Meta wants to combat the rise of TikTok, but creators have been loathe to use its short-form video options.
Most Reels were posted by anonymous or aggregator accounts.
Meta’s big bet on Instagram Reels seems to be panning out so far. The short-form video tool is where Instagram users are getting the most likes, comments and shares, and Reels accounted for more than half of Facebook’s most-viewed posts in the last quarter of 2021. But there’s a catch: Some of the most popular Reels were on TikTok first. There’s also no way to put this politely, but some of the other highly viewed Reels just aren’t that good.
About three-fourths of the most viewed Reels from last quarter were posted by anonymous accounts, and more than 80% came from accounts that just aggregate other people’s content, according to an analysis by the Integrity Institute that was originally provided to Recode. That includes reposts from TikTok, showing how even the viral content Meta craves to attract young people is still being created on the platform of one of its biggest competitors.
Meta wants creators to be able to make a living off Reels, and it’s pouring $1 billion into the effort. But it likely doesn’t want to just give that money to spammy accounts that, while keeping people engaged, are hardly making Reels a fun place to hang out and discover new things. And if authentic creators aren’t able to get the same kind of engagement as those anonymous or aggregator profiles, there’s less of an incentive for them to focus on Instagram as primary platform for short-form video.
“If you’re a creator, obviously you don’t want unoriginal content on the platform because it’s people stealing your content,” Jeff Allen, a former Facebook data scientist who co-founded the Integrity Institute, told Recode.
There’s even less drive to post original videos on Instagram for creators who have already found fame on TikTok. Creator Kris Collins, who has over 40 million followers on TikTok, told Protocol earlier this week that she prefers to use Instagram to post photos of her life, not Reels. She wouldn’t create an original Reel, but she would repost one of her TikToks if it performed particularly well, showing how posting on — let alone natively using — Reels is still an afterthought for short-form video creators.
Perhaps in an effort to ameliorate these issues, Meta announced changes last month to entice creators to start making original Reels. The company said it will start deprioritizing videos stamped with TikTok’s logo; Meta is also starting a trial to share over half of ad revenue with creators. Maybe it just needs a bit more time to prove Reels will work. And hey, that $1 billion in cash for creators couldn’t hurt.
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Sarah Roach is a news writer at Protocol (@sarahroach_) and contributes to Source Code. She is a recent graduate of George Washington University, where she studied journalism and mass communication and criminal justice. She previously worked for two years as editor in chief of her school’s independent newspaper, The GW Hatchet.
Amazon is planning to conduct a racial equity audit of its hourly workers led by former Attorney General Loretta Lynch, the company said in a securities filing reported by CNBC.
The audit follows a push by Amazon shareholders to make the company be more transparent about how its policies affect diversity and inclusion in the workplace. The company said the focus of the audit will be “to evaluate any disparate racial impacts on our nearly 1 million U.S. hourly employees resulting from our policies, programs, and practices.” Amazon didn’t say when the results of the audit will be completed, though they will be made public once finished. In 2021, 44% of Amazon shareholders supported a proposal for a racial equity audit, according to the filing, but the proposal was rejected last year.
Amazon’s board of directors recommended that shareholders vote against the resolution for the audit, arguing that the company is conducting its own human rights assessment and has launched initiatives promoting workforce diversity and inclusion. But New York State Comptroller Thomas DiNapoli has proposed an independent audit to be voted on again at the company’s shareholders meeting next month.
The proposal filed on behalf of shareholders argues that the company’s assessment wouldn’t do enough, as it isn’t “an audit conducted by auditors who are experienced in rooting out biases and discrimination.”
“There is no public evidence that Amazon is assessing the potential or actual negative impacts of its policies, practices, products, and services through a racial equity lens,” the filing reads. “Because of the pattern and magnitude of controversies repeatedly facing Amazon, we believe that it is in shareholders’ best interests for Amazon to proactively identify and mitigate risks through an independent racial equity audit.”
Shareholders are also reportedly are voting next month on an independent audit of Amazon’s treatment of warehouse workers, according to CNBC, which Amazon has urged shareholders to vote against.
A federal appeals court ruled on Monday that scraping of publicly available data does not violate the anti-hacking statute known as the Computer Fraud and Abuse Act.
The move by the Ninth Circuit in HiQ Labs v. LinkedIn is a win for researchers and journalists who have long pulled extensive data from public sources, but may represent a setback for massive tech platforms who previously argued that U.S. law helped them protect their users’ data by declaring it off limits.
In a 2019 appeal, the circuit court in San Francisco had previously backed hiQ, which scrapes data on workers from LinkedIn and packages it into analytics about skills and susceptibility to recruitment. LinkedIn, which is owned by Microsoft, had sought to block hiQ’s access to public profiles, citing in part the CFAA’s prohibition on accessing a computer “without authorization.” HiQ, however, won a preliminary injunction in district court.
Last year, in a separate case, the Supreme Court issued its first ruling on the CFAA, in a decision that was seen as narrowing the famously broad statute and giving legal cover to users who access information that’s available to them. Although that decision, in Van Buren v. United States, focused primarily on a separate issue, the high court said weeks later that the Ninth Circuit should revisit the hiQ case in light of the justices’ ruling.
The appeals court panel found on Monday that “the reasoning of Van Buren reinforced its interpretation of the CFAA.” The three judges reaffirmed scraping rights, ruled again that the preliminary injunction against LinkedIn was proper when considering potential harm to hiQ, and sent the case back to the district court for any further proceedings.
LinkedIn said in a statement it would “continue to fight to protect our members’ ability to control the information they make available on LinkedIn” and said it continues to “prohibit unauthorized scraping on our platform.”
The ongoing global chip crunch has made consumer electronics tougher to track down. The electric vehicle industry faces a similar conundrum, but instead of semiconductors, companies are staring down a shortage of materials to make batteries. Rivian CEO RJ Scaringe predicted that the supply of EV batteries would become a huge issue in years to come.
The chip crunch, Scaringe said, would look like a “small appetizer to what we are about to feel on battery cells over the next two decades,” according to the Wall Street Journal.
