Tech Brew Ride Home - Tue. 07/16 - Who Put The Politics In My Tech?

Starting point is 00:00:00 On April 4th, 2023, around 2 in the morning, a man was found stabbed multiple times on a sidewalk in downtown San Francisco. Hey, who did this to you? What happened next turned the story into a political firestorm. Reports have identified the victim as Bob Lee, the founder of Cash App. From Bloomberg Podcasts, this is Foundering, the Killing of Bob Lee, beginning April 16. Welcome to the Tech meme ride home for Tuesday, July 16th, 2019. I'm Brian McCullough today. Facebook explains Libra to Congress.

Starting point is 00:00:43 Amazon might be next in the EU's woodshed. Google might be next in Trump's crosshairs. Another Tesla lineup shakeup, a couple of interesting raises, and Microsoft opens windows up to all of your digital assistance. Here's what you miss today in the world of tech. Tech's big week of congressional scrutiny kicked off today with Facebook's head of blockchain projects. David Marcus, appearing before the Senate Banking Committee to discuss Facebook's Libra cryptocurrency project.

Starting point is 00:01:16 Let's start with a big picture take on what happened and then we'll zero in. There was a lot of back and forth, a lot of questions about things like, is this safe for the global economy? What about things like money laundering? But overall, the hearing today was much more, I don't know, intelligent than we're used to. when tech execs are hauled before Congress, Marcus seemed smart and forthcoming, but also the senators were, again, I'm looking for a word here, sharper than they tend to be when they're talking to tech executives. This was Casey Newton's take. Overall, the hearing was surprisingly coherent. Many senators showed strong base knowledge of how Libra worked and asked the right

Starting point is 00:02:04 questions. Marcus was generally forthcoming, beyond the topics of how much Facebook had invested in the Lieber Project and what data it will glean from transactions atop its social network, end quote. Friend of the pod, Matt Stoller tweeted this, quote, Facebook's political problem is that the company obviously knows nothing about banking and monetary policy, and this was exposed today. Senators defer to the company on technology questions, but not on banking. questions, end quote. And that's kind of exactly the tightrope that Facebook is walking here. Getting into currencies is getting into the traditional power of sovereign nation states. Exercising oversight over the financial systems of their polities is exactly the business that

Starting point is 00:02:51 legislators are in. This is what they do for a living. Facebook can't fudge this stuff and get away with it, I think. That's not to say that there weren't some rhetorical fireworks to today, quoting the verge, Senator Sherrod Brown led off the hearing with a blistering rebuke of the company, putting the new project in the context of a string of scandals ranging from Cambridge Analytica to racial massacres in Myanmar. Quote, like a toddler who has gotten his hands on a book of matches, Facebook has burned down the house over and over and called every arson a learning experience, Brown said. We would be crazy to give them a chance to experiment with people's bank accounts and to use

Starting point is 00:03:33 powerful tools they don't understand, like monetary policy to jeopardize hardworking Americans' ability to provide for their families, end quote. And quoting from CoinDesk, when Marcus reiterated his talking point that Facebook would be only one of many companies involved in the Libra project, Brown shot back. You know better than that. Only Facebook has access to two billion people, end quote. Several times during the hearing, Marcus said trust is, quote, primordial, end quote. At one point, at one point. At one point Brown asked him, what the hell does that mean that trust is primordial? Quote, it means we need to continue to do better, Marcus answered. Aside from data privacy, the lawmakers

Starting point is 00:04:15 grilled Marcus on consumer protection. Senator Kirsten Leah Sinema of Arizona asked what hypothetically would happen if a resident of her state using a wallet developed in Spain, got scammed by someone in Pakistan. Where could the consumer go for recourse? Quote, Americans will likely use an American-based wallet service, Marcus replied, adding that if not, their rights to redress would depend on the provider's terms and conditions, end quote. And quoting from the New York Times, Mr. Brown asked if there was any amount of opposition that would convince Facebook to scrap Libra. Quote, is there anything that elected leaders can say that will convince you and Facebook that it should not launch this currency, he said. Mr. Marcus said that the company would not move ahead

Starting point is 00:04:59 with the project until the concerns of regulators are answered, end quote. So this is one of those things that we might need to wait a few days for it to get some good analysis of, especially because the house gets a shot at this tomorrow. But if I had one take right now, it is, today was a lot of noise, and I don't think anything really happened. No one is going to stop Facebook from trying Libra, not saying they should.

