Dozen Worthy Reads đ° (No. 159)
This week : Facebook's antitrust, Uber/ATG, Google Fuchsia, Apple Privacy Labels, Old laws, Doordash & Flywheels, Salesforce, Tiktok & finance, Oculus is the new Apple, Facebook oversight board.
Hi All,
I hope you all are doing well and welcome (if you arenât new then again) to Dozen Worthy Reads. A newsletter where I talk about the most interesting things about tech that I read the past couple of weeks or write about tech happenings. You can sign up here or just read on âŚ
It's that time of the year when all the âtopâ lists start to surface. Last yearâs edition was a collection of Top Books, Top Companies, Top Strategies and such. But this year I decided to go with The Year on TikTok: Top 100 đđ for your viewing pleasure.
I also have a birthday coming up (Christmas day!) so in advance of that, and a fair warning to you all, as I reflect upon getting older and wiser Iâd like to share with you all principles that I have learnt, whether from my reading, hard lessons, or from the smartest people that have written about this such as Ray Dalio. I hope you enjoy this somewhat uncharacteristic piece of content. Once again, thank you for reading and lets get into this week:
Facebook and Antitrust
Well Christmas came early for Facebook this year ⌠as more than 40 state attorneys and the FTC filed lawsuits against Facebook. This displays broad bi-partisan coordination and weâll see how this plays out
From the FTC press release, emphasis mine:Â
Following a lengthy investigation in cooperation with a coalition of attorneys general of 46 states, the District of Columbia, and Guam, the complaint alleges that Facebook has engaged in a systematic strategyâincluding its 2012 acquisition of up-and-coming rival Instagram, its 2014 acquisition of the mobile messaging app WhatsApp, and the imposition of anticompetitive conditions on software developersâto eliminate threats to its monopoly. This course of conduct harms competition, leaves consumers with few choices for personal social networking, and deprives advertisers of the benefits of competition.
The FTC is seeking a permanent injunction in federal court that could, among other things: require divestitures of assets, including Instagram and WhatsApp; prohibit Facebook from imposing anticompetitive conditions on software developers; and require Facebook to seek prior notice and approval for future mergers and acquisitions.
Now this is super interesting for MANY reasons, but before I proceed, I am not looking at this from a legal perspective (for obvious reasons, I am technologist and not a lawyer!)Â
Facebook wanted to eliminate threats to its monopoly. What exactly does that mean? I mean, if you consider WhatsApp in its current form, there is little to no monetization. Sure Facebook definitely wanted to capture Instaâs audience and Facebookâs international market. But how did they âeliminateâ choices for the consumer? They all exist (and are still free). I mean one can argue that the products have been made worse thanks to Facebookâs âinterferenceâ but is that really true? Maybe Insta is a bit bloated but that would have happened anyway I think
Secondly Facebook âunderstood the threatâ no question. They did also try to buy Snapchat and when that didnât happen Facebook copied the format (with some success). If the argument here is that they killed innovation in the space, that is completely untrue. Remember Instagram had no monetization options when Facebook acquired them. But what guarantee did they have that theyâll be able to monetize Insta? None. They took a risk and it paid off
Thirdly what is âPersonal Social Networkingâ? How do you define that? There is Social Networking (Facebook, Twitter, Instagram, LinkedIn, Snapchat), there are hybrids among those options and there are pure play media companies such as TikTok and YouTube that get bundled into the same definition. So is the argument that no ânewâ Personal Social Networking company was able to get created because of the fear of Facebookâs acquisition? No venture investment was made for the fear of failure?Â
The way I kinda see this is Facebook took a bet and was successful. What if Insta had failed, wasnât able to generate revenue and had to close down. Wouldnât that be more âkilledâ than acquiring and monetizing?Â