While giving press a tour of the company’s factory in Normal, Illinois, last week, Scaringe said that building enough batteries to keep up with demand for EVs would be a major hurdle for the industry. He anticipates shortages in every part of the battery building process, including mining raw materials like cobalt, lithium and nickel, processing materials and building the battery cells themselves.
“Put very simply, all the world’s cell production combined represents well under 10% of what we will need in 10 years,” Scaringe told reporters, according to the WSJ. “Meaning, 90% to 95% of the supply chain does not exist.”
Rivian has had a rocky start to the year. The company raised prices on its R1T electric pickup truck and R1S electric SUV in early March, even for those who had places early reservations, citing inflation and the high cost of materials. The company reversed that plan after massive outcry from customers. Rivian in March also cut its production outlook in half to 25,000 vehicles, which it attributed to supply chain issues.
Car companies already dealing with a shortage of automotive sensors due to the chip crunch are now exploring ways to boost battery supply. Scaringe said Rivian is considering adding in-house battery production to diversify its supply.
“We are not going to have a single supplier,” he told the WSJ. “We are going to have multiple suppliers.”
Rivian also isn’t the only EV maker feeling the squeeze of inflation. Tesla also increased prices by 5-10% across its entire lineup due to the surging cost of nickel and other materials. If battery supply issues persist, car buyers who want to make the jump to EVs may face even higher costs.
A group of Apple employees calling themselves the Fruit Stand Workers United have announced their intention to try to form a legally-recognized union at Apple’s Grand Central flagship store in Manhattan.
If successful, the FSWU would become the first group of unionized Apple employees. The Apple workers have affiliated themselves with Workers United, the national union that has successfully led more than 20 Starbucks stores to unionize so far (and hundreds more in earlier stages in the process). Workers at the JFK8 Amazon facility in Staten Island have also paralleled the unusual success of the Starbucks union movement, voting to form the first group of unionized Amazon workers earlier this month. Amazon plans to challenge the result of that election, and a second election with another group of workers in another Staten Island facility is scheduled to begin April 25.
The workers already affiliated with the FSWU must convince at least 30% of their retail peers at the Grand Central location to sign union interest affiliation cards, which would then trigger a formal union election administered by the National Labor Relations Board if Apple does not voluntarily recognize the union.
“We are fortunate to have incredible retail team members and we deeply value everything they bring to Apple. We are pleased to offer very strong compensation and benefits for full time and part time employees, including health care, tuition reimbursement, new parental leave, paid family leave, annual stock grants and many other benefits,” an Apple spokesperson wrote in a statement to Protocol.
If successful in its unionization efforts, the FSWU plans to demand higher salaries and benefits, including a minimum wage of $30/hour (Apple’s current minimum sits at $20/hr for retail workers) and increased tuition reimbursements and 401(k) matches. “Grand Central is an extraordinary store with unique working conditions that make a union necessary to ensure our team has the best possible standards of living in what have proven to be extraordinary times with the ongoing COVID-19 pandemic and once-in-a-generation consumer price inflation,” the workers wrote on their newly launched union website.
“Hourly wage workers across the country have come to the realization that without organizing for a collective voice, employers will continue to ignore their concerns in the workplace. Workers from every single worksite, be they from Starbucks or Amazon or Apple, have spent years repeatedly expressing their concerns in the workplace — concerns about safety, their well-being, how to improve and make the workplace better — but management have ignored or done little to address the challenges workers face,” Workers United wrote in a statement to Protocol.
Happy Tax Day! Sen. Elizabeth Warren thinks you might be getting scammed.
In a letter to Intuit CEO Sasan Goodarzi, Warren, as well as Reps. Katie Porter and Brad Sherman, laid into the company over its TurboTax tax-filing program’s fees. According to the lawmakers, TurboTax offers products that “scam American taxpayers into paying for services that should be free.”
At the core of their concern is the IRS’ Free File program, through which TurboTax and other participants were supposed to offer tax preparation services to low-income Americans for free. But the lawmakers described that program “a failure” due to underutilization, and noted that Intuit left the program last year. According to stats in the letter, the program was intended to serve 70% of Americans, but as of 2018, it was only serving 3%.
Warren, Porter and Sherman hold TurboTax partly accountable for that, in light of reporting by ProPublica, which found the company was adding code to its Free File site that kept it from surfacing in Google results. The company has since changed that code, according to ProPublica, but that did not apparently satisfy Warren and her colleagues.
They argued Intuit’s “influence peddling” in Washington has allowed these issues to fly under the radar. The company previously hired a former top IRS official to be its chief tax officer and, according to the letter, Intuit also hired former FTC chair Jon Leibowitz to defend the company against a lawsuit recently filed by the FTC.
That suit takes aim at TurboTax’s “bogus” promises of free tax preparation, accusing TurboTax of “disseminating the deceptive claim that consumers can file their taxes for free using TurboTax” when they often end up getting charged in the end. Intuit called the FTC’s claims “not credible.”
In their letter, the lawmakers described the suit as “welcome and long overdue.”
Now, Warren, Porter and Sherman are asking Intuit to answer questions about its “revolving door” with the IRS and other government agencies. In the letter, they asked Intuit to share the number of employees and external partners Intuit has worked with since 1999, who also held roles in the executive branch. They also asked the question in reverse: How many employees or partners went on to work in the executive branch since 1999? The lawmakers are also asking Intuit to share how much money it’s made from taxpayers who make less than $73,000 since 1999.
Intuit has until May 2 to provide answers.
Ultimately, though, the letter isn’t just seeking answers. It’s also seeking to raise the profile of the Tax Filing Simplification Act. It would give Americans a pre-filled return that they could sign and return to file their taxes. But that bill has been kicking around for years now and only seems to get any mention on Tax Day, so don’t hold your breath.
For Warren, the letter is as much about getting answers to questions as it is about pushing companies to change their ways without government intervention. After all, the senator does have a long track record of using letters to get her way.
On Saturday, Elon Musk tweeted: “🎶Love Me Tender 🎶.” It wasn’t an Elvis reference. On Monday, Twitter filed its plans for a poison pill defense with the SEC, a move that would head off a potential tender offer from Musk or other parties.
Musk had offered to buy the company at $54.20 a share last week in a negotiation with the board that went nowhere, and officially became hostile when the board rejected the offer. He’s hinted in recent tweets that he might go directly to shareholders with a tender offer.
