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Facebook investor Roger McNamee was one of the tech industry’s biggest optimists — cheerleading the boom of Facebook as an early mentor to Mark Zuckerberg. But in the last two years, he’s transformed into a champion for the Washington lawmakers and regulators trying to rein in Big Tech.

The author of “Zucked: Waking Up to the Facebook Catastrophe” spent decades in tech investing, with a front-row seat to the rise of top companies. But in 2016, he also had a close-up view of how the social network giant failed to swiftly respond to concerns it was being manipulated by Russia during the presidential election. 

Since then, McNamee has emerged as an unlikely activist — regularly advising Washington policymakers on the inner workings of Silicon Valley. 

“When I first began talking to people at the [Federal Trade Commission] and members of Congress about these issues in the summer of 2017, we were still in the last days of a 50-year period where there was no reason to regulate tech,” McNamee told me. “What we have now is a dark side has emerged, essentially full-grown out of nowhere, and Washington has to get up to speed.”

McNamee and I spoke yesterday about his book and the action he wants to see from policymakers. Here's our conversation, edited for length and clarity.

Technology 202: What misconceptions did you previously have about how Washington works and approaches regulating business?

McNamee:
There is a misperception in Silicon Valley that government can only harm the economy, it can’t help. That is a ridiculous belief. In a capitalist system, the government plays an essential role as the setter and enforcer role. We have forgotten that.

If we look at the way we live today, government doesn’t set the rules and doesn’t enforce them. The tech industry sets the rules and enforces them. Our lives are more governed by the algorithms and the code of companies like Google and Facebook than they are by the law. And yet tech platforms like Google and Facebook were never elected, they are not accountable to anyone, and they show no understanding of the responsibilities that come with the power they have. If they were benevolent dictators, they would be more sympathetic. But as dictators who seem to prioritize only their own short-term best interests, they represent a threat to a lot of the values that are most basic to Americans.

Tech 202: Is Washington equipped to take on Silicon Valley and rein in these tech companies?

McNamee: It is not only capable of it, but it will do a great job. There are two reasons I think that’s true. The first is that Washington regulates industries far more complex than technology very effectively. I always point to banking, health care and defense.

When you look at tech, we didn’t even know there was something to regulate until the fall of 2017. The products that we’re talking about are products that every member of Congress — with only a handful exceptions — use to some degree or another. All their constituents use them.

Time favors this really strongly. Congress will get younger and more tech literate, and it’s just not that complicated.

Tech 202: What do you think of the recent report that Facebook and the FTC are negotiating over a multibillion fine in the wake of the Cambridge Analytica scandal?

McNamee: If the only thing that happens is a fine, then Facebook will dismiss it as a cost of business. There has to be a second part of any solution, which is we have to change the incentives.

Tech 202: These companies are global, and we’re seeing regulators in Europe scrutinizing the tech giants more and more. Are you also communicating with European regulators and policymakers as they’re looking into Facebook?

McNamee: I have communicated with people in Europe and would be available to help them in any way possible. They seem to have it under control. I look at whether it’s the Global Data Protection Regulation, whether it is the German law that would radically alter the profiling done by Facebook and by others who have similar techniques, whether it is the United Kingdom’s parliamentary report that branded Facebook and its executives as “digital gangsters,” those are all very positive steps.

I don’t think any of these things is the perfect answer. I would prefer to move away from the GDPR or California model of penalties after the fact and go to preventing the kinds of behaviors that cause the problems in the first place, and that would be data related to people’s most private activities, like financial transactions and location. But every one of those laws increases the pressure on the technology platforms and data economy participants to reform their behavior and accept they owe a responsibility to society to do no harm.

Tech 202: What do you think needs to be included in a national privacy law as Congress considers legislation?

McNamee: If you want to protect people’s privacy, the most important thing is to eliminate the exploitation of their most private data. It’s hard to get the genie back in the bottle on the data itself. It’s very straightforward to eliminate use cases. Eliminating the use of personal financial data without explicit permission on a per transaction basis is the most obvious place to start.

