This Week in Startups - Emergency Pod! Facebook hands off Trump’s indefinite ban to the Oversight Board | E1164

Episode Date: January 22, 2021

FOLLOW Jason: https://linktr.ee/calacanis

It's an emergency podcast. It's an emergency podcast. Facebook is sending Trump's lifetime ban to their own Supreme Court. Yes, that's right. I've got to get this bullhorn out of here. I'm sorry, I've blown out your ears, everybody. But Facebook is sending Trump's lifetime ban to their own Supreme Court. It's known as the Oversight Board.

And we are going to explain to you today on today's emergency podcast, what is the oversight board? How does it work? Who runs it? And we're going to take our most educated guess on if Trump will ever. get his Instagram and Facebook handles back because those are worth hundreds of millions of dollars in future revenue for him for sure, maybe billions. And will Twitter and YouTube and Google join the oversight board? Is that the long game here? Stick with us. We'll answer all these questions

and more when we're back on this emergency pod. Do you ever wish you invested early in some of the best performing IPOs of 2019 and 2020? Well, our crowd investors did invest early in many of those awesome IPOs. And with Our Crowd, accredited investors can invest directly and easily in startups early well before they IPO or get bought. And that is really what you're looking to do. That's what I do for a living. Our Crowd investors have benefited from companies IPOing like BeyondMead. What a great company. And some of the companies that Our Crowd's investors have invested in have been acquired by buyers like Intel, Nike, Microsoft, and Oracle. Our Crowd has an in-depth due diligence process that includes meeting with the management teams of these private

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O-U-R-C-O-W-D.com slash twist. This is a big decision here. The timeline is pretty basic. I think you know the first half of the timeline here, everybody. On January 6th, we had riots in our capital that were incited by Mr. Trump himself. I think we're all in agreement on that. That is not a partisan issue here. Plenty of people on the right feel that way and they were disgusted by what they saw. Nobody wants to see that kind of behavior and, of course, loss of life, property damage and the delaying of the peaceful transfer of power. Later that day, after the riots had happened, the insurrection, Facebook gave Trump a 24-hour ban citing public safety concerns. Something happened that next day, were in the ensuing 24 hours because on January 7th, Zuck posts to Facebook, a press release,

where he announced it on his personal page, they would do an indefinite ban of Trump's account. So Facebook's response was titled Our Response to the Violence in Washington. It was written by Guy Rosen, who is the VP of Integrity at Facebook. It's kind of ironic or paradoxical in many ways. And Monica Bickert, who is the VP of Global Policy Management at Facebook, whatever that means. Here's the quote, events of the last 24 hours clearly demonstrate that President Donald Trump intends to use his remaining time in office to undermine the peaceful and lawful transition of power to his elected successor,

Joe Biden. We believe the risks of allowing the president to continue to use our service during this period are simply too great. Therefore, we are extending the block. We have placed on his Facebook and Instagram accounts indefinitely. And for at least the next two weeks, until the peaceful transition of power is complete. And that was a very confusing end of the sentence. His accounts are being blocked indefinitely? And for at least the next two weeks? That was kind of a mixed signal.

And I guess we should have all read into it that something else was coming. And sure enough today, we got the news. Facebook is sending its decision to indefinitely suspend Trump to the oversight board for a complete review. Here is what Facebook's head of global affairs. Nick Clegg says

and how he explained it. We believe our decision was necessary and right. Okay, great. Circle the wagons. We don't disagree with you. Given its significance, we think it is important for the board to review it and reach an independent judgment on whether it should be upheld. Now, this is interesting. They're hedging their bets. Of course, Facebook wants the traffic. Facebook wants the page views. Facebook wants engagement. And Facebook doesn't want other leaders around the world looking at what they did to Trump and having them think, you know what, Facebook is too powerful. They can just silence. a president? Because anybody who's in political office, whether it's Angela Merkel or, you know, Putin, whoever, you know, they're looking at this going, wait a second, how does this apply to me?

