You Can’t Beat Climate Change Without Tackling Disinformation

Over more than a century, PR firms built and fine-tuned a machine to deceive the public. (From the Covering Climate Now series.)

This story originally appeared in The Nation and is part of Covering Climate Now, a global journalism collaboration strengthening coverage of the climate story.

In the past month or so, climate disinformation has been making its way into the news more than usual. There was the House Oversight Committee’s climate disinformation hearing in October, and then, just days later, leaked documents from Facebook revealed its role in spreading climate denial. The Oversight Committee’s investigation continues, as does the work to fully understand social media’s role in disinformation, about climate and otherwise.

But for all we know about disinformation and how dangerously effective it can be, tackling the problem rarely makes its way into conversations focused on climate solutions. This raises the question: How are you going to implement new green technology or policies without eliminating the obstacle that’s helped block both for decades?

Last week at COP26 in Glasgow, a group of organizers, brands, and advertisers published an open letter calling for disinfo to be on the negotiators’ agenda. Signatories included climate leaders like May Boeve, the executive director of 350.org, and Laurence Tubiana, the CEO of European Climate Foundation; NGOs, like Friends of the Earth and WWF; and brands like Ben & Jerry’s and Virgin Media O2. They had straightforward asks: an agreed-upon definition of climate disinformation, action against climate dis/misinformation to be included in the COP26 Negotiated Outcome, and for tech companies to adopt policies that would crack down on the spread of climate disinformation in both content and advertising.

Climate disinfo, unfortunately, did not make its way into the COP26 negotiations. Had the Intergovernmental Panel on Climate Change reports included contributions from social scientists on the role of media and information in tackling climate before the conference instead of next year, as they’re scheduled to be, perhaps that would have been different. In the lead-up to the event, though, Google did announce a new policy aimed at addressing this problem. In partnership with the Conscious Advertising Network, the tech giant said that it will now “prohibit ads for, and monetization of, content that contradicts well-established scientific consensus around the existence and causes of climate change.” That policy doesn’t just affect Google advertisers but YouTube creators as well, which is a big deal given that YouTube has been pushing climate disinformation to millions of viewers for years.

But one policy at one tech platform is not a systemic solution. When pressed about potential outcomes of the House climate disinformation investigation, congressional representatives seemed at a loss about what they could even be proposing to grapple with the threat. There’s a lot of talk of fining the oil companies, of Department of Justice investigations, and of providing more fodder for the two dozen or so climate lawsuits currently in state courts, but nothing around changing the system that enables disinformation in the first place—nothing that would stop the next strategy from working or keep the next industry from lying to the American people. Instead, the focus remains on making Big Oil the next Big Tobacco. But after its momentary embarrassment and a few fines, tobacco went on to profit and, perhaps more importantly, to keep deceiving the public about other products. And the oil companies, many of which were codefendants with the tobacco companies, for their role in developing the cigarette filter, watched that and learned. They pivoted almost immediately away from litigating the science. One former Shell employee told writer Nathaniel Rich, for his story “Losing Earth,” that the oil companies “didn’t want to get caught in our lies the same way the tobacco guys did.” So all that supposed accountability for disinformation just resulted in making companies better at spreading it.

To solve the disinformation problem, we have to understand that it, too, is an industry. PR firms, hired to help companies and industries avoid regulation and circumvent democracy, built and fine-tuned the disinformation machine over more than a century. The House Oversight Committee has said it will broaden its investigation of climate disinformation beyond the fossil fuel industry to its enablers—PR firms chief amongst them. The activist campaign Clean Creatives has been pressuring the PR industry to own its role in crafting and spreading disinformation, and to ditch fossil fuel clients altogether. In response to recent criticism of its work with ExxonMobil (after decades spent helping oil companies and their trade groups create and spread both disinformation and greenwashing), Edelman PR announced it will be undertaking a 60-day review of its client roster.

Some academics and advocates have begun calling for more than public shaming. “I think that their past actions provide justification for holding them to a higher standard than you would normally hold a company,” Stanford University researcher Ben Franta said. “They need to come under some level of special scrutiny, something that goes beyond mere transparency, that goes beyond disclosure. It’s almost like an information receivership.”

We don’t necessarily have a solution to climate disinformation yet. But it’s clear it will not be dismantled by a company policy here and a congressional investigation there. A problem this large and complex requires concerted effort to solve—and we can’t even start until a critical mass of people realize that doing so is critical to the success of any climate solution.

This story originally appeared in The Nation and is part of Covering Climate Now, a global journalism collaboration strengthening coverage of the climate story.

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Frances Haugen: I’ve Come Not to Bury Facebook, But to Save It

A change in leadership, employees with backgrounds in humanities, and a switch so a “slower, smaller” approach – this whistleblower darling is on a crusade to save lives by saving Facebook.

About 10,000 people were packed into the Altice Arena in Lisbon, Portugal on opening night of the Web Summit. It was one of the first tech gatherings this size since the outset of the pandemic. And Web Summit’s CEO, Paddy Cosgove, never one to shy away from thorny issues, was going to make a field day of it.

The opening speaker, no CEO or tech titan, was instead a young, genuine, and even unassuming blond woman who looked like she was plucked from an Iowa cornfield. And in an instant, Frances Haugen became the trending topic and darling of Web Summit.

Haugen (who really is from Iowa) has been thrust into the spotlight as the Facebook whistleblower. The former Facebook employee left her job as a product manager in May, taking thousands of internal documents with her.

And then she wrestled with how to do the right thing with the information she had, she told the audience. It was information that paints a sad picture of a company that has repeatedly valued profits over ethical business, sown discord, and created unhealthy dependencies.

On stage, to her right, sat Libby Lu, the CEO of Whistleblower Aid, a powerful organization that choose to represent Haugen only after a careful and laborious vetting process that looked at everything from her motives to her evidence. Now, with her as their client, the group coaches her, covers her legal fees, and even offers bodyguards and protection. Liu said Whistleblower Aid looks for a “strong sense of conscience, and an inability to tolerate wrong” before taking on a client. “They should not need to be torn between their careers and what’s right.”

