Five on Friday: Creator Revenue, Internet Outages and Antitrust

Featuring Amazon, Facebook, Google, TikTok and WeChat

This week’s Five on Friday includes features on big tech firms including Amazon, Facebook and Google, major internet outages, and a reversal on the ban against TikTok and WeChat. On July 5, Amazon’s anniversary, founder and CEO Jeff Bezos will hand the reins over to Andy Jassy; Facebook founder and CEO Mark Zuckerberg says Facebook won’t take a share of revenue from content creators until 2023; and Google fights back against antitrust allegations. Also this week, news outlets and online apps experienced a major internet outage, causing some publishers to scramble for a new way to get the news out, and President Joe Biden reversed the ban on TikTok and WeChat, while asking for a review of their data gathering and usage practices.

Jeff Bezos to Hand Over CEO Reins on Amazon’s 27th Anniversary

Jeff Bezos, founder and CEO of Amazon, will step down from his CEO role to become Executive Chair, while AWS's Andy Jassy fills the CEO slot.
Amazon founder and current CEO Jeff Bezos

Happy Anniversary to Jeff Bezos and Amazon! On the company’s 27th anniversary, a historic change will take place in the company. Bezos will step down as CEO and hand the reins to Andy Jassy, head of Amazon Web Services (AWS), on July 5.

“We chose that date because it’s sentimental for me, the day Amazon was incorporated in 1994, exactly 27 years ago,” said Bezos in a virtual shareholders’ meeting.  

Bezos, who was 30 when he started Amazon, said he selected Jassy for the CEO role because he is an outstanding leader.

“He has the highest of high standards and I guarantee that Andy will never let the universe make us typical,” Bezos said. “He has the energy needed to keep alive in us what has made us special. While it won’t be easy, I do predict Andy will also find it satisfying and oftentimes fun.”

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Bezos isn’t going far though. He may not be involved in day-to-day operations, but he will become Amazon’s executive chairman, where he will focus on new products and initiatives.

“As much as I still tap dance into the office, I’m excited about this transition. Millions of customers depend on us for our services, and more than a million employees depend on us for their livelihoods. Being the CEO of Amazon is a deep responsibility, and it’s consuming. When you have a responsibility like that, it’s hard to put attention on anything else. As Exec Chair I will stay engaged in important Amazon initiatives but also have the time and energy I need to focus on the Day 1 Fund, the Bezos Earth Fund, Blue Origin, The Washington Post, and my other passions. I’ve never had more energy, and this isn’t about retiring. I’m super passionate about the impact I think these organizations can have,” Bezos said in an email to staff, and published by GeekWire.

Jassy has hard shoes to fill and lots of people who want to take those shoes away. In late May, for example, the attorney general for the District of Columbia filed an antitrust lawsuit against Amazon. Jassy and Amazon’s legal team will face this lawsuit as well as additional scrutiny from American and international regulators who fear Amazon is using its dominant market power to squeeze out smaller players.

Facebook Won’t Take Creator Revenue Share til 2023

In a Facebook post Monday, Mark Zuckerberg, founder and CEO, said the company will not take a revenue share from certain products until 2023. Those products include paid online events, subscriptions, badges and a new product for independent news products. When they do, Facebook’s revenue share will be “less than the 30% that Apple and others take.” Zuckerberg also mentioned a new payout interface to compare the fees and taxes charged by different companies and how they impact their earnings.

That post went live at 8:15 a.m. on June 7. Since then, it received more than 270K likes and loves, 43K comments, and 10K shares. There were some negative comments, mostly about reach and how the algorithm has negatively impacted creators, and there was other input unrelated to the topic at hand. Here is a small sampling of the comments to Zuckerberg’s announcement:

Is Facebook being generous or strategic? The latter, most likely. Facebook wants to be “the” platform for creators, and offering to pay them more than what Apple and others will charge is a big attraction. We wonder if other platforms will follow suit by lowering their fees.

Internet Outage Wreaks Havoc on Publishers

Did someone break the internet? On Tuesday morning Eastern time, it felt that way to publishers including USA Today, CNN, The New York Times, The Guardian and the Financial Times who lost access to the world wide web. Other popular online tools and streaming apps also lost access, including Shopify, YouTube, Zoom, Instagram, Hulu, Amazon, Reddit, Vox, GitHub, Twitch, PayPal, Disney World and Spotify, reports MediaPost. The outage occurred from North America to South Africa.

The culprit was Fastly, a cloud computing services provider, who tweeted about the problem as reports of outages came in.

The company explained the sequence of events that led to identifying and fixing the problem.

The company will review how the incident occurred and how the company handled it to see how they could have done things differently.

