Creators are already selling videos as NFTs. YouTube wants in on the action.
Every big platform is bracing itself for Web3. NFTs will arrive on Instagram soon. Spotify is hiring for Web3 experts. Twitter already lets users show off their virtual art as profile pictures. YouTube isn’t far behind on its own NFT plans, which are vague at the moment, but CEO Susan Wojcicki said they’ll help relatively small creators jumpstart their platforms.
“We are seeing that creators are selling their videos and memes as NFTs,” Wojcicki told livestreamer Ludwig Ahgren on a recent podcast episode of The Yard. “If creators are selling their videos as NFTs, then that’s an important form of monetization. I don’t think it would be good if that all happened on another platform.”
Wojcicki said allowing creators to sell NFTs on the platform can help smaller influencers who are just beginning to build up their accounts, pointing to musicians who have begun using NFTs as a way to fundraise.
“At the end of the day what YouTube does is, we’re a platform that distributes content and monetization,” she said. “If NFTs are an important part of that equation, then we think we should be there.”
Wojcicki, who owns “a few” NFTs herself, didn’t provide too many details on YouTube’s Web3 plans. But she said YouTube is in the “best position” to verify virtual assets that belong to creators through its Content ID tool, which lets creators track and manage their content. “It would be a problem for you if some other third-party site were selling your videos without knowing that it belonged to you,” Wojcicki added.
Ahgren pushed back on NFTs, saying they’re a “blight” in the gaming world and will only help already big influencers in the long run. Gaming companies that have introduced these tools have gotten their fair share of backlash, both for environmental reasons and because some see crypto in gaming as unnecessary. Wojcicki acknowledged that YouTube’s decision to work on NFTs was “polarizing” but that the platform’s goal behind NFTs is to protect creators. “We’re going to be really careful. I think you are going to be OK with what we do with NFTs,” she said.
YouTube’s $100 million Shorts Fund has also been polarizing for creators. Wojcicki told Ahgren that the money from the program is only a temporary form of revenue. “I don’t think [Shorts funds are] permanent,” Wojcicki said. She added that YouTube is working to make the Shorts program “more scalable” in the future and that the platform is working on a new program for creators to make money. “But I can’t say anything else,” she said.
Ahgren pointed to a video posted by YouTuber Hank Green, who said creator funds aren’t sustainable because the pool of dedicated cash is static even though the number of creators eligible for the fund grows. But Wojcicki said the Shorts Fund was only an initial form of monetization for short-form creators, and the platform is looking to run more ads on short-form content so people can earn money like they would on longer YouTube videos. “YouTube has a great monetization program for long-form creators, and we want to extend that for Shorts,” Wojcicki said.
YouTube’s decision to stop displaying the dislike count may not have been a popular one, but Wojcicki said even though the move got its fair share of backlash, it was made in the best interest of creators.
“I understand there were many people — and yes, we heard loud and clear — why people were unhappy with that decision,” she told Ahgren. “But then we also saw the impact that it was having on a lot of new creators, and that’s bad. We need to have, and continue to support, smaller creators and how they’re growing. That’s really important for the long-term health of our ecosystem.”
Correction: An earlier version of this story misspelled Ludwig Ahgren’s name. This story was updated on April 11, 2022.
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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.
The Supreme Court has blocked Texas’s social media “censorship” law, HB 20, after two tech industry groups, NetChoice and CCIA, filed an emergency application asking the court to take the case up on its shadow docket last week.
The emergency filing came after a 5th Circuit court lifted an injunction on the law, allowing it to go into effect with potentially catastrophic consequences for the tech industry. More than 30 groups filed amicus briefs in support of NetChoice and CCIA since last week, and the court has sided with them.
The court decided to overturn the 5th Circuit’s decision by a 5-4 vote, with Justices Samuel Alito, Clarence Thomas and Neil Gorsuch writing a dissent.
“Despite Texas’s best efforts to run roughshod over the First Amendment, it came up short in the Supreme Court,” said Chris Marchese, counsel at NetChoice.
“We are encouraged that this attack on First Amendment rights has been halted until a court can fully evaluate the repercussions of Texas’s ill-conceived statute,” CCIA president Matt Schruers said in a statement.
HB 20 bans social media platforms from moderating content based on users’ “viewpoint.” The statute is aimed at punishing online services for what Republicans insist is censorship of conservative content — an approach that has raised significant constitutional concerns and could undermine platforms’ years of efforts to tackle hate speech and harmful misinformation.
Texas has argued that it is seeking to ensure its residents can speak freely on popular forums by forcing those platforms to “carry” all views or face a flood of lawsuits from users who can claim they have been “censored.” But a broad coalition of legal scholars have concluded that it is the state that’s trying to impose punishments on private actors for their handling of content, in clear violation of U.S. free speech protections.
NetChoice and CCIA, which both represent social media companies, sued to stop the law, and a federal district court had paused the rollout over the likelihood that the statute violates the First Amendment. An appeals court, however, allowed the measure to go into effect earlier this month while the lower court proceeding is ongoing. The appeals court judges cleared the way for the law after a hearing at which they appeared to struggle with basic tech concepts, including whether or not Twitter is a website.
“The Supreme Court noting the constitutional risks of this law is important not just for online companies and free speech, but for a key principle for democratic countries,” Schruers said. “No online platform, website, or newspaper should be directed by government officials to carry certain speech. This has been a key tenet of our democracy for more than 200 years, and the Supreme Court has upheld that.”
The Court’s decision to block the law came from an unusual coalition: Chief Justice John Roberts, as well as Justices Brett Kavanaugh, Amy Coney Barrett, Sonia Sotomayor and Stephen Breyer. Justice Elena Kagan, a vocal critic of the shadow docket, denied the application to vacate the Fifth Circuit’s decision, but notably did not join with the conservative justices in their dissent, authored by Justice Alito.
Although NetChoice and its allies cited cases from as recently as 2019, Alito wrote that he, Thomas and Gorsuch weren’t sure how “existing precedents, which predate the age of the internet, should apply to large social media companies.” Thomas, in particular, has previously voiced support for treating social media platforms as common carriers.
Alito argued it was plausible the Texas law’s disclosure requirements are constitutional and that the law was too novel to evaluate at this stage. In his dissent, Alito also suggested he agreed with Texas that, by invoking Section 230 and seeking not to be held as publishers of user posts, the platforms forgo the kinds of robust free-speech protections that speakers normally get.
