WEBVTT - The Big Tech Stories of 2022: The World vs Big Tech 0:00:04.440 --> 0:00:07.840 Welcome to text Stuff, a production from I Heart Radio. 0:00:11.880 --> 0:00:15.160 Hey there, and welcome to tech Stuff. I'm your host, 0:00:15.360 --> 0:00:19.440 Jonathan Strickland. I'm an executive producer with I Heart Radio. 0:00:19.760 --> 0:00:24.959 And how the tech are you? Well? We made it mostly. 0:00:25.320 --> 0:00:28.280 Now that we're creeping up to the very end of 0:00:28.360 --> 0:00:32.280 twenty two, it is time to look back over the 0:00:32.280 --> 0:00:35.080 past year and reflect on some of the big tech 0:00:35.280 --> 0:00:40.840 news stories that unfolded over the previous twelve months. And gosh, 0:00:41.240 --> 0:00:44.839 there were a ton of them. So when I started 0:00:45.280 --> 0:00:49.280 just putting together a bullet list of stories that I 0:00:49.320 --> 0:00:53.760 felt were particularly important, that list quickly stretched to a 0:00:53.760 --> 0:00:56.959 couple of pages. And this was just a bullet list, right, 0:00:57.000 --> 0:01:01.440 I didn't give like context or anything. So this week 0:01:01.880 --> 0:01:05.000 we're going to look back and talk about what happened 0:01:05.040 --> 0:01:08.440 in two and why it was important, both in the 0:01:08.520 --> 0:01:12.760 text sphere and beyond. So this is just the first 0:01:12.800 --> 0:01:16.160 of those episodes. I'm taking a little more time to 0:01:16.280 --> 0:01:18.480 kind of cover these and not just say, hey, look 0:01:18.520 --> 0:01:21.319 at this headline now before I jump into it. I 0:01:21.360 --> 0:01:25.520 also want to say I am not organizing these episodes chronologically, 0:01:26.160 --> 0:01:29.679 so it's not like we're gonna start in January and 0:01:29.920 --> 0:01:32.759 end up in December at the end of them. Instead, 0:01:32.800 --> 0:01:37.720 I grouped stories kind of thematically, so that way we can, 0:01:37.920 --> 0:01:41.160 you know, look at things that were unfolding that we're 0:01:41.200 --> 0:01:45.120 maybe not directly related to each other, but kind of 0:01:45.160 --> 0:01:49.560 give an indication of general trends that sort of thing. 0:01:50.000 --> 0:01:52.600 Now that being said, our first story does happen to 0:01:52.720 --> 0:01:57.960 be one that began early in two and that story 0:01:58.800 --> 0:02:05.760 is Microsoft's bid to acquire Activision Blizzard, the video game company. Now, 0:02:05.800 --> 0:02:09.640 first off, Microsoft is perhaps best known for the Windows 0:02:09.639 --> 0:02:16.000 operating system, more arguably the Office suite of products. Among gamers, 0:02:16.360 --> 0:02:19.480 it is widely known as the company behind Xbox and 0:02:19.800 --> 0:02:24.280 Xbox Game Pass, and Activision Blizzard is a video game 0:02:24.280 --> 0:02:27.280 company that traces its lineage all the way back to 0:02:27.520 --> 0:02:32.000 nineteen seventy nine. In fact, Activision got started just four 0:02:32.160 --> 0:02:36.880 years after Microsoft launched, and that whole history is fascinating 0:02:36.919 --> 0:02:40.320 because Activision was a splinter group off of Atari. But 0:02:41.320 --> 0:02:45.920 the history of Activision Blizzard gets super complicated and has 0:02:45.960 --> 0:02:48.720 a lot of hairpin turns and dead ends, and honestly, 0:02:48.800 --> 0:02:51.040 I've done episodes about it in the past, so we 0:02:51.120 --> 0:02:54.080 won't go into a ton of detail. But then we 0:02:54.160 --> 0:02:57.840 also have to talk about Blizzard Entertainment, a much younger 0:02:58.120 --> 0:03:01.560 game company compared to Activision. It had been founded in 0:03:01.760 --> 0:03:07.079 nine and Activision acquired Blizzard in two thousand and eight, 0:03:07.120 --> 0:03:10.960 and the consolidated power of these companies allowed it to 0:03:11.000 --> 0:03:15.160 perform quite well. In fact, depending upon how you want 0:03:15.200 --> 0:03:17.720 to measure it, Activision Blizzard is one of the top 0:03:17.960 --> 0:03:21.920 five largest video game companies in the world. But again 0:03:22.520 --> 0:03:26.600 this depends on how you measure largest, right. Do you 0:03:26.680 --> 0:03:31.440 measure it by revenue? Do you measure it by market capitalization? 