WEBVTT - Tech News: Investors Change Their Relationship Status With Facebook To "It's Complicated" 0:00:04.400 --> 0:00:07.800 Welcome to Tech Stuff, a production from I Heart Radio. 0:00:12.080 --> 0:00:14.920 Hey there, and welcome to tech Stuff. I'm your host, 0:00:15.080 --> 0:00:17.960 Jonathan Strickland. I'm an executive producer with I Heart Radio 0:00:18.360 --> 0:00:21.279 and how the tech are you? It is time for 0:00:21.320 --> 0:00:25.759 the tech news for Thursday, February three, twenty two. So 0:00:26.280 --> 0:00:32.120 Meta slash Facebook held it's quarterly earnings call yesterday and 0:00:33.560 --> 0:00:36.800 things did not go well for the company. So a 0:00:36.880 --> 0:00:40.960 lot of today's news will be about, you know, breaking 0:00:41.000 --> 0:00:44.240 all of that down. But let's get the big ticket 0:00:44.280 --> 0:00:48.159 item out the way first. The collective bad news and 0:00:48.159 --> 0:00:53.040 that earnings call prompted a more than drop in Facebook's 0:00:53.120 --> 0:00:56.480 stock price and then meant the company lost nearly two 0:00:56.560 --> 0:01:00.880 hundred billion dollars in value. Uh I'll repeat the way 0:01:00.960 --> 0:01:05.280 New York Magazine put it because it's mind boggling. So 0:01:06.040 --> 0:01:09.759 at three pm yesterday Meta the company was worth around 0:01:09.840 --> 0:01:13.840 nine hundred billion dollars and by four thirty pm, it 0:01:13.959 --> 0:01:17.720 was worth seven hundred twenty billion dollars. And actually, as 0:01:17.760 --> 0:01:20.840 I started work on this episode, the valuation of the 0:01:20.880 --> 0:01:24.880 company was sitting at around six hundred seventy billion dollars. 0:01:24.880 --> 0:01:27.840 So it's even worse than what was being reported late 0:01:27.920 --> 0:01:33.440 yesterday afternoon. That's how badly that earnings call went, because 0:01:33.480 --> 0:01:35.120 a lot of that news was just the kind of 0:01:35.160 --> 0:01:39.920 stuff investors don't want to hear. Now. One of the 0:01:40.000 --> 0:01:45.000 many big issues covered during that Meta earnings call was 0:01:45.080 --> 0:01:48.920 that for the first time Facebook, the platform saw a 0:01:49.000 --> 0:01:53.760 decline in daily users in North America, which represents the 0:01:53.840 --> 0:01:57.120 number one market where Facebook rakes in the advertising cash. 0:01:57.160 --> 0:02:00.160 You know, Facebook has more than a billion user as 0:02:00.200 --> 0:02:03.440 we hear it all the time, nearly two billion users, 0:02:04.080 --> 0:02:06.800 but the ones in America are the ones that are 0:02:07.040 --> 0:02:12.280 really the the profit making, the revenue generating users for 0:02:12.320 --> 0:02:18.160 the company. Well, it turns out that they recently lost 0:02:18.160 --> 0:02:21.000 about a million users in North America, which is bad 0:02:21.040 --> 0:02:24.800 news for Meta because it hasn't seen much success in 0:02:24.800 --> 0:02:28.880 attracting new young users. Now, there's no doubt in my 0:02:28.919 --> 0:02:33.040 mind that the whole reason the company was developing Instagram 0:02:33.080 --> 0:02:37.560 apps for the under thirteen crowd was because the apps 0:02:37.600 --> 0:02:41.600 that Meta has right now, that being Facebook, Instagram, WhatsApp, 0:02:42.400 --> 0:02:46.640 are not bringing in new users at a pace that 0:02:46.960 --> 0:02:50.200 is going to give investors confidence. And this kind of 0:02:50.240 --> 0:02:52.519 touches on something that drives me nuts when it comes 0:02:52.520 --> 0:02:55.920 to big business, and that is this. This applies to 0:02:55.919 --> 0:02:59.359 big business businesses in general, but it's if you are 0:02:59.400 --> 0:03:04.440 not growing, you're effectively dying. So you need growth quarter 0:03:04.600 --> 0:03:08.120 over quarter and year over year to demonstrate value to 0:03:08.280 --> 0:03:11.320 investors who want to return on their investment. Which you 0:03:11.320 --> 0:03:13.720 know that makes sense, right, Like you invest in something, 0:03:13.760 --> 0:03:16.000 you're probably doing it because you're hoping to get a 0:03:16.040 --> 0:03:18.720 return on it. Maybe you're doing it because you believe 0:03:18.800 --> 0:03:23.320 in