Pivot - The DOJ readies a lawsuit against Google, Amazon tries to get into designer retail again, and a Friend of Pivot on the “plandemic”

Episode Date: May 19, 2020

Kara and Scott talk about Facebook purchasing Giphy and reports the DOJ is likely to sue Google for antitrust violations in the digital ad space. They also discuss Amazon swooping in to "save" designer fashion by teaming up with Vogue. The "everything store" has been trying to corner this market for years. Then we are joined by Phil Howard the Director of the Oxford Internet Institute, where he studies the spread of misinformation. He takes Kara and Scott through some of the latest conspiracies on the internet and how to stop them. Learn more about your ad choices. Visit podcastchoices.com/adchoices

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did you watch Obama's commencement speech? It felt like we had our president, any president who can give a speech without, you know, referring to Independence Day back. What did you think about that? I thought it was interesting that he's sort of crossing the line that most presidents don't cross, and that is he is, in his own Obama-esque way, he's going after the president. And typically, former presidents have sort of an unwritten pact with each other that they don't, they're not critical of previous presidents or administrations. And he's clearly, when he says, you know, these people aren't even pretending that they're in charge, it's pretty clear who he is talking about. But in general, I thought it was really—I was really moved by the whole thing.

Did you watch it? Yeah, I did. Yeah, it was great. It was a great speech. You know, it was funny because it was that Independence Day thing that they put Trump's hat on, which was so cheesy and ridiculous. And I liked Independence Day. It's a movie I've seen a lot of times. It was interesting. It's a movie I've seen a lot of times. It was interesting.

It was an interesting move. I think this idea of previous presidents, he's attacked Obama so drastically. I feel like gloves off is fine on this one because not just Obamagate, which is the most recent thing, but it's constant and persistent and incredibly disrespectful.

You're not supposed to also insult previous presidents this way, but this is all that's happening. You know what I mean? That's fair. Just saying we didn't do this before is not an excuse for anything at all anymore. But it was interesting that it went on all the networks. It was all over social media.

It was a very calculated and, I thought, very deft way of getting across that speech. I thought it was the same kind of stuff. I think the Trump campaign is quite good about getting messages out, not as sharp as they've been. Maybe I haven't seen the bowels of Facebook, but I'm talking about the sort of larger ones. And I thought it was rather clever. And it was such a contrast. It was such an interesting contrast, which I think was the point of the thing. And I watched it all on social media, not on the networks, but the networks did broadcast it.

Because, you know, they like a fight. All those cable networks like a fight going on that they can then talk about endlessly. But it was interesting. It was well done. It was a well-done speech, I thought. He also, it's just so striking just how ridiculously old these people are. He looks younger.

He's already been president for eight years and been out of office for four years, and he looks like their nephew. Yeah. I mean, adopted, of course, but he looks like their nephew. The other thing that was out this weekend, which we should discuss very slightly, was Facebook's acquiring of Giphy for $400 million.

This is their second big purchase in the U.S. since the U.S. shutdown because of the pandemic. They also an Indian internet provider, Jio. They did not buy it outright. They're not allowed to, I believe. Now seems to be a bold time to be acquiring a video library company and also this one. Do you think it's going to be allowed? It's an interesting situation there. That's a company that has never been bought. And I met the founders once a while ago, and Yahoo had been looking at them a million years ago. I'm sure Google had looked at them. They probably were in some bit of distress, but maybe not. It was an interesting move.

Yeah. First off, it feels a little bit weird because don't you think of Giphy? I think of Giphy as sort of in the same genre vein as Wikipedia, almost as if it's a public good. And I realize it isn't, but for some reason it has that sort of PBS Wikipedia feel about it, almost as if it's common, you know, public source or common source or whatever you call it. What's interesting is I do think it'll probably go through because it's $400 million, and I think the majority of people who regulate these things probably don't really understand what the... Facebook is going to start getting kind of these gift signals from all over the

internet, which they'll use to understand. I mean, they could do a variety of things. They can anticipate news stories. If the New York Times is all of a sudden pulling gifs on Marguerite Bestia, they have a heads up that, okay, they're working on a story on Marguerite. There's all kinds of signals they'll be able to get from all across the Internet and different players now, which they'll get very good at analyzing to their own benefit. at analyzing to their own benefit. You could also see that they might start copying all sorts of features or way that people handle images by examining how people use GIFs. So it's another example.

They're going more and more vertical into content, which is interesting, but this is a different type of content, if you will. It's not the end content. It's a piece. It's a part of the recipe. But the whole thing just kind of makes you just go, okay. The whole thing just sort of makes you nervous. I'm uncomfortable when Facebook buys anything. What do you think of this? I think that it might be looked at. I think it might be looked at. I think they'll have competitors complaining because they're embedded in so many places. They have so many partnerships with not just Facebook, but Twitter and a bunch of others.

And so, you know, anything Facebook buys is going to be looked at. And it's, you know, they will have so much. What I think it is, is they'll have so much information about other people's activities. This is just what the FTC was looking at in these smaller purchases where any of these big companies purchase something and then get enormous amounts of information from it. And this is where the real, they're not crimes, but this is where the real problems are in this space is them acquiring companies like Giphy. And I think it definitely will be scrutinized, which speaking of big tech getting bigger or maybe not, the DOJ is reportedly bringing antitrust charges to Google. I'm surprised Facebook is not involved in this, but this is the DOJ. Remember, the FTC and the DOJ split up the investigations.