0:03:32.160 --> 0:03:36.680 But no matter how you look at it, Activision Blizzard 0:03:36.880 --> 0:03:42.360 is a very big, influential company in the video game space. Now, 0:03:42.400 --> 0:03:46.880 we first heard of Microsoft's plan to purchase Activision Blizzard 0:03:47.040 --> 0:03:51.560 in mid January twenty two. Microsoft's offer was to buy 0:03:51.560 --> 0:03:55.280 out Activision Blizzard for nine dollars per share in an 0:03:55.320 --> 0:03:59.360 all cash transaction, and that would amount to around sixty 0:03:59.400 --> 0:04:03.320 eight point seven billion dollars billion with a B. That's 0:04:03.320 --> 0:04:07.080 a yawlsa right there. This was actually a hefty premium 0:04:07.080 --> 0:04:10.240 on Activision Blizzard stock, which over the last year hit 0:04:10.280 --> 0:04:13.720 a high of eighty six dollars ninety cents and a 0:04:13.880 --> 0:04:17.960 low of sixty dollars sixty cents, so bucks per share 0:04:18.600 --> 0:04:22.840 pretty attractive price, right, So you tell shareholders, hey, we're 0:04:22.839 --> 0:04:27.119 gonna pay you a premium on every single share you own. 0:04:28.080 --> 0:04:30.359 You just have to less know if you're cool with it. 0:04:30.440 --> 0:04:32.840 And the shareholders were like, we're totally cool with it. 0:04:33.600 --> 0:04:36.719 But let's get a little more backstory, because this whole 0:04:36.800 --> 0:04:39.760 thing has a lot of complications. So first up, in 0:04:40.640 --> 0:04:44.720 one last year, several former and some current employees at 0:04:44.760 --> 0:04:49.000 Activision Blizzard came forward with accusations that the company was 0:04:49.080 --> 0:04:53.640 fostering a culture that allowed for sexual harassment, pay disparity, 0:04:53.680 --> 0:04:59.159 and discrimination. Further, that the CEO of the company, Bobby Codek, 0:04:59.640 --> 0:05:02.880 had been aware of these problems for years and had 0:05:02.920 --> 0:05:07.080 failed to do anything about them. We heard many stories 0:05:07.120 --> 0:05:09.760 that were familiar to anyone who was paying attention during 0:05:09.800 --> 0:05:13.160 the Me too movement that the company's HR department was 0:05:13.200 --> 0:05:17.680 serving more as a shield for the company than as 0:05:17.920 --> 0:05:21.240 a department looking out for employees. That's something that the 0:05:21.240 --> 0:05:24.320 more cynical folks out there will say is the real 0:05:24.360 --> 0:05:27.680 reason HR exists in the first place, not to protect employees, 0:05:28.040 --> 0:05:31.919 but to protect the company. Now in retrospect, it was 0:05:32.000 --> 0:05:35.760 clear that this Microsoft deal was moving behind the scenes 0:05:36.240 --> 0:05:39.640 while this Activision Blizzard scandal story was unfolding back in 0:05:41.000 --> 0:05:45.239 but while the scandal was unfolding, folks were wondering why 0:05:45.640 --> 0:05:48.400 the company was being so reluctant to address the concerns 0:05:48.400 --> 0:05:52.480 that were being brought forth. Meanwhile, Activision Blizzard was also 0:05:52.520 --> 0:05:56.200 accused of trying to discourage employees from unionizing. There were 0:05:56.240 --> 0:05:59.359 pockets of employees in the company who wanted to organize 0:05:59.400 --> 0:06:01.919 into a union and in order to negotiate better working 0:06:01.920 --> 0:06:05.640 conditions and compensation. It's illegal in the United States for 0:06:05.680 --> 0:06:08.840 a company to try and prevent that from happening, so 0:06:09.160 --> 0:06:13.440 that was also unfolding at the time. Microsoft's announcement was 0:06:13.480 --> 0:06:17.320 a bit of a relief for some people. The reaction 0:06:17.680 --> 0:06:20.840 among certain folks was that Microsoft was probably going to 0:06:20.920 --> 0:06:23.760 clean house if it took possession of Activision Blizzard, that 0:06:23.839 --> 0:06:27.280 it would do what the leadership at Activision Blizzard had 0:06:27.320 --> 0:06:30.720 seemed reluctant to do. But others worried that this would 0:06:30.760 --> 0:06:33.600 just mean employees would have an even harder time organizing 0:06:33.640 --> 0:06:38.479 because Microsoft was not exactly known for championing the rights 0:06:38.520 --> 0:06:42.040 of workers. And then there were questions about whether or 0:06:42.080 --> 0:06:47.839 not various regulatory bodies around the world would resist this acquisition. 