whatever the company is or whatever. That's great. If 0:03:23.360 --> 0:03:25.760 you're doing it for that reason and not because you're 0:03:25.800 --> 0:03:29.960 hoping for a return, that's a different story. But generally speaking, 0:03:30.000 --> 0:03:32.359 people are hoping that they get more money out than 0:03:32.400 --> 0:03:36.080 they put in. But all this means constantly having to 0:03:36.120 --> 0:03:39.000 find ways to expand, even when you start pushing up 0:03:39.040 --> 0:03:43.080 against tough borders around your business. You folks probably know 0:03:43.320 --> 0:03:46.880 that at one time one of the companies that owned 0:03:47.440 --> 0:03:52.480 Hell Stuff Works was Discovery Communications. So at that time 0:03:52.520 --> 0:03:55.920 I saw in the cable channel industry that companies tried 0:03:55.960 --> 0:03:59.760 to get a presence in more countries. They tried to expand, 0:04:00.120 --> 0:04:04.480 introducing services in countries where they didn't already exist because 0:04:04.480 --> 0:04:08.920 they had pretty much saturated the markets where they already were, 0:04:08.960 --> 0:04:11.000 Like in Europe and the United States. They could not 0:04:11.560 --> 0:04:14.440 expanded to more households because they had pretty much touched 0:04:14.800 --> 0:04:19.080 everyone they could in those countries, so they had to 0:04:19.120 --> 0:04:22.760 look elsewhere in order to continue to grow. And pretty 0:04:22.800 --> 0:04:26.960 much every big industry faces this same challenge, and with Facebook, 0:04:27.520 --> 0:04:30.960 so much of that gets wrapped into dominating users time 0:04:31.120 --> 0:04:34.880 and keeping them on the various meta platforms for as 0:04:34.920 --> 0:04:39.040 long as possible, as frequently as possible. Well, you tend 0:04:39.040 --> 0:04:41.200 to hit a limit there as well, which means you 0:04:41.240 --> 0:04:44.080 really do need to get more users into the pool 0:04:44.160 --> 0:04:47.000 because you know eventually you're going to be dominating as 0:04:47.080 --> 0:04:49.359 much of people's time as you possibly can, So you 0:04:49.400 --> 0:04:52.880 need more people in order to continue to grow, and 0:04:53.520 --> 0:04:55.800 Meta just hasn't been doing a good job at bringing 0:04:55.800 --> 0:04:59.000 in new users. The Verge published a Great Beast by 0:04:59.040 --> 0:05:02.200 Alex Heath about Facebook's challenges when it comes to reaching 0:05:02.240 --> 0:05:06.839 young folks, and he cites a Facebook researcher that found 0:05:06.880 --> 0:05:10.080 that Facebook's reach with teenagers in the United States declined 0:05:10.120 --> 0:05:14.320 by between two thousand nineteen to two thousand twenty one. 0:05:15.000 --> 0:05:18.920 This was specifically with regard to the Facebook app, and 0:05:18.920 --> 0:05:21.839 that the the researchers were projecting a drop of another 0:05:21.960 --> 0:05:27.320 forty in teenager reach over the next two years. Heath 0:05:27.400 --> 0:05:30.520 also says research shows that while Instagram is still popular 0:05:30.560 --> 0:05:33.680 with younger users, the level of engagement with the app 0:05:33.839 --> 0:05:37.400 is on the decline. So this is all bad news 0:05:37.440 --> 0:05:40.599 for the long term and really for the short term 0:05:40.640 --> 0:05:45.280 too for Meta, but we're not done yet. Another big 0:05:45.279 --> 0:05:47.960 issue in that earnings call was about how other companies 0:05:48.000 --> 0:05:52.279 are affecting Meta's revenue and numbers. For example, Apple made 0:05:52.279 --> 0:05:56.800 a change to its iOS system that introduced new privacy settings, 0:05:56.880 --> 0:06:00.320 and that has hit Meta hard. Has hit other company 0:06:00.400 --> 0:06:03.760 is hard to, but Meta in particular was really upset 0:06:03.800 --> 0:06:07.200 about this. Uh. Those settings allow iOS users to opt 0:06:07.240 --> 0:06:11.279 out of what is called app tracking. Now, generally speaking, 0:06:12.120 --> 0:06:14.920 app tracking would let a developer create an app that 0:06:15.000 --> 0:06:19.479 collects data about the user's activities on that device, and 0:06:19.520 --> 0:06:22.320 it's kind of like how websites can use cookies to 0:06:22.360 --> 