Twitter had announced its intention to set up the defense Friday, with details forthcoming. The plan goes into effect at the close of business on April 25. Should any shareholder purchase more than 14.9% of the company by then, the board will offer existing shareholders — but not the party accumulating the shares — special rights.
The mechanics of the plan are similar to most poison pills, with the goal being to dilute the stake that a hostile party owns by issuing new shares. Shareholders will be able to exercise the rights to purchase a thousandth of a share of preferred stock for $210. That price, along with the current market price, forms the basis for a calculation of how many shares of common stock shareholders will receive. The “acquiring person” — the party accumulating a stake of 15% or more — isn’t eligible. The bottom line is that Twitter can flood the market with newly issued shares.
The exercise price in a poison pill is typically set high to discourage hostile offers. It’s common for the price to be set at a multiple of two or three times the current market price. By that standard, $210 is higher than usual.
But $210 is also half of $420, which might be a symbolic gesture by the board. The $54.20-a-share price in his Twitter offer seemed to call back to the time Musk proposed taking Tesla at $420 a share, a number that’s an allusion to weed culture. It probably feels good to stick it to the guy who’s trying to buy your company.
Musk hasn’t launched a tender offer yet, but if he were to do so with the plan in place, shareholders could in theory exercise their rights to buy shares cheaply and unload them on him at the designated price, making a purchase economically unfeasible.
California regulators have introduced a new proposal that would ban new gas-powered cars by 2035, a move that would be a global first. If it becomes reality — and if history is any guide when it comes to California and cars — the rest of the U.S. might just be dragged along, too.
The state’s Clean Air Resources Board unveiled its plan to phase out gas-powered vehicles on Thursday, and it’s expected to vote on the proposal in August, after a 45-day public comment period and a June 9 public hearing. The rule would require the state to up its zero-emission car sales in the coming years, culminating in the full ban. It comes in response to Gov. Gavin Newsom’s executive order to end the sale of gas-powered cars by 2035, which he issued last September.
Román Partida-López, legal counsel for transportation equity at the non-profit Greenlining Institute, said he expects the rule to pass in a form fairly close to where it is currently, given that CARB has already been in talks with both the advocacy community and the auto industry. “There’s probably some buy-in from both,” he told Protocol.
Car companies have historically had a bit of a tenuous relationship with California regulators, which have imposed more stringent air pollution standards than federal ones. (A number of states have adopted California’s standards as well.) Since the Trump administration, though, they have mostly fallen in line. For instance, they gave up on a high-profile lawsuit over California’s ability to set its own emissions in February 2021. California is such a large market for vehicles that not only do its policies inform what kinds of cars are sold nationwide, they also tend to be echoed by federal policy.
The proposal wouldn’t apply to sales of used vehicles, which is how most people in the U.S. buy their cars). It also wouldn’t require cutting gas-power vehicle sales cold turkey on Jan. 1, 2035. Starting with the 2026 model year, 35% share of new cars, SUVs and small pickup trucks sold in California must be zero-emission. After that, the required share would ratchet up yearly. Of the total, 20% can be plug-in hybrids.
Partida-López said that while the rule is a step in the right direction — and could “set the standard of what electric vehicles could look like post-2026,” when the current, less ambitious clean cars rule sunsets — it does not go far enough in terms of delivering on the state’s environmental justice goals.
“Currently, the rule itself just addresses the status quo approach,” Partida-López said, in reference to the number of automakers that have already committed to selling only zero-emissions vehicles by 2035 or thereabouts. “It’s building on the commitments that automakers have already made, and not necessarily being transformative or pushing them to do better.”
The rule in its current form would likely result in one major boon for low-income communities: In expanding the number of EVs on the market, it will inevitably expand the used EV market as well, which has remained relatively thin even as the number of them on the market has swelled in recent years. But Partida-López would like to see more intentionality, saying the rule could include formal requirements that automakers work to increase accessibility and deployment of EVs in low-income communities, including access to charging networks and other avenues. There’s extra urgency to do that given that those same communities often face disproportionate impacts from air pollution from gas-powered cars zipping down roads and over highways nearby.
These issues could also factor into people’s livelihoods. Ride-hailing companies, for instance, have said they want to transition to EVs in the coming decades. But infrastructure as well as the cost of EVs have so far created barriers to actually getting drivers in zero-emission cars.
An alliance of automobile manufacturers expressed qualified support in the wake of the proposal, saying that they are committed to electrifying the transportation sector. They also expressed concerns, however, about whether the right pieces are in place to meet the rule’s timeline. The lack of charging infrastructure and competition for critical minerals could make the transition a little rocky. Partida-López acknowledged this is a potential challenge as well, but argued that aligning regulations with the automakers plans will incentivize the state to address these issues sooner than later.
Fight for the Future, an advocacy group that has campaigned to preserve net neutrality and ban facial recognition, wants Zoom to stop considering plans to incorporate controversial “emotion AI” in its services. Protocol was the first to report Zoom’s interest in the technology.
“We get that you’re trying to improve your platform, but mining us for emotional data points doesn’t make the world a better place,” said the organization in an open letter to the virtual meeting giant. The letter – accompanied by an online petition – calls on Zoom to “Make the right call and cancel this crummy surveillance feature—and publicly commit to not implementing sentiment analysis in the future.”
Emotion AI uses computer vision and facial recognition, speech recognition, natural-language processing and other AI technologies to capture data representing someone’s external expressions in an effort to detect the internal emotions or feelings they indicate. The validity of the technology is an open question.
Despite criticism around the legitimacy of emotion AI, it is finding its way into everyday tech products and generating investor interest. One company that currently offers software used by sales reps incorporating emotion AI features, Uniphore, recently collected $400 million in Series E funding at a valuation of $2.5 billion.
Now that one of the world’s largest video communication platforms is considering using emotion AI, organizations like Fight for the Future predict that it could be used in all sorts of ways that affect people’s everyday lives.
“But we see the writing on the wall,” stated the group’s letter. “Ultimately, this software will be sold to schools and employers who will use it to track and discipline us.”
