EU official warns Musk he’ll have to ‘fly by our rules’ as he buys Twitter
Dado Ruvic | Reuters
After a cryptic tweet from Musk suggesting he’d completed his acquisition of Twitter, Thierry Breton, the European commissioner for the internal market, warned Musk that he will have to comply with the bloc’s new digital regulations.
“The bird is freed,” Musk tweeted. In response, Breton quote-tweeted Musk saying: “In Europe, the bird will fly by our rules.”
Although not officially confirmed, a spokesperson for crypto exchange Binance, which provided Musk equity financing for the Twitter takeover, said Friday the transaction had been completed.
Musk, one of Twitter’s most popular users, is known for tweeting everything from announcements about Tesla and his other companies, to memes and attacks on his critics.
The Tesla and SpaceX CEO has previously called himself a “free speech absolutist,” and says he wants to reform Twitter as a “digital town square” with fewer restrictions on what users can say.
That will have ramifications for the way content is moderated on Twitter, a key concern for regulators looking to rein in digital giants over the spread of hate speech and disinformation online.
Under the European Union’s recently approved Digital Services Act, large tech companies will be required to have robust content moderation systems to ensure they can quickly take down illegal material such as hate speech, incitement to terrorism and child sexual abuse.
For his part, Musk has said he wouldn’t allow illegal content on the platform.
The EU’s rules are expected to come into force by 2024. Companies can be fined up to 6% of global annual revenues for violations.
Guy Verhofstadt, a member of the European Parliament, said Friday that “the need for rules and accountability is bigger than ever.”
“So one man @elonmusk now owns the biggest debate in the world …” he said in a tweet. “Self-regulation in social media has never worked … even with lesser characters than his.”
Breton, a former CEO of French IT consulting firm Atos, is seen as a key architect of the European Union’s digital reforms. Alongside the Digital Markets Act, which seeks to curb the dominance of internet giants, the Digital Services Act is part of a bold plan by the bloc to regulate Big Tech.
In May, Musk and Breton met in person, and Musk at the time said the Digital Services Act was “exactly aligned with my thinking.”
But regulators on both sides of the Atlantic are worried that Musk could, for example, allow former President Donald Trump back onto the platform. Musk, who has previously said he would reverse the ban on Trump’s account, reportedly intends to scrap lifetime bans on Twitter users, according to Bloomberg.
Tesla issues recall on Semi over defective brake module, rollaway risk
According to recall filings posted on the website of the National Highway Traffic Safety Administration (NHTSA), 35 Semi trucks were affected. The trucks were built with an electronic parking brake valve module found to contain a defect by supplier Bendix in February 2023.
The defect left drivers vulnerable to “rollaway” incidents and increased the likelihood of a crash. According to a recall notice, the defective modules may “fail to move into the park position when the parking brake is activated” leaving drivers unaware their Semi could roll away. The parking brake component defect has not resulted in a crash or any damages, according to the filings.
While Tesla showed off the design of the Semi in late 2017, it only began producing the trucks in Nevada last year and began deliveries to early customer Pepsi at a marketing event late last year.
In filings on the NHTSA site, Tesla said it will “replace the parking brake valve module with a revised part with improved internals that prevent air leakage and allow the driver to engage and disengage parking brakes.”
Elon Musk’s electric vehicle maker is expected to issue its first-quarter, 2023 vehicle production and deliveries report this weekend. Tesla has not previously broken out Semi production and delivery numbers in its quarterly updates.
Signal President Meredith Whittaker learned what not to do from working at Google
Florian Hetzt | The Washington Post | Getty Images
She’s now president of an organization that operates one of the world’s most popular encrypted messaging apps, with tens of millions of people using it to keep their chats private and out of the purview of big tech companies.
Whittaker has real-world reasons to be skeptical of for-profit companies and their use of data — she previously spent 13 years at Google.
After more than a decade at the search giant, she learned from a friend in 2017 that Google’s cloud computing unit was working on a controversial contract with the Department of Defense known as Project Maven. She and other workers saw it as hypocritical for Google to work on artificial intelligence technology that could potentially be used for drone warfare. They started discussing taking collective action against the company.
“People were meeting each week, talking about organizing,” Whittaker said in an interview with CNBC, with Women’s History Month as a backdrop. “There was already sort of a consciousness in the company that hadn’t existed before.”