The New York Times and Wall Street Journal are both reporting the Department of Justice as well as the state's attorneys generals could wage an antitrust suit as early as this summer. Both cases would be litigating Google's grip on the online advertising market. Right now, Google makes about roughly one-third of every dollar spent on internet advertising. If the lawsuit does happen, it will be the biggest antitrust suit the government has pursued since its settlement with Microsoft in the late 1990s and the first major move to break up the big four. Scott, what do you think about this? And, you know, it's interesting you could do this without also doing

Google, without doing Facebook. Yeah, and that it's interesting you could do this without also doing Facebook. Yeah, and that's the interesting thing here is that the order, going after Google first sort of intimates or somehow communicates that Google is the worst offender. So there is... It's the longest time offender. Yeah, but it says something. It communicates to the public that, oh, Google must be the worst.

So I think timing around who goes first is actually important. But you covered the analogy here is obviously the DOJ's case against Microsoft in the 90s. I know you covered that. Give us a brief history lesson. Well, it didn't actually end up with anything, right? I mean, it was a big, noisy trial. Bill Gates made a mess of himself at the being deposed. I did not have sex with that woman.

Oh, no, it was someone else. No, that was a different one. That was a different one. He was in this, if you ever want to go see a really terrible deposition, go look at the Bill Gates deposition in this trial. You know, Netscape was involved. People from AOL were involved, all kinds of people about what they were doing. And in the end, it didn't, you know, it didn't, it slowed them down is what it did.

And I think later different rulings had called into question some of the initial rulings. And I think it was more that it was Microsoft, the first time, this one tech company is scary for the rest of us and has impact on it. Maybe 10 or less years ago, they had started to look at Google for its behavior and its wanting to take over the search market. There was some noise when it was trying to get the Yahoo search market. When that was a big deal, the percentage of the search market. And then that went away. And the Obama administration really declined to do anything about the growing power of Google. And so I think they sort of didn't do anything. I don't know, there's a boxing term, but they just

didn't do anything at all. And then now we're here. And so to me, I don't know how you do this without doing the other. Because they basically split up the advertising here. And so to me, I don't know how you do this without doing the other. Because they basically split up the advertising market. And this breakup drum you've been beating for a long time. And so why do one if you're not going to look at the whole system of these things? Is it undercut the case? I'm not a lawyer. But it really is interesting. They may have more ability to prove it.

They've worked with companies like Yelp and some others, which have been cross-purposes with Google for a long time. That's actually a really interesting point. I think if you were to try and tackle this, you're right. You need to understand the ecosystem. It would seem obvious synergy. A lot of this just comes down to resources. That is, the DOJ and the FTC decided to divide and conquer.

They kind of split up the four and said, all right, you take these guys, we'll take these guys, because it's a resource issue. This is kind of the flare across the bow of the battleship saying, all right, we're about to enter a 10-year shooting war. Because this could take 10 years. And we're talking about hundreds, if not thousands, of lawyers on either side. Which is a problem, the 10 years, by the way. Things change so quickly. They do. And also, to be fair, typically when the government kicks off a DOJ trial, it's usually the high watermark for the power of that company.

About the time they start calling IBM in front of Congress is when IBM's power begins to wane. So we'll see. I don't think that's the case here. To your point, though, it seems as if 20% to 30% of the research that you would do around competitive dynamics or anti-competitive behavior would overlap with Facebook's anti-competitive behavior. And I agree with you. It seems to me like the initial 50% of their diligence and research should be on the market that is 70% Facebook and Google as opposed to just Google. So I agree with you.

It seems to me that they would go after both. I also think it's just strange and diminishes the threat that Facebook, Amazon, and to a lesser extent Apple represent by announcing that they're going after Google first. I think that's just unusual. Maybe there's a reason for it, but it definitely says to the public that Google is the biggest offender when you go after them first. It says that this is the menace that we're most frightened of. They may be able, this is the one they may be able to prove first. It says that this is the menace that we're most frightened of. They may be able, this is the one they may be able to prove better. I think that's the issue. So it's interesting that the state's attorney generals are also involved. These lawyers coordinate with each other, obviously. And I think it will be around the

online advertising business, and Google is the dominant player in this regard. But then you also, as you know, have Amazon coming in here. I think they'll make that defense. There's other big players. What's, I think, difficult is how many resources Bill Barr has committed to this. And then so there's always, with the Trump administration, what else is going on here, right? What political thing? Now, Bill Barr has committed to this. And then so there's always, with the Trump administration, what else is going on here, right? What political thing? Now, Bill Barr is so tainted right now from a political point of view. It's hard to imagine there won't be some attacks in that direction towards him and deservedly.

And it will take them too long. I think that's one of the issues. Google and others have worn down these regulators. And I wonder where the FTC will come out here. I guess I forget which ones. They might be looking at Facebook, I think. And many people felt like the FTC didn't take enough aim at Facebook during that time. There's also a competition, people don't realize it, between the FTC and the DOJ, right?

Who's going to get these cases? If you watch any legal drama with regulators involved, they're always like, no, I'll get this case. No, I'll take this case. And so I think the advantage is still to the tech companies. But what's interesting is that it didn't slow them down. The coronavirus hasn't slowed them down. The coronavirus hasn't slowed them down. And these companies have been trying to go for redemption for a while, using this period to do that. And these cases will proceed as planned, I think is interesting. And I think it's actually been effective. I think they have,

A, it helps to have the distraction of an enemy that's even more frightening than them. And two, my sense is that their behavior during this period has largely been seen as accretive to society as opposed to everybody, you know, is worried that they see it as an opportunity to spread more misinformation. Yep, agreed, agreed, agreed. One of the things that's interesting is that the Federal not, declined to prosecute Google back in 2013. This is the historical thing I was talking about, saying it didn't warrant it, even though there were companies like Yelp and others really pressing. And in this case, you know, a lot of big media companies like News Corp was very aggressive in this area. And according to Wall Street Journal, they had been contacted. I think

contacted is a very loose term because I think a lot of these companies have been pressing. And they also, of course, face these issues in Europe in terms of their market share and things like that. And I think it will be interesting to see their defense. It's saying there's other big giants. I would imagine that's their defense. Look, there's Facebook. Look, there's Amazon. Look, there's plenty of competition in the space. And I think there will be considerable legal resources devoted to this. And I think it'll be hard for the government, especially on its back heel in this environment. And then, of course, everything is politicized at this point. And, you know, you'll get some.