The dissent also signaled that the high court may not be done with the issue. Shortly after NetChoice sought its emergency ruling from the Supreme Court, another appeals court upheld most of an injunction on a similar Florida law. A potential circuit split could result in the Supreme Court having to take up the issue once again. “This application concerns issues of great importance that will plainly merit this Court’s review,” Alito wrote.
Thousands of Salesforce employees are pressing the company to cut ties with the National Rifle Association, according to a letter seen by Protocol and first reported by SF Gate. The letter comes after the shooting at an elementary school in Uvalde, Texas, that left 19 children and two adults dead.
A Salesforce employee, who spoke under the condition of anonymity, said the company has not responded to the letter. The employee said Salesforce is expected to hold an all-hands with company executives next week, but it’s unclear if the letter will be addressed during that meeting. A company spokesperson did not return Protocol’s request for comment.
The letter, addressed to co-CEOs Marc Benioff and Bret Taylor and other company leaders, urges the company to end its “commercial relationship” with the NRA. “The NRA uses Salesforce products to drive their marketing and fundraising efforts,” the letter states.
It also cites a recent CNBC interview where Benioff said “we need to take direct action” on social issues. Benioff has spoken out on several social issues, including expressing support for LGBTQ+ people and abortion rights. He’s also called for stricter gun control laws, and Salesforce announced in 2019 that the company would no longer work with vendors that sold semi-automatic and 3D-printed guns online.
Tech companies have been called on to end their relationship with the association before. Apple, AT&T, Amazon and Roku were asked to take down NRATV from their products after the mass shooting in Marjory Stoneman Douglas High School in Parkland, Florida. Roku and Apple publicly stated that they would not remove the channel at the time. Those calls were renewed in a recently launched petition.
Here is the full text of the letter:
Marc and Bret,
“It takes a monster to kill children. But to watch monsters kill children again and again and do nothing isn’t just insanity-it’s
inhumanity.” — National Youth Poet Laureate Amanda Gorman
Marc, as you said today on CNBC regarding gun violence, “We obviously need to do something … We need to take direct
It’s not in our power to get background checks or other gun control measures passed by Congress — but we can effect
change by ending our commercial relationship with our customer, the National Rifle Association.
The NRA uses Salesforce products to drive their marketing and fundraising efforts. It is unconscionable to consider their
use of Marketing Cloud to capitalize on mass shootings.
[Nineteen] children and two teachers were killed yesterday. Based on past history, it is likely the NRA is already upping, or preparing to up, their Marketing Cloud usage in response to this tragedy, not to prevent future tragedies from happening, but to sow fear,
sell guns, and abet future atrocities.
Netflix has been testing ways to crack down on password sharing in markets outside of the U.S., and early reports indicate that the A/B tests have resulted in a haphazard experience for users.
Netflix said in its recent earnings call that it would start charging an additional fee for users who share passwords with people who live outside of their household. Those tests have begun in South America. According to global tech publication Rest of World, those changes have not been communicated to users in Peru in a uniform way, causing confusion about the new policy and how it’s being applied.
While many continue to share their Netflix accounts at no extra cost, the crackdown on only some subscribers has caused a few cancellations, according to Rest of the World. Netflix confirmed to the publication that different subscribers may be paying differing charges.
Netflix’s varied rollout is a sign that the company is testing different versions of its password sharing policy as a way to nail down which is the most effective, which is expected given the way the company’s well-known A/B testing works. Even something as simple as an icon to express how much a user likes a show took nearly a year of testing to figure what will resonate with users the most.
Netflix first announced it was testing this feature in March in Chile, Costa Rica and Peru, through which users would be able to “add an extra member” for roughly $2 or $3 per month, depending on the country. Netflix said that extra members would get a separate login and password. The new policy is the first time that Netflix is defining “household” as people who live exclusively in the same vicinity as the subscriber, according to Rest of World.
Netflix is testing its password-sharing and pricing changes as it struggles to grow its user base. The company reported that it lost 200,000 subscribers in the most recent quarter, causing its shares to plunge and analysts to question whether Netflix has peaked.
Microsoft has released mitigations for a zero-day vulnerability in Office that could enable execution of code by a remote user.
The flaw, which security researcher Kevin Beaumont dubbed “Follina,” affects the Microsoft Support Diagnostic Tool (MSDT) in Windows and has reportedly been exploited.
The vulnerability affects the majority of versions of Windows in use today — including Windows 7 and above, as well as Windows Server 2008 and above.
In a blog post, Microsoft provided a workaround for the remote code execution flaw, which “exists when MSDT is called using the URL protocol from a calling application such as Word.”
“An attacker who successfully exploits this vulnerability can run arbitrary code with the privileges of the calling application,” Microsoft said in its post. “The attacker can then install programs, view, change, or delete data, or create new accounts in the context allowed by the user’s rights.”
The vulnerability is being tracked as CVE-2022-30190. Microsoft has ascribed a “high” severity level to the vulnerability with a score of 7.8 out of 10.
BNPL might seem like a 2021 trend, but payment companies still think the short-term credit plans are all the rage.
Affirm announced a partnership with Stripe Tuesday “to help businesses grow their revenue,” according to a press release. Klarna announced a similar partnership with the payments company in October, while Afterpay became available to some Square sellers in January after Block finalized the acquisition of the Australian “buy now, pay later” company last fall.
These partnerships promise opening up millions more transactions to “buy now, pay later” services, which profit from both the interchange charged to merchants and interest paid on purchases which aren’t subsidized with a zero-interest offer. In both cases, merchants like the way “buy now, pay later” plans increase consumers’ propensity to buy.
For Stripe, which wants to offer a broad variety of payment options, the partnership makes additional geographic sense. Affirm is stronger with U.S. sellers, while Klarna is stronger with those abroad.
The deals come at a moment when a growing group of economists and investors worry that “buy now, pay later” is either a risky trend or a passing fad. Affirm’s stock has fallen from roughly $177 last year, per TechCrunch, to just over $30 Tuesday morning. And Klarna set plans to lay off 10% of staff last week after it was reported the company was looking for more funding, possibly at a lower valuation.
