Friday, March 1, 2019

Big Tech has it coming

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March 1, 2019

Good Friday morning. I hope you've been enjoying Aaron's incisive reporting from Barcelona and Clay's insightful commentary from China. Fortune is a truly global organization.

I'm going to end the week where I started, noting the tightening regulatory noose around the necks of the tech behemoths. They've built trillions of dollars of value in the past decade or so, more or less unencumbered by the type of scrutiny applied to other industries that reach deeply into our society's fabric. No longer.

Already, there's a growing sense that Democrats and Republicans could come together on privacy legislation, if for no other reason than out of concern that a hastily written law in California that takes effect in 2020 needs to be pre-empted, legislative jargon for passing a bill that subordinates state law to federal statute.

Then this week the Federal Trade Commission said it would form a task force to study anti-competitiveness in the tech industry. The agency, which consumer advocates feel has gone easy on the tech industry, said it will assign 17 staff attorneys to the project, a seemingly impressive commitment. "This is a long-overdue step by the commission, which has failed to stay abreast of developments in the digital economy on both the consumer protection and competition fronts," said Sen. Mark Warner, the Virginia Democrat who is a leading light on regulating Big Tech, in a statement. "Often in D.C. the use of 'task forces' serve as punts, but I hope in this instance the chairman is serious about shining a light on – and ultimately cleaning up – the dark underbelly of the digital economy."

On Thursday The Wall Street Journal reported that a New York state regulator is looking into Facebook's data-collection methods in response to a Journal investigation. Its article has a good roundup of similar investigations around the world.

The regulatory initiatives are having real consequences, intended and otherwise. This wonky but informative BusinessWeek article, for example, explains how Oracle's expensively acquired ad-targeting business has faltered in part because partners who weren't able to comply with Europe's General Data Protection Regulation stopped sharing data with Oracle. As I've noted before, Fortune's newsletters no longer transmit to European email addresses because former owner Meredith decided not to invest in complying with GDPR to support a niche and soon-to-be-sold part of its business.

It's a tough time to operate a tech (or publishing) company. It's a very good time to be a lawyer or lobbyist—around the globe.

Adam Lashinsky
@adamlashinsky
adam.lashinsky@fortune.com

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NEWSWORTHY

Closing shop. Tesla marked down the price of its Model 3 sedan to $35,000, but to meet that price point the electric vehicle maker has had to trim costs. The company plans to shutter its retail stores in favor of online-only sales. Analysts weren't impressed by the news , especially after CEO Elon Musk said the company would not be profitable in the first quarter.

I 💔 NY. New York Governor Andrew Cuomo has beseeched Amazon CEO Jeff Bezos not to pull the company's second headquarters from Long Island City, reports the New York Times. Over the past two weeks, the state politician has urged executives to reverse course in multiple personal phone calls.

Render unto Zuckerberg. Facebook is planning a virtual currency for WhatsApp that's pegged to basked of fiat currencies, reports the New York Times. Other chat apps, such as Telegram and Signal, are also working on digital coins of their own.

Our of sight, out of mind. Twitter is working to develop a "hide tweet" button, giving users the ability to moderate discussions that unfold under their tweets. The microblogging site already offers "block," "mute," and "unfollow" options.

Need a lift? Some Lyft and Uber drivers will get to participate in the companies' upcoming initial public offerings, reports the Wall Street Journal. Top performers for ride-sharing giants will reportedly have an opportunity to buy shares at the IPO price.

Market moves. Box and Nutanix shares were down 20% and 25%, respectively, after the companies failed to meet Wall Street's expectations in their latest earnings reports. Dell, meanwhile, beat the street in the company's first earnings report since it returned to the public markets.

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FOR YOUR WEEKEND READING PLEASURE

A few longer reads that I came across this week that may be appealing for your weekend reading pleasure:

Age of Anxiety (The New Republic) | America seems to be in the midst of a full-blown panic attack. Is there anything we can do about it?

Inside the Secret Sting Operations to Expose Celebrity Psychics (The New York Times Magazine) | Are some celebrity mediums fooling their audience members by reading social media pages in advance? A group of online vigilantes is out to prove it.

Ong's Hat: The Early Internet Conspiracy Game That Got Too Real (Gizmodo) | Ong's Hat is one of the internet's earliest conspiracy theories, but before that, it was a place...deep in the woods of New Jersey's Pine Barrens. Rumors swirled for years that something profound had once happened there, a confluence of mad science and the paranormal that had warped reality itself, opening a door into strange, unfathomable worlds.

What Its Like to Write About Race and Video Games (Kotaku) | Alas, my job here at Kotaku is, in part, to look at things I see in games and reflect on them.... But sometimes readers see me pointing out these minor flaws and seem to think it's the most important thing I have going on or the only thing I care about.

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FOOD FOR THOUGHT

I demand a restraining order. Facebook likes to tell people they're in control of their data. But are they? The Wall Street Journal's Katherine Bindley takes the media giant to task over the inescapability of its data-suctioning tentacles. Despite taking advantage of the company's privacy controls, Bindley says she's still seeing creepy advertisements—and no one at the company can explain why.

If we take advantage of all these privacy controls, it shouldn't still feel as if Facebook is spying on us, right? We shouldn't see so many ads that seem so closely tied to our activity on our phones, on the internet or in real life.

The reality? I took those steps months ago, from turning off location services to opting out of ads on Facebook and its sibling Instagram tied to off-site behavior. I told my iPhone to "limit ad tracking." Yet I continue to see eerily relevant ads.

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IN CASE YOU MISSED IT

Is Your Business Ready for Blockchain? by Julie Sweet

What Retail Workers Say About Technology Potentially Eliminating Their Jobs by Jonthan Vanian

Last Year Was a Record Breaker for the Video Game Industry. Here's Why It Won't Happen Again in 2019 by Lisa Marie Segarra

These Companies Are the Best Workplaces in the Bay Area by Ed Frauenheim

A New Data Protection Bill Aims to Tackle Racial Ad Targeting by Erin Corbett

A Record Number of Robots Were Put to Work in the U.S. in 2018 by Natasha Bach

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BEFORE YOU GO

Out, damned dot! Suffering phone fatigue? The red notification badges that Apple and Google use to indicate unread messages and updates induce anxiety not only because they're inexhaustible, but also because of a simple design choice: their color. Red conveys urgency, anger, danger; it evokes stress. As Angela Lashbrook explains for OneZero, a tech publication on Medium, people should be allowed to choose their own hue.

Google has the lead over Apple here: the Android Oreo operating system already employs different shades depending on the app.

This edition of Data Sheet was curated by Robert Hackett. Find past issues, and sign up for other Fortune newsletters.

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