BITS, NIBBLES AND BYTES

BITS: Lawmakers on Capitol Hill and privacy advocates say the Federal Trade Commission's investigation into Facebook is a test of the agency's ability to rein in Silicon Valley giants, The Washington Post's Tony Romm reported. “The FTC is speaking to the whole industry in what it does here. Its audience is well beyond Facebook and that company's customers. It’s to the whole world and the entire tech industry, that finally it means business in protecting privacy,” Sen. Richard Blumenthal (D-Conn.) said. The FTC is negotiating with the social network on a fine that could reach billions of dollars and would settle a probe by the agency into Facebook's privacy practices.

Some critics have claimed that the agency has not been tough enough with tech firms that don't abide by their legal agreements about privacy issues with the FTC. “The Facebook inquiry is a basic test of the credibility of the FTC to be an effective privacy enforcement agency,” William Kovacic, a former Republican FTC commissioner who now teaches at George Washington University, told Tony. “Anything other than a significant penalty will be seen as a form of policy failure and will really impede the agency’s ability to function in the future.”

NIBBLES: Disinformation efforts are targeting several candidates or potential contenders for the Democratic nomination for the 2020 presidential election, Politico's Natasha Korecki reported. The disinformation campaign, which uses memes and hashtags and misrepresents the candidates' positions, appears aimed at undercutting the contenders as they are still in the early days of their presidential bids. Those efforts have mainly targeted Sen. Kamala D. Harris (D-Calif.), Sen. Elizabeth Warren (D-Mass.) and Sen. Bernie Sanders (I-Vt.), who have officially announced their candidacies, as well as former congressman Beto O'Rourke (D-Tex.), who is weighing a presidential run.

Some signs suggest that part of the disinformation efforts are coordinated and bear similarities with the Russian troll farm Internet Research Agency's tactics, but this activity has not been definitely attributed to specific actors. Moreover, not all of those disinformation efforts are the result of a coordinated effort. “Recent posts that have received widespread dissemination include racially inflammatory memes and messaging involving Harris, O’Rourke and Warren,” Politico reported. “In Warren’s case, a false narrative surfaced alleging that a blackface doll appeared on a kitchen cabinet in the background of the senator’s New Year’s Eve Instagram livestream.”

BYTES: Several companies have paused advertising on YouTube after a video blogger reported material sexually exploiting children on the site, the Wall Street Journal's Patience Haggin and Suzanne Vranica reported. Companies that have removed ads from the video platform include Nestlé, McDonald’s, Epic Games, which makes the video game Fortnite, Canada Goose and other firms. For a brand to be associated with that kind of content can damage their reputation, according to ad buyers, the Journal noted. A spokeswoman for YouTube said the company took quick action against the material after it found out about the issue.

“The advertisers’ withdrawals come after video blogger Matt Watson posted a video on YouTube on Sunday that showed inappropriate user comments about videos featuring underage girls, including some that identified precise segments where children appear in compromising positions,” according to the Journal. “The video, which had received over 1.7 million views as of Wednesday afternoon, said YouTube’s recommendation algorithm leads users to similar content.”

PRIVATE CLOUD

— Pinterest stopped showing results for searches on terms related to vaccination in an effort to crack down on unsubstantiated anti-vaccination content on its platformthe Wall Street Journal's Robert McMillan and Daniela Hernandez reported. The company made the change late last year and has also started to police content about unreliable cancer therapies. Pinterest has said its decision to block searches on vaccination is temporary. “Most shared images on Pinterest relating to vaccination cautioned against it, contradicting established medical guidelines and research showing that vaccines are safe, Pinterest said,” according to the Journal. “The image-searching platform tried to remove the antivaccination content, a Pinterest spokeswoman said, but has been unable to remove it completely.”

— Facebook chief executive Mark Zuckerberg will meet today with Jeremy Wright, the United Kingdom's digital chief who wants to regulate Silicon Valley technology companies, according to a report this morning from CNN's Hadas Gold. Zuckerberg is meeting with Wright after declining to appear in front of Parliament after several requests. Wright is on a tour of Silicon Valley this week, as the Tech 202 previously reported. "For Wright, the visit to California with UK Digital Minister Margot James is a way to get input from the companies that will be directly impacted by any future UK regulation — something that is no longer a question of if it happens, but when and how," Wright reported. 