But the companies are showing resilience in experimenting with multiple strategies. Several are looking into offering debit cards as part of a super app approach, aimed toward being an all-in-one shopping and discovery solution for customers and retailers. Square, which owns Afterpay, offers a card through Cash App, while Affirm has a debit card enabled with pay-later options. Klarna, which already offers the Klarna Card in parts of Europe, opened a waitlist for U.S. customers in February.
Ecommerce partnerships remain important to the “buy now, pay later” companies. Shopify and Amazon have partnerships with Affirm, while Klarna has partnerships with companies like Wish and AliExpress.
A listing on Binance brought a surge of trades Tuesday for luna 2.0, an attempt by crypto entrepreneur Do Kwon to revive the collapsed Terra blockchain ecosystem.
The coin was trading at about $9.50 early Tuesday morning, a roughly 50% increase in the past 24 hours, according to CoinMarketCap. Binance listed the new luna coin at 2 a.m. Eastern Time Tuesday, placing it in its Innovation Zone, a trading designation reserved for coins that “may have increased volatility and pose a higher risk than other tokens.”
Unsurprisingly, the new luna has indeed been volatile. It launched early Saturday with a list price of $17.80 and climbed for a short time but then quickly fell to a low of just under $4. Even with the gains Monday and early Tuesday, the new luna is off about 50% from its listing price.
The coin was airdropped to holders of the previous version of luna and its affiliated TerraUSD, or UST, algorithmic stablecoin. Both currencies lost nearly all value earlier this month in a bank-run-style sell-off that helped push down values in the broader crypto market.
Under a plan from Kwon, approved last week, the original Terra blockchain was split off and will now be known as Terra Classic, while the original luna coin that crashed near zero this month has been renamed luna classic with the ticker LUNC. The new luna trades as LUNA.
The UST stablecoin will be left behind and not receive a new version on the recreated blockchain.
The plan was an attempt by Kwon to save some of the apps built on the Terra blockchain after that collapse, and recoup some value for investors in the original ecosystem. Some holders of the former luna and UST coins pledged to sell as soon they received the airdrop.
Not all is going smoothly with the airdrop. Terraform Labs, the developer behind the plan, tweeted Monday that it is “aware that some have received less $LUNA from the airdrop than expected [and] are actively working on a solution.”
In addition to Binance, the relaunch is being supported on a list of large exchanges such as FTX and Bitfinex. Two major staking firms, Figment and Chorus One, said they are sitting out the relaunch, citing concerns with the voting process and how quickly the new chain was launched.
After the spectacular implosion that followed the TerraUSD and luna only weeks ago, there is plenty of skepticism for version 2.0 of the ecosystem. Billy Markus, dogecoin’s co-creator, tweeted ahead of the relaunch that “luna 2.0 will show the world just how truly dumb crypto gamblers really are.”
Regulators will surely be watching as well — and the industry is bracing for new rules to come on stablecoins.
Under Bob Iger’s leadership, Disney acquired Pixar, Marvel and other tech-forward companies. Those moves were very intentional: “I envisioned a world where technology would be so disruptive that it would allow for an explosion really of production,” Iger once said on a podcast with LinkedIn’s Reid Hoffman.
Months after leaving Disney’s board, that vision has guided his lineup of investments. Iger has bet big on the metaverse, fast delivery and online presentation tools. The former Disney CEO’s investments reflect a world where we have nearly anything at our fingertips in the real and virtual worlds — as well as ways to stay entertained, of course. Here’s a look at where Iger has put his money so far and some clues at why.
After leaving Disney, Iger’s first big move came in March when he joined Genies’ board and invested an undisclosed amount of money. The company has a mobile app that lets users create their own rendered avatars for their social media profiles. Eventually, the avatars are supposed to be able to travel through the metaverse. Genies claims it has “tools that allow you to manifest your ideas and experiences as an avatar ecosystem,” which is basically Web3 speak for “you can customize your avatar with digital clothes.” The company is led by 29-year-old Akash Nigam and is valued at $1 billion after raising $150 million in a series C funding round last month.
“I’ve always been drawn to the intersection between technology and art, and Genies provides unique and compelling opportunities to harness the power of that combination to enable new forms of creativity, expression and communication,” Iger said in a statement.
Iger joined eBay, sports agent Rich Paul and the Chernin Group to buy a 25% stake in Funko, which makes action figures, bobbleheads and other pop culture collectibles. As part of the $263 million investment, Chernin Group CEO Peter Chernin and Iger became advisers on the company’s board. Several characters from Pixar and Marvel are part of Funko’s product line, which makes the former Disney CEO’s investment in the company a logical post-Disney step.
Just a couple of weeks after announcing his investment in Funko, Iger became a part-owner of Gopuff, an instant grocery delivery service that competes with companies like Instacart, for an undisclosed amount. He also became an adviser to the company’s executive team. The company is valued at $15 billion and counts Horizon, Fidelity and SoftBank as investors as well.
“I believe consumer commerce will be very different in the near future, and Gopuff is building the platform to power it,” Iger said in a statement announcing the acquisition.
Iger’s investment comes at a time when instant delivery startups are at a post-pandemic crossroads, but Iger seems to be optimistic about their future. Gopuff, Gorillas, Getir and others have needed to cut staff in recent weeks while tech startups as a whole struggle in the face of a major market correction.
Iger’s announced an investment this week in Canva, a popular design company that helps people create videos, presentations and more. The size of the investment wasn’t disclosed, and Iger also became an adviser. The company was last valued at $40 billion. Rumors have flown around that Canva could be looking at an IPO in the near future, and Iger’s involvement in the company could help push that forward.
It may have started with social media, but the concept behind awarding a “verified” check mark to prove a person’s identity online may soon go broader. Much broader, if Microsoft pulls off its goal for its new Verified ID service — and the effort doesn’t turn into a privacy disaster.
In short, Microsoft wants to enable the creation of digitally verifiable credentials for personal attributes, said Ankur Patel, principal program manager for digital identity at Microsoft.
As part of Verified ID, individuals would be able to get digital credentials that prove where they work, what school they graduated from, which bank account they have — and, perhaps more controversially, whether they’re in good health according to their doctor.
The idea is for individuals to carry these credentials in their digital wallet, which can be easily provided to whoever needs it, such as when applying for a job or a loan, or onboarding at a new employer, Patel said. “My education institution gets to give you an attestation that says I have education, and my doctor gets to tell you if I’m healthy, and my bank gets to tell you if I have money,” he said. “All of those things put together make up my digital identity.”