Now, for Putin, it doesn't. He can just kick Facebook out or do whatever he wants. But for other leaders, this actually is probably really rattled them in some way. Our decision, here's a quote, our decision to suspend then President Trump's access was taken in extraordinary circumstances. a U.S. president actively fomenting a violent insurrection designed to thwart the peaceful transition of power. Five people killed, legislators fleeing the seat of democracy. This has never happened before, and we hope it will never happen again. It was an unprecedented set of events, which call for an unprecedented action. So here you're getting this context of, hey, we didn't want to do this, but I think that the FBI and other Homeland Security showed the social media

companies, Amazon Web Services and others, here is exactly what's coming next. And this is what's going to happen on inauguration day. And this is what's going to happen in the weeks to come. And I think that's what really led to this collective action, including Pauler and Amazon Web Services and everybody, YouTube, banning all the Trump accounts and going after these Q&N accounts, etc. Here's a 30-second clip of Facebook's head of global affairs, Nick Clegg, discussing the ban from an interview with Reuters. I'll comment after we play the clip. I'm very confident that any person looking at the circumstances in which we took that decision and looking at our existing policies will agree, given the, in my view, sort of crystal clear link between the words of the

former President Trump and the actions of people on the Capitol, we felt it really was, whilst it's a controversial decision because he was the President of the United States, it actually wasn't a particularly complicated one to take, given it was so obvious to us that that was contrary to the longstanding policies we have in place. So what is Facebook's oversight board? That's what you're asking right now. Well, you might have missed the news about this. It was announced a couple of years ago.

Back in November of 2018, Mark Zuckerberg first mentioned the idea of an independent oversight board. That probably means it was brewing for a couple of years. And here's what he said. This is the quote from a November 2018 post. I've increasingly come to believe that Facebook should not make so many important decisions about free expression and safety on our own. In the next year, we're planning to.

create a new way for people to appeal content decisions to an independent body whose decisions would be transparent and binding. The purpose of this body would be to uphold the principle of giving people a voice while also recognizing the reality of keeping people safe. I mean, talk about dramatic foreshadowing here. This is exactly the ultimate test case, the ultimate stress test for Mark Zuckerberg's new Supreme Court. And him saying that it would be transparent and binding and it would occur outside of Facebook is really what makes this a pretty, I have to say, interesting next step from. I was going to almost even say impressive. And I'll get into my analysis of it in a minute, but we should get through this a little bit. Facebook announced the funding in December of 2019.

An initial commitment of $130 million to launch its new oversight board, which is designed as a way for users to appeal the social giants content decisions. The purpose of this board, to be clear, is not to make decisions in real time. There's still a safety group at Facebook dealing with those stuff. This is for appeals. You've been banned or the content's been taken down or the account's been taken down and you want to appeal it. Do you appeal it to Facebook and Zuckerberg makes the decision? It's kind of uncomfortable. Here's a third party that's funded by them and how third party is a company or a non-profit or an NGO, whatever this is being funded by Zuckerberg himself. I guess that's a really good criticism and concern. So what is the oversight board? The oversight board, according to the

Associated Press is Facebook's panel intended to rule on thorny content issues such as when post-constitute hate speech or the decision to ban a world leader was the right one or not. That's what the Associated Press describes this as. From the AP, it is empowered to make binding rulings. That is, rulings that can't be overturned by the CEO Mark Zuckerberg or the board of Facebook, etc. So is it actually going to be legally binding? I could see if Zuckerberg didn't like this, he could just say, we're not going to listen to

the oversight board again. So that's, you know, the, the, the, an interesting, uh, he would lose some credibility, but I mean, he doesn't have much credibility in my mind to begin with. I mean, he's double crossed so many people and made so many horrible decisions and has the largest fines ever handed out to a corporation ever with the exception of maybe Exxon or BP oil. Like, he's got some of the record fines there. So I don't think he has a problem changing his mind. It does have 20 members. The first one members were chosen by Facebook. And Facebook also pays the members, the board member's salaries, according to the Associated Press, also from the oversight board. board's website. Their stated purpose, the purpose of this board is to promote free expression by

making principled independent decisions regarding content on Facebook and Instagram, and by issuing recommendations on the relevant Facebook company content policy. So there is going to be some sort of loop back. If they figure out something about hate speech or, you know, something from hate speech in another country might be different than in France, might be different than the U.S. might be different than Australia. They can adapt and change those. So I think this is a way for them to say, hey, look, going forward, if the board, the oversight board, see some trends, they can go influence how Facebook does their day-to-day decision-making. All right, so just some timeline about this board. The website is oversightboard.com. The board trust was formed in October of