“We have been — and will continue to — innovate and invest in fundamental changes to the safety of our underlying platforms. Broadly, this means fully leveraging the isolation capabilities of WebAssembly and Compute@Edge to build greater resiliency from the ground up. We’ll continue to update our community as we make progress toward this goal,” said Nick Rockwell, senior vice president of engineering and infrastructure, in a June 8, 2021 blog post.

“Even though there were specific conditions that triggered this outage, we should have anticipated it. We provide mission critical services, and we treat any action that can cause service issues with the utmost sensitivity and priority. We apologize to our customers and those who rely on them for the outage and sincerely thank the community for its support,” he added.

With roughly half the internet down, media outlets got creative. Alex Hern from The Guardian created a liveblog on Twitter that followed and reported on the outage. Others like The Verge turned to Google Docs, said Nieman Lab. In a comedy of errors, The Verge unfortunately forgot to make their content read-only and “contributors” from around the world edited the documents they had access to.

Fortunately, content delivery network Fastly identified and fixed the problem quickly, but it shows how vulnerable we are and how much we rely on the internet for pretty much everything (e.g., news, communication, shopping, payments, etc.) We can all learn a lesson from this: always have a back-up plan in place.  

Image: Bigstock Photos

Google Wants Antitrust Allegations from Publishers Dismissed

In May, a federal judge dismissed antitrust claims against Google for monopolizing the programmatic display ad market. The U.S. District Court judge that heard the case said the market the advertisers complained about was too narrow, because it didn’t include display ads on social media or those sold directly by publishers. The plaintiffs can refile a claim with “serious concerns” by June 14, says Benzinga via Yahoo! Finance.

Google won this round, and it is hoping the same judge – U.S. District Court Judge Beth Labson Freeman – will dismiss similar claims by web publishers when the case is heard in October, says Media Post.

“To anyone with a computer, tablet, or phone, it is readily apparent that there is extensive display advertising on Facebook and other owned-and-operated ‘social’ sites, on Amazon and other owned-and-operated ‘shopping’ sites, and on other sites that contract with advertisers directly,” Google writes in papers filed Friday with Freeman.

In April, 125 newspapers in 11 states filed or announced lawsuits against Google and Facebook for unlawfully monopolizing the digital ad market through a secret deal known as Jedi Blue.

“As found by recent investigations conducted by both federal and state agencies, Google and Facebook have monopolized the digital advertising market and restricted the monetization of local news by local news organizations,” AIM Media CEO Jeremy Halbreich said. “This has had a dramatic impact on the revenues and resources available for local news organizations. These monopolistic practices must come to an end. It is no longer appropriate for these two platforms to profit directly from local news while publishers increasingly struggle.”

Image: Bigstock Photos.

Biden Reverses Trump’s Ban on TikTok and WeChat, Replaces with a Broader Executive Order

On Wednesday, President Joe Biden reversed former President Donald Trump’s ban on TikTok and WeChat. The popular apps were banned by Trump due to security risks they may have posed if data from Americans fell into the hands of the Chinese government. TikTok and WeChat can breathe a sigh of relief for now, but they are not entirely in the clear.

In its place, Biden issued his own executive order, the Executive Order on Protecting Americans’ Sensitive Data from Foreign Adversaries. Here is an excerpt:

“The Federal Government should evaluate these threats through rigorous, evidence-based analysis and should address any unacceptable or undue risks consistent with overall national security, foreign policy, and economic objectives, including the preservation and demonstration of America’s core values and fundamental freedoms. By operating on United States information and communications technology devices, including personal electronic devices such as smartphones, tablets, and computers, connected software applications can access and capture vast swaths of information from users, including United States persons’ personal information and proprietary business information.  This data collection threatens to provide foreign adversaries with access to that information.  Foreign adversary access to large repositories of United States persons’ data also presents a significant risk.”

Risk factors in the “evidence-based analysis” should include:

  • Ownership, control, or management by persons that support a foreign adversary’s military, intelligence, or proliferation activities
  • Use of the connected software application to conduct surveillance that enables espionage, including through a foreign adversary’s access to sensitive or confidential government or business information, or sensitive personal data; ownership, control, or management of connected software applications by persons subject to coercion or cooption by a foreign adversary
  • Ownership, control, or management of connected software applications by persons involved in malicious cyber activities
  • A lack of thorough and reliable third-party auditing of connected software applications
  • The scope and sensitivity of the data collected
  • The number and sensitivity of the users of the connected software application
  • The extent to which identified risks have been or can be addressed by independently verifiable measures

What’s next? Within the next 120 days, the Secretary of Commerce, with input from Secretary of State, the Secretary of Defense, the Attorney General, the Secretary of Health and Human Services, the Secretary of Homeland Security, and the Director of National Intelligence, will prepare a report to the assistant to the president and the national security advisor with commendations on how to protect sensitive data. Other measures including threat assessments and recommendations for executive and legislative action, as well as ongoing monitoring.

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