scott wins and fails. I'm going to let you do this. I think I'm going to do the first failure is the fact that our nation's capital is a fortress. That's it. That's just, there's no winning this week on that. And the win is, of course, Biden will be finally inaugurated after all the mishigas Trump has tried to pull.

Well, my fail is because we don't realize we're so, obviously the house is on fire. So we don't have time to pay attention to the fact that the house next door is on fire. It's always been said, America can't be the world's cop, but we have been this source of good and a wonderful enforcer.

And there was always a notion that America is watching. I don't think had it not been for this mob and the total desecration of our moral authority, I don't think Alexei Navalny would have been arrested at the airport in Moscow. I don't. Thereei Navalny would have been arrested at the airport in Moscow. I don't. There's a fantastic doc. Yeah.

Oh, that guy. There's a fantastic documentary called The Dissident about Khashoggi. I don't think MBS under a different administration would have started killing American residents and journalists. And- Agreed. That guy going into Russia, I thought, oh my God.

Arrested at the airport. Arrested, and the court, they're having a chain record here. And the general notion is, they used to be worried about America. They said, well, America could put economic sanctions on us. They could start arresting our diplomats. And now they're like, they're not gonna do the right thing.

We don't have to worry about them. They have people storming their capital. So this has just so many, this is an opportunistic infection that creates all sorts of disease around the world. And it's just incredibly, we are going to be paying the price for this. And so will the 7 billion people on this planet. There will be fewer vaccinations because of misinformation. There will be more girls who don't go to school in developing nations. And there will be more corruption, and there will be less freedom around the world because we are no longer the world's force of good and have lost that moral authority.

And I realize that's pretty much Debbie Downer. My win is political philosopher Hannah Arendt. I did not know her. And I've been getting, people have been sending me. What? Famous. I didn't know her. I know.

Hey, you can take the boy out of the fraternity. 2.27 GPA out of UCLA. And by the way. All right. Okay. Let me hear. I'm excited to hear what you have to say about him. I've been keeping forward of these quotes.

And the aim of the totalitarian education has never been to instill convictions, but to destroy the capacity to form any. Under conditions of tyranny, it is far easier to act than to think. In conditions of tyranny, it is far easier to act than to think. The ideal subject of totalitarian rule is not the convinced Nazi or communist, but people for whom the distinction between fact and fiction and the distinction between true and false no longer exist. Another one, the point is that both Hitler and Stalin held out promises of stability in order to hide their intention of creating a state of permanent instability. I just think this, I think this woman, I'm just so, I think this woman is a genius and I'm embarrassed I didn't know about it.

I'm reading her stuff now, but I think she was a gift to the 20th century and her work is getting new examination and new oxygen. Anyways, my win is Hannah Arendt. Okay. I think one of her, I studied her quite a bit. Well, of course you did. Well, I studied Holocaust studies and propaganda. How could you not? She was a great, she had a lot to talk about in totalitarianism and quotes and things like that. One of my favorite is, I just found it again, is the earth is the very quintessence of the human condition. We are where we are because of who we are.

And maybe we need to look a little bit harder at ourselves because this is not an accident. What's happening right now? Well, that's, yeah, the world isn't what it is. It's what we make of it. Yeah. Yeah, anyways. Quintessence. Look it up, Scott.

That and that hot guy. Maybe you should go to college and teach my son. I'm going to make him show up at your class if you show up at all, Scott. 2.27 GPA, Scott. That and that hot guy. Maybe you should go to college and teach my son. I'm going to make him show up at your class if you show up at all, Scott. 2.27 GPA, UCLA, and still got into grad school. And still got into grad school. If only you were a professor at a major university. Hello, white privilege. If there's a university you're affiliated with where you can learn about people like Hannah Arendt and others.

I feel shamed. I feel shamed. You should. You should feel shamed. I feel shamed. You should. You should feel shamed. I'm going to give you a whole reading list. It's coming to you right now. Okay, Scott, that's the show. I was so impressed with Rebecca and Commissioner Slaughter.

And we will have more interesting people coming up on Pivot in the coming weeks. And hopefully this time when we tape on Monday, the Trump administration will be over and we are on to a new thing. So let's hope for better days ahead. Yeah, but let's be mindful that his administration is over, but Trump and disinformation. But let's take a minute. It's over. All right. Go to nymag.com slash pivot. It's over for now. To submit your question for the pivot podcast, the link is also in our show notes. Read us out, Scott. Today's show was produced by Rebecca Sinanis.

Ernie Indretat engineered this episode. Thanks also to Hannah Rosen and Drew Burrows. Make sure you subscribe to the show on Apple Podcasts. Or if you're an Android user, check us out on Spotify or, frankly, wherever you listen to podcasts. If you liked our show, please recommend it to a friend. Thanks for listening to Pivot from the New York Magazine and Vox Media. We'll be back later this week for another breakdown of all things tech and business.

The hot dukers, I like to call them the hook, the hook. Enjoy the inauguration, everybody. Thank you. A lot of AI systems feel like they're designed for specific tasks performed by a select few. Well, Clawed by Anthropic is AI for everyone. The latest model, Clawed 3.5 Sonnet, offers groundbreaking intelligence at an everyday price. Clawed Sonnet can generate code, help with writing, and reason through hard problems better than any model before. You can discover how Clawed can transform your business at anthropic.com slash Claude. Support for the show comes from Alex Partners. Did you know that almost 90% of executives see potential for growth from digital disruption?

With 37% seeing significant or extremely high positive impact on revenue growth. In Alex Partners' 2024 Digital Disruption Report, you can learn the best path to turning that disruption into growth for your business. With a focus on clarity, direction, and effective implementation, Alex Partners provides essential support when decisive leadership is crucial. You can discover insights like these by reading Alex Partners' latest technology industry insights, available at www.alexpartners.com. That's www.alexpartners.com. In the face of disruption, businesses trust Alex Partners to get straight to the point and deliver results when it really matters.