Haugen is a whistleblower for our time. She is the “every girl” who worked hard and had the dream of working at Facebook. Within moments on stage she told the audience that her mother is a priest, one she turned to often for advice and counsel before deciding to come forward.  Her mother, she said, told her that “every human being deserves the dignity of the truth.”

“There’s been a pattern of behavior at Facebook where they have consistently prioritized their own profits over our general safety,” said Haugen. Facebook, she said, “has tried to reduce the argument to a false choice between censorship and free speech.” But in fact, she explained, it’s the algorithmic decisions Facebook runs its business on that amplify political discord, and spread misinformation, and contribute to addictive, unhealthy behaviors. The engagements Facebook creates are dangerous because they are based on a megaphone effect in which the most volatile posts are the most amplified.

Haugen has no shortage of remedies for what ails Facebook. She gives props to Twitter and Google, which she says more deftly and more transparently manage content moderation. “We need to make it slower and smaller, not bigger and faster,” she said of Facebook, explaining that smaller groups of family and friends are easier to moderate. She argued that computer scientists need to have a moral compass, and said that happens best when they have a background in humanities as well as coding. And certainly algorithms can be bettered, to change the dynamic of what information is presented to whom.

Finally, she said, “I’m a proponent of corporate governance,” reminding the audience that Mark Zuckerberg is the Chairman, CEO, and Founder of the company, holding well over half of the voting shares.  Things are “unlikely to change if that system remains,” she said.

“Maybe it’s a chance for someone else to take the reins. Facebook would be stronger with someone who’s willing to focus on safety,” she went on. She rued the fact that Facebook just announced hiring 10,000 engineers to build out its new Meta product, when that many engineers could have been deployed to fix Facebook’s obvious current problems. Though the company has publicly pushed back, declaring that her documents were a “cherrypicked” sample taken out of context, Haugen replied that she welcomes them to release more documents to the public.

Facebook Chief Product Officer Chris Cox kept his chin up in a virtual appearance at Web Summit after the company’s nemesis Frances Haugen had spoken.

At Web Summit, Facebook had ample opportunity to respond, but after Haugen’s authentically empathetic and smart delivery, its messages rang a bit hollow. Nick Clegg, who appeared at the conference via a Livestream, said, “There are always two sides to a story,” noting that Facebook’s artificial intelligence systems study the prevalence of hate speech on platforms. “Out of ten billion views of content, five might include hate speech – that’s 0.05%,” he said.

Chris Cox, one of Facebook’s earliest employees, now head of product and a close friend of Zuckerberg, also appeared on stage via Livestream, ostensibly to showcase the new Meta agenda. But he offered these words in response to questions about Haugen’s comments: “It’s been a tough period for the company. “He added that he welcomed “difficult conversations” around Facebook’s future.

The media, lawmakers and the Web Summit audience were enamored by Haugen and her message, which came peppered with wonderfully genuine, demurring comments like, “I don’t like to be the center of attention.”

But she came across as a force of nature when she said “Facebook would be stronger with someone who’s willing to focus on safety.” She is committed to a crusade she believes is fundamental to saving lives. What makes her not afraid, she said, is that “I genuinely believe that there are a million, or maybe 10 million lives on the line in the next 20 years, and compared to that, nothing really feels like a real consequence.”

“I have faith that Facebook will change.”

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The Name Facebook Needs to Change: Zuckerberg

Facebook is reported to be considering a name change. But its image will not be remedied by anything other than fundamental reforms.

Can you imagine any normal company keeping its CEO if it faced, like Facebook does, an endless litany of criticism for failures, mistakes, harms, omissions, distortions, lies, and delusions? A normal company would not. A normal company would replace its leadership.

Facebook, of course, cannot. Facebook, of course, has no governance. Facebook is a dictatorship of one man, who controls 58% of the company’s voting shares. Yet his judgment appears worse with every passing day. It is hard to recall another big company facing this many scandals, this relentlessly.

I would not have expected myself to say it, but Facebook would be much better off without its current CEO. Sadly for the world, the prospect of such a change happening is almost nil.

We’ve reached a cruel irony. The world faces a blight of autocrats, leading country after country into xenophobic irrational often violent ultranationalism, just as one company has come to dominate the world’s communication networks, itself ruled by an irrational autocrat who is incapable of subjecting himself to any meaningful scrutiny.

And the further, deeply painful, irony is this: that exact company’s conscious and willful empowerment of those autocrats and their political parties is a significant factor in their rise. That is true around the world. A combination of several factors has played a key role. First, Facebook’s lenient “cross check” system, as revealed by the Wall Street Journal in its Facebook Files series, grants political leaders in almost every country a pass to say pretty much anything they want. (The company’s own Oversight Board this week said company managers had essentially lied to the board about how that system worked, as they investigated how Facebook treated Donald Trump.)

But that’s not all. Closely related to the lenient cross check system is the fact that the company has multiple incentives to keep government leaders happy, no matter what they post and no matter how bad they are. As this year’s first Facebook whistleblower, Sophie Zhang, put it this week in testimony for a committee of the British Parliament, “The people [at Facebook] charged with making important decisions about what the rules are and how the rules are getting enforced are the same as those charged with keeping good relationships with local politicians and governmental members.” She’s referring in large part to the power of Joel Kaplan, vice president for global public policy. (He’s a Republican known best for his friendship with conservative Supreme Court Justice Brett Kavanaugh, behind whom Kaplan sat in the controversial hearings that led to Kavanaugh’s appointment to the court.)

