WinSocially Weekly
Big Tech, political and personal challenges
Round 2 of our newsletter and many thanks for all the suggestions and feedback. A welcome to all the new subscribers! As our initial group of readers will notice, we’ve moved to Substack in order to handle the newsletter creation and distribution more efficiently.
Big Tech, Big Problems?
From India to Germany to the US, the challenges to the world’s most powerful digital companies are on the rise.
As we outlined last week, new regulations in India led Amazon to pull a number of products from their website. This caused turmoil and alarmist reports with suggestions that Walmart may look to exit from its recent acquisition of Flipkart. These have subsequently been dismissed and additionally, Amazon made a deal to get many of its products back online.
What these regulations represent is a triumph of domestic political considerations due to the upcoming elections in India.
The vote, which must be held by May, has increased the influence of local retailers that lobbied for growth-crimping curbs on the U.S. giants. On cue, India this month rolled out constraints on foreign e-commerce players including Jeff Bezos-led Amazon and Walmart-owned Flipkart, which together control 70 percent of its online shopping. The tighter rules, aimed at protecting small traders, may end up benefiting the country’s richest man, Mukesh Ambani, who is building a home-grown competitor.
India is hardly unique in this. Even on home turf, extreme scepticism towards big tech companies is becoming the dominant narrative in politics. Witness the problems faced by Amazon while planning for their new HQ in New York.
But critics objected to the massive subsidies New York offered to lure the tech behemoth. New York State committed to $1.525 billion in incentives, contingent on the company creating 25,000 new jobs with an average salary of $150,000. Protesters took to the streets in Long Island City, criticizing the deal for being bad for taxpayers and the neighborhood.
In Europe, Germany's antitrust watchdog restricted Facebook's data collection via other sites.
A key implication of this is that Facebook-owned properties like WhatsApp and Instagram cannot pool information with a user's Facebook data without their consent.
However, let’s not get ahead of ourselves. Despite these and other privacy scandals, the money is still pouring into Facebook. How much do the majority of social media users really care about privacy?
The social media behemoth, which turned 15 on Monday and now has 2.3 billion active monthly users worldwide, reported record quarterly profit of nearly $7 billion last week — up a stunning 61% from the same quarter in 2017. For all of last year, Facebook’s profit soared 39% to $22 billion.
Bezos’s Blackmail Blog
Speaking of privacy, the best PR that big tech received this week was an alleged attempt to blackmail Jeff Bezos.
“If in my position I can’t stand up to this kind of extortion, how many people can?"
It was his response in the form of a very open blog post that received kudos even from those who have no illusions about him.
All credit to Bezos for refusing to submit to these intimidation tactics. He’s a ruthless plutocrat whose online behemoth crushes retailers big and small. He has run his company with all the transparency of the Politburo. And he has exploited his great riches to buy one of the most important and influential newspapers in the country, the Washington Post. But he’s just as entitled as the next person to a private life—and he has just performed an important public service, or maybe two.
Here’s the important lesson from this. We operate in an environment where nothing operates independently; business and tech spill into politics and culture.
The most ruthless business person can become a heroic figure by correctly handling a potential scandal and gaining sympathy from the general public.
What are the implications of a personal triumph in an era where iconic personalities are inseparable from the businesses they created?
What you should know
Guyana just won the lottery with discoveries of huge oil fields but as Sri Lankans can understand well, do they have the leadership to take advantage of that?
Spotify made two significant acquisitions in the podcasting space. Original owned content is crucial for the success of any streaming platform (aka. the Netflix playbook) and for Spotify podcasts are the logical format for that.