What's interesting is how protected Facebook has been given its help of the Trump campaign, that people perceive its help of the Trump campaign. One of the things that first struck me about just how naive I was to the resource question was Senator Mark Warner invited me down to speak to him about big tech. And I went down there. And my first thought was, of course, this is a very large and handsome man. That was the first thing I thought. He's a big, handsome man. Oh, my God, Scott. He's just enormous, and he's very handsome.

He's a handsome man. He's a big, handsome man. He's a handsome man. Yeah. And the second thing, he was in there with his legislative aides, who are all these overeducated 14-year-olds. And I brought up this. Well, what two things? He does. He does have a very eager staff. Well, they all do. Go ahead. They all do it. They said, well, what two things? He does.

He does have a very eager staff. Well, they all do. And they said, well, what would you do right away? And I'm like, mandate identity and take away the Content Decency Act and take away these shields, these liability shields. Communications decency. And both of these legislative aides practically started having seizures. And they said, there's just no way we could take on those two things.

I mean, they looked as if they had been working 18 hours a day as is. And they're like, they looked at him. They said, Senator, there's no way we can even put out a press release saying we're looking at that. Because they knew that if they even got anywhere near those two issues, they'd be overwhelmed. That there would be a shock and awe response from the entities controlled by Google. And they just look so kind of intimidated. Like, okay, you really want to poke the bear here? Yeah, well, they shouldn't be intimidated.

Guess what? Well, the bear's got a lot of lobbying. Right. So, you know, the bear is well-armed in terms of that. I think I have talked to J-people, high-ranking, and they're like, oh, God. You know, taking this on, including the length of time tech changes and their inability to do anything. I think it's really interesting. And again, they're further stressed by the coronavirus issue.

It'll degenerate, and that's to Google's and Facebook's and Amazon's advantage. Anyway, we're going to take a quick break. We'll be back to talk about Amazon making its way into retail and also a friend of Pivot. 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.

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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. Welcome back. Amazon is wasting no time in pushing into the struggling retail market. What a surprise.

The company is teaming up with Vogue and the Council of Fashion Designers of America to create a new high fashion storefront called Common Threads Vogue X Amazon Fashion. Okay. Amazon has billed it as an effort to help the retail industry, which has been floundering during the pandemic as storefronts close. But Amazon has had its sights on designer retail for some time back in December in the before times. That's where we're going to refer to it now, Scott, as we talk to Joanna Coles about Amazon's plans in fashion. Here is a rewind.

Clearly, Amazon wants to eat shops, right? It wants to finish off fashion. I do think, though, that fashion's resistance will be that fashion is frequently an emotional purchase, and it's hard to imagine a less emotional shopping environment than Amazon. Clearly, Amazon wants to eat the shops. It wants to finish off fashion. Naughty I am. We should absolutely keep that. That was very good. Thank you very much. Anyway, Scott, what do you think? Now is the time we can imagine Amazon becoming an emotional purchase platform. I have an emotional relationship with Amazon, I think, now. I think I feel weirdly grateful. I was ordering something last night and I feel bad.

It's like a bad relationship. I feel bad and yet it's good. So what? Yeah, but the emotion and the instinct you feel from Amazon is around your gut. And that is you feel it goes to survival. And that is if you go into your cave with a lot of food, you're going to be fine. If you don't go into your cave with enough food, you die the worst death that has taken more lives than any melody in history, and that's starvation. So you feel smarter, and it foots your survival instinct. The instinct that luxury is supposed to connote is, one, an old instinct, and two, a newer one. And the first is that you want to be more attractive to the other sex or the same sex, in your case, hashtag sensitive. Anyway, I don't know where I'm going

with that. But basically, the need to procreate is a close second to survival. And our ability- We're having babies now? Okay, go on. I'm seeing what's going on. The reason I'm going to buy a Ferrari is I want to pretend I'm younger and spread my seed to the four corners of the earth. And I think that increases my likelihood of spreading my seed. And the reason why most women... Did you just use seed? But go ahead. The reason why most women other than you will spend $1,100 on ergonomically impossible shoes called Manolo Blahniks or Christine Louboutin is they want to signal to the opposite sex that they have longer legs, which means our offspring will be less prone to infection. that they have longer legs, which means our offspring will be less prone to infection.

And so this procreation, this need to feel sexually attractive is immensely important. And Amazon, you just don't feel very horny when you get onto Amazon. Whereas you walk into a Birkin store, you walk into a Ferrari dealership, you're like, it's go time. It's time for us to procreate. I never feel that way. Ferrari dealership, you're like, it's go time. It's time for us to procreate. I never feel that way. The other thing, the newer instinct that luxury has been able to connect, because over the last several hundred years, the only places you found really beautiful, I mean, really artisanal works was in places of worship where God supposedly hung out. So it's instinctive that when you see

the slope of the back of a 911 or the mesh on a Bottega Veneta bag, you get stilled and you feel as if you're in the presence of something holy. You feel as if you're in the presence of God. Have people changed? Have people changed? No. Because now, like, the person providing them food into the cave is Amazon. No, because it puts...