Just Friday Oct. 22, as this column was going to press, yet another new whistleblower complaint emerged in the Washington Post, alleging again that the company willfully disregard warnings about the pernicious impact of its moderation policy failures, especially in the U.S. This still-unnamed person apparently has filed a sworn affidavit with the U.S. Securities and Exchange Commission alleging, among other things, that company executives deliberately misled investors by playing down risks from failures of governance. The Post says this quote is in the affidavit, made by a company communications official during 2017 controversies about Russian government manipulation of voters on Facebook during the 2016 election: “It will be a flash in the pan. Some legislators will get pissy. And then in a few weeks they will move onto something else. Meanwhile we are printing money in the basement, and we are fine.”

I continue to think that of all Facebook’s errors, both willful and inadvertent, the worst, by far, is that its policies regarding speech have enabled forces of division and political exploitation in country after country to spew lies, engender hate, and create social division, in a known pattern that ends up assisting evil autocrats and their allies to gain and hold political power. This is the criticism most stridently made by Zhang, whose job at Facebook was to try to combat “coordinated inauthentic behavior.”

In Time’s coverage of her testimony this week in Britain, it writes about what happened when Zhang tried to take action against manipulative and dishonest networks of pro-government posts on Facebook in undemocratic countries like Honduras: “When Zhang raised her findings with senior management, she was told by Guy Rosen, Facebook’s vice president of integrity, that threat intelligence would only prioritize campaigns in ‘the US/Western Europe and foreign adversaries such as Russia/Iran/etc.’ The company did not have ‘unlimited resources,’ he said.”

This approach is, in my view, a crime. Facebook is failing in an egregious way to take responsibility for its social and media influence in numerous countries where it is, almost always, the de facto primary media. (And this has been long known. Here’s an article I wrote about it back in 2018.) As for not having “unlimited resources,” that may be technically true, but Facebook can afford to do a lot more. Its net profits are in the range of $40 billion per year, and its CEO, even with the stock down, is still worth $127 billion.

I continue to believe the biggest smoking gun revealed so far in the numerous revelations from the most prominent recent Facebook whistleblower, Francis Haugen, is that only 13% of the company’s efforts against misinformation and disinformation in 2020 were conducted in languages other than English. Facebook is approaching 3 billion users around the world, who speak hundreds of different languages. That shameful statistic and related issues may emerge even more pointedly in revelations in the coming weeks, I hear. I hope so.

That a company could allow this sort of social harm to emerge is inexcusable, no matter what other good stuff it might make possible. This kind of harm is more likely when one person has unlimited power to make decisions with no oversight. Unfortunately, Facebook’s board of directors serves entirely at Zuckerberg’s whim, so he will go only if he decides to go.

The company was reported this week to be considering a name change. It is doing that, at least in part, to try to repair its image. But that image will not be remedied by anything other than fundamental reforms. And one fundamental reform is most needed.

Zuckerberg should no longer serve as Facebook’s autocrat.

 

David Kirkpatrick is Techonomy’s founder, and published The Facebook Effect in 2010.

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Facebook’s Tragic Obsession With Image

Facebook executives and its all-powerful CEO feel so self-righteous that they dismiss all criticism outright, including this week. It’s tragic, but it’s possible to explain.

How long must we wring our hands over the errors and arrogance of one powerful company? Sadly, probably a lot longer. That’s largely because, whenever it’s confronted with criticism, that company treats it as a mere image problem to be managed with public relations rather than an opportunity for introspection or engagement.

The past week has brought near-endless discussion about the revelations of Facebook whistleblower Frances Haugen, as revealed in the Wall Street Journal, on 60 Minutes, and in her testimony to Congress. (My summary of the Journal series and its import.) Yet when CEO Mark Zuckerberg and his confederates try to explain away Haugen’s criticism, their statements are routinely laden with self-justification, self-righteousness, lack of humility, and myopia.

For all the fascinating ins and outs of the documents she took, Haugen’s own eloquent statements, and her proposed policy solutions, it’s important to keep it all in context. Long before she ever came along, we knew this company had done much that’s irresponsible, over an extended period. We knew it had inadequate governance. None of Haugen’s revelations come as a surprise to anyone who has closely followed this renegade company, led by its unrestrained and reckless all-powerful leader. We’ve heard it all before. (For just one of innumerable examples, in late 2018 I wrote a piece for Techonomy called “Facing Facebook’s Failure.”)

Some might say, as Stephen Colbert did this week “Wait a minute! Did you tell me a corporation chose money over the safety of consumers? That is so disturbing!” (About 5 minutes in.) But ruefully funny though that may be, many of us, and many in governments around the world, believe this company’s sociocultural and political role is so great it has unique responsibilities.

Facebook and Zuckerberg fail to take their responsibilities seriously enough, though ironically, their reasons for doing so are themselves grounded in a sense of exceptionalism. We–its legions of critics everywhere–see a crying need for this company to rise to the occasion of its centrality in global communications and commerce with better governance and oversight. But Facebook’s leaders see that centrality itself as justifying a general disregard for what they see as trivial and minor blemishes on a near-heroic effort to connect the world. Far from thinking themselves in error or even, as some say, criminally liable for harms, they believe they do not get sufficient credit for all the good they do.

Endless controversies have enveloped this company from its inception, but the turn toward widespread condemnation of Facebook began with the election of Donald Trump. The months and years following saw a progressive series of revelations about the social network’s role in his victory.

A quick set of reminders: Cambridge Analytica got hold of illicitly-acquired personal data about tens of millions of American Facebook users. That data was used by the Trump campaign and others to target Facebook advertising to potential voters with devastating exactitude, by both location and political disposition. The data was further targeted, it appears, with help from detailed electoral-district polling data stolen by Russian hackers from the Democratic National Committee. That same data was almost certainly used by Russian agents to precisely target pro-Trump ads they themselves purchased on Facebook, with rubles in some cases. Similar illicit political machinations have happened with far less press coverage in scores of countries around the world. Finally, Facebook embedded employees in the Trump campaign to assist it in spending many tens of millions on Facebook ads. (This same kind of assistance was also given around that time to the neo-fascist Alternative for Germany (AfD) party, helping enable its rise.)

