Today, Explained - A little privacy, please

Episode Date: February 19, 2019

The Verge's Casey Newton says a California privacy law to protect your online data might finally push federal legislators to come up with one set of rules for the entire country. Recode's Kara Swisher says it's high time big tech gets its act together. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Aspiration is a bank that has really lofty ambitions. They want to save you money while trying to save the world. When you give Aspiration your money, you can rest assured that none of it's going to go to fund oil pipelines or to fund oil drilling. If that's the kind of thing you care about, you can download the Aspiration app right now to open an account today. Let's be real. We all know our data is being mined by Facebook and Google and everyone else, but we go along with it because it's easier to just use all of their services

and ignore the trade-off. Occasionally, we're reminded that we really should care more, that the cost of giving away all of our data can be quite high. Casey Newton covers Silicon Valley for The Verge, and he says 2019 might be the year all of this changes. I think there is going to be some action, and it's all because of something that happened last year in California. Right after the Cambridge Analytica data privacy scandal that you're probably familiar with, right? Facebook had an API that gave away a lot of data and some people got a hold of it and used it to try to influence our election. That's a big issue. I think people have a right to be very upset. I'm upset that that happened. Well, in the wake of that, there was a real estate developer named Alistair McTaggart, who spent $3 million to put forth a ballot proposal that would create

some really robust protections for consumers around their data. Now, I'm sure you get this all the time. Why do I care about privacy? I got nothing to hide. I don't care if people see what I buy. I live this boring life. When people say that to me, I say to them, well, the point is, it's not just about you. It's about society. And the initiative was gathering so much momentum that at the last minute, he brokered a compromise with the legislature and with the tech companies. And the result was a California privacy law that is going to take effect in 2020. Assembly Bill 375. It's the California Consumer Privacy Act of 2018. And it deals with how companies collect and use our data. It creates a whole new set of protections that Americans have never had access to before.

And what exactly does that regulation do? So the new law does a few things. Probably the biggest is it just grants consumers the right to know what information companies are collecting about them, why they're collecting that data, and who they're sharing it with. So pretty basic stuff, but stuff that we have so far not had any right to. It also gives us the right to tell companies to delete our information and not to sell or share it. And businesses must give us, if we opt out, the same quality of service we were getting when we were giving them our data. So that's a pretty nice set of features that so far has been denied to us in America. And so how does that compare to what's on the books nationally? Is that just far and beyond what we have already? So it's interesting that in America, we don't really have a comprehensive federal law around data privacy.

Instead, we tend to regulate it by sector. So you might have heard of HIPAA, which sort of controls the way that health data can be shared. There's FERPA, which applies to school health records. And then there's something called COPPA, which regulates data privacy, but only for kids under the age of 13. Why do they all sound like Pokemon or something? They're adorable laws with teeth. Okay, good, good, good. And, you know, in addition to those, the Federal Trade Commission has at times tried to enforce data privacy standards

or kind of set standards. But as you might imagine, tech companies have pushed back on that and told them that they do not have the jurisdiction to do that. And how did tech companies in Silicon Valley react to the law California passed? So they reacted in two ways. The first was to say that they supported the law very strongly. And then the second way was by trying to undermine it and make sure that it never takes effect. The way that they're doing that is by lobbying for a national bill that will supersede the California legislation. And privacy advocates are really, really worried that a national law,

if and when it comes to pass, is going to be much weaker than the one that was passed here. Why appear to support it and then, you know, through back channels and lobbying, try to get a national law passed? So lobbyists aren't dumb. They know that there is probably more attention being paid to data privacy right now than at any time in history. In Europe, we have a regulatory framework called the General Data Regulation Protections. We need a similar internet bill of rights here in the United States. We need to put some digital rules of the road into law when

it comes to people's privacy. And they know that it's not going to be a popular position if companies like Facebook and Google come out and say, well, we actually don't think consumers do have a right to know what data we're collecting or who we're selling it to. So they know that that would look really bad. They're also deeply worried, though, that there will be a patchwork of legislation that gets passed across the country. They would have minor variations in what kinds of data consumers could request or what sort of actions they would take, which would just make it very difficult for them to operate a national service. And so they're hoping they can get one consistent piece of

legislation that can apply to the whole country so they essentially only have to rewrite their software once. What kind of laws might come out of a federal effort here? Well, there was what they called a listening session in California this month where people on both sides of this issue talked about that exact thing. And lobbyists for the tech companies said that they are not trying to weaken the law and just that there are some inconsistencies in it. For example, the law says both that individuals can request data, but also households can request data. And so they raised the possibility that you might be able to request all of the data that Facebook has about your roommate, which was presumably not the intent of the law. So they're hoping to kind of iron out some of those kinks,

at least that's what they're saying publicly. Of course, it would also not be at all surprising if the national law didn't have quite the teeth that the California one does. Should it be reassuring that California was able to do this, considering how powerful and wealthy these companies are? Even their home state was able to legislate considering how powerful and wealthy these companies are? Even their home state was able to legislate around them in a way that they don't seem to like? I think so. Although I would also note that tech companies are really bad at getting what they want, right? Like there are all of these examples where tech companies are radically opposed to something and it happens anyway. For example, all of the big tech companies