From a business perspective, Verified ID, which leverages blockchain-based decentralized identity standards, aims to improve efficiency around verifying credentials while reducing the likelihood of fraud.
On Tuesday, Microsoft announced plans to release the service — officially, Microsoft Entra Verified ID — into general availability in early August. Entra is the new name for Microsoft’s portfolio of identity products, including its Azure Active Directory authentication service.
Patel expects it will take one to three years for Verified ID to reach the mainstream. He concedes that that sounds pretty quick, considering the fact that “we’re talking paradigm shifts here” in terms of digitizing a lot more of the analog world. “The reason this will go faster than traditional enterprise technologies is because it’s built for network effect,” Patel said.
In the first year, it’s likely that Verified ID will be used by organizations in tandem with existing verification methods, both digital and analog, with a portion of their users, according to Patel. Wider adoption will depend, in part, on making sure that the service itself hasn’t “done harm,” he acknowledged.
One potential risk is that individuals might inadvertently share sensitive information with the wrong parties using the system, Patel said. “In the physical world, when you’re presenting these kinds of things, you’re careful — you don’t just give your birth certificate to anybody,” he said. Microsoft is aiming to limit the issues in its own digital wallets with features meant to protect against this type of accidental exposure, Patel said.
Apple store workers in Atlanta were reportedly intimidated out of hosting a union election, according to Bloomberg.
The Communications Workers of America, the group that was looking to unionize Apple store employees in Atlanta, said that it withdrew its election application to the National Labor Relations Board “because Apple’s repeated violations of the National Labor Relations Act have made a free and fair election impossible.” The group also told Bloomberg that numerous cases of Covid-19 in the city’s Cumberland Mall Apple store have caused issues with the safety of in-person voting.
“Apple has conducted a systematic, sophisticated campaign to intimidate them and interfere with their right to form a union,” the CWA alleged in an email to Bloomberg. The group said they had support from the “overwhelming majority” of the Atlanta store’s workers when originally petitioning.
Because the group withdrew its request to the NLRB to hold an election, it has to wait six months before filing again to represent the same group of workers.
Apple told Bloomberg that the company is “fortunate to have incredible retail team members and we deeply value everything they bring to Apple.”
The news follows Apple increasing its starting hourly wage from $20 to $22 an hour for retail workers while reportedly telling workers that if they unionize, the company may have more difficulty improving worker conditions.
In a leaked video sent to Apple’s 58,000 retail employees earlier this week, Apple’s Vice President of Retail Deirdre O’Brien said that “because the union would bring its own legally mandated rules that would determine how we work through issues, it could make it harder for us to act swiftly to address things that you raise.”
Atlanta workers first filed a petition to unionize in late April, with around 70% of the store’s workers signing cards in support of the election. The group aimed to raise wages to $28 per hour, along with other benefits. They had been slated to hold their election from June 2 through June 4.
Apple retail workers in Louisville, New York City and Towson, Maryland still have plans to unionize as of Friday, though Apple retail workers have not won a union election at any of the company’s 272 U.S. retail stores.
A draft of a major crypto bill from Sens. Cynthia Lummis and Kirsten Gillibrand seeks to add more clarity to crypto regulation, and appears to propose a far bigger role for the Commodity Futures Trading Commission.
A draft of the widely anticipated bipartisan bill, reported by the Block, a crypto news site, would give the CFTC a wide remit over digital assets. It reads in part: “Except as otherwise provided by this section, the Commission shall have exclusive jurisdiction over any agreement, contract, or transaction involving a contract of sale of a digital asset that is offered, solicited, traded, executed, or otherwise dealt in interstate commerce, including market activities relating to ancillary assets.”
The CFTC already oversees crypto derivatives, and the agency has pushed for more resources to regulate digital assets in recent budget requests.
The draft language also defines crypto entities such as “digital asset,” “distributed ledger technology,” “smart contract,” “payment stablecoin” and “virtual currency.”
Providing a more regulatory definition of crypto, the proposal also defines “ancillary assets” as “an intangible asset that is offered, sold, or otherwise provided to a person in connection with the purchase and sale of a security through an arrangement or scheme that constitutes an investment contract, as that term is used in section 2(a)(1) of the Securities Act of 1933.”
The draft bill, expected to be formally introduced in the coming weeks, also details areas of responsibility for crypto that would fall under other agencies such as the Securities and Exchange Commission.
The language assigning primary responsibility to the CFTC matches other reports about the forthcoming bill, expected to be called the Responsible Financial Innovation Act.
Lummis, a senator from Wyoming, has been outspoken on crypto. She and Gillibrand recently appeared on stage together at the D.C. Blockchain Summit to discuss the planned legislation, where Gillibrand said she expected a Senate vote on the bill “next year at the latest.”
While the crypto industry has been lobbying for a variety of approaches to regulating digital assets, giving more responsibility to the CFTC and minimizing the SEC’s role is a common theme in many proposals.
The SEC would like Elon Musk to explain himself. In a letter the agency sent Musk last month, released Friday, a top SEC lawyer asked pointed questions about filings Musk made about his growing stake in Twitter.
The questions centered on straightforward violations of SEC rules that were readily apparent from the time Musk made filings in April revealing he had accumulated a large stake in Twitter.
SEC senior special counsel Nicholas Panos asked:
It is not clear why Musk delayed his initial filing, but the delay allowed him to accumulate more shares of Twitter at a lower price than he would otherwise have paid. That omission has already prompted a shareholder lawsuit against him.
It is likewise not clear how Musk could credibly claim that he didn’t intend to change, influence or control Twitter. In the letter, Panos noted his tweets about Twitter’s speech-moderation policies, which came as he was quietly accumulating his stake. Twitter has likewise documented extensive conversations between Musk and company officials in March and April as he was buying shares.
The Tesla CEO and the SEC have sparred before, and he is currently bound by a settlement requiring him to have designated officials at the electric car maker vet potentially market-moving tweets about the company before he posts them. Musk has sought to undo that settlement, but a judge recently ruled against him.