Starting point is 00:05:28 No one really knows if it is a good idea or not. Not saying it is or isn't. And the politicians, of course, want to be seen on cameras stomping their feet. But the bottom line is that doesn't mean anyone is going to actually put their foot down about anything. But on the substance of what was discussed today, let's end with this summary by James Titicum on Twitter on the merits of what was discussed. Concerns about Libra and Facebook doing it and money laundering and privacy and everything all wrapped into a crazy ball. Quote, Facebook is in a delicate catch-22 with Libra. The more it stresses it isn't in charge of it, the more that Libra looks vulnerable to fraud slash money laundering, end quote. And that was the thing.

Starting point is 00:06:17 Facebook was trying to stress that this is something that they want to do, but they're not going to do it in any sort of super aggressive way. This is just a way of making money more free, blah, blah, blah, blah, blah. let's see if this angle has any legs going forward into tomorrow. All right, so there are a lot of things happening around tech and politics and regulation and whatnot this week and all this summer. It's hard not to get everything mixed up into one giant confused story. So let's clarify. Remember, last week, we believe we learned that the FTC would be finding Facebook for stuff that it did in the past. Today's Senate hearing and tomorrow's House hearing, they're about if the U.S. government is going to allow Facebook to do something new.

Starting point is 00:07:08 And this next story is about the EU, which is still threatening to come down on tech companies for other stuff from the past, like it has done recently. Remember, the EU has come down heavily on Google, and now it looks like it might be Amazon's turn. Sources are telling various outlets that Margethe Vestiar, head of the EU's, competition commission is maybe days away from opening a full-blown EU antitrust probe into Amazon, quoting Bloomberg. Best-Ear has hinted for months that she wants to escalate a preliminary inquiry into how Amazon may be unfairly using sales data to undercut smaller shops on its marketplace platform. By ramping up the probe, officials can start to build a case that could ultimately lead to fines or in order to change the way the Seattle-based company operates, end quote.

Starting point is 00:08:00 It was Vestiar who brought the fines down on Google recently, who spearheaded the efforts to get Apple to repay back taxes to the EU, and even though Vestiar's term in her current position is due to expire in October, it certainly looks like she is set to settle a lot of scores on her way out the door, quoting from Bloomberg again. Qualcomm could be hit with a second hefty EU penalty as soon as next week for allegedly underpricing chips to squeeze a smaller competitor. The U.S. chipmaker was fined last year for thwarting rival suppliers to Apple and has been the subject of on and off antitrust scrutiny since 2005, end quote. Okay, and now this is entirely separate from all of that, Michigas. This morning, President Trump tweeted, quote, billionaire tech investor Peter Thiel believes Google should be investigated for treason. He accuses Google of working with the Chinese government. at Fox and Friends, a great and brilliant guy who knows this subject better than anyone.

Starting point is 00:09:07 The Trump administration will take a look, exclamation point, end quote. So what's this all about? Quoting from the Washington Post, Teal this week has charged that China's top military and intelligence officials are, quote, likely to have infiltrated Google, end quote, a claim he repeated during an interview on Fox News on Monday night. He has also faulted the tech giant for reportedly seeking to reintroduce its search engine in China where it is banned, while at the same time allowing a contract with the Defense Department on artificial intelligence to expire. The decision came in response to widespread blowback from

Starting point is 00:09:43 employees who faulted the company for helping the government build weapons of war. Quote, there's this very peculiar background where Google is working with the Chinese on communist government and not with the U.S. military, Teal said. He later appeared to blame the decision to end the Pentagon contract for a program called Project Maven on a, quote, broad base of Google employees that are ideologically super left-wing, sort of woke, and think that China is better than the U.S. or that the U.S. is worse than China, end quote. Google's ambitions in China previously had drawn widespread concern throughout the Trump administration and among congressional Republicans, partly because of the potential that Chinese spies could steal the company's technology,

Starting point is 00:10:29 including its AI advancements if it advances operations there. Quote, the work that Google is doing in China is indirectly benefiting the Chinese military, Marine General Joseph F. Dunford Jr., chairman of the Joint Chiefs of Staff, told Senate lawmakers at a hearing earlier this year, quote, we watch with great concern when industry partners work in China, end quote. Again, I feel like this show tries hard to stay out of politics. I think it's kind of why we all like this show. It gives us a bit of a respite. But look,

Starting point is 00:11:05 2019 is the year that politics is getting all up in tech's grill. So sometimes we can't avoid it. Geopolitics, partisan politics, all of it. Worth pointing out that those on the left are currently criticizing Google on human rights grounds for wanting to do business with China, workers inside Google. organized protests about this, as you just heard. And right-leaning workers within Google have been leaking internal Google laundry, dirty laundry to lawmakers in an attempt to bring scrutiny to Google's alleged political bias. Link in the show notes to a BuzzFeed piece about that. Things are all mixed up and crazy and political right now. And also, it is worth noting that Peter Thiel is also a member of Facebook's board of directors. Tesla has tweaked its car lineup and pricing again.