With tensions high, Google workers then learned that the company reportedly paid former executive Andy Rubin a $90 million exit package despite credible sexual misconduct claims against the Android founder.
Whittaker helped organize a massive walkout against the company, bringing along thousands of Google workers to demand greater transparency and an end to forced arbitration for employees. The walkout represented a historic moment in the tech industry, which until then, had few high-profile instances of employee activism.
“Give me a break,” Whittaker said of the Rubin revelations and ensuing walkout. “Everyone knew; the whisper network was not whispering anymore.”
Google did not immediately respond to a request for comment.
Whittaker left Google in 2019 to return full time to the AI Now Institute at New York University, an organization she co-founded in 2017 that says its mission is to “help ensure that AI systems are accountable to the communities and contexts in which they’re applied.”
Whittaker never intended on pursuing a career in tech. She studied rhetoric at the University of California, Berkeley. She said she was broke and needed a gig when she joined Google in 2006, after submitting a resume on Monster.com. She eventually landed a temp job in customer support.
“I remember the moment when someone kind of explained to me that a server was a different kind of computer,” Whittaker said. “We weren’t living in a world at that point where every kid learned to code — that knowledge wasn’t saturated.”
‘Why do we get free juice?’
Beyond learning about technology, Whittaker had to adjust to the culture of the industry. At companies like Google at the time, that meant lavish perks and a lot of pampering.
“Part of it was trying to figure out, why do we get free juice?” Whittaker said. “It was so foreign to me because I didn’t grow up rich.”
Whittaker said she would “osmotically learn” more about the tech sector and Google’s role in it by observing and asking questions. When she was told about Google’s mission to index the world’s information, she remembers it sounding relatively simple even though it involved numerous complexities, touching on political, economic and societal concerns.
“Why is Google so gung-ho over net neutrality?” Whittaker said, referring to the company’s battle to ensure that internet service providers offer equal access to content distribution.
Several European telecommunications providers are now urging regulators to require tech companies to pay them “fair share” fees, while the tech industry says such costs represent an “internet tax” that unfairly burdens them.
“The technological sort of nuance and the political and economic stuff, I think I learned at the same time,” Whittaker said. “Now I understand the difference between what we’re saying publicly and how that might work internally.”
At Signal, Whittaker gets to focus on the mission without worrying about sales. Signal has become popular among journalists, researchers and activists for its ability to scramble messages so that third parties are unable to intercept the communications.
As a nonprofit, Whittaker said that Signal is “existentially important” for society and that there’s no underlying financial motivation for the app to deviate from its stated position of protecting private communication.
“We go out of our way in sometimes spending a lot more money and a lot more time to ensure that we have as little data as possible,” Whittaker said. “We know nothing about who’s talking to whom, we don’t know who you are, we don’t know your profile photo or who is in the groups that you talk to.”
Tesla and Twitter CEO Elon Musk has praised Signal as a direct messaging tool, and tweeted in November that “the goal of Twitter DMs is to superset Signal.”
Musk and Whittaker share some concerns about companies profiting off AI technologies. Musk was an early backer of ChatGPT creator OpenAI, which was founded as a nonprofit. But he said in a recent tweet that it’s become a “maximum-profit company effectively controlled by Microsoft.” In January, Microsoft announced a multibillion-dollar investment in OpenAI, which calls itself a “capped-profit” company.
Beyond just the confusing structure of OpenAI, Whittaker is out on the ChatGPT hype. Google recently jumped into the generative AI market, debuting its chatbot dubbed Bard.
Whittaker said she finds little value in the technology and struggles to see any game-changing uses. Eventually the excitement will decline, though “maybe not as precipitously as like Web3 or something,” she said.
“It has no understanding of anything,” Whittaker said of ChatGPT and similar tools. “It predicts what is likely to be the next word in a sentence.”
OpenAI did not immediately respond to a request for comment.
She fears that companies could use generative AI software to “justify the degradation of people’s jobs,” resulting in writers, editors and content makers losing their careers. And she definitely wants people to know that Signal has absolutely no plans to incorporate ChatGPT into its service.
“On the record, loudly as possible, no!” Whittaker said.