The letter’s publication confirmed earlier reports that the SEC planned to investigate how Musk accumulated his Twitter stake in the run-up to his striking a deal to buy the company. Panos copied Heidi Steele, a lawyer at McDermott Will & Emery, a firm Musk hired to advise him on the Twitter takeover.
Twitter will not accept the resignation of Egon Durban, a close ally of Elon Musk, from his position on its board, the company said in a filing on Friday.
Shareholders voted to boot Durban from Twitter’s board at the company’s annual meeting on Wednesday. Durban is to co-CEO of Silver Lake, a venture capital firm that is helping put together Musk’s $44 billion takeover of Twitter, according to Reuters. Silver Lake is also an investor in Twitter.
Durban tendered his resignation after shareholders voted to not re-elect him on Wednesday. Twitter is required to have a Silver Lake representative on its board, though it doesn’t need to be a partner or employee of the firm.
Durban played a critical early role in connecting Musk with other Twitter board members as Musk and the company discussed his growing stake. Durban also helped Musk attempt to take Tesla private back in 2018 (which didn’t work out).
Jack Dorsey, who stepped down from the board at the same shareholders meeting, also played a huge role in those early Twitter takeover conversations.
The shareholders took the recommendation of shareholders advisement boards to not reelect Durban due to the fact that he also serves on six other boards. Because Twitter doesn’t want to have to replace him, Durban committed to step down from one of those six boards by May 25, 2023.
Almost 40% of DoorDash’s new U.S. hires last year were either Black or Latino, the company revealed Thursday in its 2021 diversity report. But few of those hires joined in technical roles, where DoorDash’s numbers lag behind companies like Uber and Lyft.
With the influx of underrepresented hires, DoorDash now says that 36% of its U.S. workforce is from an underrepresented background, a list that includes Black or African American, Hispanic or Latino, multiracial, American Indian/Alaska Native and Native Hawaiian or other Pacific Islander employees.
But employees from underrepresented ethnic groups are still few and far between in director-level roles and above (11%) and technical positions. Underrepresented employees make up just 7% of DoorDash’s technical workforce, lagging behind Uber at 13% and 11.6% at Lyft. DoorDash said it plans to increase that 7% number to 10% by 2025, and to increase the percentage of underrepresented people in leadership roles to 20% by 2025.
DoorDash doesn’t break out the job functions of its new hires, but at Uber, Black employees made up the largest group of new hires for support roles last year. Almost 49% of new support hires at Uber identified as Black. (24.3% of Uber’s new hires in all roles last year were Black or Latino.)
DoorDash touted that 19% of its people managers are from underrepresented ethnic groups — an increase of six percentage points from 2020 — and 46% of its new hires were from underrepresented groups, a 12-percentage-point increase from the year before. The company didn’t list its attrition rate by race, but in its first ESG report released last month, DoorDash pointed to a 91% one-year retention rate associated with its diversity-focused Elevate leadership program.
Stop us if you’ve heard this one before: A Twitter shareholder is suing Elon Musk for allegedly manipulating the company’s stock price.
The Verge reported that the lawsuit, filed on Wednesday night in a federal district court in San Francisco, alleges that Musk made statements “designed to create doubt” about the deal and drive Twitter’s share price down significantly, including a tweet which claimed that it “cannot move forward” without proof that less than 5% of Twitter’s users are bots.
The complaint alleges that Musk did this to “create leverage that Musk hoped to use to either back out of the purchase or re-negotiate the buyout price.”
The complaint is a proposed class action lawsuit brought on by a small group of shareholders, though damages would go to all of the company’s shareholders.
“As detailed herein, Musk’s conduct was and continues to be illegal,” the complaint reads. “Musk’s market manipulation worked — Twitter has lost $8 billion in valuation since the buyout was announced.”
Though Musk has said he is committed to the deal, he did say recently that renegotiating the deal price was not “out of the question.” The complaint requests an injunctive relief which could potentially force Musk to stick to his original purchase price of $54.20. (Twitter has also said it has no interest in renegotiating that price.)
This complaint marks another lawsuit against Musk related to Twitter. In mid-April, a shareholder sued Musk for failing to disclose his ownership stake in the company during the SEC-mandated window, alleging that hiding this fact kept the company’s share price low artificially. According to the complaint, “investors who sold shares in Twitter stock between March 24, 2022 … missed the resulting share price increase as the market reacted to Musk’s purchases and were damaged thereby.”
Twitter’s shares have fallen this month after peaking at a little over $50 in early May, closing at $39.52 on Thursday.
Yet another tech company is slashing its workforce: PayPal has reportedly started laying off employees in risk management and operations just weeks after laying off more than 80 employees at its San Jose headquarters.
The payments company has laid off dozens of staff members in Chicago, Nebraska and Arizona, a source familiar with the matter told Bloomberg. The corporate layoffs at its San Jose HQ were announced in a filing earlier this month, according to Bloomberg.
The decision follows slowed growth in its first-quarter earnings, with spending on its platform reaching $323 billion, or a 15% increase from the year prior.
PayPal approved plans for a “strategic reduction of the existing global workforce” in 2020, and the company has spent $20 million to reduce its workforce — mostly to cover severance and employee benefits, according to Bloomberg. The company expects to spend $100 million more on restructuring, but said that cutting staff will end up saving the company $260 million a year.
PayPal told Bloomberg in a statement that the company is “constantly evaluating how we work to ensure we are prepared to meet the needs of our customers and operate with the best structure and processes to support our strategic business priorities as we continue to grow and evolve.”
The news comes as other major tech companies like Microsoft, Nvidia, Lyft, Snap, Uber, Meta, Salesforce and Coinbase have announced hiring freezes or slowdowns amid tech stocks slumping. Smaller companies have also laid off workers, including Bolt, Carvana and Cameo.
Facebook parent company Meta is accusing Apple of harming competition in the mobile app marketplace through restrictions on iOS software surrounding game streaming and other related technologies, according to a new filing with the National Telecommunications and Information Administration published Thursday.
“Despite having some of the most popular apps in the world, Meta’s ability to innovate on its products and services and even reach its customers is determined, and in some cases, significantly limited, by the most popular mobile operating systems, such as Apple’s iOS,” the filing reads.
Meta submitted the comment as part of an ongoing study the NTIA is conducting for the U.S. Department of Commerce’s White House Competition Council, which the Biden Administration established last year as part of an executive order to study market competition across various sectors of the U.S. economy.