Like, or, and I don't mean food. It's, I need to have my blank. It puts to utilitarian. It puts to your, the front of your brain as opposed to the rear of your brain. It puts to smart. Okay, so how does it get in here? Does it buy Conde Nast? What if it buys Conde Nast?

Well, it also represents desperation. Anna Winter is accessorizing her analog outfit with a pair of digital earrings by saying, we're partnering with Amazon. And it shows that Conde Nast has really fallen far fast. Whereas a company like Hearst that was big in print has diversified into data businesses and is probably as strong as they've ever been. Condé Nast, although the family owns a bunch of cable companies that they get billions from, the print properties have just gone from bad to worse. They've had a very difficult time figuring out any sort of way out. And a lot of it's not their fault.

They still make some of the best print properties, but what they should have done, they should have sold Vogue five years ago to some golf billionaire who wanted to go to Vogue parties. But this is- So what do they do? Would they sell to Amazon? Is that the way in for Amazon is to buy something? I don't know. I think a better partner would be someone like a Pinterest.

They didn't buy Neiman Marcus. Remember, there was that rumor. I think a better partner would be someone like a Pinterest. They didn't buy Neiman Marcus. Remember, there was that rumor. What should Amazon be looking at if they wanted to get, besides buying the most expensive house in Los Angeles or a big house here, what should Amazon do if it wanted to be in the fashion business? Or does it? Does it want to be in the to be? I think it does. So one of the key dimensions of profitable e-commerce is value-to-weight ratio. And some of the best ratios in the world of commerce as it relates to fulfillment, to the cost of fulfillment relative to the cost of the product, specifically the margin,

is that $120 two-ounce bottle of La Mer or that $1,100 poochie dress that weighs 15 ounces. So this is absolutely an enormous opportunity for e-commerce. But they have been – this is one of the areas they have been really, really unsuccessful. They had Amazon beauty shops. It's a not emotion. So the gangster acquisition for them in terms of value would be – Can't wait. 100% would be Nordstrom.

They can pick up Nordstrom for – Nordstrom. That was a rumor too. Seattle. Seattle-based. That's right. They know each other. And Nordstrom for— That was a rumor, too. Seattle. Seattle-based. That's right. They know each other. And Nordstrom has outstanding operations and management.

They are very—I mean, everybody assumes that everyone that works at department stores are idiots. They're not. Nordstrom and— No, Nordstrom was always the same. They're very, very good. They have fantastic e-commerce. They're very innovative. Struggled, though.

Struggled. Had some struggles. It's like being the best buggy whip manufacturer. It's just going to be a tough place to be right now. But they're very strong, and they would immediately have access to all the brands that you populate your high-end beauty cabinet with and what's in the most fashionable closets in the world. So you would inherit those relationships. Unfortunately, you'd inherit bad real estate. I don't think they want to be the anchor in a bunch of bad malls.

But it would seem if they really wanted to get into luxury or fashion, I don't think they'd go after a media property that's dying. I think they'd go after a company that has all the relationships with the beauty and luxury. Why not have gone after Neiman Marcus? Because Neiman Marcus has a really shitty cap table. It's a marginal business with just a terrible cap structure as too many private equity guys have loaded it up with debt.

So they would just be buying a company that they would be sort of bailing out. And what do you get with Neiman Marcus? You get, I don't know. It's just Neiman Marcus. Yeah, Nordstrom's better. Neiman Marcus doesn't have half the operating mojo as a Nordstrom. Nordstrom is an outstanding company. All right. I like this. This is one of my one of your home foods. Neiman Marcus is a trivia question is an outstanding company. All right.

I like this. Neiman Marcus is a trivia question from the 80s. All right. Likelihood. Likelihood is. Well, it hasn't happened. I thought this was going to happen a couple of years ago. Yeah.

And they got to know each other. They got to play golf at the same Seattle golf club or whatever. They don't play golf. They go kayaking. Is that what they do up there? But go ahead. I don't know. I don't ever go to Seattle.

I used to date someone there. I think Seattle is actually one of the most overrated cities in America. He's not in Seattle anymore. He's like flying all over the place. Ever since Kurt Cobain died, Seattle, you have nothing for me. Oh, I like Seattle. Totally overrated. Anyway, all right.

All right. Very good. I like that. It's like L.A. with rain. I like that idea. That's really interesting. Wow. We're going to have to try.

We have to have Joanna Coles back on so she can do her real actual sexy British accent and talk about this. This is really interesting. Very interesting, Scott, as usual. But now we're going to move on to a totally different direction moving forward. We're going to talk about internet conspiracies, more importantly, where they come from and how to stop them. We have with us Phil Howard. I just did a long podcast, Recode Decode podcast with him and how to stop them. We have with us Phil Howard. I just did a long podcast, Rico Deco podcast with him and Emily Bell from Columbia. He is from the Oxford Internet Institute.

He is the author of the new book called Lie Machines, How to Save Democracy from Troll Armies, Deceitful Robots, Junk News Operations, and Political Operatives. Phil, welcome to Pivot. Thank you for coming. And you and I just recently had a long talk. So let's go right into it. What are some of the biggest stories of misinformation on the Internet right now? If you could take us through Plandemic or the concept. We talked about a number of really disturbing—and you guys track this at the Oxford Internet Institute. That's right.