0:06:48.400 --> 0:06:52.839 After all, Microsoft and Activision Blizzard are both involved in 0:06:52.880 --> 0:06:55.920 the video game business, and you could argue, well, yeah, 0:06:55.960 --> 0:06:58.880 that's just one part of Microsoft's overall business. It's not 0:06:58.960 --> 0:07:03.520 their primary foecus. But it's still a major company in 0:07:03.560 --> 0:07:07.520 the video game industry. So would regulators view the acquisition 0:07:08.080 --> 0:07:12.600 as a reduction in overall competition within the market? Would 0:07:12.600 --> 0:07:16.640 they worry that this newly merged entity would end up 0:07:16.760 --> 0:07:21.320 hurting consumers down the line and discouraging competition. Now, over 0:07:21.360 --> 0:07:27.240 the course of these concerns started bubbling up. Now he 0:07:27.400 --> 0:07:30.840 first really started seeing some resistance in the European Union. 0:07:31.200 --> 0:07:34.320 There were reports that Sony, another big player in the 0:07:34.400 --> 0:07:38.520 video game space, was bending the ear of regulators in 0:07:38.560 --> 0:07:42.080 the EU and the UK. That there were concerns that 0:07:42.400 --> 0:07:46.640 these merged companies would hold certain popular titles like Call 0:07:46.680 --> 0:07:51.800 of Duty and not publish them to Sony's PlayStation platform. Now, 0:07:51.880 --> 0:07:55.560 Microsoft representatives said repeatedly that there were no such plans 0:07:55.600 --> 0:07:59.520 to withhold titles from Sony players. They were arguing that 0:07:59.600 --> 0:08:01.400 if they were to do that, they would be leaving 0:08:01.400 --> 0:08:03.600 money on the table and that it would make no 0:08:03.680 --> 0:08:07.480 sense financially to prevent them from going to to the PlayStation. 0:08:08.400 --> 0:08:11.040 But then over here in the United States, the Federal 0:08:11.080 --> 0:08:15.760 Trade Commission or f TC, got involved. It has brought 0:08:15.840 --> 0:08:19.360 a case against Microsoft an Activision Blizzard to prevent the merger, 0:08:19.600 --> 0:08:23.760 and the analysts that I follow say that the cases, 0:08:23.840 --> 0:08:27.720 in their opinion, a fairly weak one, that while Microsoft 0:08:27.720 --> 0:08:32.040 and Activision Blizzard our competitors, that this merger does not 0:08:32.160 --> 0:08:36.200 necessarily indicate a reduction in competition for the overall market. 0:08:36.760 --> 0:08:40.040 It seems to me that the general consensus is this 0:08:40.160 --> 0:08:43.840 deal will go through, but it will take longer than 0:08:43.880 --> 0:08:47.360 what Microsoft had hoped for originally. Now I say it 0:08:47.480 --> 0:08:50.440 seems because I just don't know. It may very well 0:08:50.480 --> 0:08:55.760 be that Microsoft will abandon its deal because on a 0:08:55.800 --> 0:08:59.960 similar note, this past year we saw one proposed merger 0:09:00.280 --> 0:09:04.600 fall through in the tech space due to regulatory obstruction. 0:09:05.320 --> 0:09:08.720 In Video, the chip making company that's best known for 0:09:08.840 --> 0:09:13.640 its graphics processing cards, had announced way back in that 0:09:13.800 --> 0:09:18.760 it intended to purchase the British semiconductor company ARM, best 0:09:18.760 --> 0:09:22.200 known as the company that designs arms CPUs. So what 0:09:22.400 --> 0:09:26.280 ARM usually does is it designs the CPU architecture and 0:09:26.320 --> 0:09:30.880 then license that design out to fabricators that actually make 0:09:31.200 --> 0:09:36.520 the chips well. Way back in a Japanese conglomerate, soft Bank, 0:09:36.880 --> 0:09:41.640 which is a truly enormous company, purchased ARM for lots 0:09:41.679 --> 0:09:46.000 and lots of money, like many billions of dollars. So 0:09:46.120 --> 0:09:50.120 in Nvidia was going to buy ARM from soft Bank 0:09:50.480 --> 0:09:57.640 for forty billion dollars, pending regulatory approval. That approval did 0:09:57.640 --> 0:10:02.079 not come. UK regulators were concerned that ARMS operations are 0:10:02.120 --> 0:10:04.760 a matter of national security. Keep in mind, ARM is 0:10:04.880 --> 0:10:09.880 a British