2019. It began operation in October of 2020, which is, yes, that's right, only a couple of months ago, and they've received over 20,000 appeals as of December 1st, and the cases that have actually been evaluated equals six. That means 0.03% of appeals make it to review for those of you who are slow at math. And who knows, maybe more of them will be eventually reviewed. But I think this is going to be one of these situations where they're going to take the most important cases, perhaps the ones with the most followers or the ones that are most covered by the press. Who knows what vector. They will define importance as, but obviously Trump's going to go to the front of the line. Some of the examples that the Oversight Board is reviewing according to an Axios article, one of them is

Facebook removed a user's post where they were quoting violent rhetoric from former Malaysian Prime Minister Mahathir Mohammed, but the user says the post was intended to spread awareness of the horrible words. So that's an interesting one. If you quote somebody, if you quote Hitler, if you quote somebody who says something horrible, are you responsible for it or not? And if a journalist quotes something in that context, that's fine. The New York Times could quote, you know, a despot or a murderer or a serial killer. That doesn't mean that you're endorsing it. But if those horrible words are put on Facebook with no context, they could actually be amplified and it could be amplified by people who are white supremacists or whoever. Arguing about different

treatments of churches and mosques in Armenia and Azerbaijan. That's a fascinating one. And in each of these first too, you have different types of governments and they might take these different arguments, they might assess these different arguments in the local context and it might be very different than what we're used to here in America. A user in Brazil posted photos depicting breast cancer to raise awareness, but Facebook took them down because female nipples were showing. And this is something we all know on Instagram, the free the nipple trend that's been happening every couple of months. It trends on social media because Instagram was taking down pictures of people breastfeeding, etc.

A quote from Nazi propaganda minister, Joseph Goebbels, appeared in a post by a U.S. user who says he intended it to underscore a slide toward fascism in America. Facebook removed the post under dangerous individuals and organizations policy, i.e. is this person quoting and saying, I hope we do not reach a level where, you know, this Joseph Gerbil's quote is reality, etc. And how do you know what the intent of the person is. And I think that's what this board will try to do is figure out the intent and maybe how to contextualize these things. And the only case that was referred to the board by Facebook itself rather than users involves the removal of COVID-19 misinformation, which misinformation is in the eye of the beholder because we had our own government and the World Health Organization giving us mixed signals on, of course, mask wearing. And, you know, many times governments have been involved in conspiracies.

Governance have lied. Government agencies have done propaganda. That is not true. And so now we're asking Facebook to sort all that out for us. And also science changes over time. What might be incorrect science and considered a conspiracy theory might be a cover-up, you know, to another person. So if this had been the case from the movie The Insider, a great film with Russell Crow, would that person investigating big tobacco be silenced because they were spreading propaganda that cigarettes were dangerous at that time? These are the kind of things that make this actually a really difficult way or a difficult process. And, you know, of course you're probably wondering, how are these board members paid? I want to jump to that. Because

I think it's super important. The amount they're being paid is undisclosed as of yet. But they did put $130 million into this, and they have a huge staff from what I understand. Here is Aspen Institute's executive director, Vivian Schiller, who was asking a board member of the oversight board, Michael McConnell, if members of the board are being paid and how much? Here's the 18 second clip. Are the members of the oversight board and the chairs being paid for this work? Yes. Yeah.

How much are you being paid? Well, the individual amounts are not public information, but in general it's simply to compensate us for alternative uses of our time. I love that quote. I like this woman Vivian Schiller because it's fantastic. And how much are they being paid? She just asked it like very like how much are how much did the apples cost per pound? She asked in a very like clinical, non-emotional way.

And I almost thought he was going to tell her, but he said to just, doing it to compensate for their times, which means that I don't know if they have a fixed fee or they're getting paid $10,000 an hour because they might get paid $10,000 an hour for a speaking gig. And then I was wondering, are they full time or what's the actual commitment here? According to Sarah Fryer from Bloomberg in a tweet, members are committing to an average of 15 hours a month. So it's not a full-time job, but it is if you were working whatever, you know, 150 hours, 200 hours a month. It would be 10% of your time. So it's a side hustle for sure two days a month. Now, how were the board members selected? This is from the official website to ensure that

a global perspective. The oversight board includes members from a variety of cultural and professional backgrounds reflecting the diversity of the Facebook community itself. These members were chosen because they are experienced that deliberating thoughtfully and collegially skilled at making and explaining decisions based on a set of policies and principles I'm familiar with the digital content and governance. Special consideration was given to people who have demonstrated a proficiency in questions of online content moderation and a history of working with others on difficult problems towards a common goal. That's all nice PR speak. But I do like the idea that they're trying to be thoughtful and they're trying to be collegiate and just work together to in good faith get through