Apple responded to the filing with a statement:
Meta’s filing focuses on three areas: web browsing, as it relates to Apple’s restrictions on what web apps can do versus native iOS software; gaming and the restrictions Apple imposes on developers who try to bundle HTML5 and cloud-based games within existing apps (like the Facebook app); and Apple’s App Tracking Transparency initiative, the privacy feature the company rolled out last year that Meta has said will cost it about $10 billion in advertising revenue this year.
“Taken together, Apple’s restrictions on third-party web browsers, its restrictions on third-party gaming apps, and its ATT framework severely limit developers’ ability to create and consumers’ ability to enjoy cross-platform apps that could lower barriers to switching from Apple to Android and other devices,” the filing goes on to say. “Apple’s self-serving tactics prevent consumers from realizing the innovation and benefits of a dynamic and otherwise well-functioning mobile app ecosystem.”
Meta’s feud with Apple over app store restrictions is not a new one by any means, but it has intensified in the last few years as Meta has increased its investments in the gaming sector. The social networking giant tried in 2020 to publish a dedicated Facebook Gaming app on Apple’s App Store that would feature livestreaming, similar to Amazon’s Twitch, alongside mobile games that could be played instantly with no download required, either using HTML5 technology or via streaming from the cloud.
Apple rejected the app repeatedly due to a series of cloud gaming restrictions the iPhone maker was forced to update for clarity. Still, many of the restrictions remained following the update, resulting in a high-profile back-and-forth between the two companies that has only grown more bitter as Apple has targeted Meta with iOS privacy changes and Tim Cook has taken public shots at Mark Zuckerberg and his company’s business model.
Meta ultimately removed the gaming components from the Facebook Gaming app to publish it on the App Store. It later resorted to asking users to try a web version that skirts Apple’s restrictions; Apple says web apps for cloud gaming and similar features are allowed on the iPhone, but it has strict rules around including those same features inside apps unless the app is dedicated to something else. (That’s why, for instance, you can play HTML5 mini-games inside the main Facebook app — because by Apple’s logic, it is primarily a social networking platform and not a gaming one.)
Meta cites switching costs and ecosystem lock-in as reasons why it cannot simply rely on to Google’s Android, which has fewer restrictions regarding what apps can and cannot do with regards to gaming. “Restrictions that Apple imposes on cross-platform gaming, web-based, and ad-supported apps prevent them from lowering barriers to switching and lock consumers into iOS devices,” the filing says. “Apple’s policies restricting cloud games and HTML5-based games have prevented Meta from introducing features that would enable developers to distribute and monetize, and users of iOS devices to enjoy, a variety of games. …These limitations have curbed Facebook Gaming’s growth and prevented it from emerging as a robust competitor to Apple in game discovery and distribution.”
Meta’s filing does not mention Epic Games, the Fortnite creator that sued Apple and Google in 2020 over many of these same restrictions. The comment does however make many of the same arguments as Epic did in those cases. Epic’s suit against Apple is currently tied up in appeals, and the similar Google suit has yet to get a court date.
“Apple’s restrictions serve to maintain the App Store as the primary place for users to discover and access games on iOS devices,” the filing concludes. “They also have the effect of maintaining high barriers to switching to an Android device, because users’ game data will often be stored in native iOS game apps and cannot be easily transferred outside of the Apple ecosystem, whereas Instant Games and cloud gaming services would allow for a seamless transition between iOS and Android devices.”
Update 5/26, 2:08PM ET: Added statement from Apple.
The CFPB has a message for banks and lenders: You’ve got to explain your algorithms. The agency stressed in a new circular that financial services companies must give a clear explanation for denying a credit application and cannot simply argue that the systems they use are “too complicated.”
“Companies are not absolved of their legal responsibilities when they let a black-box model make lending decisions,” CFPB Director Rohit Chopra said in a statement.
The Equal Credit Opportunity Act requires banks and lenders to offer “specific reasons for denying an application for credit or taking other adverse actions,” the CFPB said.
Technology, including AI, has enabled banks and fintech companies to make credit decisions based on more widely available financial data. “Data harvesting on Americans has become voluminous and ubiquitous, giving firms the ability to know highly detailed information about their customers before they ever interact with them,” the CFPB said.
But the “reasoning” behind these “black-box models” may be “unknown” to those who use them for credit decision-making.
The CFPB said banks and lenders cannot say that they can’t comply with the law because “the technology they use to evaluate credit applications is too complicated, too opaque in its decision-making, or too new.”
The move highlights the growing concern of federal regulators about the use of AI and other technologies both in the financial system and more broadly. Congress is concerned as well: Sen. Ron Wyden reintroduced a bill, the Algorithmic Accountability Act, that would require companies using AI to examine the impact of those systems.
Last year, five agencies, including the CFPB, the Federal Reserve Board and the Office of the Comptroller of the Currency, began soliciting comments on the use of data technology in financial services and to find out if AI is being deployed “in a safe and sound manner.”
Microsoft is slowing hiring for its Windows, Office and Teams software groups, Bloomberg reported Thursday, joining a growing list of tech companies that have pumped the brakes in the light of the economic downturn.
All new hires must now be approved by Rajesh Jha, Microsoft’s executive vice president, and his leadership team, a company spokesperson told Bloomberg. The hiring slowdown is not companywide and is specific to those teams, as they’ve expanded recently. The spokesperson said that Microsoft will continue to grow its headcount overall this year and “will add additional focus to where those resources go.”
“As Microsoft gets ready for the new fiscal year, it is making sure the right resources are aligned to the right opportunity,” the company said in a statement to Bloomberg.
The company’s fiscal year starts on July 1.
Microsoft is the latest name on an ever-growing list of major tech companies to have changed their hiring plans, another sign that the slumping stock market is taking a toll. Nvidia announced in its earnings call on Wednesday that the company will slow hiring later this year as a way “to focus our budget on taking care of existing employees as inflation persists.” Other companies like Lyft, Snap, Uber, Meta, Salesforce and Coinbase have made similar moves amid tumbling share prices.
Microsoft’s share prices are down this year, from around $330 at the beginning of January to around $265 today.
While tech giants have the ability to simply slow down their rapid pace of hiring to adjust to the market, smaller tech companies and startups have had to take more drastic measures. Carvana, Mural, Klarna and Cameo have all laid off a not-insignificant number of employees. Several of those layoffs took place on video calls because workers are largely still remote, which isn’t ideal.