We track it on a weekly basis. And I would say the misinformation of the week is around Obamagate, whatever that may or may not be. It's certainly around the rumor that COVID was created in a lab. And then it's often also pegged to immigrants and migrants bringing in COVID or making us all suffer in some way. And so when you talked about this idea, these different stories, they go up and down, correct? They sort of rise and fall. There was one you were talking about that if you took the flu vaccine, you are more susceptible to COVID, correct? And that runs into the anti-vaxxers at the same time.

Absolutely. They're the source for this. And in fact, that rumor is sort of evergreen in that whenever there's a new medical crisis that seems to be connected to a mysterious disease, the anti-vax claim is that if you were inoculated as a kid at some point, you're either more susceptible or you're going to suffer if you take another vaccine. It's a sort of constant refrain. And Phil, isn't there, it seems like propaganda throughout history has been required more creativity on the part, if it was a foreign entity trying to damage a country, they had to come up with a narrative and a story

and then figure out a way to plant it, promote it. Now it seems like all you need is a credit card because we have so much batshit crazy internally that we just find the most divisive incendiary statements from, I don't know, our president, and then they just, with a credit card, just pour fuel on it. I mean, aren't we the problem? I think you're right. Your instinct is right in that there are dozens and dozens of people who will spend their own money to put together or slap together a website and launch an automated campaign, a bot-driven campaign to push some messages around. Lab based in Montreal called the Global Research Initiative, something like that. And long before Breitbart, this was an outlet for conspiracy theories and extremist white supremacist content.

And it's a small shop of a guy and one or two volunteers putting out this stuff. I refuse to believe anyone in Canada does anything not nice. They do. But it does. It does from big state actors, right? Talk about sort of the way these things move through the system. Well, that's certainly where it goes to scale, right? We've just worked out that the Chinese can reach a billion social media accounts in English

when they push their messaging. And usually what foreign governments will do is, rather than planting a clearly fake story, they'll turn some fake story that was generated domestically into a question. So was the coronavirus generated in a lab? And that becomes the RT story, or that becomes the CGTN headline, except that they can reach hundreds and hundreds of millions of social media users. Whereas these small operations that are locally based, they reach tens of thousands.

And the point being for a country like China or Russia, do they have differing goals that they're trying to pull off or is it similar? Well, China is very interested. China wants to make sure we do not refer to this as the Wuhan virus and they want to make sure that we do not retaliate with trade in any way. For the Russian goals are a little bit more, I mean, they're much more tied to undermining trust in our public institutions and in our elections, right, in the way we hold elections. And what about domestic actors? Well, that gets even harder to speculate on. Most of this activity is on the far right.

It's not really on the far left. Once in a while, there's a group on the far left that does this, but it's usually ultra-conservatives that spend big money on these things. And they're, I mean, for the most part, they're about supporting big money. They're about supporting Republican candidates or about undermining the role of government in public life. And we always talk about the threat to us. Are we good at this? Are we doing the same thing to the other guys i don't think so uh i think the other guys um are much more likely to spend money in ways that

violate everybody's privacy norms and launch campaigns that are that are simply full of and launch campaigns that are simply full of made-up information. There's also a strange subgroup of people who are just grifters, right? They just want to make some money out of this, generate a documentary and drive some clicks through to their website. And they don't have actually any strong ideological beliefs. They just want to keep the servers running and make a little money out of these kinds of things. Is that what something like Plandemic is? Or is that really from people's feelings? They just want to keep the servers running and make a little money out of these kinds of things.

Is that what something like Plandemic is, or is that really from people's feelings? Talk about that particular movie and how it's gone around. Plandemic is an interesting phenomenon. I haven't interviewed them. I don't know what their motivations are, but I would say that they're very successful at driving traffic. Any talk of a sequel or a follow-on movie or a deeper explanation or a book, a book contract, all that stuff is the follow-on money-making activity that seems to be an important part of the reason to produce this junk. And how is it different from, say, everyday news information that may be disputed, like watching Fox News versus an MSNBC, and misinformation itself. What's the difference between misinformation and disinformation?

So I'm going to touch that by separating out Fox News. The main difference, though, is that the major news organizations do fact-checking and have a culture of professional journalism norms. And we don't always agree with them. They're not always applied consistently. Sometimes the fact-checking doesn't work. But on the whole, for the most part, most stories get a lot of vetting. And if an editor doesn't like something in the story, they'll spike the story, or things will get edited until they're closer to truths. Misinformation does not have any of that oversight.

It's their creative essays, their commentary, what you and I might see as commentary essays using the New York Times font or put on a website with the BBC colors. As for Fox, they are ostensibly a commentary outlet. I don't know what their fact-checking processes are, but I'd be surprised if they were as rigorous as other news organizations. And what can we do?

Yeah, what can the platforms do? Okay, well, there's two questions. The what we can do question is not forward stuff that we haven't checked out ourselves. Try to engage with the friends and relatives who do send junk. Try to consume stuff about COVID. When you say engage, you like threaten to put in a home, that kind of thing? When you say engage? Threaten to lock away. No, you know, try your best to have a civil conversation and ask them to check their sources.

Right. I don't, yeah, the threats won't work. So the worst possible situation is if Democrats and Republicans all unfriend each other, right? And if family members really do de-link, break social media ties and never hear from each other, that would make things much, much worse. All right. What about the platforms themselves? You had talked about the idea that the advertising, there was a lot of heat around political advertising and

the lies that Facebook allows versus, you thought that was not as important as something, as content itself. As the content. Yeah. When we did our work with the Senate Select Committee on Intelligence, we found that the Russians had largely moved on to Instagram. It was no longer, we were doing this work in 2018. And so we found the Russians had moved moved on to Instagram. It was no longer, we were doing this work in 2018. And so we found the Russians had moved off of Facebook and Twitter and were mostly on Instagram. And then we found that overall ads paid for in rubles were a fairly small amount of the content that was placed.