In all this are multiple errors of commission and omission by Facebook. It failed to govern its data, enabling the Cambridge Analytica hack. It failed to govern its advertising, enabling the Russian electoral interference. It acted amorally in several domains, including the design of its algorithms and in its advertising operations. For lots more damning detail about all these failures, read the recent book An Ugly Truth: Inside Facebook’s Battle for Domination, by Sheera Frenkel and Cecilia Kang.

What can easily lead an observer to despair is the near-endless series of other areas Facebook has made similar errors and oversights. The errors have emerged from its headlong and heedless search for global growth, regardless of region, language, or country.

Much has been made this week about Instagram’s pernicious effects on girls’ mental health, and it’s a serious problem. But the most damning piece of data in the Haugen documents, in my opinion, is that only 13% of Facebook’s efforts to combat misinformation and disinformation in 2020 were conducted in languages other from English, despite that 90% of users are outside the US, overwhelmingly speaking other languages. People in most countries function on Facebook with literally no guardrails. This failure of oversight has contributed, by all evidence, to the rise of dishonest autocrats in country after country, including Duterte in the Philippines, Erdogan in Turkey, Orban in Hungary, and Bolsanaro in Brazil. In all those countries, Facebook’s services serve as the primary media, and corrupt fear-mongering politicians and political parties concentrate a huge share of their communications efforts on the platform, using both paid and unpaid messages.

In the many statements and appearances by company executives this week, none addressed this shameful statistic. And with the press obsessed over teenaged girls’ reaction to Instagram, they were not asked to. In Mark Zuckerberg’s own disingenuous and misleading Facebook post, he said a “false picture” of the company had been painted by the articles and testimony. Unless he can address issues like that statistic and show it to be false, he is lying.

For all the controversies aired in recent days, another very damning report, albeit unverified, emerged about two weeks ago. Bloomberg reporter Max Chafkin says, in his new biography of Peter Thiel, that in an early 2019 meeting with Trump and Jared Kushner at the White House, Zuckerberg agreed to continue his policy of not fact-checking political speech if Trump would hold off on regulating Facebook. Zuckerberg of course denies such a deal occurred.  But it would be in keeping with his self-righteous and self-centered governance of his company.

Always keep in mind that as he mouths high-minded defenses of his own behavior, Zuckerberg has through that behavior become the richest person his age in human history. He is now the sixth richest in the world, according to Bloomberg’s real-time rankings, with $123 billion, aged 37. As he moved fast and broke things, he got richer than anyone, ever. No wonder we feel disinclined to give him the benefit of the doubt. Also, in case you forgot, he absolutely and completely controls the company, in a manner also unprecedented for any organization this size in the history of business. This is the practical reason why he and other executives can so freely disregard criticism. He personally controls 58% of voting shares and cannot be overruled. When a group of directors began proposing significant steps towards governance of speech on Facebook about two years ago, he unceremoniously fired them all from the board.

The damning information could go on endlessly, and will, until Zuckerberg is forced to change. But for an eloquent analysis of the company’s ineffective image-centric crisis response this week, read this trenchant thread from political consultant Steve Schmidt, analyzing one of the only public appearances by a senior Facebook executive in the wake of Haugen’s revelations. As he calls it–“a blizzard of words and empty assertions delivered with confidence.”

David Kirkpatrick is founder of Techonomy and author of The Facebook Effect.

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New Taxes Could Help Manage Big Tech

We have to find ways to level the playing field or this small group of vastly-powerful companies will continue to amass disproportionate wealth even as they wreak social havoc. Without major systemic changes society will remain the victim of their ever-growing power.

Historically technology has undone the economic power it creates.  IBM is a good example, still here, but living off its past and fumbling the future.  Yet for the current generation of tech giants, this time may be different.  It is hard to see what displaces the huge installed base that exists today for these companies.  Artificial intelligence, mirror worlds, quantum computing——these will all play an important part in our future, but I am not sure they create a discontinuity.  The current tech giants are already the leaders in these, across the board. So we must find ways to manage and restrain their power.

The technology giants benefit enormously from two factors.  First, they have been able to largely monopolize the market for top technology talent by being able to offer above-market but below-value compensation that others cannot match, aside from potential startup unicorns.  The vehicle for this has been equity-based compensation, aided and abetted by favorable tax treatment from the government along with short-term focused equity markets.  Second, their key raw material, for the most part, is aggregated personally-identifiable information (PII), which they collect by offering free services.  Again, the free services are above market but below value, as there is little value in one person’s data but enormous wealth in aggregating the data of many. 

Thus their dominance is the result of a combination of things.  There is a virtuous circle here—for them.  Top talent yields good business results yields rising stock prices, which yields tax advantages and high compensation for employees. 

Yet we have to find ways to level the playing field. Otherwise, this small group of vastly powerful companies will continue to amass disproportionate wealth even as they periodically wreak social havoc. Legal constraints like antitrust and conventional regulation just do not seem to work.  Taxes do.  We have what we have because corporate leaders optimize within the rules they are given. So we need new rules, and changing how and what we tax may be the most promising approach to genuinely-impactful positive progress.

To level the playing field, I propose five interlocking policy changes. Four of these tax changes are designed to alter behavior more than to raise revenue.  The last one alters how equity compensation awards are taxed, effectively raising taxes on the tech giants but lowering them for their employees.

1. An Excise Tax on Corporate Market Value

Here’s a strawman for this: a tax of 1% on market capitalizations over $100 billion, rising by 1% for each incremental $100 billion.  Thus, a corporation valued at $300 billion would pay $3 billion annually in tax.  This tax simply reflects the principle that diversity is good and increases economic robustness, but it lets the market decide what to value and who to punish. Competition is good for society and the economy.  The levels and amounts of such a tax will be a political decision.  This applies to all companies.  The social costs of excessive market and societal power are the same regardless of industry.