As inflation levels continue to rise and with retail labor union drives around the country, Apple is increasing its starting hourly wage from $20 to $22 an hour for retail workers.
Meanwhile, Apple’s Vice President of Retail Deirdre O’Brien sent a video to all of Apple’s 58,000 retail employees yesterday, saying that if workers unionize, Apple may have more difficulty improving worker conditions.
“Apple moves incredibly fast,” she can be heard saying in the leaked video. “And I worry that, because the union would bring its own legally mandated rules that would determine how we work through issues, it could make it harder for us to act swiftly to address things that you raise.”
Apple also watermarked the video, presumably so that any copies would identify which store it was leaked from.
As of today, Apple retail workers in Louisville joined retail workers in New York City, Atlanta and Towson, Maryland, in announcing union drives. No Apple retail workers have won a union election at any of the company’s 272 retail stores in the U.S., but their push comes in the wake of a growing labor union movement within the retail and tech sectors, most prominently involving Starbucks and Amazon warehouse workers.
Apple announced the pay raise in the wake of growing employer concerns nationally around worker retention and satisfaction brought about by low unemployment, high inflation and this growing union push. Apple corporate employees have also pushed back vocally against the company’s return-to-office plans.
“Supporting and retaining the best team members in the world enables us to deliver the best, most innovative products and services for our customers …This year as part of our annual performance review process, we’re increasing our overall compensation budget,” an Apple spokesperson said in a statement to The Wall Street Journal.
A well-funded startup in the cybersecurity industry, Lacework, has become the latest tech firm to disclose a major round of layoffs amid fears of a broader economic slowdown.
In a statement provided to Protocol, Lacework confirmed that the layoffs impacted 20% of its employees, in connection with what it called a “decision to restructure our business.”
The company did not disclose how many employees in total have been laid off. Lacework had previously disclosed having more than 1,000 employees as of March 2022.
A Lacework representative said that a figure for the total number of employees affected by the layoffs shared on Twitter on Wednesday was a “significant overestimate.”
In a blog post Wednesday, the cloud security vendor said that “today, we made the very difficult decision to say goodbye to some of our colleagues, as part of a restructuring and modification to the company plan.”
The company has “taken every effort to provide those impacted with severance encompassing compensation, healthcare coverage, and access to outplacement support. As they pursue opportunities outside of the company we will help in whatever way we can,” the company said in its blog post, signed by co-CEOs David Hatfield and Jay Parikh.
Lacework has raised $1.85 billion in funding since its launch in 2014, most of which was announced in 2021. The company disclosed raising $525 million in January 2021, followed by a $1.3 billion funding in November 2021 that brought with it an eye-popping valuation of $8.3 billion. Lacework touted the fundraise as “the largest funding round in security industry history,” and the firm ranks at No. 3 in terms of the biggest valuations for privately held security companies, according to CB Insights.
The company has said that its customer base grew by 3.5X in 2021. Between the massive funding and rapid expansion of its business, Lacework went on a hiring spree last year — going from 200 employees in January 2021 to more than 1,000 as of March.
However, “over the past several weeks and months, a seismic shift has occurred in both the public and private markets,” the co-CEOs said in the post. “While we do not have control of the environment around us, we do have a responsibility to control how we operate our business and make changes as needed to best position the company for continued and long-term success.”
Lacework offers a “data-driven” service that aims to stand out in the fast-growing cloud security market by collecting and analyzing data from across a customer’s cloud environments. The goal is to to provide customers with crucial security insights, such as which threats should be prioritized for action, the company has said.
The Lacework platform supports AWS, Google Cloud, Microsoft Azure and Kubernetes (Amazon EKS) environments. Previously disclosed customers include VMware, Snowflake and Pure Storage.
Lacework is also notable for having been just the third company to be incubated out of Sutter Hill Ventures, following a model that was used to launch Pure Storage and Snowflake. The company is led by Hatfield, who was formerly the president of Pure Storage, and Parikh, previously Facebook’s vice president of engineering.
“Despite the broader economic environment – demand for cloud security will remain strong, and it is critical to all online, cloud businesses,” the co-CEOs said the post Wednesday.
Nvidia plans to slow hiring later this year, following similar moves from Lyft, Snap, Uber, Meta, Salesforce, Coinbase and others.
“We have been successful in hiring this year and expect to slow hiring in the second half of fiscal 2023 as we integrate our new employees,” Nvidia CFO Colette Kress said in her CFO commentary, which the chipmaker released Wednesday with its Q1 earnings report. Nvidia disappointed investors with lower expectations for its Q2 sales, sending shares dropping 6.5% in after-hours trading.
The New Indian Express first reported on a “hiring pause” at Nvidia on Friday, citing an internal Slack message reportedly sent to hiring managers that instructed them to only make offers to the top 10% of interviewees.
“Onsite interviews (basically any onsite that’s already planned) — continue, BUT, we will raise our standard to the highest levels,” the Slack message read, according to the India-based newspaper. “We were told that leadership wants to take a pause to onboard the thousands of new hires we’ve recently made.”
Hiring managers interviewing candidates who are considered “diversity candidates” should “proceed as usual,” the Slack message reportedly read.
In an email to Protocol, an Nvidia spokesperson said the company is also slowing hiring “to focus our budget on taking care of existing employees as inflation persists.”
Hiring slowdowns have quickly become the norm among publicly traded tech companies adjusting to a market downturn. Nvidia is the first major chipmaker to announce a pause like this, which isn’t a surprise, given that its fiscal year is on a different schedule than many of its competitors.
No word of a slowdown just yet from Intel — which, unlike Nvidia, manufactures its own chips — and is facing a manufacturing labor shortage dire enough that the company recently decided to allow the re-hiring of employees it had previously laid off.
The Federal Trade Commission is charging Twitter for “deceptively” using security data — the phone numbers and emails it asked users to input to secure their accounts — to actually target ads to them, the agency announced Wednesday. The FTC will require that the company pay $150 million.
Under an order proposed by the FTC and the Department of Justice, Twitter will also be prohibited from “profiting from its deceptively collected data,” the FTC said in a press release. The agency alleges that Twitter asked users to give the company their phone numbers and email addresses to protect their accounts, then gave the data to advertisers for targeted ads.