Lastly they want to break up these acquisitions? Facebook has kinda pre-emptively integrated messenger services to counter this. Of course for this are âtechnical and business reasonsâ. This happening would be a bad precedent. How would this take place? Who is responsible for the associated costs? Would they âundoâ the cross party messaging products/services or better still would they be forced to also create cross platform products where say I could send a message to Kik or Signal from WhatsApp.Â
I donât know what will happen with this antitrust lawsuit, but what I do know is that is bad precedent to try and unwind an acquisition. I also think that in general tech regulation is the right thing and tech is too important to be left to their own devices.Â
Coverage on this topic from the best in the biz:
Verge : The FTC is suing Facebook to unwind its acquisitions of Instagram and WhatsApp
Alex Kantrowitzâs : The Quirk That Stuck Facebook With A Robust Antitrust Case
Casey Netwon : The FTC seeks to break up Facebook
Matt Stoller : The End of the Facebook Crime Spree
As an aside, WhatsApp acquired Kustomer to finally monetize WhatsApp for business messaging. Facebook : Facebook (FB) Plans to Turn Messaging App WhatsApp Into a Moneymaking Business
Also an interesting excerpt from a WSJ article : Apple and Google to Stop X-Mode From Collecting Location Data From Users' Phones
Both Apple and Google disclosed their decision to ban X-Mode to investigators working for Sen. Ron Wyden (D., Ore.), who has been conducting an investigation into the sale of location data to government entities.
The interesting thing here is that Apple and Google basically approached a senator to disclose this decision beforehand. Is this a new playbook for tech? Vetting out such decisions with the government? 10 years ago I this this would have been a unilateral internal decision.Â
Uber sells ATG to Aurora
As I wrote in the previous edition of Dozen Worthy Reads, I am not sure that Uber Selling ATG is the right decision but it finally happened. In addition to ATG Uber also sold Uber Elevate to Joby thereby divesting more and focusing on the core. This is a good decision in the short run but in the long run things remain to be seen:
A couple of weeks ago there was this rumor that Uber is in talks to sell their ATG unit (Self driving unit) to Aurora. I oscillate between if this is a good move or a really bad move. Given that L5 Autonomy is many years away Uber is probably in survival mode at this point and with profitability being a key issue Uber is probably offloading ânon performing businesses that are not core to getting back to profitability. So this makes sense to show the market that Uber can put on big boy pants and earn its place as a tech heavy hitter (I mean they are competing with some serious muscle for self driving with companies such as Google/Waymo (and Apple) that have way more cash AND profitable businesses to subsidize this discovery. Uber.. Sadly⌠does NOT.Â
Now if you use this lens and think about self driving this kind of technology will (once ready) be widely available to anyone and everyone. Hell if I have enough money to buy a few of those cars Iâll start Dozen Worthy Rides (where every 13th ride is free .. he he) and compete for customers. Uber is probably banking on the fact that they have a large brand presence (as a product they are BRILLIANT and people love the convenience) as their savior. However I think this is a situation of damned if you do and damned if you dont. Remember the way it works for airlines (to use a transport example) way too few of us care about how safe a particular airline is (else safety would be a filter facet). We are perfectly comfortable booking almost any flight at the cheapest price (bar some conveniences for some types of travellers).Â
The other subtle point to consider is this : Uber is a two sided marketplace, what happens when one side (drivers do not exist?) My guess is that if this happens Uber is doomed in the long run (the rideshare industry will become asset heavy similar to trucking)Â
Google Fuchsia
OK so this one was news to me, I didnât even know Google had another OS called Fuchsia. From 9to5 : Google is opening Fuchsia OS development to the public
For almost as long as itâs been in development, Fuchsia has been open source, meaning anyone can view and download the necessary source code to build the OS for themselves. In fact, last year, Google quietly launched an official Fuchsia.dev website for the project, teaching developers how best to work on Fuchsia and, to a much lesser extent, how to make Fuchsia apps. All throughout the last four years, however, Fuchsia has been something of a skunkworks project, with Google remaining surprisingly quiet about its purpose.