Fight for the Future played a key role in coordinating protests that led to the demise of the Stop Online Piracy Act (SOPA) and the PROTECT IP Act (PIPA) legislation.
Here’s a little good news: Wind turbines in the U.S. produced more electricity than both coal and nuclear power plants for the first time ever. It’s an important milestone with a few caveats — notably that it was only for one day — but it reflects the reality that wind power is growing and coal is fading away. Now, we just need to speed up that transition a bit so it’s more than a one-off.
Wind turbines produced more than 2,000 gigawatt-hours of electricity on March 29, making it the second-biggest source of electricity in the U.S. behind natural gas for that day, according to the Energy Information Administration. The EIA report notes wind has outcompeted coal and nuclear in the past, but the March feat also saw it best both at once in a renewable energy first.
That’s a big win for wind power, which has grown by leaps and bounds. In 2019, wind power became the biggest source of renewable energy in the U.S., and installed capacity has increased nearly fiftyfold over the 21st century. At the same time, coal use has declined precipitously across the country. That’s partly what led to the electricity generation flip-flop.
Spring weather also played a supporting role. Demand for electricity is usually lower owing to reduced heating and cooling demand. That gives some coal and nuclear plants downtime to reduce power generation and perform maintenance. Yet at the same time, winds are usually strongest in major wind-power generating regions at this time of year, cranking up output. And that’s a recipe for last month’s milestone. Even though wind power has been on the rise, the EIA forecast indicates it won’t outcompete nuclear or coal in any month between now and the end of 2023.
So while March 29 was a great day for wind power, it’s just one day in one country. We need it to happen with increasing frequency around the world if we want a shot at fixing the climate. In the International Energy Agency’s net zero scenario, wind and solar alone would have to make up 70% of the global electricity supply by 2050. We’re nowhere close to that yet.
To close the gap, the world will need to invest anywhere from three to six times the amount of money currently going into renewables, according to the recent United Nations climate report. On the bright side, any money invested in renewables is buying more bang for the buck; the report found the average cost to install wind power dropped 55% over the last decade. (Solar dropped even further, plummeting 85%.) Not that you need an economic reason to preserve a habitable climate, but the case is certainly becoming increasingly clear.
Twitter’s board of directors has unanimously decided to execute a maneuver referred to as a poison pill in order to prevent Elon Musk from taking over the company. Insiders told the New York Times and Wall Street Journal that the board was planning such a move late Thursday.
The plan “is intended to enable all shareholders to realize the full value of their investment in Twitter,” a press release reads. In doing so, it will “reduce the likelihood that any entity, person or group gains control of Twitter through open market accumulation without paying all shareholders an appropriate control premium or without providing the Board sufficient time to make informed judgments and take actions that are in the best interests of shareholders.”
Under the plan, shareholders will be able to purchase additional shares at the “then-current exercise price.” It would be triggered when a shareholder purchases 15% or more of Twitter’s stock. Elon Musk currently owns just over 9% of Twitter, and would have been capped at 14.9% had he joined the board of directors. The plan expires April 14, 2023.
A company being targeted in a hostile takeover can adopt a poison pill strategy to make itself less attractive or harder to acquire. One method involves making shares available to existing shareholders — except for the hostile party — at a reduced price. This then requires the shareholder attempting a hostile takeover to buy more shares quickly and makes the shares less favorable to the acquiring body. Twitter is executing what is called the “flip-in” method, discounting its own shares, rather than the “flip-over” method, which would involve discounting shares of an acquiring company, because Elon Musk is attempting to purchase Twitter outright as an individual.
Critics say the method is unfriendly to shareholders, who also need to purchase more shares quickly to maintain their investments. However, if Musk takes the company private, he would buy most shareholders out of their investment for $54.20 a share. Musk tweeted Thursday afternoon that he would “endeavor to keep as many shareholders in privatized Twitter as allowed by law.” The exercise price of the rights plan wasn’t announced. Twitter said more details would be forthcoming in an 8-K filing.
This story is developing.
The Department of Homeland Security is looking into the spread of child sexual abuse material on TikTok, sources told The Financial Times. The platform is under a separate investigation for allegedly allowing CSAM videos to be uploaded to the public feed, while bad actors on TikTok are also using a privacy feature to share CSAM with others.
DHS’ probe comes after a child privacy researcher reported to TikTok that CSAM was being posted on the platform. The Financial Times found that TikTok moderators had a hard time keeping up with the number of videos being uploaded publicly. Investigators also found that abusers have used the platform for grooming, which involves befriending a child online and later abusing them. A source told the FT that the U.S. Justice Department is also investigating how predators are misusing a TikTok feature called “Only Me.”
The Justice Department launched its investigation after child safety groups and law enforcement found that CSAM content was being passed through private accounts. Users would include keywords in their public videos, usernames and bios, and illegal content was uploaded through the private “Only Me” feed, which shows videos only for those who are logged in. Predators would share their passwords with victims and other predators to access the “Only Me” videos.
TikTok did not immediately return Protocol’s request for comment. But the platform said in a statement that it has worked with law enforcement on the issue and removed accounts and content that includes CSAM.
“TikTok has zero-tolerance for child sexual abuse material,” the company said. “When we find any attempt to post, obtain or distribute CSAM, we remove content, ban accounts and devices, immediately report to [The National Center for Missing & Exploited Children], and engage with law enforcement as necessary.”
Platforms and lawmakers have taken their own steps to address CSAM. Apple tried rolling out new child-protection features, but the company later delayed those plans after privacy advocates argued that they would do more harm than good. A couple months ago, lawmakers reintroduced the Earn It Act, which would take away tech companies’ Section 230 immunity regarding CSAM at the state and federal level. At the same time, a recent report found that despite tech’s plan to fight CSAM, the issue is getting bigger and more difficult to handle.
TikTok told Protocol that it’s not aware of government investigations the FT reported, but the platform has a zero tolerance policy on CSAM. “Upon reading this story, we reached out to HSI to begin a dialogue and discuss opportunities to work together on our shared mission of ending child sexual exploitation online — just as we regularly engage with law enforcement agencies across the country on this crucial topic,” a spokesperson said.
Protocol contacted DHS for more details about the investigation.
Update: This story has been updated with comment from TikTok.