2.  An Excise Tax on Personally identifiable information.

PII is the core value for the tech giants, even more than their software.  Just as we tax oil companies for the oil they extract from the ground, we need to tax the tech giants on the PII they collect.  Since no individual’s data is very valuable on their own, but the value of large aggregated groups of such data is high, people charging for use of their own data is not realistic. But since the exact value of such data is impossible to accurately assess, despite its obvious worth, there are metrics such as petabytes accessed per month.  The tax should be targeted to collect, say, an annual tax equal to 20% of the profits of Facebook. Again, the level is a political decision.  It could be as low as 5% or as high as 50% or even higher.  There are ways for Facebook and similar companies to avoid aggregating PII but still conduct their business.

3.  An Excise Tax on Stock Trades

This is called a “Tobin tax” after its initial developer, Nobel-prize-winner James Tobin.  Essentially, it presumes that capitalism is too efficient and overweights the present.  Such a tax offsets this overweighting.  Such a tax would reduce the ability of managements to spike stock prices for their own advantage and focus our capital markets more on the longer term. Make it a low tax, maybe 0.5%, but even that would help refocus the market on economic rather than trading value. The goal is to change behaviors not raise revenue.

4.  An Excise Tax on Stock Repurchases

Corporate repurchases of their own stock are often motivated by the desire to increase executive pay packages which are tied to the price of the stock.  So it is no surprise corporate managements favor them.  There are some legitimate purposes for such repurchases, so the tax might be set relatively low, something like 5%.  Again, the intent is to drive behavior, not raise revenue.

5.  Tax Treatment of Equity Compensation

The tax code encourages companies to grant stock options by giving companies a tax deduction for the actual amount received by employees after a stock has appreciated, even though they do not include that in their reported earnings.  Employees pay ordinary income tax on that amount.  We should tax equity compensation for employees the same way we tax carried interest for venture capitalists, at capital gains rates. But we should allow corporations to only deduct their accounting cost of these awards or maybe a multiple of that.  No one would have foreseen the huge gaps we have seen.  Today this is a huge tax advantage for the tech giants.

Facebook and others did no wrong.  They did what our laws and courts ask them to do: maximize profits.  Maybe they made business judgments that were short-term biased, but our entire capital market is focused that way.  All these taxes should be phased in over time.  The biggest challenge to any policy change is the enormous amount of wealth their equity represents, with all the political pressures that implies. One consequence might be that we’d have more, smaller, companies. But letting the giants divide into multiple companies may ultimately be very beneficial to their shareholders.

If we want a different outcome, we must set different rules.  These tax ideas are but a start. The political reality may be that none of these are feasible, or perhaps only some.  But without major systemic change in how we give companies incentives, society will remain the victim of their ever-growing power.

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Instagram for Kids: Doomed from the Start

Will Facebook continue wading into the quagmire of children’s digital content or double down on the next generation gold rush – the metaverse?

Under intense scrutiny from lawmakers and childrens’ advocates, Facebook has, once again, reluctantly pivoted to a promise that it will listen first and act only after that. This week the company, which owns Instagram,  paused its controversial efforts to build an “Instagram for Kids” that would allow kids under 13 years of age to share photos and comments with each other providing they had parental permissions. Facebook said that the company is taking a timeout on Instagram for Kids because it is “the right thing to do”, adding that it would “work with parents, experts, and policymakers to demonstrate the value and need for this product.” (It made this decision after a devastatingly critical series of articles in The Wall Street Journal, with related follow-ons in The New York Times and Washington Post.)

Putting the Instagram for kids project on pause is a big concession for Facebook.  Those who give the company the benefit of the doubt will say this marks a big and thoughtful step from a company whose mantra has too often been “move fast and break things”. Harsher critics will say the embattled company will simply move on to more lucrative waters like its new infatuation with the metaverse in order to win the next generation of consumers. But whichever way it turns, Facebook has lost another round in its campaign to earn public trust.

Facebook’s Inability to Move into New Marketplaces

The company has a history of ill-timed rollouts as it struggles to remain the dominant social network and keep attracting new generations of users. For example, it abandoned and then downsized its 2019 plans to forge into the cryptocurrency space with its Libra token amidst public outcry.

Facebook Messenger for Kids, now available in the U.S., Canada, Peru, and Mexico, suffered serious public backlash when it was introduced in 2017, though it has operated mostly without incident since.  It is meant to be a safe way for parents to give children under 13 access to instant messaging. Anecdotal evidence suggests that despite creating a reasonable set of guardrails, most parents who tried the platform were either not tech-savvy enough or committed enough to use Messenger for Kids routinely. As we publish, Facebook is facing extensive inquiries from Congressional lawmakers, looking at everything from its role in vaccine misinformation to whether it contributed to the January 6th insurrection. A Senate hearing on September 30 found a Facebook safety official unable to convincingly reply to legislators from both parties with strong criticisms of how it manages Instagram.

Timing and Good Will

Is it Facebook’s missteps, timing, or lack of goodwill that makes its efforts to stake out the kids’ space so polarizing? Other video-sharing-based companies have carved a relatively smooth path to their walled gardens for kids, notably YouTube and TikTok.  While not perfect, YouTube for Kids makes it fairly straightforward for a parent to set up access to age-appropriate videos that have been vetted for appropriateness and are presented free of ads. And TikTok offers settings that provide additional safety and privacy features for kids under 13. Why does Facebook/Instagram get so much pushback? Timing is everything.

The conversation surrounding Instagram for Kids became much more frenzied when the Wall Street Journal released its series of reports called the Facebook Files. Based on a whistleblower’s internal documents and memos, one part of the expose reveals that Facebook has been, for quite some time, conducting numerous studies into how its photo-sharing app affects its millions of young users. The documents suggest it is well aware of Instagram’s potentially harmful effects, notably amongst teenage girls. Instagram can exacerbate negative body image issues, anxiety, depression, and even suicidal thoughts.