0:06:27.480 track browser activities across the web, except this was more 0:06:27.520 --> 0:06:31.839 about tracking what an iOS user was up to. Meta 0:06:31.960 --> 0:06:35.240 was using that data to build out its massive amount 0:06:35.279 --> 0:06:39.120 of information about folks, you know, users, Facebook users, and 0:06:39.160 --> 0:06:42.120 then it could use that information when making ad deals 0:06:42.120 --> 0:06:47.000 with advertisers and could serve up more targeted ads to 0:06:47.200 --> 0:06:50.200 those users. So the reason Meta pulls in the big 0:06:50.240 --> 0:06:53.040 box is because the company knows what it's users like. 0:06:53.279 --> 0:06:55.400 You just you know, look at their activities on the 0:06:55.440 --> 0:06:59.160 various platforms or in this case, by tracking what they're 0:06:59.160 --> 0:07:02.560 doing on their as devices or in their browsers, and 0:07:02.600 --> 0:07:06.000 then you can draw conclusions about what they like. And 0:07:06.040 --> 0:07:09.640 that means advertisers can have their ads more effectively reach 0:07:09.960 --> 0:07:14.720 target audiences. So Facebook is able to command very high 0:07:14.880 --> 0:07:19.560 ad prices for this service, and the advertisers see their 0:07:19.560 --> 0:07:24.360 businesses benefit right because they see more activity because people 0:07:24.400 --> 0:07:26.560 who are more likely to react to their ads are 0:07:26.600 --> 0:07:31.160 getting their ads. And all of this just costs a 0:07:31.280 --> 0:07:36.560 tiny bit, okay, let's be fair, a lot of user privacy, 0:07:36.680 --> 0:07:41.120 and everybody wins. Except then Apple had to go and 0:07:41.280 --> 0:07:46.240 upset the the Apple cart by letting users actually choose 0:07:46.240 --> 0:07:50.160 to opt out of those services. When using an app. 0:07:50.520 --> 0:07:54.320 They could turn off permissions for app tracking and Meta 0:07:54.360 --> 0:07:58.200 would no longer get that juicy, juicy data that was 0:07:58.280 --> 0:08:01.840 just so mean of you, Apple, You hurt poor little Meta, 0:08:02.560 --> 0:08:07.640 which predicts that this change in Apple's policy is going 0:08:07.720 --> 0:08:12.040 to create a quote unquote headwind. That's quote on the 0:08:12.160 --> 0:08:16.679 order of ten billion dollars end quote, according to Meta 0:08:16.800 --> 0:08:22.080 CFO Dave Winner. In other words, because Meta will not 0:08:22.280 --> 0:08:26.240 have access to those users data, the company will not 0:08:27.000 --> 0:08:30.760 make ten billion dollars That should rightfully be Meta's all 0:08:30.800 --> 0:08:37.760 because users want privacy. I mean, how unreasonable, right I 0:08:37.800 --> 0:08:40.480 guess y'all can probably tell I'm not feeling much empathy 0:08:40.520 --> 0:08:45.480 for Meta here. The company protested Apple's announcement about this 0:08:45.840 --> 0:08:49.599 numerous times, taking out full page ads in newspapers to 0:08:50.280 --> 0:08:54.040 cry out about it, and also using the argument you're 0:08:54.040 --> 0:08:56.400 gonna hurt small businesses because they won't be able to 0:08:56.400 --> 0:08:59.080 reach their customers because we can't track everything that their 0:08:59.160 --> 0:09:04.120 potential customer are doing, and using small business to be 0:09:04.520 --> 0:09:10.120 like your straw man argument is pretty low. Not surprising, 0:09:10.360 --> 0:09:14.120 but low, and uh, you know, keep in mind, app 0:09:14.160 --> 0:09:17.440 tracking is not totally gone. It's not like Apple got 0:09:17.559 --> 0:09:21.480 rid of it. It's just that users will be presented 0:09:21.480 --> 0:09:24.600 the option to opt out of it, and some people 0:09:24.800 --> 0:09:27.559 won't opt out, so I mean it's not totally drying 0:09:27.679 --> 0:09:31.080 up though. Um. You know, if you are presented with 0:09:31.160 --> 0:09:34.400 the option to opt out of app tracking, I recommend 0:09:34.400 --> 0:09:39.040 you do that. Anyway, let's talk about something else. Let's 0:09:39.040 --> 0:09:43.120 talk about Meta's division called Reality Labs. That's the part 0:09:43.160 --> 0:09:46.240 of Meta that's actually focused on building out Meta's version 0:09:46.440 --> 0:09:51.760 of a metaverse, whatever that