A year after launching its Clubhouse copycat and announcing its push into podcasts, Facebook is pulling back on efforts trying to make it in all things audio. It appears live chatting on your phone may not be the future after all. (Who could’ve possibly predicted this?)
With live audio fading away as people begin to see other people IRL again, Facebook has reportedly lost some interest in bringing the sound of people’s voices to the masses. The company cranked out a Clubhouse clone and other audio offerings including podcasting tools, short-form stories called Soundbites and a Live Audio Rooms project that launched last April. But the platform is deprioritizing those efforts, according to Bloomberg.
Instead, it’s reportedly trying to get podcasting partners excited about doing events in — what else? — the metaverse as well as ecommerce. Facebook parent company Meta has recently turned its attention to other projects, including laying the groundwork for Mark Zuckerberg‘s metaverse fantasies and working on short-form video as a way to compete with TikTok’s rise.
The company told Protocol in an email that it is seeing good engagement on its audio products, and has been receiving feedback from creators and users on what is and isn’t working.
But it was always going to be an uphill battle for supremacy on the audio front, even for a company with billions to spend. Spotify dominates the podcasting market, having reportedly surpassed Apple in October as the top podcast platform among U.S. listeners. Apple, of course, hasn’t given up on getting the crown back. And it has a better shot of doing that than Facebook coming to usurp both the podcasting heavyweights.
Meanwhile, live audio is ruled by Clubhouse and Twitter Spaces. But it’s not exactly a growth industry, with interest stalling out as COVID-19 restrictions relax and more people returning to normal activities instead of holing up at home talking to strangers on their phones. Clubhouse, once the live audio app that had everyone talking about it, is trying to do things that aren’t just live audio to retain its stagnating user base. This week it added a Discord-esque gaming feature, and had previously added an optional text chat feature that Twitch, YouTube and Discord already had. At least it won’t have to worry about Facebook trying to bigfoot it anymore.
The Lazarus Group is allegedly responsible for the $622 million Axie Infinity hack last month, one of the largest DeFi hacks to date, where the Ronin network was breached to access the funds.
While the wallet address suspected to be behind the attack has been known since the day of the attack, the U.S. Treasury Department tied the wallet address to North Korea’s Lazarus Group on Thursday and sanctioned the funds by adding the address to the Office of Foreign Assets Control’s Special Designated Nationals List.
Blockchain analytics firms Chainalysis and Elliptic have both confirmed that the wallet address listed by OFAC is the same one used in the attack. Elliptic also stated that its analysis “indicates that the attacker has managed to launder 18% of their stolen funds as of April 14.”
Sky Mavis, the owner of Axie Infinity, has pledged a $150 million funding round led by Binance to reimburse users who suffered the attack, with the goal of recovering all stolen funds over the next two years. It also stated that the company is “still in the process of adding additional security measures before redeploying the Ronin Bridge to mitigate future risk,” and to “expect the bridge to be deployed by end of month.”
Elon Musk has a lot of thoughts about Twitter, Tesla and the SEC, and he minced few words diving into the drama he’s caused with his Twitter takeover bid during a wide-ranging conversation at the TED conference in Vancouver today.
In an interview with TED head Chris Anderson, Musk said his effort to take Twitter private is in the public interest.
“This is not about the economics. It’s for the moral good,” Musk said.
But that sentiment has critics — and those include Twitter employees. Musk caused concern initially when he revealed he had acquired a sizable stake in Twitter, and again when he was set to join the company’s board of directors. After he declined his board seat, it became clear Musk has bigger ambitions for Twitter: deciding the company’s policies on free speech and content moderation.
“My strong, intuitive sense is that having a public platform that is maximally trusted, and broadly inclusive, is extremely important to the future of civilization,” he said.
Here are a few key takeaways from Musk’s TED talk.
Musk said Twitter should allow users to speak “freely within the bounds of the law” and called for the platform’s algorithm to be open source so the general public can suggest changes.
“I think like the code should be on GitHub, so then people can look through it and say, ‘I see a problem here. I don’t agree with this.’ And they can highlight issues, suggest changes,” Musk said.
Musk also commented on his use of the platform, which Anderson said even admirers consider “somewhere between embarrassing and crazy” — but effective.
“It’s stream of consciousness,” Musk said. “If I’m on the toilet and find something funny? I just tweet it out.”
Uh … relatable?
Twitter plans to fight Musk’s bid to take the company private, The Information reported Thursday. When asked if he had a backup plan in that event, Musk cryptically replied: “There is.”
Of course, there were no details on what that plan entailed, but Musk said he would reveal them at “another time.”
In his SEC filing this morning, the Tesla CEO said he’d reconsider his role as a shareholder if Twitter doesn’t take his offer.
Today was apparently a great day for Musk to clear the air over his drama with the SEC, sparked by a tweet that he had secured funding to take Tesla private (a thing you’re supposed to clear with regulators and not with Twitter followers). After that tweet, Musk entered into a deal with securities regulators that his tweets be pre-approved, but Musk has had trouble keeping his word and the SEC has found it downright impossible to make him adhere to the agreement.
Musk said that at the time of his deal with the SEC, Tesla was in a “precarious financial situation.” He was told by banks that if he didn’t settle with the commission, Tesla was at risk of going bankrupt.
“I was forced to concede to the SEC unlawfully,” Musk said. “Those bastards. And now, it makes it look like I lied when I did not. I was forced to admit that I lied to save Tesla’s life.”
Between 2017 and 2019, Tesla had a tough time producing Model 3 vehicles. At the start of 2019, Tesla had lost millions following production woes and slowing demands for those vehicles. Musk said Tesla messed up nearly every element of producing the Model 3, from batteries to paint shop to final assembly.
Musk said he lived in Tesla’s Fremont and Nevada factories during that time. He sometimes slept on the floor of the factories so the team “going through a hard time could see me on the floor and knew I was not in some ivory tower.”
Anderson pointed out that Musk’s lifestyle at the time was concerning, but Musk said there wasn’t any other way to come out of Tesla’s crisis. “And we barely made it,” Musk said.
“I know more about manufacturing than anyone alive on earth,” he added, in typical Musk fashion.
Peloton is making more big changes to satisfy shareholders — and in the process potentially pissing off loyal customers.