This baffles me a bit. Why build a new OS? Fuchsia was referred to as an âexperimentâ and now the goal has changed? What are the use cases for a new OS? How will this be used? Is there room for a new OS for a desktop? A phone? A wearable device?Â
One concern developers may have with contributing to Fuchsia is that in the past Googlers have referred to Fuchsia as an âexperimentâ in new technologies for operating systems. Standing in direct contrast to that notion, the Fuchsia.dev website was updated earlier this year to state that Fuchsia is intended to become a full operating system used on real products.
Fuchsiaâs goal is to power production devices and products used for business-critical applications. As such, Fuchsia is not a playground for experimental operating system concepts. Instead, the platform roadmap is driven by practical use cases arising from partner and product needs.
Overall, this is a very strong sign of life for the Fuchsia project, putting it one step closer to an eventual launch. For now, though, Google emphasizes that Fuchsia is not yet ready for primetime on a formal product, so donât go trying to run Fuchsia as your primary OS.
Fuchsia is not ready for general product development or as a development target, but you can clone, compile, and contribute to it.
Apple, privacy, and defaults
Apple has a new requirement for privacy labels which were announced back in June 2020. App developers now have to submit this information on what data they collect by January 2021. WhatsApp has cried foul saying that pre-existing/installed apps do not have to do this. Apple responded back with :
The new rules apply equally to all iOS apps, including all Appleâs built-in apps like Messages. For iOS apps that donât have dedicated product pages on the App Store, like Messages, they will still have the same privacy information be made available to users on Appleâs website.
While Apple is going to create these pages on the website I think that is an unfair advantage. Why canât apple create App Store pages? Why canât they show the privacy labels to a user the first time they open an app? Apple is pushing the privacy narrative but still considers it an âusâ v/s âthemâ which I think is not fair. The second thing as alluded to in the article, collecting is one thing? How is this used? What measures does the company take to protect privacy? Is the information sold? To whom? For how much $? All this isnât clear and while this might be a step in the right direction there is a lot of improvement that needs to be made
Old laws, new use cases?
From Justices express qualms about sweeping computer crime law
During arguments in a case involving a Georgia police officer convicted of violating the 1986 Computer Fraud and Abuse Act by accessing a license plate database, the justices pushed a Justice Department lawyer to explain how a ruling in the governmentâs favor wouldnât open the door to prosecutions of innocuous behavior. Those could include browsing Instagram on a work computer or performing public-spirited security research to test a system for vulnerabilities.
The case that could decide the scope of the CFAA stems from a tawdry sting operation. In 2017, a district court convicted police officer Nathan Van Buren for using his access to the license plate database to check whether a strip club dancer was an undercover officer in return for a loan from a man who turned out to be an FBI informant. Van Burenâs lawyers argued that he hadnât violated the CFAAâs prohibition on unauthorized computer access because heâd had legitimate access to the database as part of his job.
The U.S. Court of Appeals for the 11th Circuit upheld Van Burenâs conviction, finding that the CFAA prohibited accessing a computer for improper purposes even if the defendant was authorized to use it for other purposes. Four appeals courts have now interpreted the CFAA in this broad manner, while three have interpreted it more narrowly.
So basically an old law (CFAA, 1986) has unintended consequences today for not just the officer (whom might I say I donât condone) but this could open up a can of worms...