ends up being. Reality Labs 0:09:51.800 --> 0:09:56.760 also covers hardware like the meta quest VR system. Well, 0:09:56.800 --> 0:10:01.079 in the Reality Labs division brought in about two point 0:10:01.120 --> 0:10:03.840 to seven billion dollars in revenue, and that is a 0:10:03.920 --> 0:10:08.080 lot of money. Two point to seven billion. However, it 0:10:08.160 --> 0:10:12.599 had a net loss of ten point one nine billion 0:10:12.679 --> 0:10:18.839 dollars Yoza so in and in that loss of six 0:10:18.880 --> 0:10:21.600 point six two billion dollars, and then a year earlier 0:10:21.640 --> 0:10:24.319 in twenty nineteen that had a loss of four point 0:10:24.360 --> 0:10:28.640 five billion dollars. So Reality Labs is growing in terms 0:10:28.679 --> 0:10:32.840 of how much money it's losing the company year over year. However, 0:10:32.880 --> 0:10:35.199 we have to keep in mind we are talking about 0:10:35.280 --> 0:10:39.040 division that's trying to build something totally new, and there 0:10:39.080 --> 0:10:41.559 are only a few avenues for revenue right now out 0:10:41.600 --> 0:10:44.920 of that division. So the whole value proposition four Reality 0:10:45.000 --> 0:10:48.280 Labs is that the metaverse is presumably going to be 0:10:48.320 --> 0:10:51.600 the future of online activity, and it will cover everything 0:10:51.679 --> 0:10:58.160 from commerce to entertainment, to socializing to how businesses conduct themselves. 0:10:58.679 --> 0:11:02.000 But for that to happen, it has to be built first, 0:11:02.400 --> 0:11:05.560 and that means you should expect to see losses from 0:11:05.640 --> 0:11:08.760 that kind of division because Meta the Company has to 0:11:08.800 --> 0:11:11.559 pour in the resources to actually make the ding darn 0:11:11.720 --> 0:11:16.160 thing first. So the ten billion dollars, while a shocking number, 0:11:16.800 --> 0:11:19.760 makes sense, it would have been far more perplexing if 0:11:19.800 --> 0:11:23.320 Reality Labs had reported a profit because they don't really 0:11:23.360 --> 0:11:27.600 have anything to sell yet apart from some hardware. Dave Winner, 0:11:27.960 --> 0:11:31.960 remember that's metas CFO or chief financial officer, said that 0:11:32.000 --> 0:11:36.520 the losses will quote likely increase meaningfully in the quote 0:11:36.600 --> 0:11:40.439 this year because they're still building this thing, So that 0:11:40.559 --> 0:11:43.640 I'm guessing scared off some investors as well. Because the 0:11:43.679 --> 0:11:47.199 metaverse is most likely a long term project. It's not 0:11:47.280 --> 0:11:49.560 something that we're going to see launched by the end 0:11:49.600 --> 0:11:52.880 of two A lot of folks are pegging it as 0:11:52.920 --> 0:11:55.560 being another decade or so before we get anything, you know, 0:11:56.280 --> 0:12:00.559 significant in the space of Metaverse. Meanwhile, Meta the company 0:12:00.640 --> 0:12:03.280 is showing a decline in users. As we just mentioned 0:12:03.320 --> 0:12:06.880 people fewer people are using at least Facebook. Some of 0:12:06.880 --> 0:12:09.800 the other apps are doing fine, but in the North 0:12:09.840 --> 0:12:13.400 America of kind of flatlined. Uh. Then you also have 0:12:13.480 --> 0:12:17.839 the problem that Meta is seeing difficulty in reaching new users, 0:12:17.960 --> 0:12:21.440 and you've got these massive losses building out the next 0:12:21.480 --> 0:12:25.120 big thing like they're accumulating, and the next big thing 0:12:25.160 --> 0:12:27.160 is probably not gonna be ready for ten years or so. 0:12:28.400 --> 0:12:32.560 This collective message probably told a lot of investors, you know, 0:12:32.760 --> 0:12:36.280 that this was a dangerous or at least a very 0:12:36.400 --> 0:12:39.800 long term plan, and a lot of them probably just said, Yeah, 0:12:39.840 --> 0:12:42.160 I think I'm just gonna peace out for now and 0:12:42.200 --> 0:12:45.320 I'll check back later. Okay, let's wrap up the meta 0:12:45.360 --> 0:12:48.720 Facebook stuff before we go to break. Nikita Beer posted 0:12:48.720 --> 0:12:52.400 a great tweet which The Verge shared in an article 0:12:52.520 --> 0:12:56.360 about this earnings call, and in that tweet, Nikita laid 