Child safety is the new tech battleground
Two senators from opposite sides of the aisle introduced sweeping legislation yesterday that would require online platforms to help parents better control their children’s online experience. The Kids Online Safety Act, which comes after months of news reports and Congressional hearings on social media’s impact on children’s mental health and safety, is lawmakers’ latest bid to limit the power of internet giants.
“Big Tech has brazenly failed children,” said Senator Richard Blumenthal, Democrat of Connecticut and one of the bill’s authors. The bill, co-written with Senator Marsha Blackburn, Republican of Tennessee, came together after internal research leaked by the Facebook whistle-blower Frances Haugen showed how Instagram could harm teens’ mental health, among other effects, and led to Instagram’s chief, Adam Mosseri, testifying before Congress.
What the bill would do:
Require online platforms to refrain from promoting harmful behavior, including suicide, self-harm, eating disorders and bullying.
Give parents of children under 16 tools to protect them, including the ability to modify algorithmically generated recommendations, ban certain kinds of content, prevent third parties from accessing minors’ data, and limit children’s online screen time.
Require platforms to publish annual reports about their potential risks to minors.
Tech companies say they already follow numerous federal requirements for protecting children, and have made changes in response to public concern and foreign regulations. In recent months, Instagram and TikTok have unveiled new features and rules intended to keep younger users safe.
But the pressure on tech could grow, as state legislatures and foreign governments propose other limits. The Future of Tech Commission, an independent bipartisan group, recommended additional measures, including a total ban on collecting data from users younger than 16 and on behavioral advertising aimed at that group.
The legislation could affect more than Big Tech. It would apply to any online service that is “reasonably likely to be used” by children younger than 16, including video games and streaming services. That’s by design, according to Blumenthal: “Others who make the same kinds of choices and who drive content to children ought to be held responsible, as well.”
HERE’S WHAT’S HAPPENING
Fed officials discussed scaling back economic support more quickly. Minutes from the central bank’s board of governors meeting last month show concern that inflation showed little sign of abating. In more positive economic news, retail sales rose 3.8 percent last month, reflecting unexpected resilience in consumer spending.
Google will overhaul privacy on Android phones. The changes will limit the sharing of user data across apps and with third parties. A similar move by Apple shook up the business of targeted advertising, costing companies like Meta billions in sales; Google said its changes would be less disruptive.
Pandemic mandates face new pressures. Texas yesterday sued to strike down federal mask requirements at airports and on airplanes and other public transportation; the Supreme Court recently declined to hear a similar case. Meanwhile, both the commissioner of the N.B.A., Adam Silver, and Mayor Eric Adams of New York City questioned New York’s vaccination mandate for hometown athletes (read: Kyrie Irving).
Roblox’s stock hits a record low after a disappointing financial report. Shares in the gaming company, considered a vanguard of the metaverse, fell more than 26 percent after it disclosed a loss that was double analysts’ expectations. Meanwhile, shares in Shopify, which had soared during the pandemic, fell after the e-commerce services provider forecast a slowdown in sales.
A key witness in the 1MDB fraud case begins his testimony. At the trial of the former Goldman Sachs banker Roger Ng, an ex-colleague, Tim Leissner, said that the two had been told in 2012 of a plan to pay foreign officials $1 billion in bribes so Goldman could arrange bond offerings for a Malaysian state fund.
How resilient is Russia’s economy?
Stock futures are down this morning as the Ukraine crisis continues, with Western officials accusing Russia of lying about withdrawing troops from the Ukrainian border. There has been talk of potential economic punishments for Moscow, including sanctions. But some have pointed out that President Vladimir Putin has been making Russia’s economy more able to withstand those potential blows.
Steve Rattner, the former Obama administration official who manages Mike Bloomberg’s fortune, has put together some data that help illustrate the fruits of Putin’s labor. Russia has drastically trimmed its national debt, relative to its economy, and bolstered its reserves of foreign currency to nearly $650 billion, with just 16 percent of that in dollars.
As The Times’s Max Fisher pointed out, those measures don’t make Putin invulnerable to harsh sanctions. But they buy him time, and reduce the West’s leverage over Russia.
Taking a hit to save a SPAC deal
The cryptocurrency start-up Circle announced today that it has revised its deal to go public by merging with Concord Acquisition, a SPAC run by the former Barclays chief Bob Diamond. The deal reflects the growing popularity of Circle’s main product, stablecoins — but also the lengths to which a blank-check company will go to save a deal.
The revised deal now values Circle at $9 billion, double what the original transaction did in July, and dilutes the value of Concord’s original $276 million stake. That’s in part because the initial deal was approaching its expiration date, with the companies still awaiting regulatory approval. If the transaction failed to close, Diamond’s SPAC would have been forced to give back money it had raised from public investors, plus interest, a predicament facing many blank-check funds as enthusiasm for the once-popular sector has faded.