Facebook retaliated with a statement saying the WSJ document was taken out of context and that the data shows teens can benefit from photo-sharing sites. And the WSJ  has now published some of the documents, which do show plenty of positive effects for teens from Instagram. At the end of the day, it would be surprising if Facebook hadn’t done its research and identified the negatives. It shouldn’t come as a big surprise that Instagram might cause harm. Like most other social media products, the double-edged sword is omnipresent. The question is: What will Facebook do to mitigate the most toxic effects? In all the controversy, that question has not really been addressed by the company. And it certainly wasn’t answered on September 30 to the senators’ satisfaction.

All Hands on the Metaverse?

The “for kids digital content” market has always been a bear.  That’s even more true when the content is user-created and shared. From a revenue perspective, this market appears to be a losing proposition.  You can’t advertise to these kids, for example. Under COPPA laws you can’t gather any personal information. And kids don’t typically own credit cards to purchase things. Yet enterprising children everywhere seem to either cajole parents to release the purse strings or figure workarounds, because they’re more tech-savvy than their parents. I’ve long thought that kids are so important to the future of the Internet that it might be wiser to create a nationally-funded effort — a sort of PBS of the Internet — where kids’ safety was paramount.

Moving forward, it’s clear that Facebook is in the hot seat for Instagram for Kids, and just generally more subject to strong criticism than when it purchased Instagram in 2012. It was initially run more independently, until its two founders, Kevin Systrom and Mike Krieger, left in late 2018. Adam Mosseri, the longtime Facebook executive who is the latest CEO of Instagram, has vociferously defended the company’s decision to put the kids project on pause.

At the same time, Andrew Bosworth, Facebook’s newly appointed CTO, has been super-vocal on a related matter, cheerleading Facebook’s newest mission to become a metaverse company. And maybe that’s the direction Facebook/Instagram will move toward, as it plows millions of dollars into a campaign to build a socially-responsible metaverse while rebranding itself from a social media company to a metaverse one. It’s a bold, long-visioned play, even though Facebook is a relative latecomer to the metaverse. (The Washington Post, however, portrays the metaverse pivot as partly a head fake that aims to distract regulators and legislators from the company’s separate mistakes.)

Facebook’s past, the current Instagram Kids media coverage, and future metaverse issues are more closely tied than you might think. The question is whether Facebook will continue wading into the current quagmire of children’s digital content or double down and focus on the next generation gold rush — for kids who will inevitably be active in the metaverse. (Read a Techonomy summary of that trend here.) I think it would be best for the company to adopt a “tech-Darwinism” view that they’ll make more money reaching out to kids where they’ll be tomorrow, and ditch Instagram for Kids entirely.

Extra credit: Watch this recent Atlantic Interview with Andrew Bosworth to understand the company’s ambitious metaverse plans.

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Outlaw? Pariah? Renegade Empire? Digesting the WSJ Series About Facebook

How can one company make so many mistakes? An astonishing reportorial coup by the Wall Street Journal is rattling Zuckerberg’s empire.

The Wall Street Journal this week began publishing an extraordinary series of damning articles about Facebook. The five so far consistently hit one theme–that the company is often very well informed about harms its systems cause society, but nonetheless chooses either not to take action or to lie in public about what it knows, or both. What makes the series unusually authoritative is that it derives from an extensive cache of internal company documents, many created by teams at the company intended to detect and prevent harms.

Here’s the Journal’s summary of its first four articles: “Facebook’s own research lays out in detail how its rules favor elites; its platforms have negative effects on teen mental health; its algorithm fosters discord; and that drug cartels and human traffickers use its services openly.” The most recent piece, published Friday Sept. 17, documents how the company has been unable to prevent its systems from being overrun by anti-vaccine propaganda. Again, all this comes not from dissident ex-employees or outsiders, but from the company’s own employees, as documented in internal presentations.

Sadly, for those like me who have followed Facebook closely for years, none of this is a surprise. But the Journal series may bespeak a major shift, even for those who are jaded and expect little other than evasion and apathy from this shockingly-powerful company. The articles suggest it may start to be seen widely as an outlaw enterprise, one that cares little whether or not its activities bring harm to society. The series demonstrates a company reflexively making choices about how to respond to challenges based not on a desire to reduce harm but rather on an obsession with user growth, user activity (which generates page views that enable more advertising), and especially, public perception.

One depressing and telling new statistic revealed in the the Thursday installment of the series is about global efforts around misinformation, which is rampant and has damaged country after country. Internal documents show that Facebook employees and contractors in 2020 spent 3.2 million hours finding and often removing false or misleading posts and ads. But only a shocking 13 percent of all that work was spent on content outside the U.S. Yet, the article too gently points out, 90 percent of Facebook usage is in other parts of the world. The reason for the discrepancy, based on the evidence presented here as well as accounts in the recent book The Ugly Truth, is that the company is primarily concerned about negative press coverage in the U.S.

The article makes the urgent point that Facebook does not even have the capacity to perform oversight in many places where egregious harms are taking place because of the platform. It gives the example of Ethiopia, where “armed groups use the site to incite violence against ethnic minorities.” The documents show that few, if any, company employees monitor such activity. The company has no speakers or reviewers for some languages used in Ethiopia, nor are the artificial intelligence tools Facebook touts as a silver bullet to address harmful speech used in those languages.

In classic obfuscatory company-speak, spokesman Andy Stone responded to such concerns by telling the Journal this week the company has safety programs in “over 50 languages.” Sounds good, right? In fact, Facebook officially supports over 110 languages, and scores more are used on its platform. Facebook’s net profits after tax will exceed $40 billion this year. Could it afford to ensure hate is monitored and managed in all those languages?

The Journal notes the documents show that employees themselves feel “embarrassment and frustration, citing decisions that allow users to post videos of murders, incitements to violence, government threats against pro-democracy campaigners and advertisements for human trafficking.” The Journal also writes that these internal reports “offer an unparalleled picture of how Facebook is acutely aware that the products and systems central to its business success routinely fail and cause harm.”

“We’re not actually doing what we say we do publicly,” a company researcher says in one document. That statement summarizes much of the entire series, and even Facebook’s standard attitude.