— More technology news from the private sector:

The companies hope to lure cardholders by offering them extra features on Apple’s Wallet app, which will let them set spending goals, track their rewards and manage their balances.
Wall Street Journal
Zuckerberg seemed to forget his company makes a connected camera designed for the living room.
CNBC
Lyft Inc plans to launch the roadshow for its initial public offering (IPO) during the week of March 18, making it the first U.S. ride-hailing company to debut in the stock market, people familiar with the matter said on Wednesday.
Reuters
Apple dug a tunnel beneath the App Store, and the rats are getting through.
The Verge
PUBLIC CLOUD

— Democratic presidential hopeful Sen. Cory Booker (D-N.J.) wants Amazon to open headquarters in Newark after the tech company abandoned plans to do so in New York amid local opposition, Cheddar's Jim Roberts reported. “We want HQ2,” Booker told Cheddar in an interview. “We’ve sent that message out already. And everybody from the Governor to the Mayor to local leaders have been reaching out to Amazon.” Booker, a former mayor of Newark, also suggested that the city could be able to address concerns about gentrification. “We are growing and booming as a city,” he said. “But we are making sure that we have a pathway for all of Newarkers to prevent the ills that are often evident in gentrification and make sure that things work on our terms.” (Amazon founder and chief executive Jeffrey P. Bezos owns The Washington Post.)

— A conservative group called Job Creators Network placed a billboard in Times Square scolding Rep. Alexandria Ocasio-Cortez (D-N.Y.) for her opposition to Amazon's now-scrapped plan to open headquarters in New York, the Hill's Tal Axelrod reported. “The pullout of Amazon—because of anti-business politicians, notably Ocasio-Cortez—is a major blow to the New York economy,” the group said in a statement, according to the Hill. “The retreat will not only cost the area $12 billion in economic activity, but 25,000 new jobs that would have paid an average salary of $150,000.”

— European Union countries approved a revamp of copyright rules that would affect Facebook and Google, Reuters's Foo Yun Chee reported. “The revamp would require Google and other online platforms to sign licensing agreements with rights holders such as musicians, performers, authors, news publishers and journalists to use their work online,” according to Reuters. “Google’s YouTube and Facebook’s Instagram and other sharing platforms will have to install upload filters to prevent users from uploading copyrighted materials.” The changes still have to go through a number of votes before becoming law.

— More technology news from the public sector:

The last few years have seen drones become an increasingly common sight in our skies.
CNBC
Putin wants soldiers to stop revealing secrets of his shadow wars on their social media pages.
Foreign Policy
FAST FWD

— Dane Butswinkas, Tesla's general counsel, is leaving the company two months after he was hired and is returning to the Williams & Connolly law firm where he previously worked, the Wall Street Journal's Tim Higgins and Rebecca Ballhaus reported. “Mr. Butswinkas’s exit marks another high-profile executive departure for the company during the past two years, as Tesla has labored to turn the Model 3 into its first mass-market electric car,” the Journal reported.

#TRENDING

— Tech news generating buzz around the Web:

Consumer Tech
Samsung’s new Galaxy S10 has a hole for the camera. Its Galaxy Fold closes up like a book. Is that enough to reignite sales? Our tech columnist takes a first look.
Geoffrey Fowler
Googling yourself has become a rite of passage.
The Atlantic
‘Did you get the emoji of the car that hit you?’
The Verge
404 ERROR

— News about tech incidents and blunders:

The booming industry of spyware to spy on romantic partners doesn’t exist in a vacuum: Companies need financial and tech giants to process their payments and advertise their wares.
Motherboard
Consumer Tech
A massive fraud operation affects potentially millions of Android users, according to Oracle researchers.
Brian Fung
A security bug is allowing users to bypass new privacy controls introduced by Facebook-owned messaging service WhatsApp on iPhones this month, the service said on Wednesday after users posted about the problem on social media.
Reuters
BURN RATE
There’s plenty of speculation right now around apparently disgruntled investors in SoftBank’s Vision Fund, but the drum continues to beat and the checks continue to be written.
TechCrunch
CHECK-INS

Today:

Coming soon:

  • NetChoice, a trade association of e-commerce businesses, hosts a panel on free speech online on Capitol Hill in Washington on Feb. 26.
  • Senate Commerce Committee hearing on “policy principles for a federal data privacy framework” on Feb. 27.
  • The Cato Institute holds a conference titled “Who’s afraid of Big Tech?” on March 1.
  • The Center for Strategic and International Studies holds an event on “digital governance and the pursuit of technological leadership” on March 4.
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