company. Obviously, this is already complicated by the 0:10:09.880 --> 0:10:13.720 fact that ARMS current owner is a Japanese company, so 0:10:14.400 --> 0:10:17.679 it's interesting that national security became a big concern for 0:10:17.760 --> 0:10:22.760 this particular transaction. Uh I will say that soft Bank 0:10:22.880 --> 0:10:29.240 reportedly is preparing ARM for a public offering next year, 0:10:29.480 --> 0:10:32.640 so in other words, ARM will again become a a 0:10:32.800 --> 0:10:36.160 traded company on the stock market like it was before 0:10:36.200 --> 0:10:41.000 soft Bank took possession of the company back in. Meanwhile, 0:10:41.720 --> 0:10:46.200 companies that rely on ARM processors, which include competitors to 0:10:46.400 --> 0:10:50.559 in Vidia, we're worried that in Video's acquisition of ARM 0:10:50.600 --> 0:10:53.600 means that they would get cut off from access to 0:10:53.760 --> 0:10:58.000 those ARM processors, or that they would see a big 0:10:58.080 --> 0:11:01.640 price hike, and thus this would be bad for competition. 0:11:01.760 --> 0:11:06.400 So those companies were objecting to this proposed merger, and 0:11:06.440 --> 0:11:09.840 the myriad of concerns from different sources ultimately led to 0:11:10.000 --> 0:11:13.760 Nvidia and ARM walking away from this deal that happened 0:11:14.000 --> 0:11:18.160 way back in February twenty two. By my reckoning, that 0:11:18.280 --> 0:11:23.640 was fifty years ago. It might just feel like that now. 0:11:24.320 --> 0:11:28.120 Some may point to this failed merger as one of 0:11:28.160 --> 0:11:31.000 the signs that the world in general is starting to 0:11:31.040 --> 0:11:34.520 push back against big tech, and I'm going to talk 0:11:34.640 --> 0:11:38.160 more about that in just a second. But the Nvidia 0:11:38.240 --> 0:11:42.359 and ARM deal had a lot of complicating and unique factors, 0:11:42.800 --> 0:11:46.839 from concerns about competition to that national security angle, which 0:11:47.000 --> 0:11:51.520 you know most mergers in tech don't involve. And then 0:11:51.559 --> 0:11:54.320 there was a further monkey wrench thrown into the works 0:11:54.440 --> 0:11:58.120 in the form of a Chinese subsidiary of ARM, Armed 0:11:58.200 --> 0:12:01.680 China that really did not want to see the parent 0:12:01.760 --> 0:12:05.560 company change hands to an American owner. So you actually 0:12:05.600 --> 0:12:10.840 had a part of ARM itself that was objecting to 0:12:11.040 --> 0:12:16.079 this merger. So, in other words, this Nvidio ARM deal 0:12:16.440 --> 0:12:20.160 had a lot of factors that I don't think translate 0:12:20.400 --> 0:12:24.360 to the industry at large. They were unique for that 0:12:24.559 --> 0:12:29.120 specific set of circumstances. But all that being said, twenty 0:12:29.240 --> 0:12:34.360 two undeniably was a year in which we saw growing 0:12:34.440 --> 0:12:39.080 scrutiny and resistance to so called big tech around the world. 0:12:39.400 --> 0:12:42.160 By the way, big tech that's just a phrase that 0:12:42.200 --> 0:12:46.360 refers to obviously the largest, most influential companies within the 0:12:46.360 --> 0:12:50.400 tech space. And sometimes people who use big tech are 0:12:50.520 --> 0:12:54.120 really being more precise in that they're being imprecise in 0:12:54.120 --> 0:12:58.680 their language, but they're specifically referencing four or five companies, 0:12:58.720 --> 0:13:04.600 in particular Apple, Meta, Google, Amazon, and if they're referring 0:13:04.600 --> 0:13:08.280 to five, they throw Microsoft in there too. But big 0:13:08.280 --> 0:13:12.960 tech can also refer to other influential companies like Nvidia, 0:13:13.240 --> 0:13:17.240 or Oracle, or or ten Cent or Intel, those kind 0:13:17.240 --> 0:13:20.840 of things. So when you read the phrase big tech, 0:13:20.920 --> 0:13:24.320 just keep in mind a lot of journalists use that 0:13:24.360 --> 0:13:27.840 as shorthand for those five companies I first mentioned. Others 0:13:27.920 --> 0:13:33.240 will use it to just reference big, powerful, influential tech 0:13:33.320 --> 0:13:36.080 companies in general. And here in the United States we 0:13:36.120 --> 0:13:39.600 saw some progressives but into positions of authority with