0:12:56.360 --> 0:12:58.960 out some of Facebook's big challenges, a couple of which 0:12:59.000 --> 0:13:02.520 we have actually touched on already, and Zuckerberg and his 0:13:02.559 --> 0:13:05.559 fellow executives covered a few of these during that earnings call. 0:13:06.080 --> 0:13:08.000 One of those challenges is that a lot of folks 0:13:08.040 --> 0:13:10.719 have turned to alternatives when it comes to spending their 0:13:10.760 --> 0:13:15.160 time online, uh namely the TikTok platform. When we'll talk 0:13:15.280 --> 0:13:18.880 more about TikTok much later in this episode. So Meta 0:13:19.000 --> 0:13:23.040 has tried to fight back against that trend by introducing 0:13:23.080 --> 0:13:28.199 TikTok like features on platforms like Instagram, but it hasn't 0:13:28.240 --> 0:13:31.640 really made a huge difference for younger users in particular. 0:13:32.320 --> 0:13:35.520 This also seems to mark a shift in user preferences 0:13:35.559 --> 0:13:38.880 in general. Zuckerberg said that people are showing more of 0:13:38.920 --> 0:13:42.880 a tendency to shift away from interacting with their friends online, 0:13:42.880 --> 0:13:47.400 which is kind of the bedrock of Facebook's model, and 0:13:47.480 --> 0:13:51.079 more toward consuming content that's made by others, which is 0:13:51.120 --> 0:13:54.960 something you might expect on a platform like TikTok or YouTube. So, 0:13:55.000 --> 0:13:57.480 in other words, instead of sharing stuff with friends, folks 0:13:57.520 --> 0:14:02.800 are watching TikTok stars do whatever folks are doing on TikTok. Now, 0:14:02.880 --> 0:14:05.840 I don't know. I deleted TikTok off my phone ages 0:14:05.880 --> 0:14:10.320 ago because I'm old and I don't understand kids, which 0:14:10.480 --> 0:14:15.080 we understand is the law. Nikita also pointed out that 0:14:15.200 --> 0:14:18.199 a tried and true method of growth among big companies, 0:14:18.440 --> 0:14:21.680 that is mergers and acquisitions like the stuff we're seeing 0:14:21.720 --> 0:14:24.680 with Microsoft. Will talk more about that a bit too. 0:14:25.480 --> 0:14:27.240 That kind of thing is a lot more difficult for 0:14:27.320 --> 0:14:31.280 Meta because we're now in an era where antitrust measures 0:14:31.280 --> 0:14:35.800 have regained some importance. We're seeing more regulatory bodies around 0:14:35.840 --> 0:14:40.680 the world examined proposed acquisitions and push back against big companies, 0:14:40.720 --> 0:14:46.400 particularly big tech companies, So that avenue isn't really accessible 0:14:46.440 --> 0:14:50.240 to Facebook, right. If Facebook made a move to buy 0:14:50.360 --> 0:14:55.960 up another competitor like TikTok, they would likely face strong 0:14:56.000 --> 0:15:01.640 opposition among regulators around the world. So, oh, that's one 0:15:01.720 --> 0:15:06.120 method of growth Facebook just can't can't touch. Uh. And 0:15:06.320 --> 0:15:09.400 as we've seen in lots of different companies, especially like 0:15:09.440 --> 0:15:13.800 cable companies. I remember when I talked about Comcast. Comcast's 0:15:14.000 --> 0:15:16.680 main method of growth through most of its history has 0:15:16.720 --> 0:15:21.720 been to acquire other cable companies. That's how Comcast really grew. 0:15:21.800 --> 0:15:25.920 It wasn't so much organically growing the business as it 0:15:26.000 --> 0:15:30.680 was gobbling up regional competitors. So that's something that Facebook 0:15:30.720 --> 0:15:33.960 can't really do anymore because of this increased level of scrutiny. 0:15:34.040 --> 0:15:37.160 So yeah, Meta has got some big obstacles in the way. Now. 0:15:37.440 --> 0:15:39.360 I am not saying that the company is at the 0:15:39.400 --> 0:15:42.120 beginning of the end, because it's still raked in thirty 0:15:42.200 --> 0:15:47.239 nine billion dollars in profit in one not revenue profit 0:15:47.840 --> 0:15:51.520 nearly forty billion dollars. It would be ludicrous to suggest 0:15:51.520 --> 0:15:54.080 a company that has that kind of profit is really 0:15:54.080 --> 0:15:57.240 in danger of going under. But it's definitely at a 0:15:57.280 --> 0:16:01.480 point where the company is possibly too big to get 0:16:01.640 --> 0:16:06.640 much bigger, and