Michael Ohlrogge, a law professor at New York University and an expert on SPACs, told DealBook that he couldn’t recall a SPAC deal ever having its valuation grow when it was revised, since such revisions usually happen because of deterioration in the target company’s performance.
Circle says its own business is booming. The company said the higher valuation reflects “material improvements” in its operations, with its USDC stablecoin more than doubling its circulation to $52.5 billion since the original deal was struck. Stablecoins, which are cryptocurrencies linked to the value of stable assets like the dollar, have grown in popularity, though they have also drawn scrutiny in Washington.
“I don’t think we should be criticizing China, which has terrible problems, because they’re not just like the United States. They do some things better than we do. They should like us, and we should like them.”
— Charlie Munger, in an interview at the annual meeting of the Daily Journal, the publisher of which he’s chairman. Munger, whose company has been buying shares in China’s Alibaba, added that “we should learn to get along with people who have a different system of government.”
Twitter’s new chief takes a baby break
Parag Agrawal has been Twitter’s C.E.O. for less than three months. But he’s about to take “a few weeks” of parental leave, the social media company confirmed to The Washington Post. That pulls him into the sometimes heated debate about top executives taking time off for family obligations.
What Agrawal is doing: He’ll take less than the 20 weeks that Twitter gives all employees for parental leave. But that still puts him in a relatively small cohort of top male tech leaders who have taken paid paternity leave, including Mark Zuckerberg of Meta, who took two months off in 2015, and Alexis Ohanian, the Reddit co-founder who took 16 weeks in 2017.
Parental leave has had a rocky history in Silicon Valley:
Yahoo’s then-C.E.O., Marissa Mayer, took heat for twice taking just two weeks off after giving birth — including in 2015, when she delivered twins — and working throughout her leave.
Elon Musk suggested last year that he left primary care duties for his infant son to his then-partner, the musician Grimes: “Well, babies are just eating and pooping machines, you know?” he told The Times last year. “Right now there’s not much I can do.”
The venture capitalist Joe Lonsdale weighed in on Spotify’s six months of parental leave, tweeting last year, “Any man in an important position who takes 6 months of leave for a newborn is a loser.” (Lonsdale later told The Post that he now thinks “there is nothing wrong” with leaders taking leave, as long as “everything is working well.”)
Why it matters: Ample evidence has emerged about the benefits of paternity leave, for families and society more broadly. Experts say that leaders who take advantage of their companies’ policies can reduce the stigma that rank-and-file employees may feel in doing the same.
THE SPEED READ
Thrive Capital, the investment firm founded by Joshua Kushner, has raised $3 billion for its latest fund, bringing its assets under management to $16 billion. (WSJ)
Blackstone will pay roughly $6 billion to buy Preferred Apartment Communities, which operates rental housing and commercial properties across the Southeast. (NYT)
The U.S. investment firm Silver Lake agreed to buy a smaller stake in New Zealand’s All Blacks rugby team after objections from a players’ association. (WSJ)
Third Point’s Dan Loeb told investors that the stock market is undervaluing Amazon by $1 trillion, but it’s unclear whether he’ll begin an activist campaign to break up the company. (WSJ)
Carl Icahn said he’s prepared to begin a board fight at McDonald’s to force the company to improve its treatment of pigs. (Bloomberg)
Jana Partners has nominated four directors at Zendesk, amid growing investor opposition to the company’s plan to buy the parent of SurveyMonkey. (Reuters)
A little-known activist investor, Alta Fox Capital, is seeking seats on the board of Hasbro to force a shake-up of the toymaker. (Alta Fox)
China is trouncing the U.S. when it comes to 5G wireless data speeds, say the Harvard professor Graham Allison and the former Google C.E.O. Eric Schmidt. (WSJ op-ed)
Regulators’ inquiries into block trades were reportedly reignited by the way Morgan Stanley and Goldman Sachs used them to avoid losses in the unwinding of the investment firm Archegos. (Bloomberg)
Regulators have served search warrants on prominent short sellers like Carson Block and Andrew Left as part of an investigation into potential market manipulation. (NYT)
The Biden administration accused China of failing to uphold a wide range of trade commitments, signaling a continued tough approach to Beijing. (NYT)
A Florida woman is accused of using proceeds from a federal pandemic-relief loan to pay a hit man to assassinate a T.S.A. employee. (NYT)
Best of the rest
An in-depth look at Pat Gelsinger, the man charged with reviving Intel. (NYT)
A union election at the Amazon warehouse on Staten Island is set for March. (NYT)
Employers pushing workers to return to the office are fighting an uphill battle. (Axios)
“Tech Companies Face a Fresh Crisis: Hiring” (NYT Magazine)
Where did the money for the winning bid on an NFT tied to Melania Trump come from? (Bloomberg)
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