regard 0:13:39.679 --> 0:13:43.600 to ensuring that markets stay fair and competitive, which was 0:13:43.679 --> 0:13:47.320 a real change of pace from the last I don't know, 0:13:47.400 --> 0:13:51.000 like forty years. So they include Lena Kahn, who is 0:13:51.040 --> 0:13:53.559 the chair of the Federal Trade Commission or f TC, 0:13:53.800 --> 0:13:57.200 so she's the one leading the US charge against Microsoft 0:13:57.280 --> 0:14:02.240 and the Activision Blizzard merger. And there's also Jonathan Canter, 0:14:02.559 --> 0:14:06.520 who leads the Antitrust Division at the Justice Department. Figures 0:14:06.559 --> 0:14:09.640 like these are starting to throw roadblocks in the way 0:14:09.760 --> 0:14:12.800 of large tech companies which have long been used to 0:14:12.840 --> 0:14:16.800 being able to get their own way. For example Meta. 0:14:16.960 --> 0:14:20.120 Now we're going to talk way more about Meta later 0:14:20.200 --> 0:14:22.600 on in this series of episodes about the big stories 0:14:22.600 --> 0:14:27.240 of two, but within this context, regulators have moved to 0:14:27.280 --> 0:14:30.800 block Meta from acquiring a tiny little VR company called 0:14:30.880 --> 0:14:36.680 Within Unlimited and it's fitness app called Supernatural. They're saying 0:14:36.720 --> 0:14:40.040 that because the VR industry in general is a pretty 0:14:40.080 --> 0:14:42.560 small one, there are not that many players in the 0:14:42.640 --> 0:14:48.479 VR space, that Meta acquiring another VR company reduces competition 0:14:48.640 --> 0:14:52.400 in that space, and that this would be bad for 0:14:52.640 --> 0:14:57.000 VR moving forward. If VR and Meta becomes synonymous with 0:14:57.040 --> 0:15:01.520 one another, that could mean a reduction in competition and innovation, 0:15:02.040 --> 0:15:05.160 and that's a bad thing. Now, we've also heard politicians 0:15:05.200 --> 0:15:07.720 float the idea of forcing Meta to break up into 0:15:07.760 --> 0:15:10.840 smaller companies, similar to how the US government broke up 0:15:10.880 --> 0:15:13.480 a T and T many years ago. Though I should 0:15:13.480 --> 0:15:16.480 point out a T and T kind of recombined over 0:15:16.520 --> 0:15:19.360 the years, like Terminator one thousand style, like all those 0:15:19.400 --> 0:15:24.680 little drops of mercury. So we'll see if that happens. Okay, 0:15:24.880 --> 0:15:27.120 We've got a lot more to talk about with this 0:15:27.320 --> 0:15:30.960 line of tech stories from two, but before we do that, 0:15:31.040 --> 0:15:45.400 let's take a quick break. We're back, Okay. So we 0:15:45.400 --> 0:15:49.160 were talking about regulations and the tech industry and sort 0:15:49.160 --> 0:15:53.680 of a pushback on big tech. Well we really saw 0:15:53.720 --> 0:15:57.600 that take form over the European Union. Uh, they have 0:15:57.680 --> 0:16:00.640 been pushing back against big tech quite a bit this year, 0:16:00.680 --> 0:16:05.600 including Meta. At the end of this year, in two, 0:16:05.640 --> 0:16:08.800 a story that's unfolding as I'm recording this, the European 0:16:08.840 --> 0:16:13.600 Commission launched an antitrust investigation into Meta, specifically over how 0:16:13.640 --> 0:16:18.479 the company handles classified ads on Facebook. So the regulators 0:16:18.480 --> 0:16:22.200 are arguing that Meta gives preferential treatment to its own 0:16:22.320 --> 0:16:27.440 Facebook marketplace classified ads over other types of classified ads 0:16:27.520 --> 0:16:30.680 that could be posted to Facebook. This aligns with a 0:16:30.680 --> 0:16:34.360 similar case against Meta brought by the Competition and Markets Authority, 0:16:34.640 --> 0:16:40.640 which is the regulatory authority in the UK. Similarly, we 0:16:40.680 --> 0:16:45.560 saw more arguments against Apple and also Google's policies of 0:16:45.600 --> 0:16:49.560 taking a cut of all in app purchases made in 0:16:49.680 --> 0:16:54.840 iOS or Android apps, respectively. Now Apple tends to get 0:16:54.880 --> 0:16:59.480 a lot more focus about this, perhaps because until very recently, 0:16:59.720 --> 0:17:05.439 the company was strictly focused on only allowing users to 0:17:05.480 --> 0:17:09.960 download apps through the official Apple App