WATCH: AI hype is real
How TikTok and its parent company spent over $13 million on struggling lobbying campaign
Evelyn Hockstein | Reuters
Weeks after Republican Rep. Ken Buck of Colorado and Sen. Josh Hawley of Missouri introduced legislation that would bar TikTok downloads nationwide, Buck’s staff received a call in February from Michael Beckerman, the head of the social media company’s U.S. public policy shop, according to a person close to Buck.
Beckerman pushed back on concerns from Buck’s staff that TikTok is harvesting customer data, and advocated for the company’s new initiative known as Project Texas, this person explained. Project Texas is TikTok’s effort to place its U.S. customer data into a secure hub managed by the tech giant Oracle, which is meant to ease U.S. government concerns that the information could be accessed by Chinese parent company ByteDance or members of the ruling party in China.
The lobbying comes amid a sustained effort by TikTok to play down fears raised by lawmakers who want to ban the app, which has 150 million monthly active users in the U.S. The company has tried to show it can address concerns about user information without an outright ban, but most lawmakers at a contentious hearing about TikTok this month seemed unconvinced Project Texas would adequately do so.
TikTok CEO Shou Zi Chew told U.S. lawmakers at the hearing that China-based employees at ByteDance may have access to some U.S. data from the app. But he assured them employees would no longer have that data once Project Texas is complete.
The sustained lobbying pressure and Chew’s testimony so far have not stifled the effort on Capitol Hill to sever TikTok’s ties to its Chinese owner or limit access to the app.
Brooke Oberwetter, a spokeswoman for TikTok, did not deny any element of this story. She defended the work of TikTok’s team in Washington and said the company is trying to address lawmakers’ privacy and safety concerns.
“Our team in Washington is — and always has been — focused on educating lawmakers and stakeholders about our company and our service,” Oberwetter said. “We will continue our work to educate lawmakers and the American public about our progress in implementing Project Texas to address national security concerns, and we will continue to work with lawmakers, stakeholders, and our peer companies on solutions that address the industrywide issues of privacy and safety.”
One of the leading proposals targeting TikTok is the RESTRICT Act, introduced by a bipartisan group of senators led by Sens. Mark Warner, D-Va., and John Thune, R-S.D.. The bill, which does not yet have companion legislation in the House, would give the Commerce secretary the authority to evaluate national security risks related to certain technology transactions with firms or individuals in a select group of foreign adversary countries, including China. The Commerce secretary could recommend the president take action up to a ban.
Another proposal is the DATA Act, introduced by Rep. Mike McCaul, R-Texas. It would revoke protections that have typically shielded creative content from U.S. sanctions. It would also mandate the president impose sanctions on China-based companies that transfer Americans’ sensitive personal data to individuals or businesses in China. The proposal passed through the GOP-led House Foreign Relations Committee along party lines, with Democrats fearing it was rushed.
At the furthest end of the extreme is the legislation from Hawley and Buck that simply seeks to ban TikTok outright by directing the president to block transactions with ByteDance.
Since the call with Beckerman, Buck has not held back in calling the app a threat to national security. Buck’s staff members responded to Beckerman that they were still concerned about the company’s privacy, cybersecurity and national security policies, the person close to Buck said.
Another ally of the Colorado lawmaker said the lobbying money is wasted on trying to change Buck’s mind. “It’s like they’re lighting their money on fire,” a Republican strategist allied with Buck told CNBC.
Another GOP strategist familiar with TikTok’s lobbying efforts told CNBC that the company’s “last-minute blitz” to lobby Capitol Hill weeks before Chew’s testimony was “amateur hour.” The person said congressional offices at times declined meetings with company representatives, and that TikTok officials did not reach out to key lawmakers such as Hawley who have targeted the app.
Hawley has not eased his campaign to ban TikTok. He tried on Wednesday to win unanimous Senate support to fast-track his bill. Sen. Rand Paul, a Kentucky Republican who is now among the small group of lawmakers from both parties who have opposed the effort to bar access to the app, blocked Hawley’s legislation. While there are plenty of lawmakers who haven’t yet concluded a ban is necessary, only a handful have openly ruled it out.
Those who declined to be named in this story did so to speak freely about private conversations and meetings. A Hawley spokeswoman did not return a request for comment.
The interaction with Buck’s team represents just one of many instances when lobbyists for TikTok, or its China-based parent company ByteDance, have seen their campaigns fall on deaf ears on Capitol Hill, according to advisors and aides to congressional lawmakers. The fact that some lawmakers have showed little interest in hearing out TikTok executives is the latest sign the company may need more allies in Congress to prevent new restrictions on the app or a potential ban.