Other articles in the series describe equally unsavory actions. The first installment revealed a vast list of 5.8 million prominent users worldwide, many of them politicians and public figures, who are exempt from the company’s normal enforcement policies regarding speech. “These people can violate our standards without any consequences,” according to an internal presentation. The list was created, according to the documents, specifically to prevent what the company calls “PR fires”–instances of bad publicity.

Another article that has generated tremendous reaction, including demands from U.S. senators for more information, focuses on Instagram’s effects on teen self-image, and Facebook’s disingenuous public statements about what it knows about harmful effects from its platform. The senators are especially concerned because a letter sent from Mark Zuckerberg to Congress in response to a formal request for company data on this problem omitted mention of a key company study that found 32 percent of teen girls said Instagram made them feel worse if they already felt bad about their bodies.

Though the Journal repeatedly has sought comment from Facebook on all this, executives have shown little sign of contrition or even a willingness to admit the company has done anything untoward. One tiny exception is in the first article about the program exempting 5.8 million from policy enforcement on speech. Spokesperson Stone conceded criticism of the program was “fair.”

Many people find it hard to explain how one company could make so many mistakes, often so willfully. Why doesn’t this company want to be a force of order and progress? The answer is pretty simple, it seems to me. Facebook has no governance. It doesn’t have a CEO. It has an emperor. What he cares about is growth, so growth priorities prevail over harm remediation.

His control over the company is total. If he doesn’t like a board decision, he fires its members. But everyone needs and benefits from oversight. No one is perfect. Zuckerberg may be the richest person his age in human history. He may have unfailing confidence in his judgement and motives, but in central, fundamental, critical, obvious ways, he is failing as a leader.

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Spiritual Opium: China Limits Kids’ Online Gaming Time

Chinese officials unveiled tough new limits on the amount of time its young people can spend playing video games, calling them “opium for the mind.“  Let the experiment begin.

It’s been said that to really understand China you need to understand the Opium Wars. China lost face and power as the British and other foreigners sought unfettered access to its trade goods.

Somehow it’s fitting that this week Chinese party officials unveiled tough new limits on the amount of time its young people can spend playing online games. A state-owned media outlet published a piece that called video games “opium for the mind.“  (The statement caused stock prices of Chinese gaming companies like Tencent to plummet and the comment was removed shortly after it was released.) Elsewhere, the state-run Xinhua News Agency described the new online gaming rules as an effort to “protect the physical and mental health of minors”.

The ban may seem draconian, but honestly it’s the kind of intervention even many American parents secretly dream about. It applies to online gaming only (gaming consoles and playing alone are harder to regulate). Under the new regulation, online video game play for people under 18 is limited to three evening hours only on weekends and public holidays. No gaming is allowed during the school week. Online gaming companies must connect to an “antiaddiction” system operated by the government that will require users to register using their real names.

Adam Naijberg, Head of Communications for Tencent Games, offered me this somewhat generic, but important statement indicating that the company will help enforce the national mandate:  “Since 2017, Tencent has explored and applied various new technologies and functions for the protection of minors. That will continue, as Tencent strictly abides by and actively implements the latest requirements from Chinese authorities.” Najerg also says that kids make up a very small portion of its overall audience. “During the second quarter of 2021, players aged under 16 accounted for 2.6% of our China game grossing receipts. Among which, players aged under 12 accounted for 0.3%,” he told me over a messaging thread.

There’s no doubt China has been aggressive and masterful at inserting itself into the private lives and private enterprises of its country. Many say this is a continuation of President Xi Jinping’s move to reassert control over the economy. Others say it is a continuation of earlier moves this month to curb Chinese youth’s growing preoccupation with fandom. I spoke to a young colleague I’ve worked with in China, who confirmed that “it’s not only gaming, but the whole tech industry in China that is experiencing unfavorable policies at the moment.” She added that EdTech and gaming are the most outstanding examples right now, because Chinese are both strident and risk-averse in their approach to education.

Are Video Games Good for Kids?

Politics aside, this is a fascinating setup for an experiment on the detrimental or beneficial effects of video gaming with worldwide implications. There’s plenty of fuel to feed either side of the debate about how bad they are, from academicians, social scientists, parents, and educators. Scholars, says Chris Ferguson in this New York Daily News piece on the Chinese ban, are split on whether video game addiction “is real or just a moral panic.“ Pew Research suggests that American parents are equally concerned about their kids’ screen time and online gaming, with two-thirds of them saying screens make child-rearing more difficult.

Scientists have extensively examined the neuropsychological effects of playing games. Dopamine and serotonin give players a sort of high (and craving) as they play, similar to other thrilling or addicting behaviors. The good news is that your brain grows healthier and you feel good while it’s stimulated and engaged. The bad news is that you develop cravings for more of something that makes you feel that good. Research into the adolescent brain indicates that their neurotransmital systems are not fully developed yet, so their reactions to dopamine may be intensified (hence adolescent risk-taking behaviors). Here’s a good book on the subject.

Are Video Games Essential Learning Tools

Underlying the debate about kids screen time is the equally important discussion of what skills students will need to be prepared for today’s online, global and digital-first economy. In its Portrait of a Graduate (pictured above), the Battelle for Kids, a not-for-profit, forward-thinking educational reform group talks about the skills required for a 21st-century job market.  Many of those skills — collaboration, critical thinking outside the box, problem-solving are precisely the kinds of skills that online video games foster.

Susanna Pollack, President of Games For Change, a well respected organization for empowering gaming creators, says “China’s decision to restrict video game play for kids under 18 is at odds with decades worth of research around video games, youth development, and learning, as well as recent trends in educational gaming. It’s no surprise that during the COVID-19 crisis, teachers have increasingly been using popular games like Roblox and Minecraft to support the transition to remote learning and teach important skills and concepts. Video games, regardless of whether or not they are purpose-built for the classroom, offer online spaces where students can learn skills that are critical for the 21st century workforce — like collaboration, communication, critical-thinking, and problem-solving.”

