US politicians and regulators are tying themselves in knots over how to harness Big Tech, while at the same time not reining in its ability to counter China’s technological advances.
At the annual Munich security conference over the weekend, House speaker Nancy Pelosi warned European countries they will “choose autocracy over democracy” if they let Huawei take part in rolling out 5G technology. Her remarks echoed those of Mark Esper, US defence secretary, and Mike Pompeo, secretary of state. But where are the US alternatives?
In our latest Swamp Notes newsletter, Rana Foroohar highlights the Department of Justice challenge last week to the Federal Trade Commission’s antitrust ruling against Qualcomm, which it had accused of violating patent rules. In an extremely unusual move, the DoJ showed up and argued that the ruling against Qualcomm would hurt national security, a clear indication that its leadership in 5G chips was seen as more important than how it was exerting its market power.
We’ve a look today at how curbing the power of the big technology companies has been a theme of the Democratic presidential candidates’ campaigns, with Elizabeth Warren being the most severe critic of how smaller competitors have been killed off and data privacy eroded. But Ed Luce, in the same Swamp Notes, says this has receded as an issue lately, with it not being raised at recent Warren rallies in either her speeches or questions afterwards. “Part of the reason for this is Trump’s aggressive stance on China, which has taken much of the wind out of Democratic sails,” he says. “They criticise Trump’s methods but not his objective.”
If the US is conflicted in its approach to Big Tech, Europe finds itself caught in the middle of any decoupling in trade and tech (as does Cambridge). Our team in Munich report the sharp rhetoric of the US, countered by a speech from Wang Yi, China’s foreign minister, stoked fears among EU countries that they are being forced into a choice between the US and China that they do not want to have to make.
The EU has been slow to devise a sophisticated China strategy, says today’s Brussels Briefing. It was only last year that the European bloc for the first time branded Beijing a “systemic rival” in some areas, as well as an economic competitor in others and a negotiating partner in still more.
The Internet of (Five) Things
1. SoftBank investment chief pushes hedge fund
Rajeev Misra, the head of SoftBank’s $100bn Vision Fund, has lined up billions of dollars of outside investment for a new hedge fund-style investment vehicle. The plan has found support from Abu Dhabi’s state fund Mubadala and the government of Kazakhstan but would mark a sharp deviation from the vision of SoftBank’s founder Masayoshi Son, who created the telecoms company’s investment arm to take stakes in private, technology-focused start-ups and profit from scaling them up.
2. India’s Big Brother legislation, Taiwan’s little sister of democracy
India’s first personal data protection bill, a comprehensive privacy framework introduced in December, is supposed to provide new protections for India’s internet users. But today’s Big Read reports New Delhi’s proposed law has alarmed many of its original champions by carving out broad exemptions for authorities to access the personal data of its 1.4bn citizens. Privacy activists fear India will build up surveillance projects with minimal oversight. Rana Foroohar reports on a very different situation in Taiwan where digital minister Audrey Tang is using distributed ledgers, quadratic voting and various online open-source platforms to enable greater participatory democracy in Taiwan.
3. US solar gets battery boost
Thanks to a wave of investment, solar farms across the US are increasingly being built with industrial-scale battery packs on site so that noontime surpluses can be stored for release in the evening hours when people come home to switch on lights, appliances and air conditioners. Fund managers, power producers, utilities and energy-hungry tech companies are among those making big financial commitments to “solar-plus-storage” projects.
4. Coronavirus control
Beijing is tightening access to the uncensored global internet, while carefully controlling its domestic news reports, to increase its grip on the media narrative around the coronavirus epidemic, reports Yuan Yang in Beijing. Meanwhile, Samsung has begun flying electronic components for its latest Galaxy phones from China to its factories in Vietnam, where it produces nearly two-thirds of its phones.
5. The triumph of music’s triumvirate
Warner Music filing for an IPO is a sign of the booming valuations and revenues that streaming has brought to the music business. Recorded music revenues have been growing quickly for the past three years, topping $19bn in annual sales. But the industry is dominated by three large companies whose values had not been repriced to match their growing businesses, reports Anna Nicolaou.
Tech week ahead
Monday: Facebook’s chief Mark Zuckerberg will discuss regulation with Margrethe Vestager, EU antitrust and digital commissioner, and Thierry Breton, the European commissioner charged with overseeing the digital economy. Mr Zuckerberg wrote in the FT that Big Tech needs more regulation, something he also called for in Munich.
Wednesday: The European Commission publishes a White Paper on Artificial Intelligence and the European Data Strategy, which aims to create a single European data market aimed at challenging the dominance of US tech giants such as Facebook.
Thursday: Online file-sharing company Dropbox reports earnings for its December quarter. Lenovo, the world’s largest maker of personal computers, will hold an investors conference. The Beijing-based PC giant may detail coronavirus disruption, as the majority of its production and the sources of most of its components are in China.
Friday: Educational publisher Pearson reports full-year results.
Tech tools — Signal
A $50m contribution from WhatsApp co-founder Brian Acton has allowed the developer of open-source Signal to bulk up its staff and its encrypted messaging app so it will have mainstream appeal. Wired reports that in the last three months, Signal has added support for iPad, ephemeral images and video designed to disappear after a single viewing, downloadable customisable “stickers,” and emoji reactions. More significantly, it announced plans to roll out a new system for group messaging, and an experimental method for storing encrypted contacts in the cloud. “I’d like for Signal to reach billions of users. I know what it takes to do that. I did that,” Acton tells Wired. “I’d love to have it happen in the next five years or less.”