that's not great from an investor standpoint. Well, 0:16:06.680 --> 0:16:08.760 we've got a lot more to talk about, but let's 0:16:08.800 --> 0:16:20.600 take a quick break. Okay. Over in Europe, there's a 0:16:20.680 --> 0:16:25.120 little thing called g DPR that stands for General Data 0:16:25.160 --> 0:16:29.920 Protection Regulation and it applies across the European Union. Now, 0:16:29.960 --> 0:16:33.520 the purpose of this regulation is to provide protections to 0:16:33.840 --> 0:16:38.720 EU citizens with regard to how companies can collect and 0:16:38.880 --> 0:16:44.640 use those citizens private data, uh, you know online, particularly 0:16:44.680 --> 0:16:48.200 like the idea being we want to give citizens more 0:16:48.280 --> 0:16:53.080 control over their personal information and not unknowingly just hand 0:16:53.160 --> 0:16:56.880 that over to various parties on the internet. So, generally speaking, 0:16:57.440 --> 0:17:00.480 g d PR requires companies to give citizen in the 0:17:00.520 --> 0:17:04.480 EU the opportunity to opt out of data collection, and 0:17:04.480 --> 0:17:07.359 the companies are also supposed to be transparent about how 0:17:07.400 --> 0:17:12.040 they use you know, user data. So if a company 0:17:12.080 --> 0:17:16.120 does collect data through things like cookies, it's supposed to say, well, 0:17:16.800 --> 0:17:19.520 we collect your your information and this is how we 0:17:19.640 --> 0:17:22.160 use it and if you're cool with that, just consent. 0:17:22.240 --> 0:17:24.200 And if you're not cool with that, hit this other 0:17:24.320 --> 0:17:27.919 button and you know, well, part as friends well. The 0:17:27.960 --> 0:17:32.160 Interactive Advertising Bureau of Europe or i a B Europe 0:17:32.480 --> 0:17:36.879 represents advertisers and marketers with businesses in the EU, and 0:17:36.960 --> 0:17:40.080 as part of i a B Europe's services, the group 0:17:40.160 --> 0:17:47.080 developed the Transparency and Consent Framework or TCF, which essentially 0:17:47.119 --> 0:17:51.600 acts as a liaison for various companies, including big ones 0:17:51.640 --> 0:17:58.959 like Google, Microsoft and Amazon, and creates methods too. You know, 0:17:59.000 --> 0:18:02.359 present pop ups, and those pop ups are designed to 0:18:02.800 --> 0:18:06.760 get those users consent for data tracking and such. But 0:18:06.840 --> 0:18:10.240 now the Belgian Data Protection Authority or d p A 0:18:11.000 --> 0:18:15.040 says that the TCF is not doing a good job, 0:18:15.320 --> 0:18:19.040 that it is violating gdp R. The d p A 0:18:19.119 --> 0:18:22.800 says that the pop up notifications designed to get consent 0:18:22.920 --> 0:18:27.439 are not sufficiently clear or transparent enough, so a visitor 0:18:27.680 --> 0:18:31.480 is unable to make an informed decision about granting their 0:18:31.480 --> 0:18:34.840 consent in regard for data tracking, which is a big 0:18:34.840 --> 0:18:37.439 no no. Like. The idea is that the average person 0:18:37.480 --> 0:18:42.040 should understand immediately what is being requested and be able 0:18:42.080 --> 0:18:43.920 to make a decision about whether or not they're cool 0:18:43.960 --> 0:18:46.679 with it, and according to the dp A, they're saying 0:18:47.320 --> 0:18:50.080 these pop ups are not doing that. In addition, the 0:18:50.160 --> 0:18:54.320 d p A argues that the TCF serves as a 0:18:54.400 --> 0:18:58.760 data controller. Now that's just kind of a formal designation 0:18:59.280 --> 0:19:02.160 within g d p R. It would mean that TCF 0:19:02.320 --> 0:19:07.000 would be held accountable for keeping personal data safe. And 0:19:07.119 --> 0:19:09.440 tc f A said, well, well, well we are. We're 0:19:09.440 --> 0:19:13.560 not a data controller. All we're doing is facilitating these 0:19:13.680 --> 0:19:17.680 consent requests. But one of the things TCF has been 0:19:17.680 --> 0:19:21.800 doing is that it records user responses to consent requests 0:19:21.840 --> 0:19:24.880 and shares that information with other companies that are part 0:19:24.920 --> 0:19:28.399 of the TCF ecosystem. So, in other words, if someone 0:19:28.440 --> 0:19:31.960 in the EU visits let's say Amazon dot com, and 0:19:32.119 --> 0:19:36.040 Amazon presents this consent request to the user and the 0:19:36.119 --> 0:19:39.800 user agrees to it, well, TCF might share that information 0:19:39.840 --> 0:19:43.240 with say Google, And the d p A argues that 0:19:43.280 --> 0:19:47.240 this practice, which includes storing a cookie on the end 0:19:47.400 --> 0:19:52.320 users device, that makes the end user personally identifiable, and 0:19:52.400 --> 0:19:59.440 that means that the consent data constitutes personal information and 0:20:00.200 --> 0:20:04.000 TCF has not been a responsible steward of that information. 