Finally, there’s the issue of intrinsic vs. extrinsic control of the use of video games. At what age should a student begin to foster their own internal clock about overuse of online?  Will Chinese regulatory efforts be internalized by kids as they enter adulthood, or will they turn 18 and get drunk on video games once they’re freed from regulation?

Pollack report that “less than 1 percent of video game players exhibit characteristics of addiction, and none of these players experienced any negative outcomes related to addiction, according to a large-scale study published in the American Journal of Psychiatry. By imposing harsh limits to curb video game addiction she says, “China is responding to a problem that may not even exist — and keeping young people away from powerful tools that can set them up for success in the workforce of the future.”

Let the experiment begin.

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Zoom Wants to Be the Center of Your Universe. What Could Go Wrong?

Apps are likely to end up a great way to take rigidity and sameness out of Zoom meetings.  But for the moment, to have better meetings you need fewer tools, not more.

On August 24th Zoom experienced a significant worldwide outage. The Washington Post reports that it’s unclear how many people were affected. Information points to some sort of “authentication” problem. The initial problem was reported on DownDetector, a site that tracks outages on major platforms, apps, and devices. Zoom now reports 300 million daily participants so a little authorization trouble goes a long way.  My purely speculative hunch is that some of Zoom’s newly announced expansions, especially its new apps marketplace, may be contributing to the problem.

This past July Zoom announced the marketplace. Instead of asking users to exit Zoom to use an app like Calendly, Slack, DocuSign, a whiteboard, or a game, users can now launch such apps directly within Zoom. The idea is that you run virtual meetings with a full set of built-in apps, to call on as you need them. Previously the company had something called ZAPPS, apps that worked with Zoom, but this new marketplace lets apps access Zoom’s APIs, making it in theory your platform to launch just about anything you can imagine, without ever leaving a meeting. (As if there weren’t enough time already spent in Zoom meetings. But I digress.) As of launch, there are well over 50 apps in the marketplace and the number is growing quickly.

I’m hopeful Zoom will smooth out these integrations over time, but if there was an app for tearing out your hair, I would have been using it during my recent foray into this world of Zoom apps. And if I were an IT manager, I’d issue a No Zoom Apps policy until the system matures.

App integration has become the holy grail for productivity, but it’s not easy for either developers or users. Each app (not unlike app integrations anywhere) follows its own set of permissions and rules about how it will use your data. And it will use it! Each app works differently depending on whether your Zoom attendees have the app installed or not. And, you’d need your head examined to use these apps in a public Zoom meeting without prior rehearsal — something Zoom makes hard to do. I practiced by acting as host and inviting my long-suffering husband to be an attendee so I could at least see what one attendee was seeing.

Here’s a whirlwind tour of the Zoom App Marketplace.

Installation

If you’ve opened your Zoom meeting and have no idea what I’m talking about, that’s because you don’t have the latest release. On it you’ll see a new “apps” menu on your dashboard at the bottom of the Zoom screen, just to the right of the fabled “Reactions” menu.

To install an app you just click on the apps button. It shows you apps you’ve already installed and lets you go to the marketplace to discover others.  You can even install an app in the midst of a live meeting. (But that, IMO, qualifies as Zoom-icide.)

Next, you’ll notice that some apps are meant to work with Zoom meetings, some with webinars, and some with rooms, and also that each app has a level of permissions for authorization.  If you’re just a Joe Schmoe like me you can simply ask to be personally authorized.  Select  “authorize” and “add app”. The installed app will appear in your app tab. Some app approvals take a bit longer. I’m still waiting to get a beta invitation to Warmly, a Zoom app that acts as a private investigator and digs up information in real-time on whoever you’re with in a Zoom meeting. 

Office workers will need to suck up to their network admins if they want to use a Zoom app. Judging from a Reddit thread I perused, IT managers have been quite vociferous about not wanting to open up this Pandora’s box just yet.  And when administrators are ready to approve Zoom apps it’s likely to be ones already used in their workplace. Zoom apps most likely to be selected for approval include Miro (for drawing), Asana for managing projects, Slack for messaging, and Google Workplace.

Curious as to whether this was simply a free-for-all (there are tools to build your own Zoom app as well) I called Danny Stefanic, who just released his MootUp for Zoom. He told me the process to get approval was pretty stringent, requiring apps to divulge a lot of privacy and security information and to adhere to strict guidelines. And while no one from Zoom responded to my requests for more information, the guidelines page states clearly that “All apps on the Zoom App Marketplace have been reviewed for security and data compliance as part of the process to publish the app to the Zoom App Marketplace.” Comforting.

In my multi-hour experiment, I installed eight different apps with eight completely different sets of rules for how they operate in Zoom. To play the game HeadsUp I sent an invite to my co-participant, who was told to install the app. (It now cannot be uninstalled. Plus, after one free game question they want $11.95 a month.) I tried Miro, which sent me out of Zoom to register. I shared Miro. My participant could watch, not interact. In most cases, once you finally do get an app opened you have two options: “share” and “send”.  Share simply uses screen share, but I could have done that without the Zoom app even being involved. Send, on the other hand, forces your attendees to install the app, which causes total meeting disruption unless you give them a heads-up before the meeting.  Some newer apps are both ingenious and “WTF” simultaneously, like Dots, which offers feedback and rewards to meeting participants, or Circles, which takes the squares out of Zoom and puts people instead in circles. Is that something you’ve pined for as you’ve been stuck in the grid?

To be a serious app marketplace, Zoom needs uniform, specific instructions for exactly what to expect when you use its apps.  As of now, the information is pretty barebones and seems to be supplied by each app developer.

I don’t want to sound like the grinch who stole Zoom apps. They’re likely to end up a great way to take rigidity and sameness out of Zoom meetings.  But for the moment, to have better meetings you need fewer tools, not more.

Extra Viewing: This week, my company, The Virtual Events Group, featured the two of the creators of Zoom Events. It’s an events platform, totally independent of Zoom that lets you manage registrations and ticketing. You can watch their presentation here.

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