Doordash and flywheels
So Doordash had an exceptional (and Airbnb too) opening on the stock exchange, up 86% from the opening price of $102. Jake Singerâs breakdown shows why this might not be accurate and it has taken advantage of COVID in order to finally IPO. I am still bearish to a certain extentâŚ
Salesforce should buy/partner with Notion, Zoom, and Box/Dropbox?Â
So now that Salesforce has acquired Slack, how about they beef up with Notion, Zoom, Box/Dropbox to have something of an end-to-end offering to compete with MSFT? Having the sales force is extremely important (as I mentioned in the prior edition of DWR) but I think that might not be enough. Financially the above combination isnât feasible but if âbest of the breedâ isnât a completely viable option are we going to end up with 2-3 large companies that have their own stack and everyone else canât really complete at that scale/level?Â
From Casey Newton : How Microsoft crushed Slack
âThe reality with the enterprise is that you can have the best product, but thatâs not good enough,â Levie told me. âYou need distribution. And what Salesforce has â they have the procurement officers, they have the finance people. They have all of the apparatus you need to interact with to sell software, and they have it for the top 100,000 corporations around the world.â
TikTok and Finance
Having seen a few of these videos, I vehemently agree. Bogus advise in a lot of cases with real numbers being masked. Entertaining yes, but should you listen to advise from a TikTokâer about Finance. Probably not! : A 970% Stock Jump, Credit Card Tricks and Other Misinformation on TikTok
Oculus is the new Apple?
With great power comes great responsibility? And bad behavior? Facebook owns the Oculus Stores and they can gate the apps. Isnât this what Facebook complains about themselves? From : Facebook Accused of Squeezing Rival Startups in Virtual Reality
Yur released its fitness tracking app for Oculus in September 2019 and spent months working to satisfy Facebookâs security, privacy and performance benchmarks to get the app into the Oculus app store. While the app was available to users on another marketplace, Liv said, Yur couldnât get it into the Oculus store even though he said the startup met Facebookâs requirements.
Facebook in the spring released a software update for Oculus that prevented Yurâs technology from working within games, according to Liv. Liv said Yur was the only company that experienced such an issue. Subsequent updates required users to delete the Yur app in order to get the Oculus headset working again.
Then in September, Facebook released its own fitness tracker called Oculus Move that Liv said has the same functionality and look as Yurâs product. He accuses Facebook of effectively killing his product by keeping it out of the store and breaking its functionality, all while working to copy his technology.
Facebook Oversight Board
Facebook create an independent oversight board and CJR has an article on the oversight board. Key takeaways:
They can only take up appeals against content removal not against non-removal. You cannot appeal to the board to take down content, only to keep it up if it has been taken down and if so only if there is an appeal. The board has chosen 6 (yes 6) our of 20,000 cases to rule on. What are some of the cases?Â
Should a set of Instagram posts that showed nipples in contravention of Facebookâs no-nudity policy be allowed, considering the photos were part of a breast cancer prevention campaign?Â
Should historical quotes from Joseph Goebbels be allowed to circulate even if they are in violation of Facebookâs âDangerous Individuals and Organizationsâ policy?
Should screenshots of tweets by the Malaysian prime minister stay up in order to raise awareness of the hateful nature of his bigotry, or be removed because they violate Facebookâs hate-speech policy?Â
Should posts criticizing the French government be reinstated despite their allusions to âalternative treatmentsâ for covid? Â
This seems like too little and maybe iâm expecting too much too fast but a group of content moderator (~15k) have to moderate as many as 400 posts per day (yes per day). How does that compare? Does the oversight board have any teeth or is this a âlets dip our toesâ and see how this works strategy? How were those 6 cases chosen? Why those 6? Iâm not sure this is anything more than a PR stunt at this point and more so one to abdicate responsibility. If that is the case however, then this makes no sense as the content board canât really control much. Weâll see âŚ
Great Tech reads this week
Lillian Li on Community Group buying : The hottest and least understood e-commerce model: Community Group Buying
Doordashâs S1 breakdown from Mario over at the Generalist : DoorDash : The Value of Speed
Antitrust by Matt Stoller : An Economy of Godzillas: Salesforce, Slack, and Microsoft
Social Strikes Back (Bullish on Video) from a16z : Live, Social, and Shoppable: The Future of Video
Thank you for reading. Stay safe, be well! If you enjoyed reading this please consider sharing with a friend or two (or sign up here if you came across this or were forwarded this)