It was, it's the organic, It's the organic photos and text written by fake accounts over the course of months by people who are maintaining 10, 20, 30 different accounts. This is the stuff that reaches the most voters. So how do they stop that? Should they stop that? They don't want to at all, I think. Well, I would say that the business model certainly thrives on having exciting, engaging content on the platform. I also think social media platforms like Facebook are designed to bring out the controversy, to get the sensational stories up and out in front of us so that we stay on the platform. They're not designed to promote consensus or to figure out which stories are being widely read by credible sources and push those into your feed.

That's not what these platforms are designed to do. So how are they done going into this election? The thing you're most worried about are these content farms that are making these stories that seem credible, like you said, using New York Times font or people thinking it's real information. And if you were to pick two or three of the worst stories right now, what would they be? Well, certainly the worst is Obama because it's been created as an empty shell that is allowing several different kinds of actors to put whatever they want into it. And I think what makes one of these things successful is when an outlet like Fox will pick it up and turn it into a broadcast story, because that creates links, URLs, that can then go into another round of tweets or into another round of YouTube videos.

So, you know, I think the firms have actually been pretty constructive around COVID misinformation. Right, they have. The evidence suggests they're clamping down in creative ways. I don't know that they're going to show that same sense of responsibility when it comes to November 2020. Could they? They claim that the problem is just too big. They throw their arms up and say, as much as we'd like to, we can't, that it's physically impossible. Or we shouldn't. No, I don't think that's right. It's not physically possible.

They could do a much better job sharing data. Right now, they share data with journalists and independent researchers that is years out of date with so many constraints that none of us can actually play with it and figure out what's going on. They have a real-time, Facebook has a real-time ad library that could be useful to watch if we want to sort of watch things closely in October and November. But now there are more things. And one of the real problems with social media firms is when they experiment with something constructive in Canada, but then don't run it in the US. Or they play with a platform feature in Australia and find that it works well, but then they decide not to run it in another democracy. And so getting all the democracies sort of up to the same level would be something that they should do. Will they?

I don't think so. Not without government response, not without government nudges. I mean, it's taken, it took a judicial inquiry, a Senate inquiry, four years of bad press, constant pressure from journalists and academics saying there's misinformation on the platform. And that's barely got a small number of tweaks, I would say, to the platform to try to improve the level of information that's available. They're showing they're starting to spend more money on these kinds of things. But the United States is 200, 250 million voters. That's a big population to help. And I haven't seen a comprehensive help package from the social media firms. All right, Phil, thank you so much for coming on. Phil's book is called

Lie Machines, How to Save Democracy from Troll Armies, Deceitful Robots, Junk News Operations, and Political Operative. I think you've got that covered. We really appreciate it. Thank you so much for coming on Pivot. So, Cara, I have conflicting emotions after that interview. I found what he was saying exceptionally alarming. But the way he says it is so calming. Yeah, he's a calm guy.

It's like, oh, hi, Scott. Hey, sweetheart, we're here to take you to the gas chamber. I mean, that guy's so calm. He's a calm guy. Scott, hey, sweetheart, we're here to take you to the gas chamber. That guy's so calm. He's so calm. He is calm. He is calm. He looks at a dreck all day long and tries to figure out where it comes from, essentially. Anyway, Scott, one more quick break.

We'll be back for wins and fails. Do you feel like your leads never lead anywhere? And you're making content that no one sees 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. 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, Okay, Scott, we're back. What are your wins and fails this week? What are they? Well, my fail is just the ad-supported industrial complex and how incredibly redundant and non-creative they are.

They're all here for us. Yeah. They all need to tell us that we're in this together, and then they all salute. Yeah, they sent you that video. Yeah, and then they show some guy. We're here to help. Some guy or gal, an essential worker that they're calling a hero. Although it has been a huge source of comfort for me. So for example, when my son isn't doing well and really struggling,

I just yell out, Hyundai, because Hyundai is here for me, Kara. They're here for me. Hyundai, Hyundai, where are you, Hyundai? Do you like the little tinkling music? I sent Scott a video of all of them put together. I think Fast Company put it together, but it was like tinkling music? I sent Scott a video of all of them put together. I think Fast Company put it together. But it was like tinkling music. And then later the music gets more tinkly at the end. And we're here to help. We're in this together.

What else? Just stop it. All these brands. Home, home, home. Family, family, family. And also, you want to talk about the ad industrial complex. Just kidding. All these, the biggest advertisers in the world are all trying to get out of their commitments.

Yeah. This is, it's really, I mean, you could actually see, and this impacts us. I did a podcast, or I had Sam Harris on my other podcast. And by the way, that guy is very thoughtful, Sam Harris. Yes. That guy is like crazy thoughtful. Him and Fareed Zakaria are my new like brain boners. Those guys are like incredibly smart.

Anyways, he's doing this paid thing. I wonder if and when podcasts are finally going to go paid because even the people who listen to us as funny and as wonderful as our advertisers are, people are just getting sick of it. They're just sick of it. Yeah, that's interesting. Anyways, he had supported Industrial Complex and the ridiculously lame ads, it's claiming that they're here for us. We're family. Yeah. Hope.

We're in this together, Carol. We're in this together. Buy our ketchup. We're in this together, goddammit. They're not going to let you down. Who's your loser? Do you have a loser? So many losers.

So many losers. I still think these openings are, you know, it's interesting. I feel like there's, like, as usual in this country, there's no plan. We're just sort of, like, winging it. It's sort of winging it. And then we eat wings while we're doing it. You know, that's the part that I like about the United States is winging it. You know what I mean?