0:20:04.400 --> 0:20:06.960 The d p A find I A B Europe two 0:20:07.400 --> 0:20:11.920 fifty thousand pounds, which the organization can appeal, and the 0:20:12.000 --> 0:20:14.960 d p A has also demanded that TCF be brought 0:20:15.000 --> 0:20:20.680 into compliance with g DPR. So many acronyms and initialisms. Anyway, 0:20:21.119 --> 0:20:24.440 they're saying, you have to get this service in compliance 0:20:24.440 --> 0:20:27.199 with g d p R within two months, and that 0:20:27.359 --> 0:20:32.040 all the organizations that are currently using the TCF services 0:20:32.440 --> 0:20:37.359 have to delete that consent data quote without undue delay 0:20:37.560 --> 0:20:41.200 end quote. Now, this decision could force some really big 0:20:41.280 --> 0:20:45.080 changes and how companies have been obtaining consent for the 0:20:45.160 --> 0:20:48.000 use of cookies and such in the EU, which I 0:20:47.840 --> 0:20:51.719 imagine will be nearly as disruptive as the actual ratification 0:20:51.760 --> 0:20:53.840 of g d p R was in the first place. 0:20:55.320 --> 0:20:57.919 Now Here in the United States, Apple is trying to 0:20:57.960 --> 0:21:01.639 convince lawmakers to vote against a bill that would force 0:21:01.720 --> 0:21:04.680 Apple to allow users to download apps that are not 0:21:04.840 --> 0:21:09.080 in the actual Apple Store app store. Uh So, this 0:21:09.160 --> 0:21:13.399 is a practice that we usually call sideloading. That you 0:21:13.480 --> 0:21:17.200 have your you know, standard approved method of getting apps 0:21:17.200 --> 0:21:19.879 that is going through the official store, but that you 0:21:19.920 --> 0:21:22.919 can also side load apps that are not in the 0:21:23.000 --> 0:21:26.760 store onto your device. That's something that Android users can do. 0:21:27.840 --> 0:21:34.240 Google often advises caution for people to sideload apps because 0:21:34.680 --> 0:21:39.000 there's no protection system in the way. That means that 0:21:39.080 --> 0:21:42.040 you might be more likely to encounter malware, but you 0:21:42.160 --> 0:21:45.440 can do it on Google devices. But Apple has long 0:21:45.520 --> 0:21:49.320 maintained that the only way was the Apple way. So 0:21:49.359 --> 0:21:51.840 since the launch of the App Store for the iPhone, 0:21:51.880 --> 0:21:54.560 which happened way back in two thousand eight, Apple has 0:21:54.600 --> 0:21:58.480 served as the gatekeeper for all apps on iOS devices. 0:21:59.160 --> 0:22:02.200 Developers have to submit their apps to Apple for review, 0:22:02.400 --> 0:22:05.280 and the company can choose to reject submissions for pretty 0:22:05.359 --> 0:22:09.200 much any reason they like. Sometimes it's practically impossible to 0:22:09.240 --> 0:22:12.440 figure out what that reason was, or sometimes even if 0:22:12.480 --> 0:22:15.600 there were a reason in the first place. But Apple 0:22:15.640 --> 0:22:19.399 says that this practice protects users and that without it, 0:22:19.480 --> 0:22:23.480 people would develop malicious apps for iOS devices and then 0:22:23.480 --> 0:22:28.080 try to trick iOS users into downloading those apps, which 0:22:28.119 --> 0:22:32.000 would compromise those users safety and privacy in the process. 