Peloton, once a pandemic lockdown darling whose fortunes swiftly shifted once COVID-19 restrictions lifted, is significantly reducing the prices of its bikes and treadmill, the company announced Thursday, while also increasing the the price of its monthly all-access membership, which is required to unlock the classes on its Bike, Bike+ and Tread. For Peloton owners who bought their equipment at the original higher prices, the announcement will be tough to stomach.
The company’s original Bike is now $1,195, down from $1,495, and the $2,495 Bike+ is now $1,995. The company’s Tread (not to be confused with the outrageously expensive Tread+, which is still under a voluntary recall), is now $2,345, a $150 price drop. The All-Access subscription is now $44 a month, up from $39. The price increase goes into effect on June 1.
In an email to subscribers, Peloton justified the monthly price increase by pointing to the fact that the $39 price had stayed in place for eight years despite the company’s content expansion. “We will continue to constantly add value to your membership, and this change will help us deliver even more exciting content, new features, and new products you’ll love,” the email went on to say.
Peloton reported 2.77 million subscribers in its second-quarter earnings.
The company has watched its value plummet by more than 75% in the last year as pandemic restrictions eased and at-home exercisers returned to gyms. Peloton struggled to keep up with demand in the early days of COVID-19 and acquired gym equipment manufacturer Precor in April 2021 to increase supply. But now the company has a stockpile of extra bikes and treadmills that it needs to offload.
Peloton had previously twice reduced the price of its original Bike, from $2,245 to $1,895 when it launched the pricier Bike+ in late 2020, and then again from $1,895 to $1,495 after reporting dismal earnings in August 2021.
In February, CEO John Foley stepped down and former Spotify executive Barry McCarthy took the reins, promising to make changes that would restore Peloton’s reputation as the connected fitness company to beat. Under McCarthy, Peloton is testing a monthly subscription service that bundles the price of its hardware and classes in one monthly fee. The company also launched a new product, a connected camera for guided strength workouts called Peloton Guide, this month. Guide was originally priced at $495 when announced, but Peloton slashed it to $295 ahead of launch.
Meanwhile, investor Blackwells Capital is still pushing the company to explore a sale, which McCarthy has been averse to. It’s unclear who might still be interested in Peloton, although Amazon and Apple had been floated as potential buyers.
Two top Democratic House lawmakers want ID.me to produce extensive records about its government business and accuracy following outrage about the IRS’ use of the company’s facial-recognition systems.
Rep. Carolyn Maloney, who chairs the Oversight Committee, issued the extensive requests in a letter with Rep. Jim Clyburn, who chairs a subcommittee on COVID-19 and is the No. 3 Democrat in the House. The letter said the two lawmakers’ panels had “serious concerns about the efficacy, privacy, and security of ID.me’s technology … being used to verify the identities of millions of Americans seeking to access essential government services.”
The information requests, which were first reported by the Washington Post, come after backlash to the IRS’ plan to have Americans upload a selfie for verification by ID.me’s software before they could access tax information online.
Concerns from the public and members of Congress, which prompted to IRS to back away from the contract in February, focused on the security and civil liberties issues that might arise from a private company accumulating huge amounts of sensitive data as part of a partnership with the government. There were also worries about the accuracy of the software, particularly with dark-skinned faces, and the truthfulness of CEO Blake Hall’s descriptions of the company’s systems.
In their letter, Maloney and Clyburn said ID.me’s public sector contracts extended to 10 federal agencies and 30 state governments, including a role in disbursing pandemic unemployment benefits. The two lawmakers, who alleged instances of long wait times for results from ID.me’s verification process, said the company’s “performance failures and technological requirements may have undermined the effectiveness, efficiency, and equity of” the programs for the unemployed.
In a statement to Protocol, ID.me said: “We look forward to providing important information to the Committee on how ID.me has expanded access to government for disadvantaged Americans, including individuals who do not have credit history, are underbanked, or are without a home. ID.me remains a highly effective solution available for government agencies that provides the most access for under-served Americans.”
In addition to questions about the company’s contracts, the letter sought information on wait times, accuracy and fraud-detection processes.
This story has been updated with a statement from ID.me.
Meta-owned WhatsApp announced today that it’s offering a new feature for large group chats, called Communities. The groups will have moderating admins who create community rules and can delete offending members. You know, kinda (exactly) like Facebook Groups.
The new Communities will also allow admins to create subgroups dedicated to different topics, similar to the subgroup capabilities Facebook began testing in November. For example, in a community for elementary school parents, admins can create subgroups for clubs or sports teams. In a blog post announcing the new feature, WhatsApp also said communities could be used for small workplaces.
But this is the internet, and Meta is well aware of how toxic online communities can be. The most consequential part of the announcement is the emphasis on administrative control. Admins can delete members, offending media and abusive chats. Users can report abuse or remove themselves from a community or group, but admins have the final say over which users and posts are not permitted.
Meta is also controlling abuse by emphasizing that group members also interact in real life. Users can’t search for Communities to join in WhatsApp, and users also have control over which of their contacts are able to invite them to join communities. “WhatsApp is focusing our product development on meeting the needs of organizations and other groups where many people know one another already,” the blog post reads.
Messages will still be end-to-end encrypted, the company said, and members’ phone numbers will only be visible to admins. Users can also silently leave Communities and subgroups without announcing it to the other members.
9to5Mac first reported that WhatsApp was working on the Communities feature in late 2021. The feature gives WhatsApp more of a competitive edge over apps like Discord, Signal and Telegram, which are gaining users who want to chat in more private groups. The WhatsApp move also comes as Facebook Groups have become known for being breeding grounds of misinformation.
“It’s been clear for a while that the way we communicate online is changing,” Zuckerberg said on Facebook. “For a deeper level of interaction, messaging has become the center of our digital lives. It’s more intimate and private, and with encryption it’s more secure too.”
The U.S. government has warned about cyberthreats to the technology behind so-called “critical infrastructure,” especially in the energy sector, and is urging providers to take steps to harden their networks against attack.
The Department of Energy, Cybersecurity and Infrastructure Security Agency, FBI and other parts of the government said on Wednesday that unnamed but “advanced” actors appear to have the “capability to gain full system access to multiple” types of devices involved in industrial control.