That's one part. In this case, these openings, like, I was thinking, like, New Orleans, I want to go out. I'm trying to think of what I need to do in June or July to go somewhere, not here where I am. And I like, I'm in a very comfortable place. But, like, when they, there's a story about New Orleans opening. I just, would I go to New Orleans right now? I don't think I would go to New Orleans right now. And I like New Orleans, by the way.

And so, you know, everything is, people have the same feeling. They're like, and I wonder when that goes away. So I think it's just, I want them to have more thoughtful, like, is there a temperature taker there or something? Are there rules? Is there a place where people don't, like, I just feel like nobody's in charge here, that kind of thing. And that's, you know, and I think we're inundated with information but don't know what to do. That's what I would say. Well, my new Yoda, Fareed Zakaria, had some fantastic information.

That is the only program in the world, other than Killing Eve, that I stop and I go back. And I do it for different reasons. I do it on Killing Eve because the set design is so unconscious and beautiful and the people in it are so beautiful. I just love watching the fashion and the set design and the beautiful. That's just incredible. Anyways, with Fareed, I rewind it because he's just such a clear blue flame thinker, and I like to take his ideas as my own and then spread them across the world.

But he had some really interesting data, and that is if you make over $100,000 a year, there's a 60% likelihood you can work from home, and there's only a 1 in 10 chance you've been laid off. If you make less than $40,000 a year, only about 10% of you can work from home, and almost 40% have been laid off. So, the kind of we're reopening to early movement, to be clear, it is largely science-based. And you have a lot of epidemiologists, including Dr. Fauci, saying we have to be very thoughtful, i.e. we're reopening too fast. But the fuel behind it is what I'll call this graduate education class that, quite frankly, hasn't been hurt that badly. And them being at home just isn't that bad. So there's a different sense of urgency and perspective. And you have to empathize with

people who are worried about putting food on the table because we have, in this Joey Bag of Donuts fucked up culture we called America, where we've put 50% of our population in the world's wealthiest country at risk such that they can't afford to not have a paycheck for 30 days, their attitude is, well, okay, it's easy for the ruling class that disproportionately controls the economy, culture, and government to talk about the need to stay home when you're just fine, but we're not. It's an entirely different risk profile. The calculus is entirely different for one group of people versus the other. And the people who, quote unquote, control the media, control the government,

tend to be the ones that are just fine sheltering from place or sheltering in place. Yeah. All right. What about you? Win? Oh, my win? I'm just fascinated. I don't know if you'd call it a win. So I'm into this notion of when rivers reverse direction. It happened slowly but surely geologically for a bunch of reasons in the Amazon. The Amazon actually changed direction. It happened slowly but surely geologically for a bunch of reasons in the Amazon. The Amazon actually changed direction. And then the Mississippi River actually changed direction briefly after a hurricane. But I've been thinking a lot about, okay, if COVID-19 is an accelerant as opposed to a change agent, what parts of the economy do the rivers actually reverse? And the two things I'm spending a ton of time thinking about.

Reversal of rivers, not one I would pick for Scott Galloway, but go ahead. Well, that's my pedantic way of saying when trends not only stop, but they reverse. And I think there's two really interesting river reversals here, and that is I'm convinced, and we talked a little bit about this last week, that public schools might have an absolute sea change. I'm thinking, and we talked a little bit about this last week, that public schools might have an absolute sea change. I'm thinking of it. I was thinking, okay, what is the value? I'm public schools all the way through graduate school.

I talk a big game, and then I have kids, and of course, they're in private school because I can afford it. And you have your intellectual talk track, and then when your kid comes ready for school, you're like, what's the best school? And it's now almost always a private school, and if you can afford it, boom, then a private school. And it creates this downward spiral where you not only take money out of the hands of public school system, but you take out the most important resource, and that is parent engagement, right? Because a lot of the parents now in public schools are single parents. They don't have the time or the luxury to be as engaged as they would like in their kids' school. So it's been this downward spiral and this casting, continued casting and segmentation of our society.

But could you have a reversal in a 30, 40-year trend? Because one of the benefits, and we don't talk about it as parents, but one of the things that justifies $10,000 to $20,000 of that $54,000 Fieldstone or Grace Church tuition is that you get to hang out with other people like you who are more impressive than you called parents on the weekends. And Zoom classes do away with that. You get teacher-to-kid ratio of 8 to 1 as opposed to 23 or 30 to 1. That doesn't matter on Zoom. So it's really interesting. If all of a sudden the points of differentiation get shaved off or sanded down

around private school, and there's not that much difference between public Zoom classes and Zoom classes sponsored by private schools, you could see this extraordinary reversal of rivers from the white flight to private schools back to public schools. And quite frankly, it could inspire and catalyze this wonderful upward spiral after the initial overrun of resources of public schools. So I'm actually hopeful that public schools K through 12 might get a shot in the arm. And the other thing is just migration flows out of cities. I just, we have been, culture, creativity, and money have all been migrating into cities for the last super cities in the last 30 or 40 years. That's been the trend.

Could all of a sudden that river reverse? I mean, I think people get tired of it. You know, I have a lot of friends who, there was a story in the New York Times this weekend about people, like, where they're going, the zip codes, like yourselves. And I do, I agree. I've been in the city the whole time. I haven't abandoned the city. I'm in D.C. do agree. I've been in the city the whole time. I haven't abandoned the city. I'm in D.C. now. I would have been in San Francisco or New York.