Warner met earlier this year with TikTok lobbyists, according to a person at the gathering at the senator’s office. The Virginia lawmaker and Thune later introduced their bill that would empower the Commerce secretary to take action against TikTok. The White House has since endorsed the bill and called for Congress to pass it so President Joe Biden can sign it.
Warner’s office did not return a request for comment.
TikTok appears to have ramped up its lobbying just ahead of Chew’s testimony in front of the House Committee on Energy and Commerce. The company flew TikTok influencers to Washington before the event.
The company also had allies in a handful of Democratic lawmakers such as Rep. Jamaal Bowman, D-N.Y. A day before the hearing, he and popular content creators on the app held a news conference to oppose a potential ban.
But in private meetings, some of those same influencers told Bowman that there need to be regulations passed to protect their data across all social media platforms, including TikTok, while keeping the app intact, according to an aide familiar with the discussions.
Regardless of their impact on lawmakers, creators’ pleas to maintain access to TikTok in the U.S. have seemed to resonate with many American users who see the app as a source of entertainment, information and even income. During and after the hearing, TikTok users shared clips of lawmakers asking basic questions of the CEO, deriding Congress for what they saw as a lack of understanding of the technology.
But based on the five hours of tense questioning by members of both parties at the hearing, the creators’ appeals didn’t seem to offset the deep concerns lawmakers shared about the app’s connections to China, along with the addictive and potentially harmful qualities of its design.
“I don’t think they won over any lawmakers,” Alex Moore, communications director for Rep. Jan Schakowsky, D-Ill., said of TikTok’s pre-hearing lobbying. Bringing in TikTok creators to amplify the company’s message “hasn’t swayed my boss,” Moore added.
Still, Moore said his office has been hearing a lot from constituents since the hearing. Before the testimony, calls about TikTok would “trickle in,” he said. But after, “our phones were ringing off the hook,” with the majority of callers voicing opposition to a TikTok ban.
“We heard overwhelmingly that’s not what our constituents are interested in,” he said.
While often a call like that “starts out hot,” Moore said constituents would tend to calm down once staff explained that Schakowsky wants comprehensive privacy legislation so as not to “let other companies off the hook” for similar data practices.
Schakowsky told CNBC immediately after the hearing that there will still likely be “further discussion” about how to address the concerns directly related to TikTok’s Chinese ownership. But Schakowsky, who co-sponsored the bipartisan privacy legislation that passed out of the committee last Congress, said she hopes the hearing brings renewed momentum to privacy protections that would apply to other large tech companies as well.
Connected lobbying efforts
TiKTok’s and ByteDance’s lobbying efforts are directly linked.
ByteDance’s quarterly lobbying reports show all of their in-house lobbyists work for TikTok. They include Beckerman, who once worked as a policy director for former GOP Rep. Fred Upton of Michigan, along with Freddy Barnes, who had a stint in Republican House Speaker Kevin McCarthy’s office.
TikTok itself has hired its own legion of outside lobbyists. Its latest recruits include former Rep. Jeff Denham, R-Calif., and Ankit Desai, a former aide to Biden when he was a member of the U.S. Senate.
ByteDance and TikTok have combined to spend over $13 million on federal lobbying since 2019, according to lobbying disclosure reports and data reviewed by OpenSecrets.
The majority of the spending on lobbying related to the social app has come from ByteDance. The TikTok parent company spent $5.3 million on federal lobbying in 2022, a new record for the company, according to the nonpartisan OpenSecrets.
TikTok itself has spent just over $900,000 since 2020 on outside lobbying consultants.
ByteDance also donated over $400,000 last year to nonprofit groups allied with members of Congress for “honorary expenses,” according to a filing.
The document shows that ByteDance donated a combined $300,000 to the Congressional Hispanic Caucus Institute and Congressional Black Caucus Foundation, groups linked to predominantly Democratic caucuses in the House. Each of those organizations list Jesse Price, a public policy director at TikTok, as a member of either its board of directors or advisory council.
Beckerman, the leading TikTok lobbyist, signed the report showing the contributions ByteDance made.
TikTok and ByteDance have also targeted Biden’s executive office in the White House with lobbying since 2020, according to disclosure reports.
The White House did not respond when asked about further details on the lobbying effort.
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