Store, whereas Google 0:17:10.440 --> 0:17:15.560 via Android has allowed sideloading since the very beginning. Uh 0:17:15.640 --> 0:17:18.760 Android sideloading is when you are able to load an 0:17:18.800 --> 0:17:23.119 app that's not in the official app store, and while 0:17:23.160 --> 0:17:26.320 Google makes it possible, the company does warn users that 0:17:26.680 --> 0:17:31.240 this particular ability could lead to problems because you might 0:17:31.359 --> 0:17:35.960 end up downloading an app that is malicious, so there 0:17:36.000 --> 0:17:39.320 are risks involved. But Google says, hey, you're adults, you 0:17:39.359 --> 0:17:43.400 can make these decisions for yourself. Apple says, you know what, 0:17:43.640 --> 0:17:45.159 you don't know what's good for you. We're going to 0:17:45.280 --> 0:17:47.520 prevent that from happening, so you can only get them 0:17:47.520 --> 0:17:50.400 through the app store there too. I'm being a little 0:17:50.400 --> 0:17:52.640 facetious with this, but they are These are two fundamentally 0:17:52.680 --> 0:17:56.320 different approaches to how you allow your customers to get 0:17:56.359 --> 0:17:59.320 access to apps to run your devices. Apple wants a 0:17:59.400 --> 0:18:04.400 much more con trold ecosystem that's not likely to run 0:18:04.400 --> 0:18:09.960 a foul of Apple's other policies and procedures. So at 0:18:10.000 --> 0:18:12.680 the end of two we learned that Apple is now 0:18:12.720 --> 0:18:16.040 preparing to change this policy. It's going to open up 0:18:16.040 --> 0:18:18.960 iOS devices to third party app stores in order to 0:18:19.000 --> 0:18:22.840 be compliant with EUS Digital Markets Act, which I'll talk 0:18:22.880 --> 0:18:25.520 about later in this episode. So this is not going 0:18:25.560 --> 0:18:28.320 to happen immediately, but it should become a reality next year, 0:18:28.359 --> 0:18:31.800 which is a good thing because this particular EU requirement 0:18:32.160 --> 0:18:36.480 will go into effect in T four. Now, you might 0:18:36.520 --> 0:18:39.879 remember that this issue really made headlines. The issue of 0:18:40.000 --> 0:18:43.320 in app payments really made headlines when Epic Games, the 0:18:43.359 --> 0:18:48.200 company behind the massively popular title Fortnite, attempted to circumvent 0:18:48.280 --> 0:18:53.480 Apple's ecosystem by allowing players who play Fortnite on iOS 0:18:53.520 --> 0:18:56.600 devices to kind of have a work around so that 0:18:56.680 --> 0:18:59.280 they can make purchases within the game, but not through 0:18:59.320 --> 0:19:03.879 Apple's official in app payment system. This was back in 0:19:05.080 --> 0:19:07.919 and then you had this massive battle between Apple and 0:19:07.960 --> 0:19:11.320 Epic that stretched into several court cases and lasted more 0:19:11.320 --> 0:19:15.280 than a year. Neither side was totally victorious by the 0:19:15.400 --> 0:19:17.880 end of it, but it's snowballed in. Over the last 0:19:17.880 --> 0:19:20.880 two years, we've seen growing resistance to this in app 0:19:20.920 --> 0:19:25.040 payment policy, though apparently it was news to Elon Musk, 0:19:25.119 --> 0:19:27.320 as he made a big stink over it while pushing 0:19:27.359 --> 0:19:32.360 Twitter's subscription tier Twitter Blue. But we'll talk way more 0:19:32.400 --> 0:19:36.200 about Elon Musk and Twitter in another episode, not this one. 0:19:36.520 --> 0:19:39.200 I just don't have it in me. Plus, there's an 0:19:39.240 --> 0:19:42.879 ongoing story that is unfolding as I'm recording these, so 0:19:43.440 --> 0:19:46.640 I kind of want to see how it turns out anyway. 0:19:46.880 --> 0:19:50.040 To be clear, the issue isn't so much that Apple 0:19:50.080 --> 0:19:53.440 and Google take a cut of every in app transaction. 0:19:53.680 --> 0:19:57.560 That's not really the problem. I mean payment processors as 0:19:57.600 --> 0:20:00.119 a rule take a cut of every transaction. That's how 0:20:00.160 --> 0:20:03.879 they make money. The problem is that Apple and Google 0:20:04.000 --> 0:20:08.919 prevent any alternative in app payment systems on their platforms. 