Let me just say, for all you people that are leaving, I'm going. I like my grass. I can't believe I don't live here in this small town. They're not going to last long. I'm sorry. There's something so magical about cities. And I'm a city person. And they're trying to convince me too much that it's better elsewhere,

whether they're up in a small Connecticut town or Vermont or wherever they are. You know, I like Vermont and I like people. People who live there should like living there. But I think there's something wonderful about cities. It throws people together in ways that they aren't used to. I get it. I get why you wouldn't want to be here for this. But when it all goes back, you're going to want the frisson of a city. I'm just going to.

I 100% agree. But again, it might be, there might be a second order effect in that. You won't see an exodus of people who live in cities. You'll see an exodus of people who work in cities. And what I mean by that is the guy or the gal, the investment banker or the lawyer that live in Short Hills or New Jersey or Greenwich, Connecticut that have to be near Manhattan because they work there. And now their company has said, you can work from anywhere and they can increase dramatically their quality of life by moving to Raleigh or to Delray Beach, Florida,

where they can all of a sudden say, okay, if I can work from anywhere, I'm going to where there's lower taxes, more sunshine, and I can buy a house near the beach for the same amount of money I have to buy in this mediocre neighborhood in New Jersey. So there's going to be a migration, I think, of the people who have to work in the city but don't live there. But folks like you and me that are blessed enough to have the opportunity to live in the city itself, I agree. But I think it's the near city suburbs that are going to just get killed. Reversal of rivers is Scott's positive. Here's my positive.

I like that Billions is back, which I'm very happy about. Have you been watching that? You like it? Yes, I always like it. It makes me feel like the before times. I'm like, oh, it's Axe fucking up whatever. There's a lot of porn, rich porn.

They're flying to one of those internet conferences. It's like Succession. It's New York porn. Yeah, they're jumping out. They're doing whatever they're late. They're shaman. They're going to shamans this time. That's not what it is. It's my son, Louis Swisher is on the podcast, Recode Decode podcast. And you know what? My son is freaking brilliant. He's so smart. He's so

reasonable. I am very pleased with, he turned 18 this week. I have raised a fine man. Any lady who gets to marry him is a lucky lady. He's a great kid. And he was, if you listen to him on the podcast, I'm so proud of him. He's so, he's just a, he's just great. And so you can listen to, I have both, I have two tremendous sons, but I'm going to focus on Louie because this is his birthday this weekend. I have to say, if you want to hear the smartest kid who's so much, he's so much, he's every part of me that's good. And that's what I like about him. That's nice. That's a nice thing to say. Yeah. That's my happiness. I want to, what makes you happy this week? My kids make me really happy this week. What makes me happy?

You know, I find myself checking when I say this, but this whole sheltering in place thing, I'm blessed. I have a nice place to live. I'm not economically strained. I saw some photos. It looks nice. I like my, you know, I mostly like my family, mostly. And, like, I'm really taking stock of mostly. Would you please be nice to your nice family? Your family looks lovely, let me just say. Family, like, these are people you otherwise wouldn't hang out with. That's the definition of family. But, look, I'm, you know, all of it. I'm really

trying to take stock of my blessings. I'm asking, I've been thinking a lot about my, well, I'm pimping my TV show, but I got my ratings back and 80% of our viewers are men. And we have one of the youngest viewerships in cable television right now. And I thought, what do I want to do? What do I want to accomplish with young men? And I think I've decided I want you as in the viewer to be a better man. I think young men relative to every other demographic group. You're like a nicer version of Jordan Peterson. Yeah, but relative to every other group, younger men are failing and falling behind more than any other group. And I was thinking that this pandemic, and I've talked a little bit about this, offers a huge opportunity for men to break out of this cartoon of being masculine and quiet and not expressing your emotions and to really take stock of your relationships with your – you know, the first one, I think of three questions I present to young men because they all want to talk about career or Bitcoin.

I'm like, no, those are the wrong questions and the wrong topics. The three questions you've got to ask yourself are, one, do you have the relationship with your parents and your siblings that you would want? And if not, do you need to kind of put the scorecard and the bullshit aside and be kind of the man that your parents hoped you would be and your kids think you are and express real grace and generosity and start repairing and strengthening relationships. I like it. Scott is Phil Donahue. You are Phil Donahue of the current age. Anyone who needs to look that up, look up Phil Donahue. And it's a time for young men, it's a time for young men who a lot of whom are boys to

pivot to being a man and start taking care of their parents, start expressing affection and appreciation for their spouses and their partners, start reaching out to friends. This is a big opportunity for young men. As usual, we're on the same wavelength. Well, I have a really wonderful young man. He's now a man. He's now a man. There you go.

I'm very proud of him. Anyway, we should start a cult of some kind of raising young men. I'm in. As long as I'm the cult leader that gets to sleep with everyone, I'm in. No, no. I'm in. No, you just ruined it. I'm going to, that's enough. That's enough. Come to the dog. No, no. Reach new

spiritual heights. No, no, no, no. Anyway. Don't forget, if you have a story in the news you're curious about, do not join Scott's cult. And want to hear our opinion on... Nike's and cyanide. No. And we're there now. Okay.

Email us at pivot at boxmedia.com. Do not write Scott in any way. If you want to join his cult to be featured on the show, Scott, read us out. Today's episode was produced by Rebecca Sinanis. Our executive producer is Erica Anderson and special. Thanks to Drew Burrows and Rebecca Castro.

If you like what you heard, please download or subscribe. Join us later in the week when we'll be making predictions and talking all things tech and business. Have a wonderful week. Especially, it's great weather everywhere. Just go out and adore and marvel at what this world is like. And I am not an environmentalist. With a little less carbon and a little less nitrous,

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