“Twitter obtained data from users on the pretext of harnessing it for security purposes but then ended up also using the data to target users with ads,” FTC Chair Lina Khan said in a statement. “This practice affected more than 140 million Twitter users, while boosting Twitter’s primary source of revenue.”
The practice violates a 2011 order from the FTC, in which Twitter was banned from “misrepresenting its privacy and security practices,” the FTC said. The original order alleged that pitfalls in the company’s data security gave hackers to access to have unauthorized administrative control of Twitter, and that the app “deceived consumers and put their privacy at risk.”
Facebook got in trouble with the FTC under similar circumstances in 2019, settling with the agency for a historic fine of $5 billion. Though the fine was for a litany of charges, one part of the order prohibited the company from using telephone numbers obtained to enable two-factor authentication for advertising.
“Consumers who share their private information have a right to know if that information is being used to help advertisers target customers,” U.S. Attorney Stephanie M. Hinds for the Northern District of California said in a statement. “Social media companies that are not honest with consumers about how their personal information is being used will be held accountable.”
Sonos just launched its Sonos Radio service on the web, albeit in a somewhat limited fashion: A new Sonos Radio website features 45-minute samples from some of the service’s channels, as well as individual shows and mixes. The service was previously only available on Sonos speakers. The site was first spotted by a Reddit user.
The Sonos Radio website launched earlier this month when the company also announced a new voice assistant as well as a new sound bar product, a company spokesperson told Protocol. “Our new Sonos Radio site […] gives Sonos owners a holistic view of our diverse content, including over 100 exclusive original stations and shows, and lets fans everywhere preview select programming,” the spokesperson said via email.
Sonos first launched Sonos Radio as an ad-supported music service on its speakers in April 2020. The company followed up with an ad-free premium tier later that year. Taking the service beyond its own speaker hardware could Sonos help grow its ad revenue and mirrors the way TV makers like Samsung have approached advertising-supported services.
However, at least for now, bringing Sonos Radio to the web seems to be more about showcasing it to advertisers than growing listening hours. On a separate Sonos advertising site, the company touts the service as a way to reach “millions of listeners” through traditional ads as well as branded stations.
Bolt told employees Wednesday that the company would undergo “several structural changes” — in other words, layoffs — in an effort to secure its financial position.
The message from CEO Maju Kuruvilla also detailed plans for the layoffs, which will arrive as calendar invites titled “Bolt Restructuring” to individuals or groups affected. Those who are staying will receive an invite to a town hall meeting. It is unclear how many employees are affected.
The startup reportedly cut over 100 positions across its engineering, sales, marketing, and talent teams, according to a tracker posted online. Though the tracker’s contents couldn’t immediately be verified, it’s increasingly common for laid-off employees to share details and contact information in an effort to help former colleagues find jobs.
This isn’t the first time the once high-flying startup has run into trouble. In March, Authentic Brands Group sued Bolt for breach of contract, alleging that the tech provider failed to deliver on promised features and integrations, resulting in only two of its units, Forever 21 and Lucky Brand, being able to use Bolt’s software.
Several other fintech companies have also laid off employees recently as they brace for the consequences of an economic downturn. On Monday, “buy now, pay later” firm Klarna told its employees through a prerecorded video call that it was laying off 10% of its workforce. Robinhood laid off 9% of its workforce last month.
Bigger companies are feeling the heat as well. Coinbase management seemed determined to carry out a pre-downturn plan to triple the size of its workforce this year, but after reporting weak first-quarter results, they backed down last week, imposing a short-term hiring freeze and making other cost cuts.
This article was updated to add the number of employees laid off.
A federally funded AI research cloud is moving forward, and startups should be able to join the party.
A task force set up to design The National AI Research Resource, or NAIRR, a repository of data, tools and computing power needed to develop machine learning and other AI systems, published a preliminary report today outlining plans and expectations for the service.
Following months of public meetings, the task force, which is overseen by the White House Office of Science and Technology Policy and the National Science Foundation, said the resource should be operated by an independent, non-governmental entity.
And, despite expectations by some that the NAIRR would be available solely for academic research, task force leaders reaffirmed interest in opening it to startups.
The NAIRR is intended primarily for academia, said Lynne Parker, director of the National AI Initiative Office within the White House Office of Science and Technology Policy and co-chair of the task force. However, during a press conference today, she said, “Certainly the task force is open to enabling startups that have, for instance, received federal grants.” She specifically mentioned Small Business Innovation Research and Small Business Technology Transfer grant programs.
Exactly who will be able to access the NAIRR has been in question throughout the initial development phase of the resource. Some supporters of the NAIRR, including the Stanford Institute for Human-Centered Artificial Intelligence (HAI), have pushed against the idea of opening it to private corporations, noting that it should focus on the needs of academic and nonprofit researchers.
In their report, the task force also supported creation of “an independent, non-governmental entity with dedicated, expert staff” to manage the NAIRR’s infrastructure, resource allocation, user support and security. They called for federal agencies to make new or existing infrastructure resources — including some from private sector providers — available to the NAIRR for AI research and development, including data, compute and testbeds.
Several corporations including the big three cloud providers — Amazon’s AWS, Google Cloud and Microsoft’s Azure — have all submitted proposals for the project.
“Importantly, NAIRR computational resources should span the full range of possible offerings, including commercial cloud, high-performance and high-throughput computing, on-premise (at academic and/or government sites) resources, ‘edge’ computing resources and devices, and novel computing approaches and platforms,” stated the task force report.
Task force co-chair Manish Parashar, office director for the Office of Advanced Cyberinfrastructure at the National Science Foundation, pointed to existing NSF facilities that could serve as models for managing NAIRR’s shared infrastructure. “We can look at those over the next few months to see how can we learn from those, and see how effective they will be for a resource such as what’s envisioned as the NAIRR,” he said.
NAIRR planners have emphasized the need for the resource to be accessible to a diverse and inclusive group of people, and to incorporate responsible and trustworthy AI principles in data resources and AI developed using them. “The task force recommends that the NAIRR establish an ethics review process to vet all resources included in the system, and the research performed with it. NAIRR users will be required to complete regular updated ethics training modules before being granted access to the network,” said Parashar.
The task force is seeking public comments on the report and a public listening session will be held on June 23.