0:22:33.440 --> 0:22:37.080 It would also mean the Apple would lose a lucrative 0:22:37.160 --> 0:22:40.480 source of revenue for all those sideloaded apps, because the 0:22:40.520 --> 0:22:44.800 company in most regions anyway, currently forces app developers to 0:22:44.880 --> 0:22:48.560 use Apple's own payment system for all in app purchases, 0:22:48.880 --> 0:22:51.719 and Apple takes a cut out of each and every 0:22:51.920 --> 0:22:55.800 in app purchase. So if you could sideload apps on 0:22:55.920 --> 0:22:59.240 your iOS device. Well, the developers of those apps might 0:22:59.280 --> 0:23:02.320 have their own in app purchasing systems that don't use 0:23:02.359 --> 0:23:05.800 Apple's approach, and Apple would not get a cut of 0:23:05.840 --> 0:23:10.480 those transactions. Um. Also, I feel like it's necessary to 0:23:10.520 --> 0:23:13.879 point out there's already malware for iOS devices that are 0:23:13.920 --> 0:23:16.040 out there. There are some malicious apps that have made 0:23:16.080 --> 0:23:19.800 it through the App store, so Apple's argument about protecting 0:23:19.840 --> 0:23:24.200 privacy loses a little bit of credence there. That being said, 0:23:24.320 --> 0:23:27.600 I do happen to agree that sideloading will likely mean 0:23:28.200 --> 0:23:31.639 we'll see a big spike in malware targeting iOS users 0:23:31.640 --> 0:23:34.720 in the future if Apple is in fact forced to 0:23:34.960 --> 0:23:39.879 allow it. Uh, that's just gonna happen. So I generally 0:23:39.920 --> 0:23:42.280 avoid side loading apps. I have done it a few 0:23:42.320 --> 0:23:46.000 times in the past, usually to use an app that's 0:23:46.040 --> 0:23:49.880 in an early stage of development and hasn't yet been 0:23:49.920 --> 0:23:55.200 finalized and released, and I trusted the developers. But I 0:23:56.600 --> 0:24:00.880 do not, as a rule do it, even though even 0:24:00.920 --> 0:24:03.320 though I'm aware that I could get access to stuff 0:24:03.359 --> 0:24:05.720 that wouldn't make it through say the original the actual 0:24:05.800 --> 0:24:10.560 Android Store. I UH, I don't feel comfortable sideloading a 0:24:10.560 --> 0:24:14.600 lot of apps, largely because they can be pretty dicey 0:24:14.920 --> 0:24:18.879 and shady, So that part I actually do agree with 0:24:18.920 --> 0:24:21.840 Apple with However, I think that the main motivation has 0:24:21.880 --> 0:24:27.040 always been this, uh, this revenue stream that Apple gets 0:24:27.040 --> 0:24:30.520 through all the in app purchases. Of course, there are 0:24:30.600 --> 0:24:36.240 judges that have demanded Apple allow developers to offer alternative 0:24:36.240 --> 0:24:41.520 payment systems that would side step Apple's process. That's something 0:24:41.560 --> 0:24:46.000 that the company is currently appealing. So we'll have to 0:24:46.000 --> 0:24:48.720 wait and see where that goes. And we'll also have 0:24:48.800 --> 0:24:53.800 to see where this sideloading issue goes. Let's talk about 0:24:53.840 --> 0:24:57.959 something else that is kind of a malware that involves Apple, 0:24:58.119 --> 0:25:02.320 but it doesn't involve, you know, people downloading a malicious app. 0:25:02.600 --> 0:25:05.800 So last year I talked a lot about Pegasus. That's 0:25:05.840 --> 0:25:08.960 a product from an Israeli company called the ns A Group, 0:25:09.440 --> 0:25:14.760 and it is a product that compromises iOS devices. Now, again, 0:25:14.800 --> 0:25:18.320 this is not a malicious app. It doesn't involve tricking 0:25:18.359 --> 0:25:22.720 someone into downloading an app that's actually a back door 0:25:23.440 --> 0:25:28.639 vulnerability for that device. Pegasus instead would let someone activate 0:25:28.680 --> 0:25:32.760 malware on another person's iOS device by sending a message 0:25:32.760 --> 0:25:35.960 through I message, so the person didn't have to open 0:25:35.960 --> 0:25:37.480 the eye message. They didn't have to click on a 0:25:37.520 --> 0:25:40.680 link and they just had to receive it, and this 0:25:40.720 --> 0:25:46.199 would trigger a vulnerability in the iOS system and the 0:25:46.600 --> 0:25:51.359 attacker would be able to do everything from track a 0:25:51.400 --> 0:25:56.000 person's phone activity to even activating the phone's cameras and 0:25:56.040 --> 0:25:59.720 microphones and turn the phone into a surveillance device from 0:25:59.720 --> 0:26:05.520 a are And um, yeah, creepy, creepy stuff. That alone 0:26:05.800 --> 0:26:08.080 was a huge story. But then n S A group 0:26:08.240 --> 0:26:10.880 was upping the anti by selling this product to various 0:26:10.920 --> 0:26:14.960