these. So is this some sort of failure of the algorithms and do we still need human rights, a human oversight? I think we'd all agree that you do. And, you know, is this oversight board above Facebook in parallel to Facebook? How exactly this is going to work? And the board only works because it's independent according to people who are involved. Here's oversight board member and former Prime Minister of Denmark, Heli, Thoring Schmidt, who answered these questions on CNBC in September in this two-minute clip. I will give you some comments right after we play that clip. He's at the 3,000-year-old game of go, which just shows how far we've come in terms of AI as well. Why do we need you? Why do we need human beings to give oversight if the algorithms are so

technologically advanced? I think it's two different things. I mean, algorithms can do do one thing. They can actually take, obviously, every day there are millions and millions of pieces of content and you can't have human eyes looking at all that content deciding what stays up and what gets removed. So that is where you use the algorithm to do that. But in the ideal world, and I do admit we're not in the ideal world, the algorithm will reflect the decisions that we take, the community standards and decisions we take on what is actually appropriate to stay up and what should be removed. So this is the idea of the algorithm, that they don't go beyond what we have decided as human beings should stay up or should get removed. But when all that is said, I do think it's obvious to most people that we can't carry on in the world where it's basically Facebook and ultimately Mark Zuckerberg who takes the decisions on what context gets removed or stays up.

So that's why it might not be ideal and it might be a small step, but it is a step in the right direction. direction to finally have an independent board, an oversight board that can take these decisions. This wouldn't have been good if we weren't independent economically, and also if Facebook has not been very clear that they want to follow our decisions. In that way, we are above Facebook, and that is how it should be. So this is the first step of regulating this. And obviously, it would be better if the UN or a multinational body like that could do this regulation because it is global and it needs some kind of regulation, but this is the first step

in the right direction. Okay, so there you have it. They admit freely. Obviously, algorithms, you know, could ban a certain word if there was a hate speech word that people did not want to have on their service. You could block that word, but then if somebody was talking about the issue and they wanted to reclaim that word or talk about the history of that word, they couldn't even talk about it. So these things are very nuanced. The algorithms can only do so much. They do. They don't know intent. We're not really at the pre-cog level of crime yet from Minority Report. Look that up if you're a millennial. Great film for you to watch. It's going to seem quite charming in 2021. So as we wrap here, some observations. Will Twitter join this board? YouTube? Should they?

I think that that is what Zuckerberg is trying to do here. He wants to take these edge cases and push them out to this board of respected people who he has paid off with generous salaries, I am sure, and use their credibility. And of course, they get to power trip and cash the check. So that is probably a good trade of services. He's buying their reputations. They need to maintain their reputations. These are pretty serious people on the board, obviously the former prime minister of Denmark. And if you hire those people and you give them independence and then you were to take it away, oh my lord, the blowback would be significant. So this is something that I think probably Zuckerberg has thought about deeply. He doesn't want to be hated. He doesn't want

to have to make these decisions. He wants to hand them off and say, you know what? It's a difficult decision. And I agree I shouldn't have this much power. So therefore, please don't break up Facebook. Please don't, you know, rescind the 230, you know, common carrier type protections where, you know, the person who makes paper doesn't get blamed for what people write on the piece of paper. That's Facebook's position. We're a piece of paper. You write stuff on a piece of paper or you use a Bick pen, the pen and the paper are not responsible for what's written on the paper. If you write, I want to rob this bank on a piece of paper and using a Bick pen, Bick does not become responsible for it. If you get away in a Volvo car, they don't charge Volvo with your bank robbery escape.

So this seems like a good idea. You know, it's going to be hard to game this. They're not going to be able to do everything. But I think this will create a framework of independent, intellectual, a good faith discussions. And I think that this is a way to cozy up to lawmakers and say, hey, we take what we're doing seriously and we are acting in good faith. Finally, after 20 years of bad behavior, we are now going to start behaving ourselves. And I think that's pretty smart. The $130 million, what does it cover? Well, operational costs, which includes the office space and staff compensation, travel expenses, et cetera. And the $130 million is supposed to fund the board for six years, which is, you know, 22 million a year or so. And they submit an annual budget to

disperse those funds. And I'm guessing that Facebook could pull the money. So if they could pull the money, that to me seems like a pretty sinister way to do this overhang. I think to take this seriously, it needs to be funded for a decade. And they need to fund it in an escrow account for 200 million and not have the ability to revoke it because the fact that they can revoke this every year to get the funds means that Facebook is hedging. So I think Facebook's got a little mini hedge built into this if this is accurate. Who knows what's changed? And then the board members are going to hire the next set of board members. So Facebook has basically said we're not going to pick who gets paid, who gets paid what. We're not going to pick who's on this oversight board.