are heavily invested in the idea of immigration reform. They want more H-1B visas so they can get more workers from overseas to build new software. They've been fighting that battle for, it feels like a decade, and they've gotten absolutely nowhere on it. There was a piece of legislation that went into law last year called FOSTA and SESTA, which was, you know, purported to stop sex trafficking. It winds up regulating a lot of speech on the internet that is about sex that has made it impossible for a lot of online forums to, you know, even host any discussions of sex for fear that they will be held liable and potentially driven out of business. That was something that all of the tech companies opposed until suddenly they didn't, and they essentially got steamrolled by a bunch of other forces. So even when the tech industry

puts its mind to something, it's not always very good at getting what it wants. And that's despite the fact that lobbying spending at these tech companies has been increasing exponentially for a decade. Is this the kind of thing that both parties agree is a priority? You know, in California, the Democrats have supermajority control of the legislature. So, you know, there was essentially no risk that Republicans could have derailed this even if they wanted to. But nationally, it would seem that data privacy is a bipartisan issue. If you look at the hearings that were held in Congress last year with all of the big tech companies, while they weren't always about data privacy issues specifically, for the

most part, Republicans and Democrats were asking pretty pointed questions about what kinds of data these companies collect and what they're doing with it. So it doesn't seem impossible that we'll see a bipartisan compromise here. Do you think something could happen this year? staffers who told me that they did expect there was going to be kind of a mad dash before the California law takes effect next year to get something into place. I think you're going to see a lot of pressure on them to figure out some kind of national law. Casey Newton reports on Silicon Valley for The Verge. He's got a daily newsletter called The Interface, all about Facebook and democracy. You can find it at theverge.com slash interface.

Kara Swisher spends a lot of her time talking to the most powerful people in Silicon Valley. I ask her what more privacy and value for our data might look like after the break. Okay, so you've got your big banks that charge all sorts of high fees and maybe use your money to fund things that you might not agree with. And then there's this bank called Aspiration that wants to do better. They've been featured in Forbes and the New York Times and Money Magazine, which I've actually never read. That sounds like a good one. They offer a 1% annual percentage yield, zero ATM fees anywhere in the world, and the option to choose your own monthly fee, even if it's zero. I think there was like a Nine Inch Nails album that worked like that once.

Aspiration commits 10% of their earnings to charities that help other Americans and does not use any of its money to fund oil pipelines or drilling. If that sounds good to you, you can put your money where your heart is and download the Aspiration app right now. Open up an account, you earn 1% annual interest, pay zero ATM fees, and who knows, maybe, you know, make the world a better place while you're at it. You know, privacy, there's a famous quote by Scott McNeely from when he was running Sun Microsystems when he said, there's no such thing as privacy, get used to it. There's zero privacy. And I think he's probably right. Like, I mean, in fact, he's very right right now. But control of your data is what this should be about.

And do we have a right to control all of our data? Because it feels like the trade-off we're making is we get all these services for free, and in exchange, we surrender all of our information. Yeah, it's just knowledge of it, right? Yeah. It's like, you're going to be giving away your liver now. Like, if you didn't really understand that, you'd be like, oh, wait a minute. And I think if it's explained in plain English,

if you understand where it's going, and I think control, absolutely. Like, they can't use it for purposes that you weren't intended to. And since you can't anticipate everything, you should be told when they're doing unusual things with it. It should be super simple to understand where your data is going and how it moves around the internet. There are so many players here, federal lawmakers, 50 states, so many companies. What will it take to get this right for the entire country? You know, a national privacy law, some sort of privacy law

that makes sense and doesn't squash innovation, right? You don't want to make it too onerous for small companies to deal with all this data. You know, the issue is when some of these things, when they're too onerous, the Googles and Facebooks of the world do great because they have teams of lawyers. That's what's happening in Europe. So it's really hard to create startups because they have to follow these very difficult laws that are hard to do. And the question is, the other one is that these big companies can lobby. You know, they have lobbyists. You know, they act like they're like simple folk with their hoodies, but they've got huge

teams of lobbyists now. Yeah. And so you have, you know, you have legislators like Chuck Schumer, who's really friendly with Facebook, for example, or friendly with Google or others who doesn't want as much legislation. You know, Alexander Ocasio has written quite a bit about this issue, the power of tech companies on Twitter, actually, which is ironic, obviously.

But there's got to be a way to come to the middle of what works for businesses and what works for consumers. I would opt for consumers always, and that's what legislators should be doing, but obviously that happens never. The U.S. is a special case. Obviously, next to Europe, we're not as crazy about over-regulating business. Right. At all.