The warning comes amid concerns from cybersecurity experts that hackers aligned with Russia could target, or accidentally disrupt, systems worldwide as part of the country’s war in Ukraine. Last month, President Biden personally pushed U.S. companies, especially those that control pipelines, refineries and other fossil fuel infrastructure, “to lock their digital doors,” citing “evolving intelligence” that Moscow was exploring the possibility of a cyberattack.
The recent advisory from the government is reminiscent of the ransomware attack against the Colonial Pipeline last year, which disrupted the operation of the largest fuel pipeline in the U.S., causing an increase in prices and even shortages in some places along the East Coast. (Some of those shortages were driven by hoarding.) The cyber gang behind the attack may be based in Russia.
The hack reflected a lack of cybersecurity standards and support from the federal government to ensure what is currently critical infrastructure remains secure. It also shows that relying on aging fossil fuel infrastructure, in addition to damaging the climate, comes with serious risks. With gas prices continuing to remain high, a Colonial Pipeline-esque hack could cause more economic damage.
While fossil fuel infrastructure is front and center, utilities and industrial operations could also be at risk from the new hacking threat. In its Wednesday warning, the U.S. listed several devices, saying the cyber actors threatening them had “developed custom-made tools for targeting” the systems. According to the Department of Commerce, industrial control systems — for which the government cited several devices in its advisory — may handle manufacturing and transportation, as well as electrical, mechanical or hydraulic systems.
The U.S. recommended more than a dozen mitigation measures, including multifactor authentication for remote access, a shift from default passwords to “device-unique strong passwords,” maintenance of offline backups and “strong perimeter controls” around affected systems.
Gone are the days of Googling a question and putting the word “Reddit” next to it to turn up the answers you’re looking for. Reddit is making itself much more searchable by for the first time allowing users to comb through comments for keywords.
The platform announced a host of new features on Thursday aimed at making its content “more easily searchable,” including the ability to search for comments in discussions, updating its user interface and improving “search relevance,” Reddit said in a blog post. The new features rolled out Thursday for Reddit on the desktop.
“With this latest update, for the first time in sixteen years everything on Reddit is now searchable — users, posts, communities, and now comments — making Reddit one of the first platforms with this capability,” the company said in its post.
The comment search capability allows users to search for comment threads in specific communities rather than having to search through posts and comments to find the information that’s relevant to them. Reddit surveyed users last year and found that one of the top demands for its search function was the capability to search comments.
Reddit also updated its search function to make its results more relevant. For one, the platform is loosening restrictions on text matching in search, making it so that search results that don’t 100% match the keywords will still turn up. Reddit also will now monitor use patterns to turn up better results as a way of “understanding of user intentions” when they search for something, meaning that if someone is searching a popular topic that many other users are looking at, it will automatically sort results to prioritize the fresh content. It’s also looking at popularity of posts within search results to determine how it prioritizes posts in topics when searched.
The platform also updated its user interface for search to prioritize posts over other content types, as well as simplify the results page to help users “more easily skim” to find what they’re looking for.
Sina Estavi, a crypto entrepreneur who bought an NFT of Jack Dorsey’s first tweet a year ago for $2.9 million, is now trying to sell it. It’s not going well.
Estavi had suggested last week he hoped to get $50 million for it, donating half of that to charity. (“Why not 99% of it?” Dorsey asked.) An auction on OpenSea attracted few bidders, with the most recent offer around $800. The listing expires Thursday.
The NFT market has had a rocky year after zooming to prominence in 2021. Dorsey’s sale was ahead of the curve and for a good cause, benefiting the GiveDirectly charity. But fortunes would soon be made, with $17 billion in nonfungible tokens traded last year. OpenSea, the largest NFT marketplace, garnered a valuation of $13.3 billion, and Yuga Labs, the maker of the Bored Ape Yacht Club NFT collection, also soared in value.
Trading volumes crashed in 2022, with concerns about scams and hype turning off some buyers. Activity has more recently recovered, but it’s not clear that some NFTs will recover the value.
NFTs confound some people, since they amount to a pointer to a digital asset, not the asset itself. They’re best thought of as a receipt or certificate of ownership, a mechanism for restoring scarcity to a world of digital abundance. But the concept of an NFT of a tweet is particularly puzzling to some, since the underlying tweet is controlled by the user who wrote it and Twitter the company, not the owner of an NFT. Dorsey, one observer pointed out, could delete the tweet at any moment, rendering the NFT valueless.
Then again, there is this thing called capitalism, where a thing is generally considered worth what people will pay for it. So if people want to pay $2.9 million for a certificate stating that they own a tweet, they can do that. The trick is persuading other people to buy it from them for more money, and Estavi hasn’t managed that.
Estavi was reportedly arrested in Iran last year, after which his crypto ventures Bridge Oracle and CryptoLand shut down. He told CoinDesk that he was still trying to exchange customers’ BRG tokens for a new token and that the process might take months.
Starting April 28, U.S.-based third-party Amazon sellers will pay a new 5% fuel and inflation surcharge on top of current fulfillment fees. Amazon confirmed the fee hike to Protocol and relayed a copy of the email sent to sellers. The fee affects Amazon sellers who use Fulfillment by Amazon.
Amazon told sellers that it has been hit by inflation, claiming: “Like many, we have experienced significant cost increases and absorbed them, wherever possible.”
The fee, which takes effect in two weeks, will cost sellers 24 cents per unit and will apply to all product types shipped from fulfillment centers. With the hike, Amazon’s rates would increase to around $2.52/unit. Amazon said its fee is roughly half of what Fedex and UPS are charging for fuel fees, which cost sellers 49 cents and 42 cents per unit, respectively.
The vast majority of Amazon merchants are third-party sellers who use Fulfillment by Amazon, which charges sellers a fulfillment fee per unit depending on the size and weight of the item, as well as storage fees depending on the month of the year and the cubic feet that the items take up in its warehouses. According to CNBC, 89% of Amazon’s sellers use Fulfillment by Amazon.
“It is still unclear if these inflationary costs will go up or down, or for how long they will persist, so rather than a permanent fee change, we will be employing a fuel and inflation surcharge for the first time — a mechanism broadly used across supply chain providers,” Amazon said in the email to sellers.