We pick the first four people, but we're going to let it go from there. And supposedly when they hired them, they did a lot of work on making sure that they were not conflicted. Of course, everybody has some conflicts because everybody uses Facebook or Instagram. There'll be plenty of criticism of this, but I think overall it's a really good start. I don't give, as you well know, listening to this podcast, I do not give Zuckerberg a pass on anything. This seems not only like a savvy move, right, the cynical part of me, like, oh, this is pretty savvy, get them off your back kind of situation. This actually seems to be the right move. this is the move I would do. This is the move any of us would do. If you unfairly had your account

removed, you would want to have the ability to appeal it, and you wouldn't necessarily want to appeal it to the person who's running that. This really does fit nicely between the two polar extremes. One is a free-for-all, anybody can post anything they want. We know that if anybody can post anything they want in an at-scale network, it will get amplified and it will go viral. And going viral is a new phenomenon that didn't exist in the previous world when people would stand on soap boxes, as my friend David Sachs is fond of saying, it didn't exist until maybe people started having the ability to have the printing press or radio. But even then, it didn't have a global footprint of the two to three billion people that use Facebook's products,

WhatsApp, Instagram, and Facebook. So that kind of didn't exist and we needed to address that. And we also have this concept that if, you know, the famous case of like, well, I'm a Catholic and I don't believe in gay marriage show. I shouldn't have to make a gay wedding cake, and I refuse to do that. Well, it's not like there's a thousand bakeries per state in the United States or 10,000, whatever it is. We can just go to the next bakery.

It's not a big deal. There's only five or six of these services, and two or three of them really matter. And if you get neutered, like Trump has been, they snip, sniped him, and he doesn't have access to Twitter. He doesn't access to Facebook. YouTube, in these few days since he's been out of office

and lost his accounts, everybody's sleeping again at night. Everybody feels a great weight lifted because we're not sitting there saying, what is he going to do next and how crazy is it going to be? And that existential angst that he stress tested the system is now gone. So, you know, in some ways, I feel like Twitter should have, if I was running the CEO of Twitter, I kind of feel like I would want the right to take anybody off the system

who I didn't want to go to work knowing I was doing. But you also start to have this, you know, sort of soft reflection that I think Jack talked about, which is, you know, he said it sets a precedent that I feel is dangerous. The power of an individual corporation has over a part of the global public conversation. He's self-aware, and I know, Jack, it's sincere. He doesn't want to feel like he's the one who decides what the public conversation is. But you also don't want to go to work every day and have everybody in the company freaked out that you're enabling somebody to cause what happened on January 6th here in the United States. Jack concluded everything we learn in this moment will better our effort and push us to be what we are.

one humanity working together. This is really nice, I think, a nice thought. And I think this is forward progress, both getting Trump out of office and putting to bed that chapter, the American people chose to go with boring Joe Biden and get off the crazy Trump rollercoaster. And after we saw that violence, we realized, you know, there does need to be some restraint here, even for the president of the United States. And these platforms are too powerful. And they need to have some way of appealing these decisions so that they don't become the new overlords. Because nobody wants to live in a world where Zuckerberg is in charge. I can tell you that. And I'll just close with delete your Facebook account. They're not a great organization. I don't trust them. Delete your

account or don't use it. I have a basically load Facebook once every couple of days, maybe every 10 days now. And I usually do it by accident. Somebody sends me a message. I click on it. But I stop using it for login. I only use the Apple login now or my email address is login because I feel like I can trust Apple with my privacy. Do not trust Facebook. Do not trust their products. Try to get off of them if you can. We'll see you all next time on this weekend startup. This week in startups is brought to you by Our Crowd helps you invest early in pre-IPO companies alongside professional VCs. If you're interested in investing, you can join Our Crowd for free at OUR-CROWD.com slash twist.