Right, exactly, yeah. What do you think makes sense for the United States when it comes to data privacy? I think it's very clear. I did a story for the New York Times column about the Internet Bill of Rights, and it had a number of different ideas. And it's not one law. You can't have one Internet Bill of Rights. But what you can have is an idea around a couple things. I would think control of your data. When you give someone data, it's just for them, and it stops there, and they can't use it for other things. Just a knowledge of it. You can't click every time, because that's going to make you not pay attention. You're just going to keep clicking because, you know, I really want this dating app or whatever it is. The scooters.

The scooters, whatever. And so there should be just a clear signal of when you're signing in plain English, this is what we're going to do with your data. And then when they do something else with it to inform you and tell you about it. And then when they – one of the things I think is critical is when there's a hack that they have to tell you immediately. Like immediately. Like, look, even Apple didn't tell someone about this problem with the FaceTime for a week, right? And then what happens, you get all these attorney generals come in, la, la, la, and nothing happens. And so they should just say, look, if there's a big hacking, you've got to say, like, right away, even as you're trying to figure it out, that you can warn people so they can change their passwords or whatever.

How do the sort of, you know, good intentions of Silicon Valley complicate this? The fact that, you know, Google's motto is don't be evil or... That's been a little worn out. Alphabet's motto is, you know, do the right thing. That's a little worse for wear. Come on, that was such... I don't know. I was there when they talked. They talked to me about that particular thing right when they were thinking of it. It was just ridiculous. It was ridiculous PR. I'm sorry.

I know what they were thinking, like this idea. It's like, wait a minute. Did we assume evil? Like, you know what I mean? Like, wait, why do we have to declare don't be evil? Were you considering evil? I'd rather them just be honest and say, listen, you create an enormous amount of data moving through your day by wandering around, using your phone, using the maps, ordering pizza, blank, blank, playing the game, doing the dating. You're a treasure trove of information that we can then sell back to you in the form of ads.

And we're going to do that and here's how we're going to do it. And maybe they should pay us. Gavin Newsom has some ideas about this from California. Maybe they should – like look, Cara, we make $50 off of you. Do you want 20 of it? I don't know. I just, it's like, it should be, it should be more a relationship

that essentially you are, they hate this expression. And Tim Cook from Apple uses it because they don't trade in data this way. Although they certainly benefit from Google search. They get billions of dollars. You know, everybody's sort of jacked

into this system of information. And, but he does say this, and I think he's right. He's like, you're the product. I don't know if you're the product, but I just recently interviewed Roger McNamee, who's written a book called Zucked. He's like, you're not the product, you're the fuel. And that's true. I think that's a better way to put it. You're the fuel that makes them, that gives people insights and that allows marketers to reach you. And so there's got to be a new system. They're more creative. If they want to be so creative and they don't want to be evil, what are the things they

can do to give you these great services, benefit from them financially, and also help you and protect you? So we heard from Casey up top that we're definitely going to see a push for national data privacy legislation this year. What do you think the chances are of something actually getting passed? Not good. Not good. But you never know.

I mean, there's certain – it's got to go through the committees. I think it goes through the Commerce Committee in this house and the same thing in the Senate. It doesn't have a sponsor yet in the Senate, but there's a lot of people interested in the topic and what it looks like. You know, Nancy Pelosi was very committed to the idea of it, but she's got her hands full. She's got the crazy freshman over here and this and that. And also you're going into the presidential election and privacy doesn't ring quite as true as healthcare, like universal healthcare or Medicare for all. It's not as sexy a topic. Like we would like to protect your data.

Oh, thank you. It doesn't lend itself to sloganeering. Yeah, it doesn't. And it's not a great thing. I mean although Amy Klobuchar in her announcement when she had the snow falling on her head, that was one of her – it was right up in the top of her platforms is regulation of tech, which was the first big – the others talk about it. But it was right front and center for her. I don't know what her prospects are nationally. But it was interesting that she picked that.

And she's quite – there's a lot of very adept legislators on this topic. Mark Warner, Ro Khanna, he's a congressman. Michael Bennett from – there's a bunch. There's a bunch of very – people who do understand these issues, including in governors like Gavin Newsom in California or Jared Polis in Colorado certainly knows he comes from an internet background. Tons of attorney generals who are dying to do lawsuits on these things, which is not the way we should do this, lawsuits. And in the meantime, I guess we should just brace ourselves for another scandal or two before anything happens? Scandal. It's going to keep happening.

The more you load, jack yourself into the system, the more they have the ability for mistakes to happen. And most of them are mistakes. And then you're like, oh, they deliver really quickly, and I like them. And ultimately, you become a creature of what they want. But they have good delivery. Kara Swisher hosts two tech podcasts. One's called Recode Decode. The other one is Pivot. I'm Sean Ramos for him. I host just one podcast called Today Explained. And we launched this podcast supporting the show today. Aspiration wants to give you a bank account that you can sort of trust won't harm the world.

They say you can save the money and save the planet at Aspiration. None of the money you invest with them will go towards drilling or pipelines. If that sounds good to you and you're interested, you can download the Aspiration app now to open an account.