0:20:08.960 --> 0:20:11.320 So the argument is that when there are no alternatives, 0:20:11.359 --> 0:20:14.359 there's no competition. And Apple tried to kind of be 0:20:14.400 --> 0:20:17.760 a little cheeky about this earlier this year and allowed 0:20:18.040 --> 0:20:21.399 some third party payment systems for certain types of apps, 0:20:21.720 --> 0:20:26.360 but they also charged a premium for merchants to use 0:20:26.400 --> 0:20:30.520 these alternatives. So that meant that the app developer would 0:20:30.520 --> 0:20:34.399 actually see even more money diverted away from them and 0:20:34.600 --> 0:20:38.480 to the payment processor and to Apple, and would receive 0:20:38.560 --> 0:20:41.480 even less of every single transaction if they went with 0:20:41.560 --> 0:20:45.080 an alternative to Apples in app payment system. And you 0:20:45.119 --> 0:20:47.600 can bet that move did not go over well. Everyone 0:20:47.640 --> 0:20:50.360 said like, hey, we totally see what you're doing. Apple, 0:20:50.880 --> 0:20:53.400 cut it out now. It will be interesting to see 0:20:53.400 --> 0:20:55.879 how these stories unfold next year. The EU and the 0:20:56.000 --> 0:20:59.399 UK in particular are taking a really tough stance. The 0:20:59.520 --> 0:21:03.520 US also is, but the US has had, like I said, 0:21:03.600 --> 0:21:09.520 decades of being very hands off, very uh almost lassa 0:21:09.640 --> 0:21:14.000 fair about how how companies have been able to conduct 0:21:14.040 --> 0:21:18.560 themselves and to consolidate. So this is like trying to 0:21:18.600 --> 0:21:21.480 act against a lot of momentum that had been building 0:21:21.560 --> 0:21:23.200 up for for years and years and years. In the 0:21:23.240 --> 0:21:26.119 United States, it's a little different here all right. Now, 0:21:26.200 --> 0:21:29.960 let's talk about the Use Digital Services Act and the 0:21:30.040 --> 0:21:34.000 Digital Markets Act. These are two pieces of legislation that 0:21:34.080 --> 0:21:36.760 are shaking things up for tech in general, and both 0:21:36.840 --> 0:21:40.800 of them were put into effect this year, or at 0:21:40.840 --> 0:21:45.000 least enacted this year. The the actual rules end up 0:21:45.000 --> 0:21:49.560 having kind of a rolling effect on when they come 0:21:49.600 --> 0:21:53.359 into full power, so there will be time for the 0:21:53.359 --> 0:21:56.480 tech industry to comply with all the different rules. The 0:21:56.520 --> 0:22:01.080 European Commission to the European Parliament proposed both of legislation 0:22:01.600 --> 0:22:04.960 way back in December, so it wasn't until this year 0:22:05.000 --> 0:22:08.640 that they were both passed into law after receiving lots 0:22:08.640 --> 0:22:11.960 of revisions and tweaks and whatnot. Now, in both cases, 0:22:12.400 --> 0:22:15.439 the acts helped bring into alignment the laws that the 0:22:15.600 --> 0:22:18.800 various member countries of the European Union have had in 0:22:18.880 --> 0:22:23.760 place relating to specific Internet matters. So what the heck 0:22:23.800 --> 0:22:27.480 did these laws say? Well, the Digital Services Act or 0:22:27.600 --> 0:22:32.000 d s A is primarily focused on illegal content on 0:22:32.040 --> 0:22:36.879 the Internet and IT and related issues like content moderation policies. 0:22:37.520 --> 0:22:40.280 Now there are some policies that are going to sound 0:22:40.400 --> 0:22:43.680 very familiar to my fellow Americans. At least, my fellow 0:22:43.720 --> 0:22:46.960 Americans are up to speed on concepts like safe Harbor 0:22:47.080 --> 0:22:51.760 and section to thirty of the Communications Decency Act, namely 0:22:52.560 --> 0:22:57.520 that a platform or an intermediary as the EU calls them, 0:22:57.720 --> 0:23:01.359 is not liable for the content that users post to 0:23:01.520 --> 0:23:05.040 that platform, meaning a platform is not to be held 0:23:05.480 --> 0:23:09.200 as the responsible party for a user posting something illegal 0:23:09.240 --> 0:23:13.280 to that platform. So, for example, if I were to 0:23:13.480 --> 0:23:17.880 post illegal drug information like maybe I'm trying to sell 0:23:18.040 --> 0:23:21.359 drugs on Facebook, and I post that to Facebook in 0:23:21.400 --> 0:23:25.000 the EU, and it's against the law that Facebook would 0:23:25.040 --> 0:23:27.600 not be held accountable for the fact that