It’s also unclear whether sellers will pass on those costs to Amazon shoppers.
Several delivery and logistics-centered tech companies have made similar moves in recent weeks as gas prices soar: Uber and Lyft added surcharges for car rides, and Instacart tacked on an additional 40 cents per order.
Members of the Wikipedia community have formally requested that the Wikimedia Foundation, which oversees the volunteer-edited compendium of knowledge, stop accepting crypto donations.
A debate over the proposal, written by a Wikipedia user who goes by GorillaWarfare, ran from Jan. 10 to April 12 with about 400 participants.
About 71% of users who participated in the discussion voted to stop crypto donations, with common arguments centering around environmental sustainability, wanting to avoid being seen as endorsing cryptocurrencies and the risks to the foundation’s reputation by accepting crypto.
Those who argued for the acceptance of crypto donations said that other payment methods also have issues around environmental sustainability, and that bitcoin was only energy-intensive through the mining process, not transactions.
“For example, did you know McDonald’s spends more energy making Happy Meal toys than the entire global bitcoin network?” user Advtadvt said, to which another user, TheresNoTime, replied, “The difference here being that we don’t accept McDonald’s Happy Meal toys as a form of donation. Probably.”
The foundation received about $130,000 worth of crypto in the last fiscal year, which made up 0.08% of its annual revenue. The most common type of crypto donated was bitcoin. The foundation converts crypto to fiat daily, opting not to hold on to it.
While 232 participants voted to stop accepting crypto donations and 94 voted to continue accepting crypto, the Wikimedia Foundation is not legally obligated to act upon the community request.
“Our teams will continue to follow this discussion and listen to the feedback. We are already considering what has come up here as we determine our path forward,” Greg Varnum, a foundation spokesperson, said in January. The foundation uses BitPay to process cryptocurrency donations, and the link on its website is still active.
Doing business in New York will be a tad more expensive for crypto companies. The state will start making crypto companies licensed to operate in New York pay for the cost of making sure they are complying with regulations.
The provision was included in New York’s fiscal 2023 budget, which includes “a new authority to collect supervisory costs from licensed virtual currency businesses, like the department already does for banking and insurance companies,” Adrienne Harris, the superintendent of the state Department of Financial Services, said in a statement.
She noted that New York, the first state to issue operating licenses to crypto companies through its BitLicense, continues to “attract more licensees and the most crypto startup funding of any state in the nation.”
New York’s move has its critics. Cathy Yoon, chief legal officer of MPCH, said New York’s virtual currency licensing requirements are “high barriers to entry” for many crypto companies. The licensing requirements apply to most virtual currency businesses seeking to do business with New Yorkers.
“They are difficult and expensive to obtain and require a tremendous outlay of capital, which is a ridiculous burden on startups,” Yoon added.
The BitLicense currently requires a $5,000 application fees, with additional capital requirements. The annual assessment fees the DFS will charge virtual currency firms aren’t set yet, but similar fees for other financial institutions can run in the tens of thousands of dollars a year, designed to recoup the department’s operating costs.
Crypto firms that only create software aren’t subject to the existing or future licensing fees, but any businesses that custody customers’ crypto for them must obtain a license, according to a DFS FAQ. Consumers who buy, sell or mine crypto don’t need a license, though larger mining operations might need one.
New York has become a critical lobbying battleground for the crypto industry. About a dozen crypto companies and organizations, including Digital Currency Group and Blockchain.com, have spent more than $100,000 a month on lobbying, according to Bloomberg.
The San Francisco Bay Area may be the capital of the tech industry, but it’s officially losing sway as a talent hub.
A new LinkedIn Economic Graph analysis ranked the top 10 cities with the highest share of new hires last year among LinkedIn’s Top Companies, a list of 50 employers ranked by opportunity for career progression.
Although this year’s Top Companies list featured Amazon, Alphabet, IBM and Apple in the top 10 — all companies with a sizable Bay Area presence — the share of Top Companies hiring in San Francisco declined last year.
California wasn’t knocked off the list entirely: Sacramento and San Diego came in at No. 7 and No. 8, respectively. But employers on the Top Companies list did a larger share of hiring in several cities in the South and the Midwest, with Houston, Detroit, Miami, Orlando, Chicago and Austin making the top six. Austin has been a particular hiring hub for both Apple and Dell Technologies (headquartered outside of Austin), according to LinkedIn.
Silicon Valley tech campuses are coming back to life at companies like Google and Apple, but it’s clear that the tech workforce is far more dispersed than it was two years ago. Companies like Stripe, Cloudflare and Coinbase have dramatically reduced their Bay Area hiring, and Google is building new offices in Atlanta, Austin and Portland, Oregon. Meta has expanded its real estate footprint in Austin, Boston, Chicago and Bellevue, Washington, while also adding space in Silicon Valley.
Atlassian’s Jira outage, first noticed last week, is somehow still affecting hundreds of the company’s customers and potentially thousands of developers around the world. Late Tuesday the company finally released more details about the cause and scope of the outage, proving once again that delaying the release of bad news to enterprise customers is worse than the bad news itself.
“Let me start by saying that this incident and our response time are not up to our standard, and I apologize on behalf of Atlassian,” said CTO Sri Viswanath in a blog post Tuesday.
He explained that last week Atlassian engineers attempted to deactivate an old app that worked with Jira Service Management and Jira Software that is now fully integrated into its current services, but internal communication problems and a bad deactivation script actually caused “sites for approximately 400 customers [to be] improperly deleted.” The incident also took out Confluence and Opsgenie, two Atlassian products that customers use to manage their own internal incident response systems.
Compounding the mistake was a lack of automated backup and recovery tools for an incident of this nature, which is forcing Atlassian engineers to manually restore affected customers’ data in order to make sure nothing happens to the data of customers who were not affected by the initial incident. Expect that to change later this year.
Gergely Orosz, a former Uber and Microsoft engineer, might have summed it up best:
“Outages happened, happen, and will happen. The root cause is less important in this case. What is important is how companies respond when things go wrong, and how quickly they do this. And speed is where the company failed first and foremost.”