Starting point is 00:12:06 First things first, the Model 3 just got a small price cut. The Model 3 Standard Range Plus model is now $38,990 down from $39,900. But Tesla has also discontinued the standard range versions of the Model S and Model X. which effectively means the minimum price for the Model S and Model X just went up from $75,000 to $79,990 for the Model S, and the Model X now begins at $84,990 up from $81,000. In a statement to Reuters, Tesla said, quote, To make purchasing our vehicles even simpler, we are standardizing our global vehicle lineup and streamlining the number of trim packages offered for Model S, Model X, and Model 3.

Starting point is 00:12:53 We are also adjusting our pricing in order to continue to improve affordability for customers, end quote. But as Electrek notes, quote, this is the third significant pricing and options change in 2019. Tesla's chaotic pricing strategy is kind of a running joke at this point, end quote. Electric says this is probably a further effort to streamline the product offerings, of course, but at the same time, it expects further changes in the lineup. in the coming months. Now for a couple of interesting, very interesting raises, substack is that platform that seemingly everyone and their mother is using to launch an email newsletter. And now, Substack, I guess, hopes to get my mother on board as well,

Starting point is 00:13:44 thanks to a $15.3 million Series A led by Andresen Horowitz, quoting TechCrunch. Writers using Substack include Nicole Cliff, Daniel Ortberg, Jud Legume, Heather Heverlisky, and Matt Taibi. The startup says that newsletters on the platform have now amassed a total of 50,000 paying subscribers, up from 25,000, just in October, and the most popular substack authors are already making hundreds of thousands of dollars a year. A16Z's Andrew Chen, a blogger and newsletter writer himself, is joining the Substack Board of Directors. In Chen's view, the startup represents the combination of the old and the new, allowing writers to reach longstanding, quote, passionate online communities, end quote, while also pursuing, quote, a new way of doing

Starting point is 00:14:31 micro-entrepreneurship, end quote, where they make money directly from their audience. When you combine the two, wow, this is something special, Chen said. Why Combinator, where Substack was incubated, is also participating in the funding, end quote. And Patreon, that platform that helps over 100,000 online content creators of all stripes and mediums manage their paid membership communities. It has raised a $60 million series D round led by Gladebrook Capital. This brings Patreon's total funding to $165 million since its founding in 2013. Patreon co-founder and CEO Jack Conte told Eric Peckham at TechCrunch that the new funding would be used to continue international expansion, expand Patreon's fulfillment capabilities for people's

Starting point is 00:15:27 selling merch as a part of community support, bringing greater page customization on user Patreon pages, adding more features to its new pro and premium pricing tiers launched in March, and integrating better with more outside platforms using the Patreon API. When I asked Conte whether he plans to use this new funding to make more acquisitions, Patreon acquired the White Label membership management platform memberful last summer, he responded that there are no deals currently in the pipeline, but M&A is certainly on the table if they had identified the right opportunity. Quote,

Starting point is 00:16:00 it's been a few years that we have been seeing the Patreon for X trend of startups focused on a specific niche like podcasting. We're looking at those companies and always open to joining forces if the mission is aligned and the product is great, end quote. As it announced in January, Patreon expects to surpass $500 million in payments process during 2019, passing the milestone of over $1 billion paid out to creators since founding. Roughly 40% of those payments are international, and the overall monthly spend of fans who use Patreon is $12 on average, end quote. That is all for today.

Starting point is 00:16:42 As always, I've been your host, Brian McCullough. Follow me on Twitter at Brian MCC. Please pitch me stories and talk about them too on the show's subreddit, our slash right home. The last link in the show notes will let you sign up for the ad-free podcast feed, and we've got a couple of podcast classifieds today coming up right after this. If you want a classified of your own, check out ridehome.com. Forward slash classifieds. Talk to you tomorrow.

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Tech Brew Ride Home - Tue. 07/16 - Who Put The Politics In My Tech?

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