I did that, 0:23:28.320 --> 0:23:32.760 except that this protection does have strict limits. Namely, once 0:23:32.760 --> 0:23:37.359 a platform becomes aware of the illegal material, it has 0:23:37.400 --> 0:23:42.400 to act to remove that material. Failure to act means 0:23:42.440 --> 0:23:45.040 the platform will be held responsible for allowing the illegal 0:23:45.080 --> 0:23:47.919 material to stay up online and they can face some 0:23:48.160 --> 0:23:53.720 really hefty fines like ten of their overall revenue in 0:23:53.760 --> 0:23:59.200 the EU. That's massive. So also, because the EU is 0:23:59.240 --> 0:24:01.920 applying these rules to sites and services that have more 0:24:01.960 --> 0:24:06.480 than forty five million EU users, it's pretty clear that 0:24:06.520 --> 0:24:11.159 regulators are really aiming this at big tech. This is 0:24:11.960 --> 0:24:14.960 a more strict stance than what we see here in 0:24:15.000 --> 0:24:18.359 the US with Section to thirty of the Communications Decency Act. 0:24:19.080 --> 0:24:22.040 The Digital Services Act also aims to strip away the 0:24:22.080 --> 0:24:25.960 mystery behind how sites and services like Facebook and TikTok 0:24:26.040 --> 0:24:31.399 and YouTube work algorithmically. So essentially, the d s A 0:24:31.520 --> 0:24:35.080 says companies have to be able to explain how their 0:24:35.080 --> 0:24:39.560 recommendation algorithms work and and to do so, you know, 0:24:39.920 --> 0:24:42.879 beyond just hey, it just suggests things that things you'll like. 0:24:43.720 --> 0:24:46.200 So they have to explain how the algorithms pick and 0:24:46.720 --> 0:24:50.479 choose what contents is served up to users. They also 0:24:50.920 --> 0:24:53.679 have to be clear on how the company decides what 0:24:53.920 --> 0:24:58.159 content to remove and when to remove it. So for 0:24:58.359 --> 0:25:02.320 companies that have policies they will remove certain types of material, 0:25:02.359 --> 0:25:04.720 they have to be very transparent in how they make 0:25:04.760 --> 0:25:09.040 these determinations. The d s A requires companies to explain 0:25:09.119 --> 0:25:12.439 how they match advertisers to users, you know, and what 0:25:12.600 --> 0:25:15.639 goes into targeted advertising, what kind of data gets pulled 0:25:15.680 --> 0:25:19.160 and used for that purpose. Now, considering the e use 0:25:19.200 --> 0:25:24.159 protective stance around citizen data in the European Union, I 0:25:24.200 --> 0:25:26.520 suspect that last bit is going to end up shaking 0:25:26.520 --> 0:25:29.800 things up considerably for companies that depend heavily on ad 0:25:29.840 --> 0:25:33.840 revenue like Meta and Google. All right, well, let's switch 0:25:33.880 --> 0:25:37.359 over to the Digital Markets Act or d m A. 0:25:37.880 --> 0:25:40.280 So while the d s A is focused on illegal 0:25:40.359 --> 0:25:44.119 content online, the d m A aims to make e 0:25:44.400 --> 0:25:48.320 commerce more fair and equitable. As such, it is aimed 0:25:48.320 --> 0:25:53.600 to encourage competition and to prevent monopolies and anti competitive practices. 0:25:53.920 --> 0:25:55.679 So the goal of the d m A is to 0:25:55.720 --> 0:25:59.400 put a check on big text so that the larger, 0:25:59.520 --> 0:26:03.200 morris ablished companies can't just push around, or gobble up 0:26:03.320 --> 0:26:08.720 or stamp out smaller companies. Now, considering that several tech 0:26:08.760 --> 0:26:12.920 companies got to where they are largely through numerous acquisitions, 0:26:12.960 --> 0:26:16.560 this could also be a huge blow to certain corporations 0:26:16.560 --> 0:26:19.320 out there. Uh. If you were to search any of 0:26:19.400 --> 0:26:24.320 the Big Tech five and include the word acquisitions or mergers, 0:26:24.800 --> 0:26:28.320 you'd probably end up with a pretty lengthy list. Over 0:26:28.359 --> 0:26:32.119 the years, Meta in particular has a reputation for acquiring 0:26:32.160 --> 0:26:36.320 companies that would otherwise pull attention away from metas platforms. 0:26:36.640 --> 0:26:39.840 The company is known for either buying up potential competitors 0:26:39.920 --> 0:26:43.080 or attempting to copy them in an effort to minimize 0:26:43.200 --> 0:26:47.520